MARRIOTT INTERNATIONAL, INC.
Financial Highlights
(in millions, except per share amounts)
12 Weeks Ended 12 Weeks Ended
June 16, 2006 June 17, 2005
----------------- -----------------
Percent
Synthetic Synthetic
Better/
Lodging Fuel Total Lodging Fuel Total (Worse)
------------------- ---------------------------
REVENUES
Base management fees
$134 $- $134 $123
$- $123 9
Franchise fees
93 - 93
78 - 78
19
Incentive management fees
77 - 77
52 - 52
48
Owned, leased, corporate
housing and other revenue(1)
272 - 272 180
- 180 51
Timeshare interval,
fractional and whole
ownership sales and services(2)
331 - 331 335
- 335 (1)
Cost reimbursements(3)
1,905 - 1,905 1,795
- 1,795 6
Synthetic fuel
- 39 39
- 98 98 (60)
----- ---- ----- ----- ---- -----
Total Revenues
2,812 39 2,851 2,563 98
2,661 7
OPERATING COSTS AND
EXPENSES
Owned, leased and corporate
housing - direct(4)
225 - 225 138
- 138 (63)
Timeshare - direct
289 - 289 269
- 269 (7)
Reimbursed costs
1,905 - 1,905 1,795
- 1,795 (6)
General, administrative
and other(5)
141 - 141 284
- 284 50
Synthetic fuel
- 57 57
- 134 134 57
----- ---- ----- ----- ---- -----
Total Expenses
2,560 57 2,617 2,486 134
2,620 -
----- ---- ----- ----- ---- -----
OPERATING INCOME (LOSS)
$252 $(18) 234 $77 $(36)
41 471
===== ==== =====
====
Gains and other income(6)
48
63 (24)
Interest expense
(30)
(21) (43)
Interest income
12
25 (52)
Reversal of provision for
loan losses
1
- *
Equity in earnings(7)
6
6 -
-----
-----
INCOME BEFORE INCOME TAXES,
MINORITY INTEREST AND
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE
271
114 138
(Provision) benefit for
income taxes
(85)
20 *
-----
-----
INCOME BEFORE MINORITY
INTEREST AND CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE
186
134 39
Minority interest
-
4 (100)
-----
-----
INCOME BEFORE CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE
186
138 35
Cumulative effect of change
in accounting principle,
net of tax(8)
-
- *
-----
-----
NET INCOME
$186
$138 35
=====
=====
EARNINGS PER SHARE - Basic(9)
Earnings before
cumulative
effect of
change in
accounting
principle
$0.45
$0.31 45
Losses from cumulative
effect of
change in
accounting
principle
-
- *
-----
-----
Earnings per share
$0.45
$0.31 45
=====
=====
EARNINGS PER SHARE -
Diluted(9)
Earnings before
cumulative
effect of
change in
accounting
principle
$0.43
$0.29 48
Losses from cumulative
effect of
change in
accounting
principle
-
- *
-----
-----
Earnings per share
$0.43
$0.29 48
=====
=====
Basic Shares(9)
412.5
440.9
Diluted Shares(9)
436.6
468.9
* Percent can not be calculated
or is not meaningful.
(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, fractional
and whole ownership 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 and timeshare
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.
Expenses in 2005 included a $94 million charge associated
with the CTF
transaction as well as charges totaling $29 million
associated
with our bedding incentive program.
(6) Gains and other income includes
gains on the sale of real estate, note
sales, joint
ventures and timeshare note receivable securitizations,
income related
to our cost method joint ventures, and the net earn-out
payments associated
with our synthetic fuel operations. It is our
understanding
that discussions among rule-makers about the income
statement
presentation of gains from note securitizations have taken
place in recent
weeks and we are monitoring those developments. If
the Securities
and Exchange Commission or other accounting rule
making organizations
change the required presentation of gains
associated
with note securitizations, we would adjust our
presentation
accordingly.
(7) Equity in earnings includes our
equity in earnings of unconsolidated
joint ventures.
(8) Cumulative effect of change in
accounting principle, net of tax is
associated
with the adoption, in the 2006 first quarter, of Statement
of Position
04-2, "Accounting for Real Estate Time-sharing
Transactions"
which was issued by the American Institute of Certified
Public Accountants.
(9) All share and per share amounts
reflect the June 9, 2006, two-for-one
stock split
effected in the form of a stock dividend.
MARRIOTT INTERNATIONAL, INC.
Financial Highlights
(in millions, except per share amounts)
24 Weeks Ended 24 Weeks Ended
June 16, 2006 June 17, 2005
--------------- ---------------
Percent
Synthetic Synthetic
Better/
Lodging Fuel Total Lodging Fuel Total (Worse)
------------------- ---------------------------
REVENUES
Base management fees
$261 $- $261 $234
$- $234 12
Franchise fees
175 - 175 148
- 148 18
Incentive management fees
136 - 136 102
- 102 33
Owned, leased, corporate
housing and other revenue
(1)
526 - 526 347
- 347 52
Timeshare interval,
fractional and whole
ownership sales and
services(2)
637 - 637 681
- 681 (6)
Cost reimbursements(3)
3,725 - 3,725 3,477
- 3,477 7
Synthetic fuel
- 96 96
- 206 206 (53)
----- ---- ----- ----- ---- -----
Total Revenues
5,460 96 5,556 4,989 206
5,195 7
OPERATING COSTS AND
EXPENSES
Owned, leased and corporate
housing - direct(4)
433 - 433 283
- 283 (53)
Timeshare - direct
529 - 529 541
- 541 2
Reimbursed costs
3,725 - 3,725 3,477
- 3,477 (7)
General, administrative and
other(5)
291 - 291 408
- 408 29
Synthetic fuel
- 141 141 -
287 287 51
----- ---- ----- ----- ---- -----
Total Expenses
4,978 141 5,119 4,709 287
4,996 (2)
----- ---- ----- ----- ---- -----
OPERATING INCOME (LOSS)
$482 $(45) 437 $280 $(81)
199 120
===== ==== =====
====
Gains and other income(6)
82
58 41
Interest expense
(57)
(45) (27)
Interest income
23
52 (56)
Reversal of provision for
loan losses (provision for
loan losses)
3
(11) *
Equity in earnings(7)
3
1 200
-----
-----
INCOME BEFORE INCOME TAXES,
MINORITY INTEREST AND
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE
491
254 93
(Provision) benefit for
income taxes
(141)
15 *
-----
-----
INCOME BEFORE MINORITY
INTEREST AND CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE
350
269 30
Minority interest
6
14 (57)
-----
-----
INCOME BEFORE CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE
356
283 26
Cumulative effect of change
in accounting principle,
net of tax(8)
(105)
- *
-----
-----
NET INCOME
$251
$283 (11)
=====
=====
EARNINGS PER SHARE - Basic(9)
Earnings before
cumulative
effect of
change in
accounting
principle
$0.86
$0.63 37
Losses from cumulative
effect of
change in
accounting
principle
(0.25)
- *
-----
-----
Earnings per share
$0.61
$0.63 (3)
=====
=====
EARNINGS PER SHARE -
Diluted(9)
Earnings before
cumulative
effect of
change in
accounting
principle
$0.81
$0.60 35
Losses from cumulative
effect of
change in
accounting
principle
(0.24)
- *
-----
-----
Earnings per share
$0.57
$0.60 (5)
=====
=====
Basic Shares(9)
412.1
446.0
Diluted Shares(9)
438.9
475.5
* Percent can not be calculated
or is not meaningful.
(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, fractional
and whole ownership 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 and timeshare
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.
Expenses in 2005 included a $94 million charge associated
with the CTF
transaction as well as charges totaling $29 million
associated
with our bedding incentive program.
(6) Gains and other income includes
gains on the sale of real estate, note
sales, joint
ventures and timeshare note receivable securitizations,
income related
to our cost method joint ventures, and the net earn-out
payments associated
with our synthetic fuel operations. It is our
understanding
that discussions among rule-makers about the income
statement
presentation of gains from note securitizations have taken
place in recent
weeks and we are monitoring those developments. If
the Securities
and Exchange Commission or other accounting rule making
organizations
change the required presentation of gains associated
with note
securitizations, we would adjust our presentation
accordingly.
(7) Equity in earnings includes our
equity in earnings of unconsolidated
joint ventures.
(8) Cumulative effect of change in
accounting principle, net of tax is
associated
with the adoption, in the 2006 first quarter, of Statement
of Position
04-2, "Accounting for Real Estate Time-sharing
Transactions"
which was issued by the American Institute of Certified
Public Accountants.
(9) All share and per share amounts
reflect the June 9, 2006, two-for-one
stock split
effected in the form of a stock dividend.
Marriott International, Inc.
Business Segments
($ in millions)
Twelve Weeks Ended Percent
---------------------------- Better/
June 16, 2006 June 17, 2005 (Worse)
------------- ------------- -------
REVENUES
Full-Service
$1,937 $1,751
11%
Select-Service
332 293
13%
Extended-Stay
156 136
15%
Timeshare
387 383
1%
------ ------
Total lodging(1)
2,812 2,563
10%
Synthetic fuel
39 98
-60%
------ ------
Total
$2,851 $2,661
7%
====== ======
INCOME BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE
Full-Service
$169 $30
*
Select-Service
72 48
50%
Extended-Stay
26 13
100%
Timeshare
68 80
-15%
------ ------
Total lodging financial
results(1) 335
171 96%
Synthetic fuel (after-tax)
4 44
-91%
Unallocated corporate expenses
(32) (33)
3%
Interest income, provision for loan
losses and interest expense
(excluding Synthetic Fuel)
(19) 4
*
Income taxes (excluding Synthetic
Fuel)
(102) (48)
-113%
------ ------
Total
$186 $138
35%
====== ======
* Calculated percentage is not meaningful.
(1) We consider lodging revenues and
lodging financial results to be
meaningful
indicators of our performance because they measure our
growth in
profitability as a lodging company and enable investors to
compare the
sales and results of our lodging operations to those of
other lodging
companies.
Marriott International, Inc.
Business Segments
($ in millions)
Twenty-Four Weeks Ended Percent
---------------------------- Better/
June 16, 2006 June 17, 2005 (Worse)
------------- ------------- -------
REVENUES
Full-Service
$3,779 $3,380
12%
Select-Service
638 565
13%
Extended-Stay
300 262
15%
Timeshare
743 782
-5%
------ ------
Total lodging(1)
5,460 4,989
9%
Synthetic fuel
96 206
-53%
------ ------
Total
$5,556 $5,195
7%
====== ======
INCOME BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE
Full-Service
$358 $146
145%
Select-Service
117 81
44%
Extended-Stay
46 29
59%
Timeshare
119 143
-17%
------ ------
Total lodging financial
results(1) 640
399 60%
Synthetic fuel (after-tax)
7 62
-89%
Unallocated corporate expenses
(71) (59)
-20%
Interest income, provision for loan
losses and interest expense
(excluding Synthetic Fuel)
(33) (4)
*
Income taxes (excluding Synthetic
Fuel)
(187) (115)
-63%
------ ------
Total
$356 $283
26%
====== ======
* Calculated percentage is not meaningful.
(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 Properties Number of Rooms/Suites
-------------------- ----------------------
Change
Change
vs.
vs.
June June June June
June June
16, 17, 17, 16,
17, 17,
Brand
2006 2005 2005 2006
2005 2005
------------------------
--------------------------------------------
Full-Service Lodging
Marriott Hotels
&
Resorts
517 499 18 186,259 181,184
5,075
The Ritz-Carlton
60 58 2 19,382
18,931 451
Renaissance
Hotels &
Resorts
136 136 - 48,188
48,129 59
Bulgari Hotel
& Resort 1
1 - 58
58 -
Ramada International
2 4 (2)
332 724 (392)
Select-Service Lodging
Courtyard
711 668 43 102,402
96,239 6,163
Fairfield
Inn
521 515 6 47,305
47,397 (92)
SpringHill
Suites 145
134 11 16,953 15,557
1,396
Extended-Stay Lodging
Residence
Inn
500 475 25 60,050
56,458 3,592
TownePlace
Suites 123
118 5 12,389 11,935
454
Marriott Executive
Apartments
17 16 1
2,804 2,809 (5)
Timeshare(2)
Marriott Vacation
Club
International
44 44 -
9,876 9,160 716
The Ritz-Carlton
Club 7
4 3 491
273 218
Grand Residences
by
Marriott
3 2 1
313 248 65
Horizons by
Marriott
Vacation
Club
2 2 -
328 328 -
------------------ ------------------------
Total
2,789 2,676 113 507,130 489,430 17,700
================== ========================
Number of Timeshare Interval,
Fractional and Whole Ownership
Resorts(2)
------------------------------------
In Active
Total(3) Sales
--------- ---------
100% Company Developed
Marriott Vacation
Club International
43
23
The Ritz-Carlton
Club
3
2
Grand Residences
by Marriott
3
3
Horizons by
Marriott Vacation Club
2
2
Joint Ventures
Marriott Vacation
Club International
1
1
The Ritz-Carlton
Club
4
4
Grand Residences
by Marriott
-
-
------------------------
Total
56
35
========================
(1) Total Lodging Products does not
include the 2,005 Marriott ExecuStay
corporate
housing rental units.
(2) Includes products in active sales
which may not be ready for
occupancy.
(3) Includes resorts that are in active
sales as well as those that are
sold out.
MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
Comparable Company-Operated North American Properties(1)
------------------------------------------------------------
Twelve Weeks Ended June 16, 2006 and June 17, 2005
--------------------------------------------------
Average Daily
REVPAR Occupancy
Rate
------ ---------
-------------
Brand
2006 vs. 2006 vs.
2006 vs.
2005 2005
2005
-------------------------------------------------------------------------
Marriott Hotels &
Resorts
$129.97 9.3% 76.3% 0.1% pts. $170.31
9.2%
The Ritz-Carlton(2)
$252.81 10.4% 77.7% 2.6% pts. $325.44 6.7%
Renaissance Hotels &
Resorts
$129.89 15.7% 77.2% 3.1% pts. $168.34 11.1%
Composite - Full-Service
$142.47 10.3% 76.6% 0.8% pts. $186.05 9.2%
Residence Inn
$97.12 9.3% 82.0% 0.4% pts. $118.38
8.8%
Courtyard
$89.71 12.3% 75.2% 0.7% pts. $119.35 11.2%
TownePlace Suites
$61.95 13.3% 79.4% 1.6% pts. $78.00 11.0%
SpringHill Suites
$81.47 12.9% 78.5% 0.7% pts. $103.79 11.9%
Composite - Select-
Service & Extended-Stay
$89.45 11.6% 77.5% 0.7% pts. $115.41 10.5%
Composite - All
$119.92 10.7% 77.0% 0.8% pts. $155.80 9.6%
Comparable Systemwide North American Properties(1)
------------------------------------------------------
Twelve Weeks Ended June 16, 2006 and June 17, 2005
--------------------------------------------------
Average Daily
REVPAR Occupancy
Rate
-----------------------------------------
Brand
2006 vs. 2006 vs.
2006 vs.
2005 2005
2005
------------------------------------------------------------------------
Marriott Hotels &
Resorts
$115.72 9.8% 74.1% 0.7% pts. $156.14
8.8%
The Ritz-Carlton(2)
$252.81 10.4% 77.7% 2.6% pts. $325.44 6.7%
Renaissance Hotels &
Resorts
$118.06 14.3% 75.8% 2.4% pts. $155.76 10.7%
Composite - Full-Service
$124.91 10.5% 74.6% 1.1% pts. $167.46 8.9%
Residence Inn
$93.12 9.2% 81.9% 0.8% pts. $113.72
8.2%
Courtyard
$89.45 11.3% 76.5% 1.2% pts. $116.91 9.7%
Fairfield Inn
$60.85 12.4% 74.5% 2.2% pts. $81.72
9.1%
TownePlace Suites
$62.96 12.2% 79.4% 1.4% pts. $79.25 10.3%
SpringHill Suites
$77.65 12.5% 78.3% 1.8% pts. $99.16 10.0%
Composite - Select-
Service & Extended-Stay
$82.05 11.0% 77.8% 1.3% pts. $105.52 9.1%
Composite - All
$99.26 10.7% 76.5% 1.2% pts. $129.78 8.9%
(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.
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 March through May.
MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
Comparable Company-Operated North American Properties(1)
------------------------------------------------------------
Twenty-Four Weeks Ended June 16, 2006 and June 17, 2005
-------------------------------------------------------
Average Daily
REVPAR Occupancy
Rate
------ ---------
-------------
Brand
2006 vs. 2006 vs.
2006 vs.
2005 2005
2005
-------------------------------------------------------------------------
Marriott Hotels &
Resorts
$123.14 8.7% 72.8% 0.0% pts. $169.07
8.7%
The Ritz-Carlton(2)
$242.14 10.8% 75.3% 3.5% pts. $321.50 5.6%
Renaissance Hotels &
Resorts
$120.54 14.5% 74.1% 2.8% pts. $162.72 10.1%
Composite - Full-Service
$132.89 9.8% 73.2% 0.7% pts. $181.45
8.7%
Residence Inn
$93.31 9.8% 79.4% 0.2% pts. $117.56
9.4%
Courtyard
$85.45 11.9% 71.8% 0.4% pts. $119.10 11.2%
TownePlace Suites
$58.88 13.2% 75.8% 1.4% pts. $77.66 11.2%
SpringHill Suites
$75.11 10.1% 73.2% -0.7% pts. $102.56 11.2%
Composite - Select-
Service & Extended-Stay
$85.27 11.3% 74.1% 0.4% pts. $115.00 10.7%
Composite - All
$112.42 10.3% 73.6% 0.6% pts. $152.69 9.4%
Comparable Systemwide North American Properties(1)
------------------------------------------------------
Twenty-Four Weeks Ended June 16, 2006 and June 17, 2005
-------------------------------------------------------
Average Daily
REVPAR Occupancy
Rate
------ ---------
-------------
Brand
2006 vs. 2006 vs.
2006 vs.
2005 2005
2005
-------------------------------------------------------------------------
Marriott Hotels &
Resorts
$111.14 9.8% 71.4% 0.9% pts. $155.69
8.4%
The Ritz-Carlton(2)
$242.14 10.8% 75.3% 3.5% pts. $321.50 5.6%
Renaissance Hotels &
Resorts
$111.09 13.7% 72.8% 2.5% pts. $152.58 9.9%
Composite - Full-Service
$118.18 10.4% 71.8% 1.3% pts. $164.59 8.5%
Residence Inn
$89.79 9.6% 79.5% 1.1% pts. $112.88
8.2%
Courtyard
$84.63 11.3% 73.0% 1.1% pts. $115.95 9.6%
Fairfield Inn
$56.59 13.2% 70.1% 2.4% pts. $80.74
9.4%
TownePlace Suites
$60.10 12.6% 76.1% 1.5% pts. $78.99 10.5%
SpringHill Suites
$73.33 12.7% 74.5% 1.8% pts. $98.38 10.0%
Composite - Select-
Service & Extended-Stay
$77.87 11.2% 74.3% 1.4% pts. $104.74 9.1%
Composite - All
$93.91 10.8% 73.3% 1.4% pts. $128.05 8.7%
(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.
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 May.
MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
(Constant $)
Comparable Company-Operated International Properties(1,2)
------------------------------------------------------------
Three Months Ended May 31, 2006 and May 31, 2005
------------------------------------------------
Average
REVPAR Occupancy
Daily Rate
------ ---------
----------
Region/Brand(3)
2006 vs. 2005 2006 vs. 2005 2006 vs.
2005
-------------------------------------------------------------------------
Caribbean & Latin
America
$130.27 16.0% 77.7% 3.8% pts. $167.65 10.2%
Continental Europe
$105.81 10.3% 73.8% 3.7% pts. $143.45
4.8%
United Kingdom
$167.12 13.7% 78.7% 3.5% pts. $212.32
8.6%
Middle East & Africa
$108.24 13.5% 74.1% -1.3% pts. $146.13 15.5%
Asia Pacific(4)
$97.21 10.8% 76.2% 1.1% pts. $127.60
9.2%
The Ritz-Carlton
International
$163.71 7.1% 71.9% -2.7% pts. $227.60 11.0%
Total International(5)
$115.01 11.1% 75.5% 1.7% pts. $152.37
8.6%
Worldwide(6)
$118.56 10.8% 76.6% 1.0% pts. $154.86
9.4%
Comparable Systemwide International Properties(1,2)
-----------------------------------------------------
Three Months Ended May 31, 2006 and May 31, 2005
------------------------------------------------
Average
REVPAR Occupancy
Daily Rate
------ ---------
----------
Region/Brand(3)
2006 vs. 2005 2006 vs. 2005 2006
vs. 2005
--------------------------------------------------------------------------
Caribbean & Latin
America
$124.45 12.6% 75.8% 2.0% pts. $164.26
9.7%
Continental Europe
$104.11 11.1% 71.3% 3.2% pts. $146.06
6.0%
United Kingdom
$146.49 11.3% 74.1% 2.2% pts. $197.60
7.9%
Middle East & Africa
$100.52 14.2% 73.3% -1.4% pts. $137.09 16.3%
Asia Pacific(4)
$97.91 9.8% 76.4% 1.0% pts. $128.13
8.4%
The Ritz-Carlton
International
$163.71 7.1% 71.9% -2.7% pts. $227.60 11.0%
Total International(5)
$112.16 10.7% 74.4% 1.1% pts. $150.77
9.0%
Worldwide(6)
$101.49 10.7% 76.1% 1.2% pts. $133.33
9.0%
(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 for March through May. Excludes
North
America (except for Worldwide).
(3) Regional information includes
the Marriott Hotels & Resorts,
Renaissance
Hotels & Resorts and Courtyard brands. Does not
include
The Ritz-Carlton International brand.
(4) Does not include Hawaii.
(5) Includes Hawaii.
(6) Includes international statistics
for the three calendar months ended
May
31, 2006 and May 31, 2005, and North American statistics for the
twelve
weeks ended June 16, 2006 and June 17, 2005. Includes the
Marriott
Hotels & Resorts, The Ritz-Carlton, Renaissance Hotels &
Resorts,
Residence Inn, Courtyard, TownePlace Suites, Fairfield Inn
and
SpringHill Suites brands.
MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
(Constant $)
Comparable Company-Operated International Properties(1,2)
-----------------------------------------------------------
Five Months Ended May 31, 2006 and May 31, 2005
-----------------------------------------------
Average
REVPAR Occupancy
Daily Rate
------ ---------
----------
Region/Brand(3)
2006 vs. 2005 2006 vs. 2005 2006
vs. 2005
-------------------------------------------------------------------------
Caribbean & Latin
America
$134.44 13.8% 78.2% 3.4% pts. $171.92
8.8%
Continental Europe
$95.06 8.4% 68.6% 3.0% pts. $138.61
3.6%
United Kingdom
$159.02 14.0% 75.7% 3.2% pts. $210.06
9.2%
Middle East & Africa
$103.86 11.2% 70.5% -2.6% pts. $147.34 15.3%
Asia Pacific(4)
$93.13 12.5% 75.0% 1.4% pts. $124.10 10.4%
The Ritz-Carlton
International
$155.04 5.4% 69.6% -2.9% pts. $222.84
9.9%
Total International(5)
$109.75 10.7% 73.1% 1.4% pts. $150.23
8.6%
Worldwide(6)
$111.78 10.4% 73.5% 0.8% pts. $152.10
9.2%
Comparable Systemwide International Properties(1,2)
-----------------------------------------------------
Five Months Ended May 31, 2006 and May 31, 2005
-----------------------------------------------
Average
REVPAR Occupancy
Daily Rate
------ ---------
----------
Region/Brand(3)
2006 vs. 2005 2006 vs. 2005 2006
vs. 2005
--------------------------------------------------------------------------
Caribbean & Latin
America
$123.05 11.2% 75.0% 2.7% pts. $164.09
7.2%
Continental Europe
$93.17 9.3% 66.2% 2.7% pts. $140.68
4.9%
United Kingdom
$137.66 12.4% 70.7% 2.7% pts. $194.83
8.0%
Middle East & Africa
$97.33 12.3% 69.9% -2.6% pts. $139.23 16.5%
Asia Pacific(4)
$94.17 11.8% 75.2% 1.2% pts. $125.27 10.0%
The Ritz-Carlton
International
$155.04 5.4% 69.6% -2.9% pts. $222.84
9.9%
Total International(5)
$106.26 10.2% 71.8% 1.1% pts. $148.05
8.5%
Worldwide(6)
$95.74 10.7% 73.1% 1.3% pts. $130.96
8.7%
(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
for January through May. Excludes
North America
(except for Worldwide).
(3) Regional information includes
the Marriott Hotels & Resorts,
Renaissance
Hotels & Resorts and Courtyard brands. Does not include
The Ritz-Carlton
International brand.
(4) Does not include Hawaii.
(5) Includes Hawaii.
(6) Includes international statistics
for the five calendar months ended
May 31, 2006
and May 31, 2005, and North American statistics for the
twenty-four
weeks ended June 16, 2006 and June 17, 2005. Includes the
Marriott Hotels
& Resorts, The Ritz-Carlton, Renaissance Hotels &
Resorts, Residence
Inn, Courtyard, TownePlace Suites, Fairfield Inn
and SpringHill
Suites brands.
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measures
In our press release and schedules we report certain
financial measures that are not prescribed or authorized by United States
generally-accepted accounting principles ("GAAP"). We discuss management's
reasons for reporting these non-GAAP measures below, and the tables on
the following pages reconcile the most directly comparable generally accepted
accounting principle measures to the non-GAAP measures (identified by a
double asterisk on the following pages) that we refer to in our press release.
Although our management evaluates and presents these non-GAAP measures
for the reasons described below, please be aware that these non-GAAP measures
are not alternatives to operating income, income from continuing operations,
net income, earnings per share or any other comparable operating measure
prescribed by GAAP. In addition, these non-GAAP financial measures may
be calculated and/or presented differently than measures with the same
or similar names that are reported by other companies, and as a result,
the non-GAAP measures we report may not be comparable to those reported
by others.
Synthetic Fuel. We do not consider the Synthetic Fuel
segment to be related to our core business, which is lodging. In addition,
management expects the Synthetic Fuel segment will no longer have a material
impact on our business after the end of 2007, when the Internal Revenue
Code provision which provides for synthetic fuel tax credits expires, or
earlier if the company elects to make its present synthetic fuel production
shutdown permanent. Accordingly, our management evaluates non-GAAP measures
which exclude the impact of our Synthetic Fuel segment because those measures
allow for period-over-period comparisons of our on-going core lodging operations.
In addition, these non-GAAP measures facilitate management's comparison
of our results with the results of other lodging companies.
CTF transaction. Some of the non-GAAP measures are further
adjusted to exclude the impact of the $94 million pre-tax charge (2005
second quarter) associated with the agreements we entered into with CTF
Holdings Ltd. and its affiliates ("the CTF transaction"). That charge was
primarily non-cash and primarily due to the write-off of deferred contract
acquisition costs associated with the termination of management agreements.
GAAP reporting for the CTF transaction charge does not reflect the fact
that the company entered into new management agreements as part of the
CTF transaction, which substantially replaced the terminated management
agreements. Accordingly, our management evaluates the non-GAAP measures
which exclude the CTF transaction charge because those measures allow for
period-over-period comparisons relative to our on-going core lodging operations
before material charges, and in particular because those non-GAAP measures
recognize the new management agreements that were entered into as part
of the CTF transaction and the resulting continuity of management for the
hotels in question. In addition, these non-GAAP measures facilitate management's
comparison of our results with the results of other lodging companies.
Leveraged lease impairment charge and
discontinued operations. Management
evaluates non-GAAP measures that exclude the $17 million
leveraged lease
impairment charge recorded in the 2005 third quarter
and discontinued
operations in order to better assess the period-over-period
performance of our
on-going core operating business. Management does
not consider the leveraged
lease investment to be related to our core lodging business.
In addition,
non-GAAP measures which exclude these non-lodging items
facilitate
management's comparison of our results with the results
of other lodging
companies.
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
Lodging Operating Income
($ in millions)
Fiscal Year 2006
--------------------------------------------------------
Range
Range
--------- ---------
Estimated Estimated Estimated Estimated
First Second Third
Third Full Full
Quarter Quarter Quarter Quarter
Year Year
------- ------- --------- --------- --------- ---------
Operating income
$203 $234 ***
*** ***
***
Add back:
Synthetic Fuel
operating
loss ***
27 18 ***
*** ***
***
------- ------- -------- ---------- --------- ---------
Lodging
operating
income **
$230 $252 $195
$200 $950 $980
======= ======= ======== ========== ========= =========
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
======= ======= ======= ======= =====
** Denotes non-GAAP
financial measures.
*** Guidance not provided
for the third and fourth quarters of 2006.
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
Measures that Exclude Synthetic Fuel and CTF Transaction
(in millions, except per share amounts)
Twelve Weeks ending June 16, 2006
---------------------------------------------------------
Excluding
Synthetic
Synthetic Excluding
Fuel
As Fuel Synthetic
CTF and CTF
Reported Impact Fuel**
Transaction Transaction**
-------- --------- --------- ----------- -------------
Operating
income (loss)
$234 $(18)
$252 $-
$252
Gains and
other income
48 3
45 -
45
Interest income,
provision for loan
losses and
interest expense
(17) 2
(19) -
(19)
Equity in earnings
6 -
6 -
6
-------- --------- ---------- ---------- -------------
Income (loss) before
Income Taxes,
Minority Interest
and Cumulative
Effect of Change
in Accounting
Principle
271 (13)
284 -
284
-------- --------- ---------- ---------- -------------
Tax (Provision)/
Benefit
(96) 6
(102) -
(102)
Tax Credits
11 11
- -
-
-------- --------- ---------- ---------- -------------
Total Tax (Provision)
/Benefit
(85) 17
(102) -
(102)
-------- --------- ---------- ---------- -------------
Income before
Minority Interest
and Cumulative
Effect of Change
in Accounting
Principle
186 4
182 -
182
Minority Interest
- -
- -
-
-------- --------- ----------- --------- -------------
Income before
Cumulative Effect
of Change in
Accounting
Principle
$186 $4
$182 $-
$182
======== ========= =========== ========= =============
Diluted Shares 436.6
436.6 436.6 436.6
436.6
Earnings per
Share - Diluted $0.43
$0.01 $0.42 $0.00
$0.42
Tax Rate
31.4%
35.9%
35.9%
Twelve Weeks ending June 17, 2005
---------------------------------------------------------
Excluding
Synthetic
Synthetic Excluding
Fuel
As Fuel Synthetic
CTF and CTF
Reported Impact Fuel**
Transaction Transaction**
-------- --------- --------- ----------- -------------
Operating
income (loss)
$41 $(36)
$77 $(94)
$171
Gains and
other income
63 8
55 -
55
Interest income,
provision for loan
losses and
interest expense
4 -
4 -
4
Equity in earnings
6 -
6 -
6
------- ------- ------- ------------
-------------
Income (loss)
before Income Taxes,
Minority Interest
and Cumulative
Effect of Change
in Accounting
Principle
114 (28)
142 (94)
236
------- ------- ------- ------------
-------------
Tax (Provision)/
Benefit
(39) 9
(48) 32
(80)
Tax Credits
59 59
- -
-
------- ------- ------- ------------
-------------
Total Tax Benefit/
(Provision)
20 68
(48) 32
(80)
------- ------- ------- ------------
-------------
Income before
Minority Interest
and Cumulative
Effect of Change
in Accounting
Principle
134 40
94 (62)
156
Minority Interest
4 4
- -
-
------- ------- ------- ------------
-------------
Income before
Cumulative Effect
of Change in
Accounting
Principle
$138 $44
$94 $(62)
$156
======= ======= ======= ============
=============
Diluted Shares 468.9
468.9 468.9 468.9
468.9
Earnings per
Share - Diluted $0.29
$0.09 $0.20 ($0.13)
$0.33
Tax Rate
-17.5%
33.8%
33.8%
** Denotes non-GAAP financial measures.
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
Measures that Exclude Synthetic Fuel and CTF Transaction
(in millions, except per share amounts)
Twenty-Four Weeks ending June 16, 2006
---------------------------------------------------------
Excluding
Synthetic
Synthetic Excluding
Fuel
As Fuel Synthetic
CTF and CTF
Reported Impact Fuel**
Transaction Transaction**
-------- --------- --------- ----------- -------------
Operating
income (loss)
$437 $(45)
$482 $-
$482
Gains and other
income (expense)
82 (1)
83 -
83
Interest income,
provision for loan
losses and interest
expense
(31) 2
(33) -
(33)
Equity in earnings
3 -
3 -
3
------- --------- --------- ----------- -------------
Income (loss)
before Income Taxes,
Minority Interest
and Cumulative
Effect of Change
in Accounting
Principle
491 (44)
535 -
535
------- --------- --------- ----------- -------------
Tax (Provision)/
Benefit
(173) 14
(187) -
(187)
Tax Credits
32 32
- -
-
------- --------- --------- ----------- -------------
Total Tax (Provision)
/Benefit
(141) 46
(187) -
(187)
------- --------- --------- ----------- -------------
Income before
Minority Interest
and Cumulative
Effect of Change
in Accounting
Principle
350 2
348 -
348
Minority Interest
6 5
1 -
1
------- --------- --------- ----------- -------------
Income before
Cumulative Effect
of Change in
Accounting
Principle
$356 $7
$349 $-
$349
======= ========= ========= =========== =============
Diluted Shares 438.9
438.9 438.9
438.9 438.9
Earnings per
Share - Diluted $0.81
$0.02 $0.79
$0.00 $0.79
Tax Rate
28.7%
35.0%
35.0%
Twenty-Four Weeks ending June 17, 2005
---------------------------------------------------------
Excluding
Synthetic
Synthetic Excluding
Fuel
As Fuel Synthetic
CTF and CTF
Reported Impact Fuel**
Transaction Transaction**
-------- --------- --------- ----------- -------------
Operating
income (loss)
$199 $(81)
$280 $(94)
$374
Gains and other
income (expense)
58 (1)
59 -
59
Interest income,
provision for loan
losses and
interest expense
(4) -
(4) -
(4)
Equity in earnings
1 -
1 -
1
------- --------- --------- ----------- ------------
Income (loss)
before Income Taxes,
Minority Interest
and Cumulative
Effect of Change
in Accounting
Principle
254 (82)
336 (94)
430
------- --------- --------- ----------- ------------
Tax (Provision)/
Benefit
(91) 24
(115) 32
(147)
Tax Credits
106 106
- -
-
------- --------- --------- ----------- ------------
Total Tax Benefit/
(Provision)
15 130
(115) 32
(147)
------- --------- --------- ----------- ------------
Income before
Minority Interest
and Cumulative
Effect of Change
in Accounting
Principle
269 48
221 (62)
283
Minority Interest
14 14
- -
-
------- --------- --------- ----------- ------------
Income before
Cumulative Effect
of Change in
Accounting
Principle
$283 $62
$221 $(62)
$283
======= ========= ========= =========== ============
Diluted Shares 475.5
475.5 475.5
475.5 475.5
Earnings per
Share - Diluted $0.60
$0.13 $0.47 ($0.13)
$0.60
Tax Rate
-5.9%
34.2%
34.2%
** Denotes non-GAAP financial measures.
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
EBITDA
($ in millions)
Fiscal Year 2006
------------------------------
First Second
Quarter Quarter Total
------- ------- -----
Net income
$65 $186
$251
Cumulative effect of change in
accounting principle, before
tax 173
- 173
Interest expense
27 30
57
Tax provision from continuing
operations
56 85
141
Tax benefit from cumulative effect
of
change in accounting principle
(68) -
(68)
Depreciation
34 34
68
Amortization
6 8
14
Less: Depreciation reimbursed
by
third-party owners
(4) (4)
(8)
Interest expense from unconsolidated
joint ventures
5 6
11
Depreciation and amortization from
unconsolidated joint ventures
6 7
13
------- ------- -----
EBITDA **
$300 $352
$652
Synthetic fuel adjustment
24 11
35
------- ------- -----
Adjusted EBITDA **
$324 $363
$687
======= ======= =====
Increase over 2005 Adjusted EBITDA
17% 19%
18%
The following items make up the
Synthetic Fuel adjustment:
Pre-tax synthetic fuel operating losses
$31 $13
$44
Pre-tax minority interest - synthetic
fuel (5)
- (5)
Synthetic fuel depreciation
(2) (2)
(4)
------- ------- -----
EBITDA adjustment for synthetic fuel
$24 $11
$35
======= ======= =====
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/(benefit) from
discontinued operations
- - 1
- 1
Depreciation
30 29 46
51 156
Amortization
7 7 7
7 28
Less: Depreciation reimbursed
by
third-party owners
- - (12)
(5) (17)
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 from discontinued
operations
- - (2)
- (2)
Non-recurring charges -
CTF Acquisition
one-time charge -
94 -
- 94
Leveraged lease
charge
- - 17
- 17
------- ------- ------- ------ ------
Adjusted EBITDA **
$276 $306 $267 $421 $1,270
======= ======= ======= ====== ======
The following items make up the
Synthetic Fuel adjustment:
Pre-tax synthetic fuel operating
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
======= ======= ======= ====== ======
** Denotes Non-GAAP financial
measures.
________________________________________
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