Fourth Quarter Full Year 2006 Full
Year 2007
2006
--------------- ----------------- -----------------
Total fee revenue $370
million to $1,204 million to $1,360 million to
$380 million $1,214 million
$1,380 million
Owned, leased,
$45 million to $176 million to $155 million
to
corporate housing $50
million $181 million
$160 million
and other, net of
direct expenses
Timeshare sales and $115 million to
$339 million to $305 million to
services, net of
$120 million $344 million
$320 million
direct expenses(1)
General,
$220 million to $660 million to $675 million to
administrative &
$215 million $655 million
$665 million
other expenses(2)
Lodging operating $310
million to $1,059 million to $1,145 million to
income(1,2)
$335 million $1,084 million
$1,195 million
Gains (excluding
Approx $10 Approx $63
Approx $20 million
synthetic fuel)(3) million
million
Net interest
$30 million to $78 million to Approx
$125
expense(4)
$25 million $73 million
million
Equity in
Approx $5 Approx $7 million
$45 million to $55
earnings/(losses) million
million
Earnings per share No guidance
No guidance No guidance
from synthetic
fuel
Earnings per share $0.46 to $0.51
$1.59 to $1.64 $1.78 to $1.88
excluding synthetic
fuel(2,5)
Core tax rate
35.2 percent 35.2 percent
35.0 percent
excluding synthetic
fuel
(1) Includes timeshare mortgage note
sale gains.
(2) Full year 2006 includes pre-tax
expense of $39 million ($0.06 per
share) associated
with the adoption of FAS No. 123® ($12 million
($0.02 per
share) for the 2006 fourth quarter).
(3) Excludes timeshare mortgage note
sale gains and a $2 million gain
reported year-to-date
from the synthetic fuel business.
(4) Includes interest expense, provision
for loan losses and interest
income.
(5) Full year estimate is before the
cumulative effect of a change in
accounting
principle associated with the new timeshare accounting
rules.
The company recorded an after-tax charge of $105 million
($0.24 per
share) in the 2006 first quarter.
IRPR#1
Tables follow
MARRIOTT INTERNATIONAL, INC.
Financial Highlights
(in millions, except per share amounts)
12 Weeks Ended 12 Weeks Ended
September 8, 2006 September 9, 2005
-------------------- ------------------- Percent
Synthetic Synthetic
Better/
Lodging Fuel Total Lodging Fuel Total (Worse)
------- ------ ----- ------- ----- ----- -------
REVENUES
Base management fees
$ 119 $ - $ 119 $ 108 $ - $
108 10
Franchise fees
94 - 94
78 - 78
21
Incentive management fees
49 - 49
30 - 30
63
Owned, leased, corporate
housing and other
revenue(1)
239 - 239 236
- 236 1
Timeshare sales and
services(2)
374 - 374 393
- 393 (5)
Cost reimbursements(3)
1,822 - 1,822 1,771
- 1,771 3
Synthetic fuel
- 6 6
- 98 98 (94)
------- ------ ----- ------- ----- -----
Total Revenues
2,697 6 2,703 2,616
98 2,714 -
OPERATING COSTS AND EXPENSES
Owned, leased and corporate
housing - direct(4)
201 - 201 197
- 197 (2)
Timeshare - direct
298 - 298 330
- 330 10
Reimbursed costs
1,822 - 1,822 1,771
- 1,771 (3)
General, administrative
and other(5)
149 - 149 149
- 149 -
Synthetic fuel
- 4 4
- 132 132 97
------- ------ ----- ------- ----- -----
Total Expenses
2,470 4 2,474 2,447 132
2,579 4
------- ------ ----- ------- ----- -----
OPERATING INCOME (LOSS)
$ 227 $ 2 229 $ 169 $(34)
135 70
======= ====== ======= =====
Gains and other income(6)
13
39 (67)
Interest expense
(29)
(24) (21)
Interest income
11
13 (15)
Provision for loan losses
-
(17) 100
Equity in (losses)
earnings(7)
(1)
17 (106)
-----
-----
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME
TAXES AND MINORITY
INTEREST
223
163 37
Provision for income taxes
(82)
(33) (148)
Minority interest
-
18 (100)
-----
-----
INCOME FROM CONTINUING
OPERATIONS
141
148 (5)
Discontinued operations,
net of tax
-
1 (100)
-----
-----
NET INCOME
$ 141
$ 149 (5)
=====
=====
EARNINGS PER SHARE -
Basic(8)
Earnings from
continuing
operations
$ 0.35
$ 0.34 3
Earnings from
discontinued
operations
-
- -
-----
-----
Earnings per share
$ 0.35
$ 0.34 3
=====
=====
EARNINGS PER SHARE -
Diluted(8)
Earnings from
continuing
operations
$ 0.33
$ 0.32 3
Earnings from
discontinued
operations
-
- -
-----
-----
Earnings per share
$ 0.33
$ 0.32 3
=====
=====
Basic Shares(8)
400.7
430.5
Diluted Shares(8)
424.7
458.7
(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 sales and services includes
total timeshare revenue except
for base fees,
cost reimbursements, real estate gains and joint
venture earnings
(losses). We understand that the Staff of the
Securities
and Exchange Commission will be evaluating the presentation
of interest
income associated with timeshare notes receivable. We
recorded $9
million for each of the twelve weeks ended September 8,
2006, and
September 9, 2005, of such interest income as "Timeshare
sales and
services" revenue.
(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
net gains on the sale of real estate,
gains on note
sales or repayments, gains on the sale of joint
ventures,
income from cost method joint ventures and net earn-out
payments associated
with our synthetic fuel operations.
(7) Equity in (losses) earnings includes
our equity in (losses) earnings
of unconsolidated
joint ventures.
(8) 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)
36 Weeks Ended 36 Weeks Ended
September 8, 2006 September 9, 2005
-------------------- --------------------- Percent
Synthetic
Synthetic Better/
Lodging Fuel Total Lodging Fuel Total (Worse)
------- ------ ----- ------- ------ ------ -------
REVENUES
Base management fees
$ 380 $ - $ 380 $ 342 $
- $ 342 11
Franchise fees
269 - 269 226
- 226 19
Incentive management fees
185 - 185 132
- 132 40
Owned, leased, corporate
housing and other
revenue(1)
765 - 765 583
- 583 31
Timeshare sales and
services(2)
1,051 - 1,051 1,074
- 1,074 (2)
Cost reimbursements(3)
5,547 - 5,547 5,248
- 5,248 6
Synthetic fuel
- 102 102 -
304 304 (66)
------- ------ ----- ------- ------ ------
Total Revenues
8,197 102 8,299 7,605 304
7,909 5
OPERATING COSTS AND
EXPENSES
Owned, leased and
corporate housing -
direct(4)
634 - 634 480
- 480 (32)
Timeshare - direct
827 - 827 871
- 871 5
Reimbursed costs
5,547 - 5,547 5,248
- 5,248 (6)
General, administrative
and other(5)
440 - 440 557
- 557 21
Synthetic fuel
- 145 145 -
419 419 65
------- ------ ----- ------- ------ ------
Total Expenses
7,448 145 7,593 7,156 419
7,575 -
------- ------ ----- ------- ------ ------
OPERATING INCOME (LOSS) $
749 $ (43) 706 $ 449 $(115) 334
111
======= ====== ======= ======
Gains and other income(6)
55
97 (43)
Interest expense
(86)
(69) (25)
Interest income
34
65 (48)
Reversal of (provision
for) loan losses
3
(28) 111
Equity in earnings(7)
2
18 (89)
-----
------
INCOME FROM CONTINUING
OPERATIONS BEFORE
INCOME TAXES AND
MINORITY INTEREST
714
417 71
Provision for income
taxes
(223)
(18) (1,139)
Minority interest
6
32 (81)
-----
------
INCOME FROM CONTINUING
OPERATIONS
497
431 15
Discontinued operations,
net of tax
-
1 (100)
Cumulative effect of
change in accounting
principle, net of tax(8)
(105)
- *
-----
------
NET INCOME
$ 392
$ 432 (9)
=====
======
EARNINGS PER SHARE -
Basic(9)
Earnings from
continuing
operations
$ 1.22
$ 0.98 24
Earnings from
discontinued
operations
-
- -
Losses from cumulative
effect of
change in
accounting
principle
(0.26)
- *
-----
------
Earnings per share
$ 0.96
$ 0.98 (2)
=====
======
EARNINGS PER SHARE -
Diluted(9)
Earnings from
continuing
operations
$ 1.14
$ 0.92 24
Earnings from
discontinued
operations
-
- -
Losses from cumulative
effect of
change in
accounting
principle
(0.24)
- *
-----
------
Earnings per share
$ 0.90
$ 0.92 (2)
=====
======
Basic Shares(9)
408.3
440.8
Diluted Shares(9)
434.4
470.6
* 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 sales and services includes
total timeshare revenue except
for base fees,
cost reimbursements, real estate gains and joint
venture earnings
(losses). For 2006 only, timeshare sales and services
includes gains
on the sale of timeshare note receivable
securitizations.
In accordance with recent discussions between the
American Resort
Development Association and the Securities and
Exchange Commission
regarding the income statement presentation of
Timeshare
segment note securitization gains, we reclassified, in our
income statement
for the thirty-six weeks ended September 8, 2006,
timeshare
securitization gains of $40 million recognized in the 2006
second quarter
from the "Gains and other income" caption to the
"Timeshare
sales and services" revenue caption. Additionally, we
understand
that the Staff of the Securities and Exchange Commission
will be evaluating
the presentation of interest income associated with
timeshare
notes receivable. We recorded $29 million and $27 million
for the thirty-six
weeks ended September 8, 2006, and September 9,
2005, respectively,
of such interest income as "Timeshare sales and
services"
revenue.
(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.
Expenses in 2005 included a $94 million charge associated
with the CTF
transaction as well as charges totaling $30 million
associated
with our bedding incentive program.
(6) Gains and other income includes
net gains on the sale of real estate,
gains on note
sales or repayments, gains on the sale of joint
ventures,
income from cost method joint ventures, net earn-out
payments associated
with our synthetic fuel operations and for 2005
only, timeshare
note securitization gains. Timeshare note
securitization
gains for 2005 totaled $29 million. See footnote 2 for
information
regarding timeshare note securitization gains for 2006.
(7) Equity in earnings includes our
equity in earnings of unconsolidated
joint ventures.
(8) Cumulative effect of change in
accounting principle, net of tax is
associated
with the adoption, in the 2006 first quarter, of Statement
of Position
04-2, "Accounting for Real Estate Time-sharing
Transactions"
which was issued by the American Institute of Certified
Public Accountants.
(9) All share and per share amounts
reflect the June 9, 2006, two-for-
one stock
split effected in the form of a stock dividend.
Marriott International, Inc.
Business Segments
($ millions)
Twelve Weeks Ended
Percent
----------------- ----------------- Better/
September 8, 2006 September 9, 2005 (Worse)
----------------- ----------------- -------
REVENUES
Full-Service
$ 1,787
$ 1,713 4
Select-Service
331
303 9
Extended-Stay
166
149 11
Timeshare
413
451 (8)
----------------- -----------------
Total lodging(1)
2,697
2,616 3
Synthetic Fuel
6
98 (94)
----------------- -----------------
Total
$ 2,703
$ 2,714 -
================= =================
INCOME FROM CONTINUING OPERATIONS
Full-Service
$ 131
$ 129
2
Select-Service
57
49 16
Extended-Stay
29
14 107
Timeshare
61
50 22
----------------- -----------------
Total lodging financial
results(1)
278
242 15
Synthetic Fuel (after-tax)
(3)
30 (110)
Unallocated corporate
expenses
(42)
(38) (11)
Interest income, provision
for loan losses and
interest expense
(excluding Synthetic Fuel)
(15)
(28) 46
Income taxes (excluding
Synthetic Fuel)
(77)
(58) (33)
----------------- -----------------
Total
$ 141
$ 148
(5)
================= =================
(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
($ millions)
Thirty-six Weeks Ended
Percent
----------------- ----------------- Better/
September 8, 2006 September 9, 2005 (Worse)
----------------- ----------------- -------
REVENUES
Full-Service
$ 5,566
$ 5,093 9
Select-Service
969
868 12
Extended-Stay
466
411 13
Timeshare
1,196
1,233 (3)
----------------- -----------------
Total lodging(1)
8,197
7,605 8
Synthetic Fuel
102
304 (66)
----------------- -----------------
Total
$ 8,299
$ 7,909 5
================= =================
INCOME FROM CONTINUING OPERATIONS
Full-Service
$ 489
$ 275
78
Select-Service
174
130 34
Extended-Stay
75
43 74
Timeshare
180
193 (7)
----------------- -----------------
Total lodging financial
results(1)
918
641 43
Synthetic Fuel (after-tax)
4
92 (96)
Unallocated corporate
expenses
(113)
(97) (16)
Interest income, reversal
of or provision for loan
losses and interest
expense (excluding
Synthetic Fuel)
(48)
(32) (50)
Income taxes (excluding
Synthetic Fuel)
(264)
(173) (53)
----------------- -----------------
Total
$ 497
$ 431
15
================= =================
(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
-------------------- ----------------------
vs.
vs.
Sept. 8, Sept. 9, Sept. 9, Sept. 8, Sept. 9, Sept. 9,
Brand
2006 2005 2005
2006 2005 2005
--------------------------------------------------------------------------
Full-Service Lodging
--------------------
Marriott Hotels &
Resorts
516 502
14 186,154 181,599 4,555
The Ritz-Carlton
60 58
2 19,382 18,907
475
Renaissance Hotels &
Resorts
137 137 -
48,228 48,137 91
Bulgari Hotel & Resort
1 1
- 58
58 -
Ramada International
2 4
(2) 332 724
(392)
Select-Service Lodging
----------------------
Courtyard
722 680
42 104,082 98,043 6,039
Fairfield Inn
520 521
(1) 47,019 47,826 (807)
SpringHill Suites
149 135
14 17,370 15,767 1,603
Extended-Stay Lodging
---------------------
Residence Inn
511 482
29 61,329 57,296 4,033
TownePlace Suites
122 119
3 12,295 12,021
274
Marriott Executive
Apartments
18 16
2 3,027 2,809
218
Timeshare(2)
------------
Marriott Vacation
Club International
45 44
1 10,189 9,231
958
The Ritz-Carlton Club
7 4
3 400
280 120
Grand Residences by
Marriott
3 2
1 313
248 65
Horizons by Marriott
Vacation Club
2 2
- 328
328 -
------------------------- ---------------------------
Total
2,815 2,707 108
510,506 493,274 17,232
========================= ===========================
Number of Timeshare Interval, Fractional
and Whole Ownership Resorts(2)
----------------------------------------------------------------------
In Active
Total(3) Sales
-------- ---------
100% Company-Developed
----------------------
Marriott Vacation Club
International
44
24
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
--------------------------
Total
57
36
==========================
(1) Total Lodging Products excludes
the 2,045 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 September 8, 2006 and September 9, 2005
----------------------------------------------------------
Average Daily
REVPAR Occupancy
Rate
------ ---------
-------------
vs.
vs.
Brand
2006 2005 2006 vs. 2005
2006 2005
--------------------------------------------------------------------------
Marriott Hotels &
Resorts
$116.08 7.9% 74.0% -1.1% pts. $156.77
9.6%
The Ritz-Carlton(2)
$193.59 9.2% 73.4% 1.5% pts. $263.58
7.0%
Renaissance Hotels &
Resorts
$112.28 6.8% 73.3% -1.4% pts. $153.22
8.8%
Composite - Full-Service $123.48
8.0% 73.9% -0.9% pts. $167.16 9.3%
Residence Inn
$95.75 5.9% 81.7% -1.6% pts. $117.21
8.0%
Courtyard
$84.60 9.4% 73.0% -0.8% pts. $115.87
10.7%
TownePlace Suites
$64.21 11.1% 81.3% 0.4% pts. $78.99
10.5%
SpringHill Suites
$78.27 8.7% 76.1% -1.8% pts. $102.83
11.3%
Composite - Select-
Service & Extended-Stay
$85.77 8.3% 76.0% -1.1% pts. $112.93
9.9%
Composite - All
$107.42 8.1% 74.8% -1.0% pts. $143.69
9.5%
Comparable Systemwide North American Properties(1)
--------------------------------------------------------------------------
Twelve Weeks Ended September 8, 2006 and September 9, 2005
----------------------------------------------------------
Average Daily
REVPAR Occupancy
Rate
------ ---------
-------------
vs.
vs.
Brand
2006 2005 2006 vs. 2005
2006 2005
--------------------------------------------------------------------------
Marriott Hotels &
Resorts
$107.12 8.5% 73.1% -0.1% pts. $146.63
8.6%
The Ritz-Carlton(2)
$193.59 9.2% 73.4% 1.5% pts. $263.58
7.0%
Renaissance Hotels &
Resorts
$106.03 8.4% 73.6% -0.1% pts. $144.10
8.5%
Composite - Full-Service $112.57
8.6% 73.2% 0.0% pts. $153.88 8.5%
Residence Inn
$95.40 6.8% 83.0% -0.7% pts. $114.90
7.7%
Courtyard
$87.29 9.3% 75.6% -0.2% pts. $115.54
9.6%
Fairfield Inn
$64.28 9.5% 76.4% 0.5% pts. $84.14
8.8%
TownePlace Suites
$64.37 9.9% 80.8% 0.2% pts. $79.67
9.7%
SpringHill Suites
$76.99 10.1% 77.3% 0.1% pts. $99.64
10.0%
Composite - Select-
Service & Extended-Stay
$82.61 8.7% 78.1% -0.2% pts. $105.79
8.9%
Composite - All
$94.65 8.6% 76.1% -0.1% pts. $124.37
8.7%
(1) Composite -- All statistics include
properties for the Marriott Hotels
& Resorts,
The Ritz-Carlton, Renaissance Hotels & Resorts, Residence
Inn, Courtyard,
Fairfield Inn, TownePlace Suites, and SpringHill
Suites brands.
Full-Service composite statistics include properties
for Marriott
Hotels & Resorts, The Ritz-Carlton and Renaissance Hotels
& Resorts.
Select-Service and Extended-Stay composite statistics
include properties
for the Residence Inn, Courtyard, Fairfield Inn,
TownePlace
Suites and SpringHill Suites brands.
(2) Statistics for The Ritz-Carlton
are for June through August.
Marriott International, Inc.
Key Lodging Statistics
Comparable Company-Operated North American Properties(1)
--------------------------------------------------------------------------
Thirty-Six Weeks Ended September 8, 2006 and September 9, 2005
--------------------------------------------------------------
Average Daily
REVPAR Occupancy
Rate
------ ---------
-------------
vs.
vs.
Brand
2006 2005 2006 vs. 2005
2006 2005
--------------------------------------------------------------------------
Marriott Hotels &
Resorts
$120.86 8.5% 73.3% -0.4% pts. $164.99
9.0%
The Ritz-Carlton(2)
$223.76 10.2% 74.6% 2.7% pts. $299.92
6.2%
Renaissance Hotels &
Resorts
$119.20 12.0% 74.3% 1.6% pts. $160.34
9.6%
Composite - Full-Service $130.03
9.2% 73.5% 0.2% pts. $176.83 8.9%
Residence Inn
$94.13 8.4% 80.1% -0.4% pts. $117.45
9.0%
Courtyard
$85.30 11.0% 72.2% 0.0% pts. $118.12
11.1%
TownePlace Suites
$60.66 12.5% 77.6% 1.1% pts. $78.12
10.9%
SpringHill Suites
$76.16 9.6% 74.2% -1.1% pts. $102.65
11.2%
Composite - Select-
Service & Extended-Stay
$85.52 10.3% 74.8% -0.1% pts. $114.35 10.5%
Composite - All
$110.93 9.5% 74.1% 0.1% pts. $149.76
9.4%
Comparable Systemwide North American Properties(1)
--------------------------------------------------------------------------
Thirty-Six Weeks Ended September 8, 2006 and September 9, 2005
--------------------------------------------------------------
Average Daily
REVPAR Occupancy
Rate
------ ---------
-------------
vs.
vs.
Brand
2006 2005 2006 vs. 2005
2006 2005
--------------------------------------------------------------------------
Marriott Hotels &
Resorts
$109.83 9.4% 72.0% 0.6% pts. $152.64
8.5%
The Ritz-Carlton(2)
$223.76 10.2% 74.6% 2.7% pts. $299.92
6.2%
Renaissance Hotels &
Resorts
$110.17 12.0% 73.4% 1.7% pts. $150.12
9.4%
Composite - Full-Service $116.45
9.8% 72.3% 0.9% pts. $161.04 8.5%
Residence Inn
$91.66 8.6% 80.7% 0.5% pts. $113.57
8.0%
Courtyard
$85.58 10.6% 73.9% 0.7% pts. $115.85
9.6%
Fairfield Inn
$59.36 11.8% 72.4% 1.7% pts. $82.00
9.1%
TownePlace Suites
$61.54 11.4% 77.6% 0.9% pts. $79.28
10.1%
SpringHill Suites
$74.55 11.8% 75.5% 1.2% pts. $98.81
10.0%
Composite - Select-
Service & Extended-Stay
$79.58 10.3% 75.7% 0.9% pts. $105.18
9.0%
Composite - All
$94.30 10.1% 74.3% 0.9% pts. $126.89
8.8%
(1) Composite -- All statistics include
properties for the Marriott Hotels
& Resorts,
The Ritz-Carlton, Renaissance Hotels & Resorts, Residence
Inn, Courtyard,
Fairfield Inn, TownePlace Suites, and SpringHill
Suites brands.
Full-Service composite statistics include properties
for Marriott
Hotels & Resorts, The Ritz-Carlton and Renaissance Hotels
& Resorts.
Select-Service and Extended-Stay composite statistics
include properties
for the Residence Inn, Courtyard, Fairfield Inn,
TownePlace
Suites and SpringHill Suites brands.
(2) Statistics for The Ritz-Carlton
are for January through August.
Marriott International, Inc.
Key Lodging Statistics
Comparable Company-Operated International Properties(1,2)
--------------------------------------------------------------------------
Three Months Ended August 31, 2006 and August 31, 2005
------------------------------------------------------
Average Daily
REVPAR Occupancy
Rate
------ ---------
-------------
vs.
vs.
Region/Brand(3)
2006 2005 2006 vs. 2005
2006 2005
--------------------------------------------------------------------------
Caribbean & Latin
America
$105.48 9.5% 74.2% 1.2% pts. $142.25
7.7%
Continental Europe
$113.77 13.2% 75.3% 0.4% pts. $151.02 12.5%
United Kingdom
$192.62 17.6% 84.4% 3.9% pts. $228.26 12.2%
Middle East & Africa
$82.80 9.0% 69.1% 2.4% pts. $119.90
5.3%
Asia Pacific(4)
$88.08 12.7% 76.0% 1.3% pts. $115.90 10.8%
The Ritz-Carlton
International
$142.50 2.2% 68.3% -1.1% pts. $208.74
3.9%
Total International(5)
$110.22 11.3% 75.5% 0.9% pts. $146.06 10.0%
Worldwide(6)
$108.19 9.0% 75.0% -0.5% pts. $144.35
9.6%
Comparable Systemwide International Properties(1,2)
--------------------------------------------------------------------------
Three Months Ended August 31, 2006 and August 31, 2005
------------------------------------------------------
Average Daily
REVPAR Occupancy
Rate
------ ---------
-------------
vs.
vs.
Region/Brand(3)
2006 2005 2006 vs. 2005
2006 2005
--------------------------------------------------------------------------
Caribbean & Latin
America
$98.45 8.3% 72.7% 1.1% pts. $135.33
6.7%
Continental Europe
$113.21 13.0% 73.6% 1.5% pts. $153.87 10.6%
United Kingdom
$161.82 15.8% 78.8% 3.7% pts. $205.33 10.4%
Middle East & Africa
$79.57 9.4% 70.0% 2.4% pts. $113.61
5.7%
Asia Pacific(4)
$92.36 10.4% 76.6% 1.4% pts. $120.59
8.3%
The Ritz-Carlton
International
$142.50 2.2% 68.3% -1.1% pts. $208.74
3.9%
Total International(5)
$108.86 10.6% 74.8% 1.3% pts. $145.54
8.6%
Worldwide(6)
$97.10 9.0% 75.9% 0.2% pts. $127.96
8.8%
(1) International financial results
are reported on a period basis, while
International
statistics are reported on a monthly basis.
(2) Statistics are in constant dollars
for June through August. Excludes
North America
(except for Worldwide).
(3) Region information includes the
Marriott Hotels & Resorts, Renaissance
Hotels &
Resorts and Courtyard brands. Does not include The Ritz-
Carlton brand.
(4) Does not include Hawaii.
(5) Includes Hawaii.
(6) Includes international statistics
for the three calendar months ended
August 31,
2006 and August 31, 2005, and North American statistics for
the twelve
weeks ended September 8, 2006 and September 9, 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
Comparable Company-Operated International Properties(1,2)
--------------------------------------------------------------------------
Eight Months Ended August 31, 2006 and August 31, 2005
------------------------------------------------------
Average Daily
REVPAR Occupancy
Rate
------ ---------
-------------
vs.
vs.
Region/Brand(3)
2006 2005 2006 vs. 2005
2006 2005
--------------------------------------------------------------------------
Caribbean & Latin
America
$123.52 12.4% 76.7% 2.6% pts. $161.10
8.6%
Continental Europe
$102.49 10.3% 71.3% 2.0% pts. $143.75
7.2%
United Kingdom
$171.74 15.5% 79.0% 3.5% pts. $217.42 10.4%
Middle East & Africa
$95.88 10.5% 69.9% -0.7% pts. $137.08 11.6%
Asia Pacific(4)
$91.22 12.6% 75.4% 1.4% pts. $120.97 10.5%
The Ritz-Carlton
International
$154.35 4.2% 69.4% -2.4% pts. $222.36
7.8%
Total International(5)
$110.20 10.9% 74.1% 1.2% pts. $148.81
9.1%
Worldwide(6)
$110.75 9.9% 74.1% 0.4% pts. $149.52
9.4%
Comparable Systemwide International Properties(1,2)
--------------------------------------------------------------------------
Eight Months Ended August 31, 2006 and August 31, 2005
------------------------------------------------------
Average Daily
REVPAR Occupancy
Rate
------ ---------
-------------
vs.
vs.
Region/Brand(3)
2006 2005 2006 vs. 2005
2006 2005
--------------------------------------------------------------------------
Caribbean & Latin
America
$113.75 8.9% 74.1% 1.3% pts. $153.43
7.1%
Continental Europe
$100.85 10.9% 69.1% 2.3% pts. $146.04
7.3%
United Kingdom
$146.81 13.7% 73.7% 3.1% pts. $199.08
9.0%
Middle East & Africa
$90.61 11.4% 70.0% -0.7% pts. $129.52 12.5%
Asia Pacific(4)
$93.49 11.3% 75.7% 1.3% pts. $123.48
9.3%
The Ritz-Carlton
International
$154.35 4.2% 69.4% -2.4% pts. $222.36
7.8%
Total International(5)
$107.24 10.3% 72.9% 1.2% pts. $147.17
8.4%
Worldwide(6)
$96.31 10.1% 74.1% 0.9% pts. $129.99
8.7%
(1) International financial results
are reported on a period basis, while
International
statistics are reported on a monthly basis.
(2) Statistics are in constant dollars
for January through August.
Excludes North
America (except for Worldwide).
(3) Region information includes the
Marriott Hotels & Resorts, Renaissance
Hotels &
Resorts and Courtyard brands. Does not include The Ritz-
Carlton brand.
(4) Does not include Hawaii.
(5) Includes Hawaii.
(6) Includes international statistics
for the eight calendar months ended
August 31,
2006 and August 31, 2005, and North American statistics for
the thirty-six
weeks ended September 8, 2006 and September 9, 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. 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 $17 million
leveraged lease
impairment charge recorded in the 2005 third quarter
and discontinued
operations in order to better assess the period-over-period
performance of our
on-going core operating business. Management does
not consider the leveraged
lease investment to be related to our core lodging business.
In addition,
non-GAAP measures which exclude these non-lodging items
facilitate
management's comparison of our results with the results
of other lodging
companies.
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
($ in millions)
Fiscal Year 2006
---------------------------------------------------------------
Range
Range
------------------- -------------------
Estimated Estimated Estimated Estimated
------------------------------------------- -------------------
First Second Third Fourth
Fourth Full
Full
Quarter Quarter Quarter Quarter Quarter
Year Year
------- ------- ------- ------- ------- ---------
---------
Operating
income
$ 203 $ 274 $ 229
*** ***
*** ***
Add back:
Synthetic
Fuel
operating
loss
(income)
27 18 (2)
*** ***
*** ***
------- ------- ------- ------- ------- ---------
---------
Lodging
operating
income** $
230 $ 292 $ 227 $ 310
$ 335 $1,059 $1,084
======= ======= ======= ======= ======= =========
=========
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
fourth quarter and full year of 2006.
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
Measures that Exclude
Synthetic Fuel and Leveraged Lease Charge
(in millions, except per share amounts)
Twelve Weeks ending September 8, 2006
------------------------------------------------
Excluding
Synthetic
Fuel and
Synthetic Excluding Leveraged Leveraged
As Fuel Synthetic
Lease Lease
Reported Impact Fuel** Charge
Charge**
-------- -------- --------- --------- ---------
Operating income
$ 229 $ 2 $
227 $ - $ 227
Gains and other income
13 3
10 -
10
Interest income and
interest expense
(18) (3)
(15) -
(15)
Equity in losses
(1) -
(1) -
(1)
-------- -------- --------- --------- ---------
Income from continuing
operations before income
taxes and minority
interest
223 2
221 -
221
-------- -------- --------- --------- ---------
Tax provision
(78) (1)
(77) -
(77)
Reversal of tax credits
(4) (4)
- -
-
-------- -------- --------- --------- ---------
Total tax provision
(82) (5)
(77) -
(77)
-------- -------- --------- --------- ---------
Minority interest
- -
- -
-
-------- -------- --------- --------- ---------
Income (loss) from
continuing operations
$ 141 $ (3) $ 144
$ - $ 144
======== ======== ========= ========= =========
Diluted shares
424.7 424.7 424.7
424.7 424.7
Earnings (losses) from
continuing operations
per share - diluted
$ 0.33 $(0.01) $ 0.34 $
- $0.34
Tax rate
36.8%
34.8%
34.8%
Twelve Weeks ending September 9, 2005
------------------------------------------------
Excluding
Synthetic
Fuel and
Synthetic Excluding Leveraged Leveraged
As Fuel Synthetic
Lease Lease
Reported Impact Fuel** Charge
Charge**
-------- -------- --------- --------- ---------
Operating income (loss)
$ 135 $ (34) $ 169
$ - $ 169
Gains and other income
39 21
18 -
18
Interest income, provision
for loan losses and
interest expense
(28) -
(28) (17) (11)
Equity in earnings
17 -
17 -
17
-------- -------- --------- --------- ---------
Income (loss) from
continuing operations
before income taxes and
minority interest
163 (13) 176
(17) 193
-------- -------- --------- --------- ---------
Tax (provision)/benefit
(61) (3) (58)
6 (64)
Tax credits
28 28
- -
-
-------- -------- --------- --------- ---------
Total tax (provision)/
benefit
(33) 25
(58) 6
(64)
-------- -------- --------- --------- ---------
Minority interest
18 18
- -
-
-------- -------- --------- --------- ---------
Income (loss) from
continuing
operations $ 148 $ 30
$ 118 $ (11) $ 129
======== ======== ========= ========= =========
Diluted shares
458.7 458.7 458.7
458.7 458.7
Earnings (losses) from
continuing operations per
share - diluted(1)
$ 0.32 $ 0.07 $ 0.26 $(0.02)
$ 0.28
Tax rate
20.2%
33.0%
33.2%
** Denotes non-GAAP financial measures.
(1) The sum of earnings per share as
reported plus the individual earnings
per share
impact associated with Synthetic Fuel differs from earnings
per share
excluding Synthetic Fuel.
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
Measures that Exclude Synthetic Fuel, CTF Transaction,
and Leveraged Lease
Charge
(in millions, except per share amounts)
Thirty-six Weeks ending September 8, 2006
---------------------------------------------------------
Excluding
Synthetic
Fuel, CTF
Transaction
and
Synthetic Excluding CTF Leveraged Leveraged
As Fuel Synthetic
Trans- Lease Lease
Reported Impact Fuel** action
Charge Charge**
-------- -------- -------- ------- --------- ----------
Operating income
(loss)
$ 706 $ (43) $ 749
$ - $ -
$ 749
Gains and other
income
55 2
53 -
- 53
Interest income,
reversal of loan
losses and
interest expense
(49) (1) (48)
- -
(48)
Equity in earnings
2 -
2 -
- 2
-------- -------- -------- ------- --------- ----------
Income (loss) from
continuing
operations before
income taxes and
minority interest
714 (42) 756
- -
756
-------- -------- -------- ------- --------- ----------
Tax (provision)/
benefit
(251) 13 (264)
- -
(264)
Tax credits
28 28
- -
- -
-------- -------- -------- ------- --------- ----------
Total tax
(provision)/
benefit
(223) 41 (264)
- -
(264)
-------- -------- -------- ------- --------- ----------
Minority interest
6 5
1 -
- 1
-------- -------- -------- ------- --------- ----------
Income from
continuing
operations
$ 497 $ 4 $
493 $ - $ -
$ 493
======== ======== ======== ======= ========= ==========
Diluted shares
434.4 434.4 434.4
434.4 434.4 434.4
Earnings from
continuing
operations per
share - diluted $ 1.14
$ 0.01 $ 1.13 $ -
$ - $ 1.13
Tax rate
31.2%
34.9%
34.9%
Thirty-six Weeks ending September 9, 2005
---------------------------------------------------------
Excluding
Synthetic
Fuel, CTF
Transaction
and
Synthetic Excluding CTF Leveraged Leveraged
As Fuel Synthetic
Trans- Lease Lease
Reported Impact Fuel** action
Charge Charge**
-------- -------- -------- ------- --------- ----------
Operating income
(loss)
$ 334 $ (115) $ 449 $
(94) $ - $ 543
Gains and other
income
97 20
77 -
- 77
Interest income,
provision for
loan losses, and
interest
expense
(32) -
(32) -
(17) (15)
Equity in earnings
18 -
18 -
- 18
-------- -------- -------- ------- --------- ----------
Income (loss) from
continuing
operations before
income taxes and
minority interest
417 (95) 512
(94) (17) 623
-------- -------- -------- ------- --------- ----------
Tax (provision)/
benefit
(152) 21 (173)
32 6
(211)
Tax credits
134 134
- -
- -
-------- -------- -------- ------- --------- ----------
Total tax
(provision)/
benefit
(18) 155 (173)
32 6
(211)
-------- -------- -------- ------- --------- ----------
Minority interest
32 32
- -
- -
-------- -------- -------- ------- --------- ----------
Income (loss)
from continuing
operations
$ 431 $ 92 $ 339
$ (62) $ (11) $ 412
======== ======== ======== ======= ========= ==========
Diluted shares
470.6 470.6 470.6
470.6 470.6 470.6
Earnings (losses)
from continuing
operations per
share -
diluted(1)
$ 0.92 $ 0.20 $ 0.72 $(0.13)
$(0.02) $ 0.88
Tax rate
4.3%
33.8%
33.9%
** Denotes non-GAAP financial measures.
(1) The sum of earnings per share as
reported plus the individual earnings
per share
impact associated with Synthetic Fuel, CTF Transaction and
Leveraged
Lease charge differs from earnings per share excluding
Synthetic
Fuel, CTF Transaction and Leveraged Lease charge.
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure
EBITDA
($ in millions)
Fiscal Year 2006
------------------------------------
First Second Third
Quarter Quarter Quarter YTD Total
------- ------- ------- ---------
Net income
$ 65 $ 186 $ 141
$ 392
Cumulative effect of change in
accounting principle before
tax 173
- -
173
Interest expense
27 30
29 86
Tax provision from continuing operations
56 85
82 223
Tax benefit from change in accounting
principle
(68) -
- (68)
Depreciation
34 34
36 104
Amortization
6 8
8 22
Less: Depreciation reimbursed by
third-party owners
(4) (4) (4)
(12)
Interest expense from unconsolidated
joint ventures
5 6
5 16
Depreciation and amortization from
unconsolidated joint ventures
6 7
7 20
------- ------- ------- ---------
EBITDA**
$ 300 $ 352 $ 304
$ 956
Synthetic fuel adjustment
24 11
(4) 31
------- ------- ------- ---------
Adjusted EBITDA**
$ 324 $ 363 $ 300
$ 987
======= ======= ======= =========
Increase over 2005 Adjusted EBITDA
17% 19% 12%
16%
The following items make up the
Synthetic Fuel adjustment:
Pre-tax synthetic fuel operating
losses (income)
$ 31 $ 13 $ (2)
$ 42
Pre-tax minority interest - synthetic
fuel
(5) -
- (5)
Synthetic fuel depreciation
(2) (2) (2)
(6)
------- ------- ------- ---------
EBITDA adjustment for Synthetic Fuel
$ 24 $ 11 $ (4)
$ 31
======= ======= ======= =========
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
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 Transaction
- 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. |
