MARRIOTT INTERNATIONAL, INC.
Financial Highlights
(in millions, except per share amounts)
16 Weeks Ended 16 Weeks Ended
December 30, 2005 December 31, 2004
-------------------- -------------------- Percent
Synthetic
Synthetic Better/
Lodging Fuel Total Lodging Fuel Total (Worse)
------- ------ ----- ------- ------ ----- -------
REVENUES
Base management fees
$155 $- $155 $133
$- $133 17
Franchise fees
103 - 103
89 - 89
16
Incentive management fees
69 - 69
52 - 52
33
Owned, leased, corporate
housing and other(1)
361 - 361 239
- 239 51
Timeshare interval sales
and services(2)
413 - 413 349
- 349 18
Cost reimbursements(3)
2,423 - 2,423 2,156
- 2,156 12
Synthetic fuel
- 117 117 -
123 123 (5)
------- ------ ----- ------- ------ -----
Total Revenues
3,524 117 3,641 3,018 123
3,141 16
OPERATING COSTS AND EXPENSES
Owned, leased and corporate
housing - direct(4)
298 - 298 201
- 201 (48)
Timeshare - direct
357 - 357 293
- 293 (22)
Reimbursed costs
2,423 - 2,423 2,156
- 2,156 (12)
General, administrative
and other(5)
196 - 196 222
- 222 12
Synthetic fuel
- 146 146 -
160 160 9
------- ------ ----- ------- ------ -----
Total Expenses
3,274 146 3,420 2,872 160
3,032 (13)
------- ------ ----- ------- ------ -----
OPERATING INCOME (LOSS)
$250 $(29) 221 $146 $(37)
109 103
======= ====== ======= ======
Gains and other income(6)
84
69 22
Interest expense
(37)
(30) (23)
Interest income
14
48 (71)
Reversal of provision for
loan losses
-
8 (100)
Equity in earnings/
(losses) - Other(7)
18
(5) 460
----
----
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST
300
199 51
Provision for income taxes
(76)
(21) (262)
----
----
INCOME BEFORE MINORITY
INTEREST
224
178 26
Minority interest
13
10 30
----
----
INCOME FROM CONTINUING
OPERATIONS
237
188 26
DISCONTINUED OPERATIONS
-
1 (100)
----
----
NET INCOME
$237
$189 25
====
====
EARNINGS PER SHARE - Basic
Earnings from continuing
operations
$1.14
$0.84 36
Earnings from discontinued
operations
-
- *
----
----
EARNINGS PER SHARE - Basic
$1.14
$0.84 36
====
====
EARNINGS PER SHARE - Diluted
Earnings from continuing
operations
$1.07
$0.79 35
Earnings from discontinued
operations
-
- *
----
----
EARNINGS PER SHARE - Diluted
$1.07
$0.79 35
====
====
Basic Shares
207.3
224.5
Diluted Shares
220.8
239.1
* Percent cannot be calculated.
(1) Owned, leased, corporate housing
and other revenue includes revenue
from the properties
we own or lease, revenue from our ExecuStay
business,
land rent income and other revenue.
(2) Timeshare interval sales and services
includes total timeshare
revenue except
for base fees, cost reimbursements, gains, and joint
venture earnings
(losses).
(3) Cost reimbursements include reimbursements
from lodging properties
for Marriott
funded operating expenses.
(4) Owned, leased and corporate housing
-- direct expenses include
operating
expenses related to our owned or leased hotels, including
lease payments,
pre-opening expenses and depreciation, plus expenses
related to
our ExecuStay business.
(5) General, administrative and other
expenses include the overhead
costs allocated
to our lodging business segments (including ExecuStay
and Timeshare)
and our unallocated corporate overhead costs and
general expenses.
(6) Gains and other income includes
gains on the sale of real estate,
gains from
the sale of joint ventures, income related to our cost
method joint
ventures and the earn-out payments we made to the
previous owner
of the synthetic fuel operations and earn-out payments
we received
from our synthetic fuel joint venture partner.
(7) Equity in earnings/(losses) --
Other includes our equity in earnings
(losses) of
unconsolidated joint ventures.
MARRIOTT INTERNATIONAL, INC.
Financial Highlights
(in millions, except per share amounts)
52 Weeks Ended 52 Weeks Ended
December 30, 2005 December 31, 2004
-------------------- -------------------- Percent
Synthetic
Synthetic Better/
Lodging Fuel Total Lodging Fuel Total (Worse)
------- ------ ----- ------- ------ ----- -------
REVENUES
Base management fees
$497 $- $497 $435
$- $435 14
Franchise fees
329 - 329
296 - 296
11
Incentive management
fees
201 - 201
142 - 142
42
Owned, leased, corporate
housing and other(1)
944 - 944
730 - 730
29
Timeshare interval sales
and services(2)
1,487 - 1,487 1,247
- 1,247 19
Cost reimbursements(3)
7,671 - 7,671 6,928
- 6,928 11
Synthetic fuel
- 421 421
- 321 321 31
------- ------ ------ ------ ------ ------
Total Revenues
11,129 421 11,550 9,778 321
10,099 14
OPERATING COSTS AND
EXPENSES
Owned, leased and
corporate housing -
direct(4)
778 - 778
629 - 629 (24)
Timeshare - direct
1,228 - 1,228 1,039
- 1,039 (18)
Reimbursed costs
7,671 - 7,671 6,928
- 6,928 (11)
General, administrative
and other(5)
753 - 753
607 - 607 (24)
Synthetic fuel
- 565 565
- 419 419 (35)
------- ------ ------ ------ ------ ------
Total Expenses
10,430 565 10,995 9,203 419
9,622 (14)
------- ------ ------ ------ ------ ------
OPERATING INCOME (LOSS)
$699 $(144) 555 $575 $(98)
477 16
======= ====== ====== ======
Gains and other income(6)
181
164 10
Interest expense
(106)
(99) (7)
Interest income
79
146 (46)
(Provision for)/reversal
of provision for loan
losses
(28)
8 (450)
Equity in losses -
Synthetic Fuel(7)
-
(28) 100
Equity in earnings/
(losses) - Other(8)
36
(14) 357
-----
-----
INCOME BEFORE INCOME
TAXES AND MINORITY
INTEREST
717
654 10
Provision for income
taxes
(94)
(100) 6
-----
-----
INCOME BEFORE MINORITY
INTEREST
623
554 12
Minority interest
45
40 13
-----
-----
INCOME FROM CONTINUING
OPERATIONS
668
594 12
DISCONTINUED OPERATIONS
1
2 (50)
-----
-----
NET INCOME
$669
$596 12
=====
=====
EARNINGS PER SHARE -
Basic
Earnings from
continuing
operations
$3.09
$2.62 18
Earnings from
discontinued
operations
-
0.01 (100)
-----
-----
EARNINGS PER SHARE -
Basic
$3.09
$2.63 17
=====
=====
EARNINGS PER SHARE -
Diluted
Earnings from
continuing
operations
$2.89
$2.47 17
Earnings from
discontinued
operations
-
0.01 (100)
-----
-----
EARNINGS PER SHARE -
Diluted
$2.89
$2.48 17
=====
=====
Basic Shares
216.4
226.6
Diluted Shares
231.2
240.5
(1) Owned, leased, corporate housing
and other revenue includes revenue
from the properties
we own or lease, revenue from our ExecuStay
business,
land rent income and other revenue.
(2) Timeshare interval sales and services
includes total timeshare revenue
except for
base fees, cost reimbursements, gains, and joint venture
earnings (losses).
(3) Cost reimbursements include reimbursements
from lodging properties for
Marriott funded
operating expenses.
(4) Owned, leased and corporate housing
-- direct expenses include
operating
expenses related to our owned or leased hotels, including
lease payments,
pre-opening expenses and depreciation, plus expenses
related to
our ExecuStay business.
(5) General, administrative and other
expenses include the overhead costs
allocated
to our lodging business segments (including ExecuStay and
Timeshare)
and our unallocated corporate overhead costs and general
expenses.
(6) Gains and other income includes
gains on the sale of real estate,
gains from
the sale of joint ventures, income related to our cost
method joint
ventures and the earn-out payments we made to the
previous owner
of the synthetic fuel operations and earn-out payments
we received
from our synthetic fuel joint venture partner.
(7) Equity in losses -- Synthetic fuel
includes our share of the equity in
earnings of
the synthetic fuel joint ventures and the net earn-out
payments made
to our synthetic fuel joint venture partner from January
3, 2004 through
March 25, 2004. Beginning March 26, 2004, the
synthetic
fuel operations were consolidated as a result of adopting
FIN 46®,
"Consolidation of Variable Interest Entities."
(8) Equity in earnings/(losses) --
Other includes our equity in earnings/
(losses) of
unconsolidated joint ventures.
Marriott International, Inc.
Business Segments
($ in millions)
Sixteen Weeks Ended
Percent
--------------------------------------- Better/
December 30, 2005 December 31, 2004 (Worse)
------------------- ------------------- ---------
REVENUES
Full-Service
$2,442
$2,099 16%
Select-Service
397
330 20%
Extended-Stay
197
170 16%
Timeshare
488
419 16%
------------------- -------------------
Total lodging(1)
3,524
3,018 17%
Synthetic fuel
117
123 -5%
------------------- -------------------
Total
$3,641
$3,141 16%
=================== ===================
INCOME FROM CONTINUING
OPERATIONS
Full-Service
$199
$134 49%
Select-Service
79
36 119%
Extended-Stay
22
18 22%
Timeshare
78
68 15%
------------------- -------------------
Total lodging
financial
results(1)
378
256 48%
Synthetic fuel (after-tax)
33
34 -3%
Unallocated corporate
expenses
(40)
(47) 15%
Interest income, provision
for loan losses and
interest expense
(23)
26 -188%
Income taxes (excluding
Synthetic fuel)
(111)
(81) -37%
------------------- -------------------
Total
$237
$188 26%
=================== ===================
(1) We consider lodging revenues and
lodging financial results to be
meaningful
indicators of our performance because they measure our
growth in
profitability as a lodging company and enable investors to
compare the
sales and results of our lodging operations to those of
other lodging
companies.
Marriott International, Inc.
Business Segments
($ in millions)
Fifty-Two Weeks Ended
Percent
--------------------------------------- Better/
December 30, 2005 December 31, 2004 (Worse)
------------------- ------------------- ---------
REVENUES
Full-Service
$7,535
$6,611 14%
Select-Service
1,265
1,118 13%
Extended-Stay
608
547 11%
Timeshare
1,721
1,502 15%
------------------- -------------------
Total lodging(1)
11,129
9,778 14%
Synthetic fuel
421
321 31%
------------------- -------------------
Total
$11,550
$10,099 14%
=================== ===================
INCOME FROM CONTINUING
OPERATIONS
Full-Service
$474
$426 11%
Select-Service
209
140 49%
Extended-Stay
65
66 -2%
Timeshare
271
203 33%
------------------- -------------------
Total lodging
financial
results(1)
1,019
835 22%
Synthetic fuel (after-tax)
125
107 17%
Unallocated corporate
expenses
(137)
(138) 1%
Interest income, provision
for loan losses and
interest expense
(55)
55 -200%
Income taxes (excluding
Synthetic fuel)
(284)
(265) -7%
------------------- -------------------
Total
$668
$594 12%
=================== ===================
(1) We consider lodging revenues and
lodging financial results to be
meaningful
indicators of our performance because they measure our
growth in
profitability as a lodging company and enable investors to
compare the
sales and results of our lodging operations to those of
other lodging
companies.
MARRIOTT
INTERNATIONAL, INC.
Total Lodging Products(1)
-------------------------------------------------------------------------
Number of Number
of
Properties Rooms/Suites
---------- ------------
Change vs.
Change vs.
Dec. 30, Dec. 31, Dec. 30, Dec. 31,
Brand
2005 2004
2005 2004
---------------------------------
---------------------------------------
Full-Service Lodging
--------------------
Marriott Hotels
& Resorts 507
17 183,455 4,296
The Ritz-Carlton
59 2
19,285 674
Renaissance
Hotels & Resorts 137
4 48,232 773
Bulgari Hotel
& Resort
1 -
58 -
Ramada International
3 (1)
532 (195)
Select-Service Lodging
----------------------
Courtyard
692 36
99,669 5,666
Fairfield
Inn
524 1
47,999 (711)
SpringHill
Suites
137 12
16,002 1,452
Extended-Stay Lodging
---------------------
Residence
Inn
490 27
58,444 3,385
TownePlace
Suites
122 7
12,303 593
Marriott Executive
Apartments 17
3 2,852
381
Timeshare(2)
-----------
Marriott Vacation
Club
International
44 1
9,401 569
The Ritz-Carlton
Club
4 -
292 31
Grand Residences
by Marriott 2
- 313
65
Horizons by
Marriott Vacation
Club
2 -
328 -
------------------ -------------------
Total
2,741 109 499,165
16,979
================== ===================
(1) Total Lodging Products excludes
the 1,850 corporate housing rental
units.
(2) Includes products in active sales
which are not ready for occupancy.
MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
Comparable Company-Operated North American Properties
--------------------------------------------------------------------------
Sixteen Weeks Ended December 30, 2005
and December 31, 2004
------------------------------------------------
Average
REVPAR Occupancy
Daily Rate
------ ---------
----------
Brand
2005 vs. 2004 2005 vs. 2004 2005 vs.
2004
--------------------------------------------------------------------------
Marriott Hotels &
Resorts
$114.74 10.9% 71.1% 1.8% pts. $161.39
8.2%
The Ritz-Carlton(2)
$199.80 12.9% 68.9% 3.8% pts. $290.17
6.7%
Renaissance Hotels &
Resorts
$109.95 15.1% 70.1% 3.9% pts. $156.77
8.8%
Composite - Full-Service $122.82
11.8% 70.7% 2.3% pts. $173.68 8.2%
Residence Inn
$85.47 9.7% 78.5% 1.7% pts. $108.87
7.2%
Courtyard
$74.16 10.2% 68.2% 0.5% pts. $108.67
9.4%
TownePlace Suites
$52.54 11.6% 73.3% 2.6% pts. $71.70
7.5%
SpringHill Suites
$68.79 14.0% 72.3% 1.7% pts. $95.13
11.3%
Composite - Select-
Service & Extended-Stay
$75.34 10.4% 71.5% 1.1% pts. $105.33
8.7%
Composite - All(1)
$103.86 11.4% 71.0% 1.8% pts. $146.19
8.5%
Comparable Systemwide North American Properties
--------------------------------------------------------------------------
Sixteen Weeks Ended December 30, 2005
and December 31, 2004
------------------------------------------------
Average
REVPAR Occupancy
Daily Rate
------ ---------
----------
Brand
2005 vs. 2004 2005 vs. 2004 2005 vs.
2004
--------------------------------------------------------------------------
Marriott Hotels &
Resorts
$102.57 10.5% 69.0% 1.8% pts. $148.64
7.6%
The Ritz-Carlton(2)
$199.80 12.9% 68.9% 3.8% pts. $290.17
6.7%
Renaissance Hotels &
Resorts
$102.29 14.5% 69.7% 3.0% pts. $146.67
9.6%
Composite - Full-Service $109.26
11.3% 69.1% 2.1% pts. $158.11 7.9%
Residence Inn
$81.62 9.1% 77.7% 1.9% pts. $105.00
6.4%
Courtyard
$75.08 10.2% 69.9% 1.2% pts. $107.36
8.3%
Fairfield Inn
$50.48 13.5% 67.4% 3.2% pts. $74.94
8.1%
TownePlace Suites
$54.09 11.8% 74.1% 2.2% pts. $72.99
8.6%
SpringHill Suites
$65.66 13.4% 72.5% 2.7% pts. $90.54
9.2%
Composite - Select-
Service & Extended-Stay
$69.61 10.6% 71.8% 2.0% pts. $96.91
7.6%
Composite - All(1)
$86.14 11.0% 70.7% 2.0% pts. $121.85
7.8%
(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. Full-Service
composite statistics include properties for
Marriott Hotels
& Resorts, Renaissance Hotels & Resorts and The Ritz-
Carlton brands.
Select-Service and Extended-Stay composite statistics
include properties
for the Courtyard, Residence Inn, TownePlace
Suites, Fairfield
Inn and SpringHill Suites brands.
(2) Statistics for The Ritz-Carlton
are for September through December.
MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
Comparable Company-Operated North American Properties
--------------------------------------------------------------------------
Fifty-Two Weeks Ended December 30, 2005
and December 31, 2004
------------------------------------------------
Average
REVPAR Occupancy
Daily Rate
------ ---------
----------
Brand
2005 vs. 2004 2005 vs. 2004 2005 vs.
2004
--------------------------------------------------------------------------
Marriott Hotels &
Resorts
$113.31 9.0% 73.2% 1.0% pts. $154.84
7.5%
The Ritz-Carlton(2)
$204.45 12.2% 71.0% 1.9% pts. $287.99
9.2%
Renaissance Hotels &
Resorts
$108.01 12.5% 72.1% 3.0% pts. $149.90
7.8%
Composite - Full-Service $121.27
10.0% 72.8% 1.4% pts. $166.58 7.8%
Residence Inn
$86.46 8.6% 80.0% 1.0% pts. $108.09
7.3%
Courtyard
$75.32 9.1% 70.7% -0.2% pts. $106.50
9.4%
TownePlace Suites
$53.18 9.1% 75.4% 1.1% pts. $70.52
7.4%
SpringHill Suites
$70.36 16.3% 74.9% 3.4% pts. $93.89
11.0%
Composite - Select-
Service & Extended-Stay
$76.49 9.4% 73.8% 0.5% pts. $103.70
8.7%
Composite - All(1)
$103.29 9.8% 73.2% 1.0% pts. $141.14
8.2%
Comparable Systemwide North American Properties
--------------------------------------------------------------------------
Fifty-Two Weeks Ended December 30, 2005
and December 31, 2004
------------------------------------------------
Average
REVPAR Occupancy
Daily Rate
------ ---------
----------
Brand
2005 vs. 2004 2005 vs. 2004 2005 vs.
2004
--------------------------------------------------------------------------
Marriott Hotels &
Resorts
$102.21 8.7% 71.0% 1.2% pts. $144.03
6.9%
The Ritz-Carlton(2)
$204.45 12.2% 71.0% 1.9% pts. $287.99
9.2%
Renaissance Hotels &
Resorts
$100.45 12.4% 71.3% 2.6% pts. $140.89
8.3%
Composite - Full-Service $108.51
9.6% 71.0% 1.4% pts. $152.81 7.3%
Residence Inn
$83.47 8.1% 79.5% 1.1% pts. $104.99
6.7%
Courtyard
$76.31 8.9% 72.2% 0.6% pts. $105.72
7.9%
Fairfield Inn
$51.76 11.7% 69.5% 2.3% pts. $74.47
8.1%
TownePlace Suites
$54.62 10.8% 75.8% 1.1% pts. $72.11
9.3%
SpringHill Suites
$66.88 13.5% 74.0% 2.9% pts. $90.43
9.1%
Composite - Select-
Service &
Extended-Stay
$70.97 9.5% 73.8% 1.3% pts. $96.11
7.6%
Composite - All(1)
$86.56 9.5% 72.7% 1.3% pts. $119.12
7.5%
(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. Full-Service
composite statistics include properties for
Marriott Hotels
& Resorts, Renaissance Hotels & Resorts and The Ritz-
Carlton brands.
Select-Service and Extended-Stay composite statistics
include properties
for the Courtyard, Residence Inn, TownePlace
Suites, Fairfield
Inn and SpringHill Suites brands.
(2) Statistics for The Ritz-Carlton
are for January through December.
Comparable Company-Operated International Properties (1, 2)
--------------------------------------------------------------------------
Four Months Ended December 31, 2005 and December 31, 2004
---------------------------------------------------------
Average
REVPAR Occupancy
Daily Rate
------ ---------
----------
Region/Brand(3)
2005 vs. 2004 2005 vs. 2004 2005 vs.
2004
--------------------------------------------------------------------------
Caribbean & Latin
America
$102.05 10.2% 72.1% 3.9% pts. $141.62
4.3%
Continental Europe
$99.87 3.2% 72.9% 0.4% pts. $137.07
2.7%
United Kingdom
$141.92 4.5% 77.8% -0.5% pts. $182.44
5.2%
Middle East & Africa
$88.93 28.6% 69.6% 0.8% pts. $127.84
27.2%
Asia Pacific(4)
$94.14 10.8% 76.7% 0.1% pts. $122.79
10.7%
The Ritz-Carlton
International
$150.08 12.0% 72.3% 1.1% pts. $207.67
10.2%
Total International(5)
$105.37 9.7% 74.5% 0.9% pts. $141.39
8.5%
Worldwide(6)
$104.25 10.9% 72.0% 1.6% pts. $144.89
8.5%
Comparable Systemwide International Properties (1, 2)
--------------------------------------------------------------------------
Four Months Ended December 31, 2005 and December 31, 2004
----------------------------------------------------------
Average
REVPAR Occupancy
Daily Rate
------ ---------
----------
Region/Brand(3)
2005 vs. 2004 2005 vs. 2004 2005 vs. 2004
--------------------------------------------------------------------------
Caribbean & Latin America
$95.64 10.7% 73.7% 5.8% pts. $129.84
1.9%
Continental Europe
$99.99 7.0% 72.6% 1.7% pts. $137.70
4.4%
United Kingdom
$124.31 4.5% 77.8% 0.1% pts. $159.74
4.4%
Middle East & Africa
$87.53 31.3% 69.8% 3.0% pts. $125.42 25.7%
Asia Pacific(4)
$98.04 14.4% 77.7% 0.9% pts. $126.18 13.1%
The Ritz-Carlton
International
$150.08 12.0% 72.3% 1.1% pts. $207.67 10.2%
Total International(5)
$103.88 11.0% 74.8% 1.3% pts. $138.87
9.1%
Worldwide(6)
$89.18 11.0% 71.4% 1.9% pts. $124.91
8.0%
(1) International financial results
are reported on a period-end basis,
while International
statistics are reported on a month-end basis.
(2) Statistics are in constant dollars
and include results for September
through December.
Excludes North American (except for Worldwide).
(3) Regional information includes the
Marriott Hotels & Resorts,
Renaissance
Hotels & Resorts and Courtyard brands. Does not include
The Ritz-Carlton
brand.
(4) Excludes Hawaii.
(5) Includes Hawaii.
(6) Includes international statistics
for the four calendar months ended
December 31,
2005 and December 31, 2004, and North American statistics
for the sixteen
weeks ended December 30, 2005 and December 31, 2004.
Includes the
Marriott Hotels & Resorts, Renaissance Hotels & Resorts,
The Ritz-Carlton,
Courtyard, Residence Inn, TownePlace Suites,
Fairfield
Inn and SpringHill Suites brands.
Comparable Company-Operated International Properties (1, 2)
--------------------------------------------------------------------------
Twelve Months Ended December 31, 2005 and December 31, 2004
------------------------------------------------------------
Average
REVPAR Occupancy
Daily Rate
------ ---------
----------
Region/Brand(3)
2005 vs. 2004 2005 vs. 2004 2005 vs. 2004
--------------------------------------------------------------------------
Caribbean & Latin America $107.24
12.1% 73.6% 3.9% pts. $145.78 6.3%
Continental Europe
$96.69 3.1% 70.5% 0.5% pts. $137.09
2.4%
United Kingdom
$140.49 4.8% 76.9% 0.1% pts. $182.61
4.8%
Middle East & Africa
$84.96 29.5% 73.2% 4.0% pts. $116.07 22.5%
Asia Pacific(4)
$86.63 13.1% 75.8% 0.8% pts. $114.34 12.0%
The Ritz-Carlton
International
$143.30 18.3% 71.6% 3.4% pts. $200.08 12.7%
Total International(5)
$101.84 11.0% 74.0% 1.5% pts. $137.62
8.7%
Worldwide(6)
$102.94 10.1% 73.4% 1.2% pts. $140.26
8.3%
Comparable Systemwide International Properties (1, 2)
--------------------------------------------------------------------------
Twelve Months Ended December 31, 2005 and December 31, 2004
-------------------------------------------------------------
Average
REVPAR Occupancy
Daily Rate
------ ---------
----------
Region/Brand(3)
2005 vs. 2004 2005 vs. 2004 2005 vs. 2004
--------------------------------------------------------------------------
Caribbean & Latin
America
$101.02 13.1% 73.0% 4.6% pts. $138.31
5.9%
Continental Europe
$95.10 5.9% 68.6% 1.0% pts. $138.63
4.3%
United Kingdom
$120.53 3.1% 74.0% -1.1% pts. $162.96
4.6%
Middle East & Africa
$82.10 29.3% 71.7% 4.5% pts. $114.45
21.2%
Asia Pacific(4)
$90.79 14.7% 76.5% 1.5% pts. $118.63
12.5%
The Ritz-Carlton
International
$143.30 18.3% 71.6% 3.4% pts. $200.08
12.7%
Total International(5)
$100.02 11.9% 73.2% 1.8% pts. $136.57
9.1%
Worldwide(6)
$88.72 9.9% 72.8% 1.4% pts. $121.94
7.8%
(1) International financial results
are reported on a period-end basis,
while International
statistics are reported on a month-end basis.
(2) Statistics are in constant dollars
and include results for January
through December.
Excludes North American (except for Worldwide).
(3) Regional information includes
the Marriott Hotels & Resorts,
Renaissance
Hotels & Resorts and Courtyard brands. Does not include
The Ritz-Carlton
brand.
(4) Excludes Hawaii.
(5) Includes Hawaii.
(6) Includes international statistics
for the twelve calendar months ended
December 31,
2005 and December 31, 2004, and North American statistics
for the fifty-two
weeks ended December 30, 2005 and December 31, 2004.
Includes the
Marriott Hotels & Resorts, Renaissance Hotels & Resorts,
The Ritz-Carlton,
Courtyard, Residence Inn, TownePlace Suites,
Fairfield
Inn and SpringHill Suites brands.
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
($ in millions)
We consider lodging operating income to be a meaningful
indicator of our performance because it measures our growth in profitability
as a lodging company and enables investors to compare the operating income
related to our lodging segments to the operating income of other lodging
companies. However, lodging operating income is a non-GAAP financial measure
and is not an alternative to operating income or any other operating measure
prescribed by United States generally accepted accounting principles.
The reconciliation of operating income
to lodging operating income is as
follows:
Fiscal Year 2005
--------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
------- ------- ------- ------- ------
Operating income as reported
$ $158 $ $41 $ $135 $221
$555
Add back: Synthetic
fuel
operating
loss
45 36 34
29 144
------- ------- ------- ------- ------
Lodging operating
income $ 203
$ 77 $ 169 $250
$699
======= ======= ======= ======= ======
Fiscal Year 2004
-------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
------- ------- ------- ------- -----
Operating income as reported
$151 $118 $99
$109 $477
Add back: Synthetic
fuel
operating
loss
- 30 31
37 98
------- ------- ------- ------- ------
Lodging operating
income
$151 $148 $130 $146
$575
======= ======= ======= ======= ======
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
(in millions, except per share amounts)
The table below details the impact on our continuing
operations of our Synthetic Fuel segment for the 2005 and 2004 fourth quarters.
Our management evaluates the figures presented in the "Excluding Synthetic
Fuel" columns because management expects the Synthetic Fuel segment will
no longer have a material impact on our business after the Internal Revenue
Code Section 29 synthetic fuel tax credits expire at the end of 2007 or
earlier if the company elects to make permanent its present synthetic fuel
production shutdown and because the presentation reflects the results of
our core lodging operations. Management also believes that these presentations
facilitate the comparison of our results with the results of other lodging
companies.
However, the figures presented in the "Excluding Synthetic
Fuel" columns are all non-GAAP financial measures, may be calculated and/or
presented differently than presentations of other companies and are not
alternatives to operating income, income from continuing operations, net
income, earnings per share or any other operating measure prescribed by
United States generally accepted accounting principles.
Fourth Quarter 2005
Continuing Operations
-----------------------------------------
Income from Synthetic
Continuing Fuel
Excluding
Operations Impact Synthetic Fuel
------------- ----------- ---------------
Operating income (loss)
$221 $(29)
$250
Gains and other income
84 12
72
Interest income, provision
for loan losses
and interest
expense
(23) -
(23)
Equity in earnings/(losses)
18 -
18
------------- ----------- ---------------
Pre-tax income (loss)
300 (17)
317
------------- ----------- ---------------
Tax (Provision)/Benefit
(109) 2
(111)
Tax Credits
33 33
-
------------- ----------- ---------------
Total Tax (Provision)/Benefit
(76) 35
(111)
------------- ----------- ---------------
Income from Continuing Operations
before Minority Interest
224 18
206
Minority Interest
13 15
(2)
------------- ----------- ---------------
Income from Continuing
Operations
$237 $33
$204
============= =========== ===============
Diluted Shares
220.8 220.8
220.8
Earnings per Share from
Continuing Operations
-
Diluted
$1.07 $0.15
0.92
Tax Rate
25.3%
35.0%
Fourth Quarter 2004
Continuing Operations
-----------------------------------------
Income from Synthetic
Continuing Fuel
Excluding
Operations Impact Synthetic Fuel
------------- ----------- ---------------
Operating income (loss)
$109 $(37)
$146
Gains and other income
69 -
69
Interest income, provision
for
loan losses and
interest expense 26
- 26
Equity in earnings/(losses)
(5) -
(5)
------------- ----------- ---------------
Pre-tax income (loss)
199 (37)
236
------------- ----------- ---------------
Tax (Provision)/Benefit
(72) 9
(81)
Tax Credits
51 51
-
------------- ----------- ---------------
Total Tax (Provision)/Benefit
(21) 60
(81)
------------- ----------- ---------------
Income from Continuing
Operations before Minority
Interest
178 23
155
Minority Interest
10 11
(1)
------------- ----------- ---------------
Income from Continuing
Operations
$188 $34
$154
============= =========== ===============
Diluted Shares
239.1 239.1
239.1
Earnings per Share from
Continuing Operations
- Diluted $0.79 $0.14
$0.65
Tax Rate
10.4%
34.3%
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
(in millions, except per share amounts)
The table below details the impact on our continuing
operations of our Synthetic Fuel segment for the 52 weeks ended December
30, 2005 and December 31, 2004. Our management evaluates the figures presented
in the "Excluding Synthetic Fuel" columns because management expects the
Synthetic Fuel segment will no longer have a material impact on our business
after the Internal Revenue Code Section 29 synthetic fuel tax credits expire
at the end of 2007 or earlier if the company elects to make permanent its
present synthetic fuel production shutdown and because the presentation
reflects the results of our core lodging operations. Management also believes
that these presentations facilitate the comparison of our results with
the results of other lodging companies.
However, the figures presented in the "Excluding Synthetic
Fuel" columns are all non-GAAP financial measures, may be calculated and/or
presented differently than presentations of other companies and are not
alternatives to operating income, income from continuing operations, net
income, earnings per share or any other operating measure prescribed by
United States generally accepted accounting principles.
Fiscal Year 2005
Continuing Operations
------------------------------------
Income from Synthetic Excluding
Continuing Fuel
Synthetic
Operations Impact
Fuel
----------- --------- ---------
Operating income (loss)
$555 $(144)
$699
Gains and other income
181 32
149
Interest income, provision for
loan
losses and interest expense
(55) -
(55)
Equity in earnings/(losses)
36 -
36
--------- ------- ---------
Pre-tax income (loss)
717 (112)
829
--------- ------- ---------
Tax (Provision)/Benefit
(261) 23
(284)
Tax Credits
167 167
-
--------- ------- ---------
Total Tax (Provision)/Benefit
(94) 190
(284)
--------- ------- ---------
Income from Continuing Operations
before Minority Interest
623 78
545
Minority Interest
45 47
(2)
--------- ------- ---------
Income from Continuing Operations
$668 $125
$543
========= ======= =========
Diluted Shares
231.2 231.2
231.2
Earnings per Share from Continuing
Operations - Diluted
$2.89 $0.54
$2.35
Tax Rate
13.1%
34.3%
Fiscal Year 2004
Continuing Operations
------------------------------------
Income from Synthetic Excluding
Continuing Fuel
Synthetic
Operations Impact
Fuel
----------- --------- ---------
Operating income (loss)
$477 $(98)
$575
Gains and other income
164 28
136
Interest income, provision for
loan
losses and interest expense
55 -
55
Equity in earnings/(losses)
(42) (28)
(14)
--------- ------- ---------
Pre-tax income (loss)
654 (98)
752
--------- ------- ---------
Tax (Provision)/Benefit
(244) 21
(265)
Tax Credits
144 144
-
--------- ------- ---------
Total Tax (Provision)/Benefit
(100) 165
(265)
--------- ------- ---------
Income from Continuing Operations
before
Minority Interest
554 67
487
Minority Interest
40 40
-
--------- ------- ---------
Income from Continuing Operations
$594 $107
$487
========= ======= =========
Diluted Shares
240.5 240.5
240.5
Earnings per Share from Continuing
Operations - Diluted
$2.47 $0.44
$2.03
Tax Rate
15.3%
35.2%
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
(in millions, except per share amounts)
The table below details the impact on our continuing
operations of the $94 million charge (2005 second quarter) associated with
the agreements we entered into with CTF Holdings Ltd. (the "CTF transaction")
and the $17 million leveraged lease impairment charge (2005 third quarter).
The $94 million charge recorded in connection with the CTF transaction
was primarily non-cash and primarily due to the write-off of deferred contract
acquisition costs associated with the termination of management agreements.
In addition, we incurred a material charge of $17 million associated with
the impairment of our one investment in an aircraft leveraged lease. We
do not consider the leveraged lease investment to be related to our core
business.
Our management evaluates the figures in the "Excluding
CTF and Leveraged Lease Charges" column because they allow for year-over-year
comparisons relative to our on-going operations before material charges
and believes that this presentation facilitates the comparison of our results
with the results of other lodging companies. Management evaluates income-related
financial measures that exclude the leveraged lease impairment charge in
order to better assess the period-over-period performance of our core operating
businesses. Management evaluates income-related financial measures that
exclude the CTF transaction charge in order to better assess the Company's
period-over-period performance of our lodging operations in light of the
fact that the CTF transaction charge does not reflect the fact that new
management agreements, entered into as part of the CTF transaction, substantially
replaced the old management agreements the termination of which make up
the bulk of the CTF transaction charge.
However, the figures presented in the "Excluding CTF
and Leveraged Lease Charges" column are all non-GAAP financial measures,
may be calculated and/or presented differently than presentations of other
companies, and are not alternatives to operating income, income from continuing
operations, net income, earnings per share or any other operating measure
prescribed by United States generally accepted accounting principles.
Fiscal Year 2005
---------------------------------------------------
Excluding
Income CTF
Leveraged CTF and
from Transaction
Lease Leveraged
Continuing Charge
Charge Lease
Operations
Charges
---------- -----------
--------- ---------
Operating income
(loss)
$ 555 $
(94) $
- $ 649
Gains and other
income
181
-
- 181
Interest income,
provision for
loan losses and
interest expense
(55)
-
(17) (38)
Equity in earnings
36
-
- 36
---------- -----------
---------- --------
Pre-tax income
(loss)
717 (94)
(17) 828
---------- -----------
---------- --------
Tax (Provision)/
Benefit
(261)
32
6 (299)
Tax Credits
167
-
- 167
---------- -----------
---------- --------
Total Tax (Provision)/
Benefit
(94)
32
6 (132)
---------- -----------
---------- --------
Income (Loss)
from Continuing
Operations before
Minority Interest
623 (62)
(11) 696
Minority Interest
45
-
- 45
---------- -----------
---------- --------
Income (Loss)
from Continuing
Operations
$ 668 $
(62) $ (11)
$ 741
========== ===========
========== ========
Diluted Shares
231.2 231.2
231.2 231.2
Earnings/(Loss) per
Share from
Continuing
Operations - Diluted
$2.89 $(0.27)
$(0.05) $3.21
Fiscal Year 2004
---------------------------------------------------
Excluding
Income CTF
Leveraged CTF and
from Transaction
Lease Leveraged
Continuing Charge
Charge Lease
Operations
Charges
---------- -----------
--------- ---------
Operating income
$ 477 $
- $ -
$ 477
Gains and other
income
164
-
- 164
Interest income,
provision for loan
losses and
interest expense
55
-
- 55
Equity in losses
(42)
-
- (42)
---------- -----------
---------- --------
Pre-tax income
654
-
- 654
Tax Provision
(244)
-
- (244)
Tax Credits
144
-
- 144
---------- -----------
---------- --------
Total Tax Provision
(100)
-
- (100)
---------- -----------
---------- --------
Income from Continuing
Operations before
Minority Interest
554
-
- 554
Minority Interest
40
-
- 40
---------- -----------
---------- --------
Income from
Continuing
Operations
$ $594 $
- $ -
$ 594
========== ===========
========== ========
Diluted Shares
240.5 240.5
240.5 240.5
Earnings per Share
from Continuing
Operations -
Diluted
$ $2.47
- $ -
$ 2.47
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
We adopted Statement of Financial Accounting Standard
No. 123 (revised 2004), "Share-Based Payment ("FAS No. 123R") at the beginning
of our 2006 fiscal year. We estimate the adoption of FAS No. 123R, using
the modified prospective method, will result in incremental pre-tax expense
in the 2006 first quarter of $9 million and total incremental pre-tax expense
for the entire 2006 fiscal year of $44 million.
Our management evaluates diluted earnings per share from
continuing operations excluding the impact of the Synthetic Fuel segment
and the adoption of FAS 123R because it allows for year-over-year comparisons
relative to our on-going lodging operations before material charges and
because management expects the Synthetic Fuel segment will no longer have
a material impact on our business after the Internal Revenue Code Section
29 synthetic fuel tax credits expire at the end of 2007 or earlier if the
company elects to make permanent its present synthetic fuel production
shutdown. Management believes that this presentation facilitates the comparison
of our results with the results of other lodging companies.
However, diluted earnings per share from continuing operations
excluding the impact of the Synthetic Fuel segment and the adoption of
FAS 123R is a non-GAAP financial measure, may be calculated and/or presented
differently than presentations of other companies and are not alternatives
to operating income, income from continuing operations, net income, earnings
per share or any other operating measure prescribed by United States generally
accepted accounting principles.
Range
--------------------------------------
Estimated Estimated
First Quarter 2006 First Quarter 2006
------------------- ------------------
Diluted earnings
per share from
continuing
operations
excluding
the impact of the
Synthetic
Fuel segment
$ 0.67
$ 0.73
Add back estimated
eps impact
associated
with the adoption
of FAS No.
123R
0.03
0.03
------------------- ------------------
Diluted earnings
per share from
continuing
operations excluding
the impact
of the Synthetic
Fuel segment
and the adoption
of FAS No.
123R
$ 0.70
$ 0.76
=================== ==================
Range
------------------------------------
Estimated Estimated
Full Year 2006 Full Year 2006
------------------- ----------------
Diluted earnings
per share from
continuing
operations
excluding
the impact of the
Synthetic
Fuel segment
$ 2.95
$ 3.05
Add back estimated
eps impact
associated
with the adoption
of FAS No.
123R
0.13
0.13
------------------- ----------------
Diluted earnings
per share from
continuing
operations excluding
the impact
of the Synthetic
Fuel segment
and the adoption
of FAS No.
123R
$ $3.08
$ $3.18
=================== ================
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure
EBITDA
($ in millions)
Our management considers earnings before interest, taxes,
depreciation and amortization (EBITDA) to be an indicator of operating
performance because it can be used to measure our ability to service debt,
fund capital expenditures, and expand our business.
In the 2005 second quarter we recorded a $94 million
charge associated with the agreements we entered into with CTF Holdings
Ltd. (the "CTF transaction"). The $94 million charge was primarily non-cash
and due to the write-off of deferred contract acquisition costs associated
with the termination of management agreements. In addition, we incurred
a material charge of $17 million in the 2005 third quarter associated with
the impairment of our one investment in an aircraft leveraged lease. We
do not consider the leveraged lease investment to be related to our core
business. Management expects the Synthetic Fuel segment will no longer
have a material impact on our business after the Internal Revenue Code
Section 29 synthetic fuel tax credits expire at the end of 2007 or earlier
if the company elects to make permanent its present synthetic fuel production
shutdown.
Management evaluates Adjusted EBITDA which excludes the
aircraft leveraged lease impairment charge, discontinued operations and
the impact of our Synthetic Fuel segment in order to better assess the
period-over-period performance of our on-going core operating businesses.
Management evaluates Adjusted EBITDA which also excludes the CTF transaction
charge in order to better assess the Company's period-over-period performance
of our lodging operations in light of the fact that the CTF transaction
charge does not reflect the fact that new management agreements, entered
into as part of the CTF transaction, substantially replaced the old management
agreements the termination of which makes up the bulk of the CTF transaction
charge. Management also believes that these presentations facilitate the
comparison of our results with the results of other lodging companies.
However, EBITDA and Adjusted EBITDA
are non-GAAP financial measures, may
be calculated and/or presented differently than presentations
of other
companies, and are not alternatives to operating income,
income from
continuing operations, net income, cash flow from operations,
or any other
operating measure prescribed by United States generally
accepted accounting
principles.
Fiscal Year 2005
--------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
------- ------- ------- ------- ------
Net income
$ 145 $ 138 $ 149 $ 237
$ 669
Interest expense
24 21 24
37 106
Tax provision/(benefit) from
continuing operations
5 (20) 33
76 94
Tax provision from discontinued
operations
- -
1 - 1
Depreciation(1)
30 29 34
46 139
Amortization
7 7
7 7 28
Interest expense from unconsolidated
joint ventures
11 6
4 8 29
Depreciation and amortization from
unconsolidated joint ventures
12 9
7 11 39
------- ------- ------- ------- ------
EBITDA
$ 234 $ 190 $ 259 $ 422
$1,105
Synthetic fuel adjustment
42 22 (7)
(1) 56
Pre-tax gain discontinued
operations
- - (2)
- (2)
Non-recurring charges -
CTF acquisition charge
- 94
- - 94
Leveraged lease charge
- - 17
- 17
------- ------- ------- ------- ------
Adjusted EBITDA
$ 276 $ 306 $ 267 $ 421
$1,270
======= ======= ======= ======= ======
Increase over 2004 Adjusted
EBITDA
14% 10% 12%
23% 15%
The following items make up the
synthetic fuel adjustment:
Pre-tax synthetic fuel losses
$ 54 $ 28 $ 13 $
17 $ 112
Pre-tax minority interest -
synthetic fuel
(10) (4) (18)
(15) (47)
Synthetic fuel depreciation
(2) (2) (2)
(3) (9)
------- ------- ------- ------- ------
EBITDA adjustment for synthetic
fuel
$ 42 $ 22 $ (7)
(1)$ 56
======= ======= ======= ======= ======
(1) Does not include depreciation reimbursed
by third party owners.
Fiscal Year 2004
--------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
------- ------- ------- ------- ------
Net income
$ 114 $ 160 $ 133 $ 189
$ 596
Interest expense
22 24 23
30 99
Tax provision continuing
operations
18 33 28
21 100
Tax provision discontinued
operations
- -
1 - 1
Depreciation
32 29 32
40 133
Amortization
7 8
7 11 33
Interest expense from unconsolidated
joint ventures
10 11
9 15 45
Depreciation and amortization from
unconsolidated joint ventures
13 9
13 17 52
------- ------- ------- ------- ------
EBITDA
$ 216 $ 274 $ 246 $ 323
$1,059
Synthetic fuel adjustment
28 5
(6) 21 48
Pre-tax gain discontinued
operations
(1) - (1)
(1) (3)
------- ------- ------- ------- ------
Adjusted EBITDA
$243 $279 $239 $343
$1,104
======= ======= ======= ======= ======
The following items make up the
synthetic fuel adjustment:
Pre-tax synthetic fuel losses
$ - $ 21 $
12 $ 37 $ 70
Pre-tax synthetic fuel equity
losses
28 -
- - 28
Pre-tax minority interest -
synthetic fuel
- (14) (15)
(11) (40)
Synthetic fuel depreciation
- (2) (3)
(5) (10)
------- ------- ------- ------- ------
EBITDA adjustment for synthetic
fuel
$ 28 $ 5 $
(6)$ 21 $ 48
======= ======= ======= ======= ====== |