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Marriott Reports 11% Drop in 3rd Qtr Profit; 
Indicates Three-year Slump in Business Travel 
May Have Hit Bottom
Key Lodging Statistics
  • Marriott International Reports EPS from Continuing Operations of $0.38 for the Third Quarter of 2003
  • REVPAR for North American Full Service Properties Increased During Third Quarter
WASHINGTON, Oct. 9, 2003 - Marriott International, Inc. (NYSE: MAR - News) today reported diluted earnings per share from continuing operations of $0.38 in the third quarter of 2003, which ended on September 12, 2003. Income from continuing operations, net of taxes and minority interest, for the quarter was $93 million, a decline of 18 percent from the year ago quarter. The decline in the quarter's income resulted primarily from the absence of a timeshare note sale during the quarter, while prior year results included $12 million ($0.05 per share) in after-tax timeshare note sale gains.

J.W. Marriott, Jr., chairman and chief executive officer of Marriott International, said, "We are pleased to report higher year-over-year revenue per available room (REVPAR) for our full service brands. Since the fourth quarter is more dependent on business travel and group business, we can't be certain that these trends will continue in the fourth quarter, but it does appear to us that the early stage of a recovery in transient demand is underway. Our early estimates for 2004 are for three to four percent REVPAR growth in North America, suggesting that 2003 should be the trough in REVPAR.

"Our rooms growth is stronger than we predicted at the beginning of this year, even as supply growth in the U.S. hotel industry continues to decline. With our owners and franchisees, we added 8,578 rooms to our system in the third quarter and we continue to see heightened levels of interest in converting competitor hotels to our brands. We estimate that we will add over 30,000 new rooms to our system in 2003. Our pipeline of properties under construction, awaiting conversion, or approved for development currently totals more than 47,000 rooms worldwide.

During the quarter, we opened our 1,000 room J.W. Marriott hotel and 584 room Ritz-Carlton hotel at the 500-acre Grande Lakes Orlando resort. This one-of-a kind resort is off to a tremendous start and introduces an exciting luxury experience to the Orlando market."

MARRIOTT LODGING profits totaled $140 million during the third quarter of 2003, down 13 percent from the prior year, reflecting the absence of a timeshare note sale during the quarter. Lodging profits in the third quarter of 2002 included an $18 million pre-tax ($12 million after-tax) gain on the sale of timeshare notes. Base management and franchise fees were $147 million in the third quarter of 2003, up seven percent from a year ago as a result of new unit growth. Incentive management fees were $18 million in the third quarter, down $7 million from a year ago, as a result of lower operating results at our managed hotels. North American hotel margins declined 2.3 percentage points during the quarter, as lower room rates and higher insurance and benefits costs offset labor productivity gains. Gains and gain amortization totaled $15 million during the 2003 third quarter, including a $9 million pre-tax gain on the sale of an international hotel investment. In the prior year's quarter, gains and gain amortization totaled $10 million.

For the 2003 third quarter (12 weeks ended September 12, 2003), REVPAR for comparable company-operated North American properties decreased by 0.5 percent, driven by lower average room rates. REVPAR at North American full- service hotels (including Marriott Hotels & Resorts, The Ritz-Carlton, and Renaissance Hotels & Resorts) increased 0.4 percent in the quarter for managed comparable hotels, while North American REVPAR for select-service and extended-stay brands (including Courtyard, Fairfield Inn, Residence Inn, TownePlace Suites, and SpringHill Suites) posted a REVPAR decline of 2.7 percent. The Ritz-Carlton brand in North America experienced strong demand, particularly at its resort properties, with comparable REVPAR up 5.6 percent for the quarter.

Our third quarter profits for international lodging were higher than the prior year, reflecting the sale of an international hotel investment. Continued strong demand for our Caribbean and Mexican resorts resulted in 8.7 percent REVPAR growth on a constant dollar basis in the Caribbean/Latin America region. The soft economy in continental Europe continued to pressure hotel results in that region. Although Asia's REVPAR was hurt by Severe Acute Respiratory Syndrome (SARS) in the third quarter, occupancy levels improved over the summer and had returned to pre-SARS levels in most markets by the beginning of September.

Marriott's timeshare business reported 23 percent growth in contract sales in the third quarter. Contract sales were strong at timeshare resorts in Aruba, Hawaii, and South Carolina but remained weak in Orlando and Lake Tahoe. Contract sales at our four Ritz-Carlton Club resorts doubled during the quarter. Overall profits in the timeshare business decreased to $23 million in the quarter, due to the absence of a timeshare note sale. We expect to complete a note sale transaction during the fourth quarter of 2003 in line with our previously announced plan to complete two note sales during 2003 versus four smaller note sale transactions in 2002.

We added 46 hotels and timeshare resorts (8,578 rooms) to our worldwide lodging portfolio during the third quarter, while eight hotels (1,018 rooms) exited the system. Six Marriott Hotels & Resorts (2,730 rooms) opened during the quarter, including three conversions comprising 1,030 rooms. One Ritz- Carlton hotel (584 rooms), two Renaissance hotels (549 rooms), nine Courtyards (1,077 rooms), and seven Residence Inns (902 rooms) also opened during the quarter. One-third of our room additions were located outside the United States and over 20 percent were conversions from competitor brands. At the end of the third quarter, our lodging group encompassed 2,678 hotels and timeshare resorts (484,957 rooms).

CORPORATE EXPENSES were $35 million in the third quarter of 2003 compared to $25 million a year ago, in part a result of higher legal fees related to two ongoing lawsuits, higher deferred compensation plan expenses and a charge taken in connection with excess office space, partially offset by the receipt of insurance proceeds. Interest expense in the quarter was $26 million, up $7 million from a year ago, primarily reflecting lower levels of capitalized interest. Synthetic fuel operations contributed approximately $21 million ($0.09 per share), after-tax, during the third quarter of 2003, similar to the prior year's results. Minority interest of $29 million in the quarter represents the allocation of the synthetic fuel purchaser's share of operating losses, tax benefits and tax credits.

At the end of the third quarter, total debt was $1.7 billion and cash balances totaled $113 million compared to $1.7 billion of debt and $144 million of cash at June 20, 2003. We owned eight hotels at the end of the quarter.

We repurchased 3 million shares of common stock during the third quarter at a total cost of $121 million and have repurchased approximately 9.1 million shares year to date in 2003 for a total cost of $316 million. At quarter end, our remaining share authorization totaled approximately 14 million shares.

We completed the sale of one hotel, subject to a long-term operating agreement, and two land parcels for $49 million during the third quarter, as well as 14 senior living communities for $184 million. We also sold a 50 percent interest in our synthetic fuel business for $25 million. We will receive additional profits over the life of the synthetic fuel joint venture based on the amount of tax credits produced and allocated to the purchaser. In the event that a satisfactory private letter ruling from the Internal Revenue Service regarding the new synthetic fuel ownership structure is not obtained by December 15, 2003, the synfuel purchaser will have a one time right to return its ownership interest to Marriott. We believe that the exercise of this right would have no impact on Marriott's earnings in 2003.

We closed our distribution services business in 2002 and completed the sale of our senior living business in the 2003 first quarter. Therefore, we show the financial results for those businesses as discontinued operations for 2002 and 2003. Losses per share from discontinued operations were $0.01 in the third quarter of 2003 versus losses of $0.04 a year ago.

OUTLOOK

There are early signs that a strengthening economy is beginning to impact individual business travel positively. Combined with already strong leisure business, we are optimistic about 2004. However, group bookings for this year's fourth quarter continue to be weak and improve only as we look into early 2004. Based on these dynamics, we continue to estimate REVPAR growth for the 2003 fourth quarter of -2 to +2 percent versus last year.

We estimate lodging profits will total $225 million to $235 million in the 2003 fourth quarter, including estimated timeshare profits of $60 million to $62 million. This assumes completion of a timeshare mortgage note sale transaction with a gain of approximately $30 million. Including approximately $0.12 in after-tax earnings per share from our synthetic fuel operations, we anticipate that earnings per share from continuing operations will total $0.60 to $0.62 per share in the fourth quarter. Further, we estimate 2003 full year earnings per share from continuing operations, including synthetic fuel, to range from $1.86 to $1.88.

Our expectation for 2004 REVPAR is three to four percent growth. Assuming nearly flat house profit margins, completion of timeshare mortgage note sale transactions in the second and fourth quarters, 25,000 to 30,000 new room openings, and $0.33 to $0.36 of after-tax earnings per share from our synthetic fuel business, we estimate 2004 diluted earnings per share from continuing operations will range from $2.06 to $2.16. With these assumptions, our estimated range for 2004 lodging results is $770 million to $790 million.

Assuming REVPAR growth of two percent to four percent in the first quarter of 2004, we currently estimate first quarter earnings per share from continuing operations of $0.38 to $0.42, including $0.06 of earnings from synthetic fuel. Our range for lodging results for the first quarter of 2004 is $155 million to $165 million.

We expect investment spending in 2003 to include approximately $75 million for maintenance capital spending and approximately $100 million to $125 million for new company-developed hotels. We anticipate timeshare investment spending to total approximately $175 million to $200 million. We also expect to invest approximately $200 million in equity slivers, mezzanine financing and mortgage loans for hotels developed by our owners and franchisees. We expect that total investment spending in 2003 will be roughly $550 million to $600 million. In 2004, we estimate total investment spending levels to be roughly $500 million.

MARRIOTT INTERNATIONAL, INC.
Financial Highlights
(in millions, except per share amounts)



                                            12 Weeks Ended September 12, 2003
                                            ---------------------------------

                                                         Synthetic
                                              Lodging      Fuel        Total
                                            ----------  -----------  --------
    SALES
    Base management fees                     $    86    $     -     $    86
    Franchise fees                                61          -          61
    Incentive management fees                     18          -          18
    Owned and leased properties                   84          -          84
    Other lodging revenue(1)                     336          -         336
    Cost reimbursements(2)                     1,423          -       1,423
    Synthetic fuel                                 -         93          93
                                            ----------  -----------  --------
       Total Revenues                          2,008         93       2,101

    OPERATING COSTS AND EXPENSES
    Owned and leased - direct(3)                  91          -          91
    Other lodging - direct(4)                    313          -         313
    Reimbursed costs                           1,423          -       1,423
    Administrative and other(5)                   41          -          41
    Synthetic fuel                                 -         96          96
                                            ----------  -----------  --------
       Total Expenses                          1,868         96       1,964
                                            ----------  -----------  --------

    Segment Financial Results                $   140    $    (3)        137
                                            ==========  ===========

    Corporate expenses                                                  (35)
    Interest expense                                                    (26)
    Interest income                                                      31
    Provision for loan losses                                            (1)
                                                                     --------

    INCOME FROM CONTINUING OPERATIONS
     BEFORE INCOME TAXES AND MINORITY
     INTEREST                                                           106
    Benefit for income taxes                                             16
                                                                     --------
    INCOME FROM CONTINUING OPERATIONS
     BEFORE MINORITY INTEREST                                           122
    Minority Interest                                                   (29)
                                                                     --------
    INCOME FROM CONTINUING OPERATIONS                                    93

    Discontinued operations
    Senior Living Services
     Income from discontinued
      operations, net of tax                                              1
     Loss on disposal, net of tax                                        (1)
    Marriott Distribution Services
     Loss from discontinued operations,
      net of tax                                                          -
     Exit costs, net of tax                                              (1)
                                                                     --------

    NET INCOME                                                      $    92
                                                                     ========
    EARNINGS PER SHARE - Basic
       Earnings from continuing
        operations                                                  $  0.40
       Loss from discontinued operations                              (0.01)
                                                                     --------
       Earnings per share                                           $  0.39
                                                                     ========

    EARNINGS PER SHARE - Diluted
       Earnings from continuing
        operations                                                  $  0.38
       Loss from discontinued operations                              (0.01)
                                                                     --------
       Earnings per share                                           $  0.37
                                                                     ========

    Basic Shares                                                      232.7
    Diluted Shares                                                    245.8
 
 
 

                                       12 Weeks Ended September 6, 2002
                                  --------------------------------------------
                                                                      Percent
                                                         Synthetic    Better/
                                   Lodging      Fuel       Total      (Worse)
                                  ---------   --------  ----------   ---------
    SALES
    Base management fees          $    82    $     -     $    82
    Franchise fees                     55          -          55
    Incentive management fees          25          -          25
    Owned and leased properties        84          -          84
    Other lodging revenue(1)          341          -         341
    Cost reimbursements(2)          1,282          -       1,282
    Synthetic fuel                      -         55          55
                                  ---------  ---------  ----------
      Total Revenues                1,869         55       1,924

    OPERATING COSTS AND EXPENSES
    Owned and leased - direct(3)       86          -          86
    Other lodging - direct(4)         286          -         286
    Reimbursed costs                1,282          -       1,282
    Administrative and other(5)        55          -          55
    Synthetic fuel                      -         87          87
                                  ---------  ---------  ----------
      Total Expenses                1,709         87       1,796
                                  ---------  ---------  ----------

    Segment Financial Results     $   160    $   (32)        128         7
                                  =========  =========

    Corporate expenses                                       (25)
    Interest expense                                         (19)
    Interest income                                           28
    Provision for loan losses                                  -
                                                        ----------

    INCOME FROM CONTINUING
     OPERATIONS BEFORE INCOME
     TAXES AND MINORITY INTEREST                             112
    Benefit for income taxes                                   2
                                                       -----------
    INCOME FROM CONTINUING
     OPERATIONS BEFORE
     MINORITY INTEREST                                       114
    Minority Interest                                          -
                                                       -----------
    INCOME FROM CONTINUING
     OPERATIONS                                              114        (18)

    Discontinued operations
    Senior Living Services
      Income from discontinued
       operations, net of tax                                 10
      Loss on disposal, net of tax                             -
    Marriott Distribution Services
      Loss from discontinued
       operations, net of tax                                 (2)
      Exit costs, net of tax                                 (19)
                                                       -----------

    NET INCOME                                           $   103        (11)
                                                       ===========

    EARNINGS PER SHARE - Basic
      Earnings from continuing
       operations                                        $  0.47        (15)
      Loss from discontinued
       operations                                          (0.04)        75
                                                       -----------
      Earnings per share                                 $  0.43         (9)
                                                       ===========

    EARNINGS PER SHARE - Diluted
      Earnings from continuing
       operations                                        $  0.45        (16)
      Loss from discontinued
       operations                                          (0.04)        75
                                                       -----------
      Earnings per share                                 $  0.41        (10)
                                                       ===========

    Basic Shares                                           240.9
    Diluted Shares                                         252.1
 

(1) Other lodging revenue includes timeshare revenue (including note sale
gains and excluding base management fees and reimbursed costs),
 ExecuStay revenue, land rent income, and other revenue.
(2) Cost reimbursements include reimbursements from lodging properties
for Marriott funded operating expenses.  Marriott earns no markup on
these expenses.
(3) Owned and leased - direct expenses include operating expenses of
owned or leased hotels including lease payments, pre-opening expenses
and depreciation.
(4) Other lodging - direct expenses include administrative and related
expenses of the timeshare (including timeshare development, financing,
gains and joint venture results) and ExecuStay business units, except
for reimbursed costs.
(5) Administrative and other expenses include lodging segment overhead,
joint venture results, amortization, and gains and losses.  These do
not include any administrative and other expenses related to either
the timeshare or ExecuStay business units.
 

                         MARRIOTT INTERNATIONAL, INC.
                             Financial Highlights
                   (in millions, except per share amounts)
 

                                            36 Weeks Ended September 12, 2003
                                            ---------------------------------

                                                        Synthetic
                                              Lodging      Fuel       Total
                                            ----------  -----------  --------

    SALES
    Base management fees                     $   266     $     -     $   266
    Franchise fees                               169           -         169
    Incentive management fees                     75           -          75
    Owned and leased properties                  260           -         260
    Other lodging revenue(1)                     926           -         926
    Cost reimbursements(2)                     4,233           -       4,233
    Synthetic fuel                                 -         224         224
                                            ----------  -----------  --------
       Total Revenues                          5,929         224       6,153

    OPERATING COSTS AND EXPENSES
    Owned and leased - direct(3)                 269           -         269
    Other lodging - direct(4)                    828           -         828
    Reimbursed costs                           4,233           -       4,233
    Administrative and other(5)                  137           -         137
    Synthetic fuel                                 -         328         328
                                            ----------  -----------  --------
       Total Expenses                          5,467         328       5,795
                                            ----------  -----------  --------

    Segment Financial Results                $   462     $  (104)        358
                                            ==========  ===========

    Corporate expenses                                                   (89)
    Interest expense                                                     (77)
    Interest income                                                       78
    Provision for loan losses                                             (7)
                                                                     --------

    INCOME FROM CONTINUING OPERATIONS
     BEFORE INCOME TAXES AND MINORITY
     INTEREST                                                            263
    Benefit (Provision) for income taxes                                  72
                                                                     --------
    INCOME FROM CONTINUING OPERATIONS
     BEFORE MINORITY INTEREST                                            335
    Minority Interest                                                    (29)
                                                                     --------
    INCOME FROM CONTINUING OPERATIONS                                    306

    Discontinued operations
    Senior Living Services
     Income from discontinued
      operations, net of tax                                               9
     Gain on disposal, net of tax                                         20
    Marriott Distribution Services
     Loss from discontinued operations,
      net of tax                                                           -
     Exit costs, net of tax                                               (2)
                                                                     --------
    NET INCOME                                                       $   333
                                                                     ========

    EARNINGS PER SHARE - Basic
      Earnings from continuing
       operations                                                    $  1.31
      Earnings (loss) from discontinued
       operations                                                       0.12
                                                                     --------
      Earnings per share                                             $  1.43
                                                                     ========

    EARNINGS PER SHARE - Diluted
      Earnings from continuing
       operations                                                    $  1.25
      Earnings (loss) from discontinued
       operations                                                       0.11
                                                                     --------
      Earnings per share                                             $  1.36
                                                                     ========

    Basic Shares                                                       233.0
    Diluted Shares                                                     244.8
 
 

                                       36 Weeks Ended September 6, 2002
                                  --------------------------------------------

                                                                      Percent
                                             Synthetic                Better/
                                   Lodging      Fuel       Total      (Worse)
                                  ---------  ---------  ----------   ---------

    SALES
    Base management fees          $   258    $     -     $   258
    Franchise fees                    160          -         160
    Incentive management fees         109          -         109
    Owned and leased properties       273          -         273
    Other lodging revenue(1)          966          -         966
    Cost reimbursements(2)          3,887          -       3,887
    Synthetic fuel                      -        113         113
                                  ---------  ---------  ----------
      Total Revenues                5,653        113       5,766

    OPERATING COSTS AND EXPENSES
    Owned and leased - direct(3)      266          -         266
    Other lodging - direct(4)         813          -         813
    Reimbursed costs                3,887          -       3,887
    Administrative and other(5)       182          -         182
    Synthetic fuel                      -        194         194
                                  ---------  ---------  ----------
    Total Expenses                  5,148        194       5,342
                                  ---------  ---------  ----------

    Segment Financial Results     $   505    $   (81)    $   424       (16)
                                  =========  =========

    Corporate expenses                                       (77)
    Interest expense                                         (59)
    Interest income                                           75
    Provision for loan losses                                  -
                                                        ----------
 

    INCOME FROM CONTINUING
     OPERATIONS BEFORE INCOME
     TAXES AND MINORITY INTEREST                             363
    Benefit (Provision) for
     income taxes                                            (40)
                                                        ----------
    INCOME FROM CONTINUING
     OPERATIONS BEFORE
     MINORITY INTEREST                                       323
    Minority Interest                                          -
                                                        ----------
    INCOME FROM CONTINUING
     OPERATIONS                                              323        (5)

    Discontinued operations
    Senior Living Services
     Income from discontinued
      operations, net of tax                                  17
     Gain on disposal, net of tax                              -
    Marriott Distribution Services
     Loss from discontinued
      operations, net of tax                                  (7)
     Exit costs, net of tax                                  (19)
                                                        ----------
    NET INCOME                                           $   314         6
                                                        ==========
    EARNINGS PER SHARE - Basic
      Earnings from continuing
       operations                                          $1.34        (2)
      Earnings (loss) from
       discontinued operations                             (0.04)      *
                                                        ----------
      Earnings per share                                   $1.30        10
                                                        ==========

    EARNINGS PER SHARE - Diluted
      Earnings from continuing
       operations                                        $  1.27        (2)
      Earnings (loss) from
       discontinued operations                             (0.04)      *
                                                        ----------
      Earnings per share                                 $  1.23        11
                                                        ==========

    Basic Shares                                           241.9
    Diluted Shares                                         257.8
 

    *  Calculated percentage is not meaningful.
 

    (1)  Other lodging revenue includes timeshare revenue (including note sale
         gains and excluding base management fees and reimbursed costs),
         ExecuStay revenue, land rent income, and other revenue.
    (2)  Cost reimbursements include reimbursements from lodging properties
         for Marriott funded operating expenses.  Marriott earns no markup on
         these expenses.
    (3)  Owned and leased - direct expenses include operating expenses of
         owned or leased hotels including lease payments, pre-opening expenses
         and depreciation.
    (4)  Other lodging - direct expenses include administrative and related
         expenses of the timeshare (including timeshare development,
         financing, gains and joint venture results) and ExecuStay business
         units, except for reimbursed costs.
    (5)  Administrative and other expenses include lodging segment overhead,
         joint venture results, amortization, and gains and losses.  These do
         not include any administrative and other expenses related to either
         the timeshare or ExecuStay business units.
 

                         MARRIOTT INTERNATIONAL, INC.
                              Business Segments
                               ($ in millions)

                                       Twelve weeks ended
                            ---------------------------------------
                            September 12, 2003    September 6, 2002
                            ------------------    ------------------

    SALES

    Full-Service             $         1,306       $         1,194
    Select-Service                       236                   231
    Timeshare                            328                   297
    Extended-Stay                        138                   147
                             ----------------      ----------------
      Total Lodging                    2,008                 1,869
    Synthetic Fuel                        93                    55
                             ----------------      ----------------
      Total                  $         2,101       $         1,924
                             ================      ================
 

    SEGMENT FINANCIAL RESULTS

    Full-Service             $            77       $            76
    Select-Service                        28                    27
    Timeshare                             23                    40
    Extended-Stay                         12                    17
                             ----------------      ----------------
      Total Lodging                      140                   160
    Synthetic Fuel                        (3)                  (32)
                             ----------------      ----------------
      Total                  $           137       $           128
                             ================      ================
 
 

                         MARRIOTT INTERNATIONAL, INC.
                              Business Segments
                               ($ in millions)

                                     Thirty-six weeks ended
                            ---------------------------------------
                            September 12, 2003    September 6, 2002
                            ------------------    -----------------

    SALES

    Full-Service             $         3,950       $         3,714
    Select-Service                       699                   676
    Timeshare                            888                   847
    Extended-Stay                        392                   416
                             ----------------      ----------------
      Total Lodging                    5,929                 5,653
    Synthetic Fuel                       224                   113
                             ----------------      ----------------
      Total                  $         6,153       $         5,766
                             ================      ================

    SEGMENT FINANCIAL RESULTS

    Full-Service             $           259       $           265
    Select-Service                        81                    95
    Timeshare                             85                   110
    Extended-Stay                         37                    35
                             ----------------      ----------------
      Total Lodging                      462                   505
    Synthetic Fuel                      (104)                  (81)
                             ----------------      ----------------
      Total                  $           358       $           424
                             ================      ================
 
 

                         MARRIOTT INTERNATIONAL, INC.
                            KEY LODGING STATISTICS

             North American Comparable Company-Operated Properties (1)
    --------------------------------------------------------------------------
               12 Weeks Ended Sept. 12, 2003 vs. 12 Weeks Ended Sept. 6, 2002
              ----------------------------------------------------------------
                                                               Average Daily
                                  REVPAR         Occupancy          Rate
                                  ------         ---------     -------------
    Brand                      2003  vs. 2002  2003  vs. 2002   2003  vs. 2002
    --------------------------------------------------------------------------
    Marriott Hotels
     & Resorts                 $90.76  -1.3%  72.3%   0.3% pts. $125.56  -1.7%
    The Ritz-Carlton          $139.04   5.6%  68.6%   4.9% pts. $202.63  -2.0%
    Renaissance Hotels
     & Resorts                 $85.25   4.1%  68.8%   2.5% pts. $123.98   0.3%
    Composite - Full-Service   $95.18   0.4%  71.4%   1.1% pts. $133.32  -1.2%
    Residence Inn              $75.83  -2.7%  80.5%  -1.0% pts.  $94.19  -1.5%
    Courtyard                  $64.92  -3.2%  71.0%  -2.0% pts.  $91.42  -0.5%
    TownePlace Suites          $50.42  -1.6%  78.1%  -1.4% pts.  $64.53   0.2%
    Composite - Select-
     Service & Extended-Stay   $66.24  -2.7%  73.9%  -1.6% pts.  $89.68  -0.6%
    Composite - All            $84.62  -0.5%  72.3%   0.1% pts. $117.05  -0.7%
 

                North American Comparable Systemwide Properties (1)
    --------------------------------------------------------------------------
               12 Weeks Ended Sept. 12, 2003 vs. 12 Weeks Ended Sept. 6, 2002
              ----------------------------------------------------------------
                                                               Average Daily
                                  REVPAR         Occupancy          Rate
                                  ------         ---------     -------------
    Brand                      2003  vs. 2002  2003  vs. 2002   2003  vs. 2002
    --------------------------------------------------------------------------
    Marriott Hotels
     & Resorts                 $85.76  -1.0%  70.6%   0.1% pts. $121.45  -1.2%
    The Ritz-Carlton          $139.04   5.6%  68.6%   4.9% pts. $202.63  -2.0%
    Renaissance Hotels
     & Resorts                 $80.76   2.6%  68.5%   2.5% pts. $117.81  -1.1%
    Composite - Full-Service   $89.08   0.2%  70.2%   0.8% pts. $126.94  -1.0%
    Residence Inn              $77.02  -1.8%  81.0%  -0.4% pts.  $95.05  -1.4%
    Courtyard                  $66.97  -2.0%  72.7%  -1.4% pts.  $92.15  -0.2%
    Fairfield Inn              $47.28  -1.3%  71.1%  -1.0% pts.  $66.51   0.1%
    TownePlace Suites          $49.95  -0.9%  77.8%  -0.1% pts.  $64.19  -0.8%
    SpringHill Suites          $58.27   2.6%  71.7%   0.6% pts.  $81.33   1.7%
    Composite - Select-
     Service & Extended-Stay   $62.78  -1.5%  74.5%  -0.9% pts.  $84.29  -0.4%
    Composite - All            $74.32  -0.7%  72.6%  -0.1% pts. $102.38  -0.5%
 

             North American Comparable Company-Operated Properties (1)
    --------------------------------------------------------------------------
               36 Weeks Ended Sept. 12, 2003 vs. 36 Weeks Ended Sept. 6, 2002
              ----------------------------------------------------------------
                                                               Average Daily
                                  REVPAR         Occupancy          Rate
                                  ------         ---------     -------------
    Brand                      2003  vs. 2002  2003  vs. 2002   2003  vs. 2002
    --------------------------------------------------------------------------
    Marriott Hotels
     & Resorts                 $94.73  -3.5%  70.5%  -0.8% pts. $134.39  -2.3%
    The Ritz-Carlton          $155.62  -0.7%  66.8%   0.1% pts. $232.93  -0.9%
    Renaissance Hotels
     & Resorts                 $88.59  -0.8%  67.1%   0.6% pts. $132.02  -1.6%
    Composite - Full-Service   $99.71  -2.7%  69.7%  -0.5% pts. $143.14  -2.0%
    Residence Inn              $74.95  -3.0%  78.6%  -0.4% pts.  $95.41  -2.5%
    Courtyard                  $64.41  -3.8%  68.9%  -1.5% pts.  $93.44  -1.7%
    TownePlace Suites          $45.34  -2.5%  71.2%  -4.0% pts.  $63.68   3.0%
    Composite - Select-
     Service & Extended-Stay   $65.12  -3.2%  71.3%  -1.3% pts.  $91.35  -1.5%
    Total North America        $86.98  -2.9%  70.3%  -0.8% pts. $123.81  -1.7%
 

                North American Comparable Systemwide Properties (1)
    --------------------------------------------------------------------------
               36 Weeks Ended Sept. 12, 2003 vs. 36 Weeks Ended Sept. 6, 2002
              ----------------------------------------------------------------
                                                               Average Daily
                                  REVPAR         Occupancy          Rate
                                  ------         ---------     -------------
    Brand                      2003  vs. 2002  2003  vs. 2002   2003  vs. 2002
    --------------------------------------------------------------------------
    Marriott Hotels &
     Resorts                   $88.02  -3.1%  68.8%  -0.6% pts. $127.93  -2.3%
    The Ritz-Carlton          $155.62  -0.7%  66.8%   0.1% pts. $232.93  -0.9%
    Renaissance Hotels &
     Resorts                   $81.99  -0.5%  66.1%   1.1% pts. $124.07  -2.3%
    Composite - Full-Service   $91.70  -2.5%  68.3%  -0.3% pts. $134.29  -2.1%
    Residence Inn              $73.56  -2.0%  77.9%   0.0% pts.  $94.48  -2.0%
    Courtyard                  $65.17  -2.4%  70.1%  -0.8% pts.  $92.99  -1.2%
    Fairfield Inn              $42.84  -0.9%  65.9%  -0.7% pts.  $64.96   0.1%
    TownePlace Suites          $45.92  -1.3%  72.0%  -1.2% pts.  $63.77   0.4%
    SpringHill Suites          $56.51   2.7%  69.6%   0.8% pts.  $81.19   1.5%
    Composite - Select-
     Service & Extended-Stay   $59.78  -1.7%  70.9%  -0.5% pts.  $84.27  -1.0%
    Total North America        $73.72  -2.1%  69.8%  -0.4% pts. $105.64  -1.6%
 

    (1) Composite - All statistics include properties for the Marriott Hotels
        & Resorts, Renaissance Hotels & Resorts, The Ritz-Carlton, Courtyard,
        Residence Inn, TownePlace Suites, Fairfield Inn, and SpringHill Suites
        brands.  Select-Service and Extended-Stay composite statistics include
        properties for the Courtyard, Residence Inn, TownePlace Suites,
        Fairfield Inn and SpringHill Suites brands.
 

              International Comparable Company-Operated Properties (1)
    --------------------------------------------------------------------------
               12 Weeks Ended Sept. 12, 2003 vs. 12 Weeks Ended Sept. 6, 2002
              ----------------------------------------------------------------
                                                               Average Daily
                                 REVPAR          Occupancy          Rate
                                 ------          ---------     -------------
    Region                    2003  vs. 2002  2003  vs. 2002    2003  vs. 2002
    --------------------------------------------------------------------------
    Caribbean & Latin
     America                  $78.62    8.7%  70.1%   4.4% pts. $112.10   2.0%
    Continental Europe        $83.11   -5.1%  71.9%   0.0% pts. $115.56  -5.1%
    United Kingdom           $117.53   -2.6%  81.3%   2.7% pts. $144.54  -5.8%
    Middle East & Africa      $50.36   20.7%  74.3%   1.2% pts.  $67.79  18.7%
    Asia Pacific(3)           $50.52  -15.6%  64.5%  -8.1% pts.  $78.30  -5.0%

    Total International       $73.03   -3.1%  70.1%  -1.6% pts. $104.18  -0.9%
 

                 International Comparable Systemwide Properties(1)
    --------------------------------------------------------------------------
               12 Weeks Ended Sept. 12, 2003 vs. 12 Weeks Ended Sept. 6, 2002
              ----------------------------------------------------------------
                                                               Average Daily
                                 REVPAR          Occupancy          Rate
                                 ------          ---------     -------------
    Region                    2003  vs. 2002  2003  vs. 2002    2003  vs. 2002
    --------------------------------------------------------------------------
    Caribbean & Latin
     America                  $73.03    6.4%  67.1%   3.1% pts. $108.79   1.5%
    Continental Europe        $80.35   -3.9%  68.1%   0.1% pts. $117.96  -4.1%
    United Kingdom            $96.37   -0.8%  76.2%   0.7% pts. $126.45  -1.7%
    Middle East & Africa      $49.58   22.6%  72.4%   2.1% pts.  $68.43  18.9%
    Asia Pacific(3)           $57.98  -11.0%  66.4%  -6.4% pts.  $87.39  -2.5%

    Total International       $75.53   -2.1%  69.6%  -1.3% pts. $108.56  -0.3%
 

              International Comparable Company-Operated Properties(2)
    --------------------------------------------------------------------------
               36 Weeks Ended Sept. 12, 2003 vs. 36 Weeks Ended Sept. 6, 2002
              ----------------------------------------------------------------
                                                               Average Daily
                                 REVPAR          Occupancy          Rate
                                 ------          ---------     -------------
    Region                    2003  vs. 2002   2003  vs. 2002  2003  vs. 2002
    -------------------------------------------------------------------------
    Caribbean & Latin America    $88.86   10.0%  69.3%   4.3%  $128.26   3.2%
    Continental Europe           $76.32   -7.2%  66.0%  -1.0%  $115.63  -5.8%
    United Kingdom              $106.13   -6.5%  73.4%  -3.4%  $144.56  -2.2%
    Middle East & Africa         $44.31    6.6%  63.5%  -2.2%   $69.75  10.3%
    Asia Pacific(3)              $48.85  -17.3%  60.5%  -9.8%   $80.68  -3.9%

    Total International          $70.81   -4.8%  65.4%  -3.1%  $108.27  -0.3%
 

                 International Comparable Systemwide Properties(2)
    --------------------------------------------------------------------------
               36 Weeks Ended Sept. 12, 2003 vs. 36 Weeks Ended Sept. 6, 2002
              ----------------------------------------------------------------
                                                               Average Daily
                                 REVPAR          Occupancy          Rate
                                 ------          ---------     -------------
    Region                    2003  vs. 2002   2003  vs. 2002  2003  vs. 2002
    -------------------------------------------------------------------------
    Caribbean & Latin America    $82.64    8.6%  66.6%   3.5%  $124.10   2.9%
    Continental Europe           $73.45   -6.1%  62.5%  -1.3%  $117.60  -4.1%
    United Kingdom               $85.66   -5.7%  69.5%  -1.7%  $123.33  -3.4%
    Middle East & Africa         $43.67   10.0%  62.5%  -0.3%   $69.87  10.5%
    Asia Pacific(3)              $55.83  -13.0%  63.3%  -8.3%   $88.26  -1.5%

    Total International          $71.98   -4.2%  65.1%  -2.7%  $110.51  -0.2%

    (1) Statistics are in constant dollars and include results for June
        through August.  Excludes North America.
    (2) Statistics are in constant dollars and include results for January
        through August.  Excludes North America.
    (3) Excludes Hawaii.
 
 

                          MARRIOTT INTERNATIONAL, INC.
                             Key Lodging Statistics

                            Total Lodging Products (3)
    ------------------------------------------------------------------------
                                          Number of           Number of
                                          Properties         Rooms/Suites
                                Sept. 12, vs. Sept. 6,  Sept. 12, vs. Sept. 6,
    Brand                               2003   2002         2003      2002
    -------------------------------   --------------------------------------

    Full-Service Lodging
    --------------------
        Marriott Hotels & Resorts        469    +30       173,021   +10,491
        The Ritz-Carlton                  55     +7        17,794    +1,890
        Renaissance Hotels & Resorts     125     +2        45,673      +677
        Ramada International             180    +37        25,202    +4,308
    Select-Service Lodging
    ----------------------
        Courtyard                        608    +30        87,041    +4,139
        Fairfield Inn                    519    +19        49,676    +1,705
        SpringHill Suites                106    +10        12,254    +1,227
    Extended-Stay Lodging
    ---------------------
        Residence Inn                    443    +32        52,781    +4,251
        TownePlace Suites                109     +6        11,224      +616
        Marriott Executive Apartments     12     +1         2,167      +159
    Timeshare
    ----------
        Marriott Vacation Club
         International                    43     -2         7,392      +712
        Horizons by Marriott Vacation
         Club International                2       -          256      +110
        The Ritz-Carlton Club              4       -          228       +85
        Marriott Grand Residence Club      2       -          248          -
                                     -----------------------------------------
    Total                              2,677   +172       484,957   +30,370
                                     =========================================

    (3) Total Lodging Products excludes the 3,762 corporate housing rental
    units.
 
 

                         MARRIOTT INTERNATIONAL, INC.
                  Non-GAAP Financial Measure Reconciliation
                   (in millions, except per share amounts)

    The reconciliation of the effective income tax rate from continuing
    operations to the effective income tax rate from continuing operations,
    excluding the impact of our Synthetic Fuel business, is as follows:

                              Third Quarter 2003

                                                Continuing Operations
                                         -------------------------------------
                                         Income from   Synthetic    Excluding
                                          Continuing     Fuel       Synthetic
                                          Operations    Impact         Fuel
                                         -------------------------------------

    Pre tax income (loss)                   $106          ($3)        $109

      Tax Benefit/(Provision)                (36)           1          (37)
      Tax Credits                             52           52           -
                                          --------     --------     --------
    Total Tax Benefit/(Provision)             16           53          (37)
                                          --------     --------     --------

    Income from Continuing Operations
     before Minority Interest                122           50           72

    Minority Interest                        (29)         (29)          -
                                          --------     --------     --------
    Income from Continuing Operations        $93          $21          $72
                                          ========     ========     ========

    Diluted Shares                         245.8        245.8        245.8

    Earnings per Share - Diluted           $0.38        $0.09        $0.29

    Tax Rate                              -15.3%                     34.5%
 

                              Third Quarter 2002

                                                Continuing Operations
                                         -------------------------------------
                                         Income from   Synthetic    Excluding
                                          Continuing     Fuel       Synthetic
                                          Operations    Impact         Fuel
                                         -------------------------------------

    Pre tax income (loss)                   $112         ($32)        $144

      Tax Benefit/(Provision)                (41)          11          (52)
      Tax Credits                             43           43            -
                                          --------     --------     --------
    Total Tax Benefit/(Provision)              2           54          (52)
                                          --------     --------     --------

    Income from Continuing Operations
     before Minority Interest                114           22           92

    Minority Interest                         -            -            -
                                          --------     --------     --------

    Income from Continuing Operations       $114          $22          $92
                                          ========     ========     ========

    Diluted Shares                         252.1        252.1        252.1

    Earnings per Share - Diluted           $0.45        $0.09        $0.36

    Tax Rate                               -1.4%                     36.5%
 
 

                         MARRIOTT INTERNATIONAL, INC.
                  Non-GAAP Financial Measure Reconciliation
                   (in millions, except per share amounts)

    The reconciliation of the effective income tax rate from continuing
    operations to the effective income tax rate from continuing operations,
    excluding the impact of our Synthetic Fuel business, is as follows:

                              Third Quarter YTD 2003

                                                 Continuing Operations
                                         -------------------------------------
                                         Income from   Synthetic    Excluding
                                          Continuing     Fuel       Synthetic
                                          Operations    Impact         Fuel
                                         -------------------------------------

    Pre tax income (loss)                   $263        ($104)        $367

      Tax Benefit/(Provision)                (90)          37         (127)
      Tax Credits                            162          162           -
                                         --------     --------     --------
    Total Tax Benefit/(Provision)             72          199         (127)
                                         --------     --------     --------

    Income from Continuing Operations
     before Minority Interest                335           95          240

    Minority Interest                        (29)         (29)          -
                                         --------     --------     --------
    Income from Continuing Operations       $306          $66         $240
                                         ========     ========     ========

    Diluted Shares                         244.8        244.8        244.8

    Earnings per Share - Diluted           $1.25        $0.27        $0.98

    Tax Rate                              -27.4%                     34.6%
 

                            Third Quarter YTD 2002

                                                 Continuing Operations
                                         -------------------------------------
                                         Income from   Synthetic    Excluding
                                          Continuing     Fuel       Synthetic
                                          Operations    Impact         Fuel
                                         -------------------------------------

    Pre tax income (loss)                   $363         ($81)        $444

      Tax Benefit/(Provision)               (131)          28         (159)
      Tax Credits                             91           91          -
                                         --------     --------     --------
    Total Tax Benefit/(Provision)            (40)         119         (159)
                                         --------     --------     --------

    Income from Continuing Operations
     before Minority Interest                323           38          285

    Minority Interest                         -            -            -
                                         --------     --------     --------

    Income from Continuing Operations       $323          $38         $285
                                         ========     ========     ========

    Diluted Shares                         257.8        257.8        257.8

    Earnings per Share - Diluted           $1.27        $0.15        $1.12

    Tax Rate                               11.0%                     36.0%
 

This press release contains "forward-looking statements" within the meaning of federal securities laws, including REVPAR, profit margin and earning trends; statements concerning the number of lodging properties expected to be added in future years; expected investment spending; anticipated results from synthetic fuel operations; and similar statements concerning anticipated future events and expectations that are not historical facts. 

MARRIOTT INTERNATIONAL, INC. (NYSE: MAR - News) is a leading worldwide hospitality company with over 2,600 lodging properties in the United States and 68 other countries and territories. 

.

 
Contact:
Marriott International, Inc.
Also See: Marriott International, Inc. Reports 2nd Qtr Earnings of $125 million Compared with $129 million a Year Earlier; North American RevPAR Decreased 5% / Key Lodging Statistics / July 2003


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