MARRIOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
Twelve Weeks Ended
--------------------
Percent
June 13, June 15, Better/
2008 2007
(Worse)
-------- -------- ---------
REVENUES
Base management fees
$161 $148
9
Franchise fees
110 101
9
Incentive management fees
103 116
(11)
Owned, leased, corporate housing and
other revenue (1)
319 312
2
Timeshare sales and services (2)
388 453
(14)
Cost reimbursements (3)
2,104 1,992
6
------ ------
Total Revenues
3,185 3,122
2
OPERATING COSTS AND EXPENSES
Owned, leased and corporate housing -
direct (4)
273 257
(6)
Timeshare - direct
311 331
6
Reimbursed costs
2,104 1,992
(6)
General, administrative and other (5)
184 207
11
------ ------
Total Expenses
2,872 2,787
(3)
------ ------
OPERATING INCOME
313 335
(7)
Gains and other income (6)
9 12
(25)
Interest expense
(38) (52)
27
Interest income
9 9
-
(Provision for) reversal of loan losses
- -
*
Equity in earnings (losses) (7)
(3) (1)
(200)
------ ------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES AND MINORITY
INTEREST
290 303
(4)
Provision for income taxes
(139) (128)
(9)
Minority interest, net of tax
2 -
*
------ ------
INCOME FROM CONTINUING OPERATIONS
153 175
(13)
Discontinued operations - Synthetic
Fuel, net of tax (8)
4 32
(88)
------ ------
NET INCOME
$157 $207
(24)
====== ======
EARNINGS PER SHARE - Basic
Earnings from continuing operations
$0.43 $0.46
(7)
Earnings from discontinued
operations (8)
0.01 0.08
(88)
------ ------
Earnings per share
$0.44 $0.54
(19)
====== ======
EARNINGS PER SHARE - Diluted
Earnings from continuing operations
$0.41 $0.43
(5)
Earnings from discontinued
operations (8)
0.01 0.08
(88)
------ ------
Earnings per share
$0.42 $0.51
(18)
====== ======
Basic Shares
353.5 382.9
Diluted Shares
370.0 403.8
* Percent can not be calculated.
(1) - Owned, leased, corporate housing and other revenue
includes revenue from the properties we own or lease, revenue from our
corporate housing business, termination fees 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. Timeshare sales and services includes gains on
the sale of timeshare note receivable securitizations.
(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 corporate housing business.
(5) - General, administrative and other expenses include
the overhead costs allocated to our segments, and our 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 (except timeshare
note securitizations gains), gains on the sale of joint ventures, and income
from cost method joint ventures.
(7) - Equity in earnings (losses) includes our equity
in earnings (losses) of unconsolidated equity method joint ventures.
(8) - Discontinued operations relates to our Synthetic
Fuel business which was shut down and substantially all the assets liquidated
at December 28, 2007.
MARRIOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
Twenty-Four Weeks Ended
-----------------------
Percent
June 13, June 15, Better/
2008 2007
(Worse)
-------- -------- ---------
REVENUES
Base management fees
$309 $282
10
Franchise fees
206 192
7
Incentive management fees
177 187
(5)
Owned, leased, corporate housing and
other revenue (1)
589 562
5
Timeshare sales and services (2)
714 822
(13)
Cost reimbursements (3)
4,137 3,913
6
------ ------
Total Revenues
6,132 5,958
3
OPERATING COSTS AND EXPENSES
Owned, leased and corporate housing -
direct (4)
517 476
(9)
Timeshare - direct
624 643
3
Reimbursed costs
4,137 3,913
(6)
General, administrative and other (5)
346 354
2
------ ------
Total Expenses
5,624 5,386
(4)
------ ------
OPERATING INCOME
508 572
(11)
Gains and other income (6)
12 47
(74)
Interest expense
(80) (85)
6
Interest income
20 18
11
(Provision for) reversal of loan losses
2 -
*
Equity in earnings (losses) (7)
24 1
2,300
------ ------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES AND
MINORITY INTEREST
486 553
(12)
Provision for income taxes
(214) (214)
-
Minority interest, net of tax
3 -
*
INCOME FROM CONTINUING OPERATIONS
275 339
(19)
Discontinued operations - Synthetic
Fuel, net of tax (8)
3 50
(94)
------ ------
NET INCOME
$278 $389
(29)
====== ======
EARNINGS PER SHARE - Basic
Earnings from continuing operations
$0.78 $0.88
(11)
Earnings from discontinued
operations (8)
0.01 0.13
(92)
------ ------
Earnings per share
$0.79 $1.01
(22)
====== ======
EARNINGS PER SHARE - Diluted
Earnings from continuing operations
$0.74 $0.83
(11)
Earnings from discontinued
operations (8)
0.01 0.12
(92)
------ ------
Earnings per share
$0.75 $0.95
(21)
====== ======
Basic Shares
353.9 385.5
Diluted Shares
371.2 407.9
* Percent can not be calculated.
(1) - Owned, leased, corporate housing and other revenue
includes revenue from the properties we own or lease, revenue from our
corporate housing business, termination fees and other revenue.
(2) - Timeshare sales and services includes total timeshare
revenue except for base fees, cost reimbursements, real estate gains and
joint venture earnings. Timeshare sales and services includes gains on
the sale of timeshare note receivable securitizations.
(3) - Cost reimbursements include reimbursements from
lodging properties for Marriott funded operating expenses.
(4) - Owned, leased and corporate housing - direct expenses
include operating expenses related to our owned or leased hotels, including
lease payments, pre-opening expenses and depreciation, plus expenses related
to our corporate housing business.
(5) - General, administrative and other expenses include
the overhead costs allocated to our segments, and our corporate overhead
costs and general expenses.
(6) - Gains and other income includes net gains on the
sale of real estate, gains on note sales or repayments (except timeshare
note securitizations gains), gains on the sale of joint ventures, and income
from cost method joint ventures.
(7) - Equity in earnings (losses) includes our equity
in earnings (losses) of unconsolidated equity method joint ventures.
(8) - Discontinued operations relates to our Synthetic
Fuel business which was shut down and substantially all the assets liquidated
at December 28, 2007.
Marriott International, Inc. Business Segments ($ in millions)
Twelve Weeks Ended
--------------------
Percent
June 13, June 15, Better/
2008 2007
(Worse)
-------- -------- ---------
REVENUES
North American Full-Service
$1,371 $1,282
7
North American Limited-Service
538 538
-
International
399 382
4
Luxury
403 370
9
Timeshare
461 532
(13)
------ ------
Total segment revenues (1)
3,172 3,104
2
Other unallocated corporate
13 18
(28)
------ ------
Total
$3,185 $3,122
2
====== ======
INCOME FROM CONTINUING OPERATIONS
North American Full-Service
$129 $132
(2)
North American Limited-Service
112 131
(15)
International
65 59
10
Luxury
23 18
28
Timeshare
70 107
(35)
------ ------
Total segment financial results (1)
399 447
(11)
Other unallocated corporate
(77) (101)
24
Interest income, provision for loan
losses and interest expense
(29) (43)
33
Income taxes (2)
(140) (128)
(9)
------ ------
Total
$153 $175
(13)
====== ======
(1) We consider segment revenues and segment 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 revenues and results of our lodging operations to those of
other lodging companies.
(2) We allocate minority interest of our consolidated
subsidiaries to our segments. Accordingly, minority interest of our consolidated
subsidiaries of $2 million for the 2008 second quarter as reflected in
our income statement, was allocated as follows: $4 million to our Timeshare
segment, $(1) million to our International segment, and $(1) million to
Provision for income taxes.
Marriott International, Inc. Business Segments ($ in millions)
Twenty-Four Weeks Ended
-----------------------
Percent
June 13, June 15, Better/
2008 2007
(Worse)
-------- -------- ---------
REVENUES
North American Full-Service
$2,678 $2,526
6
North American Limited-Service
1,026 1,001
2
International
751 713
5
Luxury
790 709
11
Timeshare
863 975
(11)
------ ------
Total segment revenues (1)
6,108 5,924
3
Other unallocated corporate
24 34
(29)
------ ------
Total
$6,132 $5,958
3
====== ======
INCOME FROM CONTINUING OPERATIONS
North American Full-Service
$224 $246
(9)
North American Limited-Service
198 218
(9)
International
129 109
18
Luxury
49 29
69
Timeshare
74 151
(51)
------ ------
Total segment financial results (1)
674 753
(10)
Other unallocated corporate
(125) (133)
6
Interest income, provision for loan
losses and interest expense
(58) (67)
13
Income taxes (2)
(216) (214)
(1)
------ ------
Total
$275 $339
(19)
====== ======
(1) We consider segment revenues and segment 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 revenues and results of our lodging operations to those of
other lodging companies.
(2) We allocate minority interest of our consolidated
subsidiaries to our segments. Accordingly, minority interest of our consolidated
subsidiaries of $3 million for the year-to-date 2008 second quarter as
reflected in our income statement, was allocated as follows: $6 million
to our Timeshare segment, $(1) million to our International segment, and
$(2) million to Provision for income taxes.
MARRIOTT INTERNATIONAL, INC.
Total Lodging Products (1)
Number of Properties Number of Rooms/Suites
-------------------- ----------------------
vs.
vs.
June June June June
June June
13, 15, 15, 13,
15, 15,
Brand
2008 2007 2007 2008
2007 2007
-----
---- ---- ---- ----
---- ----
Domestic Full-Service
Marriott Hotels & Resorts
344 341 3 137,130
135,800 1,330
Renaissance Hotels &
Resorts
76 69 7 27,721
25,369 2,352
Domestic Limited-Service
Courtyard
708 668 40 98,901
93,328 5,573
Fairfield Inn
536 513 23 47,572
45,592 1,980
SpringHill Suites
195 162 33 22,718
18,898 3,820
Residence Inn
534 507 27 63,843
60,293 3,550
TownePlace Suites
152 128 24 15,195
12,857 2,338
International
Marriott Hotels & Resorts
179 180 (1) 52,457
51,967 490
Renaissance Hotels &
Resorts
64 72 (8) 21,118
23,423 (2,305)
Courtyard
77 72 5 14,576
13,620 956
Fairfield Inn
9 7 2
1,111 756 355
SpringHill Suites
1 1 -
124 124
-
Residence Inn
18 19 (1) 2,611
2,732 (121)
Marriott Executive
Apartments
19 18 1
3,029 3,005 24
Ramada
- 2 (2)
- 332 (332)
Luxury
The Ritz-Carlton -
Domestic
36 34 2 11,437
11,343 94
The Ritz-Carlton -
International
33 28 5 10,171
8,242 1,929
Bulgari Hotels & Resorts
2 2 -
117 117
-
The Ritz-Carlton
Residential
21 15 6
2,122 1,425 697
The Ritz-Carlton
Serviced Apartments
2 1 1
387 245 142
Timeshare (2)
Marriott Vacation Club
48 46 2 11,181
10,682 499
The Ritz-Carlton Club -
Fractional
7 7 -
388 388
-
The Ritz-Carlton Club -
Residential
3 2 1
145 82
63
Grand Residences by
Marriott - Fractional
2 2 -
248 248
-
Grand Residences by
Marriott - Residential
1 - 1
65 -
65
Horizons by Marriott
Vacation Club
2 2 -
444 372 72
------------------ ------------------------
Sub Total Timeshare
63 59 4 12,471
11,772 699
------------------ ------------------------
Total
3,069 2,898 171 544,811 521,240 23,571
================== ========================
Number of Timeshare
Interval, Fractional and Residential Resorts (2)
--------------------------------------------------------------------
In Active
Total (3)
Sales
---------- ---------
100% Company-Developed
Marriott Vacation Club
48
26
The Ritz-Carlton Club and Residences
7
5
Grand Residences by Marriott and
Residences
3
3
Horizons by Marriott Vacation
Club
2
2
Joint Ventures
The Ritz-Carlton Club and Residences
3
3
------
------
Total
63
39
======
======
(1) Total Lodging Products excludes the 2,225 and 2,054
corporate housing rental units associated with our ExecuStay brand as of
June 13, 2008 and June 15, 2007, respectively.
(2) Includes products in active sales which may not be
ready for occupancy.
(3) Includes resorts that are in active sales and those
that are sold out. Residential properties are captured once they possess
a certificate of occupancy.
Marriott International, Inc. Key Lodging Statistics
Comparable Company-Operated International Properties (1)
--------------------------------------------------------
Three Months Ended May 31, 2008 and May 31, 2007
------------------------------------------------
Average Daily
REVPAR Occupancy
Rate
-----------------------------------------------
vs.
vs.
vs.
Region
2008 2007 2008 2007
2008 2007
--------------------------------------------------------------------------
Caribbean & Latin America $159.01
8.0% 78.1% 0.5% pts. $203.49 7.3%
Continental Europe
$157.12 4.6% 73.2% -2.5% pts. $214.52
8.1%
United Kingdom
$141.23 2.9% 76.1% -0.5% pts. $185.57
3.6%
Middle East & Africa
$145.16 22.2% 83.1% 6.7% pts. $174.69 12.3%
Asia Pacific (2)
$119.87 5.4% 74.5% 0.4% pts. $160.89
4.8%
Regional Composite (3) $143.24
6.5% 75.8% 0.0% pts. $189.06 6.5%
International Luxury (4) $258.37 10.2%
75.3% 0.7% pts. $343.05 9.1%
Total International (5) $156.22
7.2% 75.7% 0.1% pts. $206.33 7.1%
Worldwide (6)
$134.92 3.2% 75.4% -0.5% pts. $178.96
3.9%
Comparable Systemwide International Properties (1) --------------------------------------------------
Three Months Ended May 31, 2008 and May 31, 2007
------------------------------------------------
Average Daily
REVPAR Occupancy
Rate
-----------------------------------------------
vs.
vs.
vs.
Region
2008 2007 2008 2007
2008 2007
--------------------------------------------------------------------------
Caribbean & Latin America $138.46
5.0% 74.2% -0.9% pts. $186.62 6.3%
Continental Europe
$157.01 8.6% 71.7% -0.5% pts. $218.84
9.4%
United Kingdom
$138.99 2.9% 75.5% -0.5% pts. $184.03
3.6%
Middle East & Africa
$145.16 22.2% 83.1% 6.7% pts. $174.69 12.3%
Asia Pacific (2)
$120.34 4.1% 74.5% -0.4% pts. $161.46
4.6%
Regional Composite (3) $140.41
6.9% 74.5% 0.0% pts. $188.58 6.9%
International Luxury (4) $258.37 10.2%
75.3% 0.7% pts. $343.05 9.1%
Total International (5) $151.21
7.5% 74.5% 0.1% pts. $202.87 7.3%
Worldwide (6)
$112.53 2.6% 74.1% -1.1% pts. $151.95
4.0%
(1) International financial results are reported on a
period basis, while International statistics are reported on a monthly
basis. Statistics are in constant dollars for March through May. Excludes
North America (except for Worldwide).
(2) Does not include Hawaii.
(3) Regional information includes the Marriott Hotels
& Resorts, Renaissance Hotels & Resorts and Courtyard brands. Includes
Hawaii.
(4) International Luxury includes The Ritz-Carlton properties
outside of North America and Bulgari Hotels & Resorts.
(5) Includes Regional Composite and International Luxury.
(6) Includes international statistics for the three calendar
months ended May 31, 2008 and May 31, 2007, and North American statistics
for the twelve weeks ended June 13, 2008 and June 15, 2007. Includes the
Marriott Hotels & Resorts, Renaissance Hotels & Resorts, The Ritz-Carlton,
Bulgari Hotels & Resorts, Residence Inn, Courtyard, Fairfield Inn,
TownePlace Suites, and SpringHill Suites brands.
Marriott International, Inc. Key Lodging Statistics
Comparable Company-Operated International Properties (1)
--------------------------------------------------------
Five Months Ended May 31, 2008 and May 31, 2007
-----------------------------------------------
Average Daily
REVPAR Occupancy
Rate
-----------------------------------------------
vs.
vs.
vs.
Region
2008 2007 2008 2007
2008 2007
--------------------------------------------------------------------------
Caribbean & Latin America $160.87 10.3%
77.9% 1.7% pts. $206.63 7.9%
Continental Europe
$143.42 6.7% 69.6% -1.0% pts. $206.03
8.3%
United Kingdom
$135.23 2.3% 72.8% -1.3% pts. $185.67
4.2%
Middle East & Africa
$139.25 19.0% 80.0% 4.9% pts. $174.15 11.7%
Asia Pacific (2)
$119.83 7.1% 73.9% 0.4% pts. $162.17
6.4%
Regional Composite (3) $137.81
7.7% 73.6% 0.3% pts. $187.20 7.3%
International Luxury (4) $248.19 12.9%
74.1% 3.1% pts. $334.81 8.1%
Total International (5) $150.26
8.7% 73.7% 0.6% pts. $203.95 7.8%
Worldwide (6)
$126.47 3.7% 72.0% -0.3% pts. $175.65
4.2%
Comparable Systemwide International Properties (1) --------------------------------------------------
Five Months Ended May 31, 2008 and May 31, 2007
-----------------------------------------------
Average Daily
REVPAR Occupancy
Rate
-----------------------------------------------
vs.
vs.
vs.
Region
2008 2007 2008 2007
2008 2007
--------------------------------------------------------------------------
Caribbean & Latin America $137.31
6.8% 72.5% 0.0% pts. $189.32 6.8%
Continental Europe
$141.82 10.1% 67.9% 0.8% pts. $208.90
8.9%
United Kingdom
$132.99 2.2% 72.2% -1.3% pts. $184.12
4.1%
Middle East & Africa
$139.25 19.0% 80.0% 4.9% pts. $174.15 11.7%
Asia Pacific (2)
$119.06 5.1% 73.3% -0.5% pts. $162.32
5.8%
Regional Composite (3) $133.72
7.7% 71.9% 0.3% pts. $185.94 7.3%
International Luxury (4) $248.19 12.9%
74.1% 3.1% pts. $334.81 8.1%
Total International (5) $144.17
8.6% 72.1% 0.6% pts. $199.91 7.7%
Worldwide (6)
$105.48 2.9% 70.6% -0.9% pts. $149.43
4.2%
(1) International financial results are reported on a
period basis, while International statistics are reported on a monthly
basis. Statistics are in constant dollars for January through May. Excludes
North America (except for Worldwide).
(2) Does not include Hawaii.
(3) Regional information includes the Marriott Hotels
& Resorts, Renaissance Hotels & Resorts and Courtyard brands. Includes
Hawaii.
(4) International Luxury includes The Ritz-Carlton properties
outside of North America and Bulgari Hotels & Resorts.
(5) Includes Regional Composite and International Luxury.
(6) Includes international statistics for the five calendar
months ended May 31, 2008 and May 31, 2007, and North American statistics
for the twenty- four weeks ended June 13, 2008 and June 15, 2007. Includes
the Marriott Hotels & Resorts, Renaissance Hotels & Resorts, The
Ritz-Carlton, Bulgari Hotels & Resorts, Residence Inn, Courtyard, Fairfield
Inn, TownePlace Suites, and SpringHill Suites brands.
Marriott International, Inc. Key Lodging Statistics
Comparable Company-Operated North American Properties
-----------------------------------------------------
Twelve Weeks Ended June 13, 2008 and June 15, 2007
--------------------------------------------------
Average Daily
REVPAR Occupancy
Rate
-----------------------------------------------
vs.
vs.
vs.
Brand
2008 2007 2008 2007
2008 2007
--------------------------------------------------------------------------
Marriott Hotels & Resorts $139.67
2.7% 75.9% -0.3% pts. $184.10 3.2%
Renaissance Hotels &
Resorts
$131.75 1.5% 74.7% 0.2% pts. $176.46
1.2%
Composite North American
Full-Service (1)
$138.29 2.5% 75.7% -0.2% pts. $182.79 2.9%
The Ritz-Carlton (2)
$277.21 1.1% 76.3% 0.5% pts. $363.32
0.4%
Composite North American
Full-Service & Luxury (3) $151.78
2.3% 75.7% -0.2% pts. $200.45 2.5%
Residence Inn
$101.22 0.5% 79.3% -1.1% pts. $127.69 1.9%
Courtyard
$95.51 -0.4% 72.7% -1.2% pts. $131.44 1.2%
TownePlace Suites
$62.38 -6.4% 71.6% -5.9% pts. $87.14 1.3%
SpringHill Suites
$84.91 1.1% 76.6% -0.5% pts. $110.82 1.7%
Composite North American
Limited-Service (4)
$94.44 -0.3% 74.7% -1.3% pts. $126.45 1.5%
Composite - All (5)
$126.61 1.4% 75.3% -0.7% pts. $168.22 2.3%
Comparable Systemwide North American Properties -----------------------------------------------
Twelve Weeks Ended June 13, 2008 and June 15, 2007
--------------------------------------------------
Average Daily
REVPAR Occupancy
Rate
-----------------------------------------------
vs.
vs.
vs.
Brand
2008 2007 2008 2007
2008 2007
--------------------------------------------------------------------------
Marriott Hotels & Resorts $122.37
2.2% 72.8% -0.8% pts. $168.07 3.3%
Renaissance Hotels &
Resorts
$119.24 1.3% 73.5% -0.3% pts. $162.15 1.7%
Composite North American
Full-Service (1)
$121.87 2.1% 72.9% -0.7% pts. $167.12 3.1%
The Ritz-Carlton (2)
$277.21 1.1% 76.3% 0.5% pts. $363.32
0.4%
Composite North American
Full-Service & Luxury (3) $130.73
1.9% 73.1% -0.7% pts. $178.79 2.8%
Residence Inn
$100.50 1.8% 79.1% -0.8% pts. $127.00 2.8%
Courtyard
$95.05 0.8% 73.6% -1.2% pts. $129.21 2.5%
Fairfield Inn
$65.69 -1.2% 70.8% -3.5% pts. $92.79 3.6%
TownePlace Suites
$65.42 -1.8% 73.5% -2.6% pts. $88.98 1.7%
SpringHill Suites
$81.62 -1.3% 73.9% -2.5% pts. $110.40 2.0%
Composite North American
Limited-Service (4)
$88.09 0.5% 74.5% -1.7% pts. $118.22 2.8%
Composite - All (5)
$104.87 1.2% 74.0% -1.3% pts. $141.79 3.0%
(1) Includes the Marriott Hotels & Resorts and Renaissance
Hotels & Resorts brands.
(2) Statistics for The Ritz-Carlton are for March through
May.
(3) Includes the Marriott Hotels & Resorts, Renaissance
Hotels & Resorts and The Ritz-Carlton brands.
(4) Includes the Residence Inn, Courtyard, Fairfield Inn,
TownePlace Suites and SpringHill Suites brands.
(5) Includes the Marriott Hotels & Resorts, Renaissance
Hotels & Resorts, The Ritz-Carlton, Residence Inn, Courtyard, Fairfield
Inn, TownePlace Suites, and SpringHill Suites brands.
Marriott International, Inc. Key Lodging Statistics
Comparable Company-Operated North American Properties
-----------------------------------------------------
Twenty-Four Weeks Ended June 13, 2008 and June 15, 2007
-------------------------------------------------------
Average Daily
REVPAR Occupancy
Rate
-----------------------------------------------
vs.
vs.
vs.
Brand
2008 2007 2008 2007
2008 2007
--------------------------------------------------------------------------
Marriott Hotels & Resorts $131.25
2.5% 71.8% -0.8% pts. $182.85 3.6%
Renaissance Hotels &
Resorts
$125.02 2.3% 71.8% 0.2% pts. $174.18
2.0%
Composite North American
Full-Service (1)
$130.17 2.4% 71.8% -0.6% pts. $181.34 3.3%
The Ritz-Carlton (2)
$270.34 2.2% 74.1% 0.9% pts. $364.76
0.9%
Composite North American
Full-Service & Luxury (3) $141.61
2.4% 72.0% -0.5% pts. $196.75 3.1%
Residence Inn
$96.98 1.0% 75.6% -0.7% pts. $128.26 2.0%
Courtyard
$90.60 0.3% 68.7% -0.8% pts. $131.90 1.5%
TownePlace Suites
$60.49 -3.9% 68.3% -4.5% pts. $88.53 2.4%
SpringHill Suites
$80.38 3.1% 71.7% 0.7% pts. $112.06
2.1%
Composite North American
Limited-Service (4)
$89.97 0.5% 70.8% -0.9% pts. $127.08 1.8%
Composite - All (5)
$118.72 1.8% 71.5% -0.7% pts. $166.16 2.7%
Comparable Systemwide North American Properties -----------------------------------------------
Twenty-Four Weeks Ended June 13, 2008 and June 15, 2007
Average Daily
REVPAR Occupancy
Rate
-----------------------------------------------
vs.
vs.
vs.
Brand
2008 2007 2008 2007
2008 2007
--------------------------------------------------------------------------
Marriott Hotels & Resorts $116.25
1.9% 69.3% -1.2% pts. $167.84 3.6%
Renaissance Hotels &
Resorts
$113.74 1.7% 70.6% -0.3% pts. $161.08 2.1%
Composite North American
Full-Service (1)
$115.85 1.8% 69.5% -1.0% pts. $166.74 3.3%
The Ritz-Carlton (2)
$270.34 2.2% 74.1% 0.9% pts. $364.76
0.9%
Composite North American
Full-Service & Luxury (3) $123.23
1.9% 69.7% -0.9% pts. $176.80 3.3%
Residence Inn
$96.40 2.2% 75.9% -0.7% pts. $127.07 3.1%
Courtyard
$89.63 1.3% 69.5% -1.0% pts. $128.94 2.7%
Fairfield Inn
$61.70 0.8% 66.6% -2.5% pts. $92.61
4.5%
TownePlace Suites
$63.12 -0.7% 70.2% -1.9% pts. $89.89 1.9%
SpringHill Suites
$78.41 0.6% 70.6% -1.5% pts. $111.11 2.7%
Composite North American
Limited-Service (4)
$83.64 1.3% 70.7% -1.3% pts. $118.23 3.2%
Composite - All (5)
$99.09 1.6% 70.3% -1.1% pts. $140.89 3.3%
(1) Includes the Marriott Hotels & Resorts and Renaissance
Hotels & Resorts brands.
(2) Statistics for The Ritz-Carlton are for January through
May.
(3) Includes the Marriott Hotels & Resorts, Renaissance
Hotels & Resorts and The Ritz-Carlton brands.
(4) Includes the Residence Inn, Courtyard, Fairfield Inn,
TownePlace Suites and SpringHill Suites brands.
(5) Includes the Marriott Hotels & Resorts, Renaissance
Hotels & Resorts, The Ritz-Carlton, Residence Inn, Courtyard, Fairfield
Inn, TownePlace Suites, and SpringHill Suites brands.
MARRIOTT INTERNATIONAL, INC.
TIMESHARE SEGMENT
($ in millions)
Segment revenues
----------------
Twelve Weeks Ended
------------------ Percent
June 13, June 15, Better/
2008 2007
(Worse)
------- -------
-------
Segment revenues
$461 $532
(13)
======= =======
Segment Results
---------------
Twelve Weeks Ended
------------------ Percent
June 13, June 15, Better/
2008 2007
(Worse)
------- -------
-------
Base fees revenue
$12 $10
20
Timeshare sales and services, net
77 122
(37)
Joint venture equity earnings
2 (1)
300
Minority interest
4 -
*
General, administrative and other
expenses
(25) (24)
(4)
------- -------
Segment results
$70 $107
(35)
======= =======
Sales and Services Revenue
--------------------------
Twelve Weeks Ended
------------------ Percent
June 13, June 15, Better/
2008 2007
(Worse)
------- -------
-------
Development
$252 $303
(17)
Services
79 72
10
Financing
49 69
(29)
Other revenue
8 9
(11)
------- -------
Sales and services revenue $388
$453 (14)
======= =======
Contract Sales (1)
------------------
Twelve Weeks Ended
------------------ Percent
June 13, June 15, Better/
2008 2007
(Worse)
------- -------
-------
Company:
Timeshare
$291 $289
1
Fractional
8 6
33
Residential
27 -
*
------- -------
Total company
326 295
11
Joint ventures:
Timeshare
- 8
(100)
Fractional
6 21
(71)
Residential
2 35
(94)
------- -------
Total joint
ventures
8 64
(88)
------- -------
Total contract
sales,
including
joint ventures
$334 $359
(7)
======= =======
* Percent can not be calculated.
(1) - Timeshare segment contract sales represent gross
sales of timeshare, fractional, and residential products from both our
wholly owned and joint venture projects, before the adjustment for percentage-of-completion
accounting.
MARRIOTT INTERNATIONAL, INC.
TIMESHARE SEGMENT
($ in millions)
Segment revenues
----------------
Twenty-Four Weeks Ended
----------------------- Percent
June 13, June 15, Better/
2008 2007
(Worse)
------- -------
-------
Segment revenues
$863 $975
(11)
======= =======
Segment Results
---------------
Twenty-Four Weeks Ended
----------------------- Percent
June 13, June 15, Better/
2008 2007
(Worse)
------- -------
-------
Base fees revenue
$23 $20
15
Timeshare sales and services, net
90 179
(50)
Joint venture equity earnings
7 (1)
800
Minority interest
6 -
*
General, administrative and other
expenses
(52) (47)
(11)
------- --------
Segment results
$74 $151
(51)
======= ========
Sales and Services Revenue
--------------------------
Twenty-Four Weeks Ended
----------------------- Percent
June 13, June 15, Better/
2008 2007
(Worse)
------- -------
-------
Development
$457 $567
(19)
Services
163 148
10
Financing
76 92
(17)
Other revenue
18 15
20
------- --------
Sales and services revenue
$714 $822
(13)
======= ========
Contract Sales (1)
------------------
Twenty-Four Weeks Ended
----------------------- Percent
June 13, June 15, Better/
2008 2007
(Worse)
------- -------
-------
Company:
Timeshare
$576 $564
2
Fractional
16 15
7
Residential
39 -
*
------- --------
Total company
631 579
9
Joint ventures:
Timeshare
- 16
(100)
Fractional
11 39
(72)
Residential
25 51
(51)
------- --------
Total joint
ventures
36 106
(66)
------- --------
Total contract
sales,
including
joint ventures
$667 $685
(3)
======= ========
* Percent can not be calculated.
(1) - Timeshare segment contract sales represent gross
sales of timeshare, fractional, and residential products from both our
wholly owned and joint venture projects, before the adjustment for percentage-of-completion
accounting.
MARRIOTT INTERNATIONAL, INC. Non-GAAP Financial Measures
In our press release and schedules, and related conference
call, 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
GAAP measures to the non-GAAP measures (identified by a double asterisk
on the following pages) that we refer to in our press release and related
conference call. Although 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 revenue, 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.
Earnings Before Interest, Taxes, Depreciation and Amortization.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
reflects earnings excluding the impact of interest expense, tax expense,
depreciation and amortization. Our management considers 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.
EBITDA is used by analysts, lenders, investors and others, as well as by
us, to evaluate companies because it excludes certain items that can vary
widely across different industries or among companies within the same industry.
For example, interest expense can be dependent on a company's capital structure,
debt levels and credit ratings. Accordingly, the impact of interest expense
on earnings can vary significantly among companies. Additionally, the tax
positions of companies can vary because of their differing abilities to
take advantage of tax benefits and because of the tax policies of the jurisdictions
in which they operate. As a result, effective tax rates and tax expense
can vary considerably among companies. EBITDA also excludes depreciation
and amortization because companies utilize productive assets of different
ages and use different methods of both acquiring and depreciating productive
assets. These differences can result in considerable variability in the
relative costs of productive assets and the depreciation and amortization
expense among companies.
ESOP Settlement Charge. Management evaluates non-GAAP
measures that exclude the charge associated with the 2007 settlement of
issues raised during the IRS' and Department of Labor's examination of
the employee stock ownership plan ("ESOP") feature of our Employees' Profit
Sharing, Retirement and Savings Plan and Trust, including adjusted earnings
per share and adjusted earnings before interest, taxes, depreciation and
amortization, because these measures allow for period-over-period comparisons
relative to our on-going operations before material charges. Additionally,
these non-GAAP measures facilitate management's comparison of our results
relative to on-going operations before material charges with that of other
lodging companies. The settlement resulted in an after-tax charge of $54
million in the second quarter 2007 reflecting $35 million of excise taxes
(impacting General, Administrative, and Other Expenses), $13 million of
interest expense on those excise taxes and $6 million of income tax expense
primarily reflecting additional interest.
Adjusted EBITDA. Our management also evaluates adjusted
EBITDA which excludes the synthetic fuel business for 2007, as well as
the $35 million charge in 2007 for excise taxes associated with the ESOP
settlement. The synthetic fuel operations, discontinued in 2007, are not
related to our core business, which is lodging. Accordingly, our management
evaluates non-GAAP measures which exclude the impact of the synthetic fuel
business 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. Our management excludes the excise taxes associated
with the ESOP settlement for the reasons noted above in the "ESOP Settlement
Charge" caption.
Prior Years' Tax Adjustments and Foreign Subsidiaries
Related Income Tax Charges. Management evaluates non-GAAP measures including
adjusted earnings per share and adjusted taxes that exclude: 1) income
tax expense in the 2008 second quarter totaling $12 million primarily due
to prior years' tax adjustments, including a settlement with the IRS that
resulted in a lower than expected refund of taxes associated with a 1995
leasing transaction; and 2) income tax expense in the 2008 second quarter
totaling $24 million related to the tax treatment of funds received from
foreign subsidiaries that is in on- going discussions with the IRS. We
evaluate these non-GAAP measures because these measures allow for period-over-period
comparisons relative to our on- going operations before material charges.
Additionally, these non-GAAP measures facilitate management's comparison
of our results relative to on- going operations before material charges
with the results of other lodging companies.
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure
EBITDA and Adjusted EBITDA
($ in millions)
Fiscal Year 2008
---------------------
First Second
Quarter Quarter Total
------- ------- -----
Net income
$121 $157 $278
Interest expense
42 38 80
Tax provision, continuing operations
75 139 214
Tax provision, minority interest
1 1 2
Tax (benefit) provision, synthetic
fuel
- (6) (6)
Depreciation and amortization
41 47 88
Less: Depreciation reimbursed by
third-party owners
(3) (3) (6)
Interest expense from unconsolidated
joint ventures
4 4 8
Depreciation and amortization from
unconsolidated joint ventures
5 6 11
---- ---- ----
EBITDA**
$286 $383 $669
Discontinued operations adjustment
(synthetic fuel)
1 2 3
---- ---- ----
Adjusted EBITDA**
$287 $385 $672
==== ==== ====
Increase (Decrease) over 2007
Adjusted EBITDA
-14% -13% -13%
The following items make up the
discontinued operations
adjustment (synthetic fuel)
Pre-tax Synthetic Fuel losses
(income)
$1 $2 $3
---- ---- ----
EBITDA adjustment for discontinued
operations (synthetic fuel)
$1 $2 $3
==== ==== ====
Fiscal Year 2007
-------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
------- ------- ------- ------- -----
Net income
$182 $207 $131 $176
$696
Interest expense
33 52 42
57 184
Tax provision, continuing operations
86 128 93
134 441
Tax (benefit) provision, synthetic
fuel
(72) (86) (41) 73
(126)
Depreciation and amortization
46 45 43
63 197
Less: Depreciation reimbursed by
third-party owners
(4) (4) (4)
(6) (18)
Interest expense from unconsolidated
joint ventures
5 5 8
6 24
Depreciation and amortization from
unconsolidated joint ventures
6 7 6
9 28
---- ---- ---- ----
------
EBITDA**
$282 $354 $278 $512
$1,426
ESOP Settlement - Excise Tax
$- $35 $-
$- $35
Discontinued operations adjustment
(synthetic fuel)
52 52 30
(15) 119
---- ---- ---- ----
------
Adjusted EBITDA**
$334 $441 $308 $497
$1,580
==== ==== ==== ====
======
The following items make up the
discontinued operations
adjustment (synthetic fuel)
Pre-tax Synthetic Fuel losses
(income)
$54 $54 $32 $(13)
$127
Synthetic Fuel depreciation
(2) (2) (2)
(2) (8)
---- ---- ---- ----
------
EBITDA adjustment for discontinued
operations (synthetic fuel)
$52 $52 $30 $(15)
$119
==== ==== ==== ====
======
** Denotes non-GAAP financial measures.
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
Measures that Exclude ESOP Settlement
(in millions, except per share amounts)
Second Quarter 2007
-------------------------------------
Excluding
ESOP the ESOP
As Reported Settlement Settlement**
----------- ---------- ------------
Income (losses) from continuing
operations before income taxes
and minority interest
$303 $(48)
$351
Provision for income taxes
(128) (6)
(122)
----------- --------- ----------
Income from continuing operations
$175 $(54)
$229
=========== ========= ==========
Diluted shares
403.8 403.8
403.8
Earnings per share from continuing
operations - diluted
$0.43 $(0.14)
$0.57
Tax rate
42.2%
34.8%
** Denotes non-GAAP financial measures.
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
Measures that
Exclude Prior Years' Tax Adjustments and Foreign
Subsidiaries Related Income Tax Charges
(in millions, except per share amounts)
Second Quarter 2008
-------------------------------------
Excluding
Prior Years' the Prior
Tax Years' Tax
Adjustments Adjustments
and Foreign and Foreign
Subsidiaries Subsidiaries
Related Related
Income Tax Income Tax
As Reported Charges Charges**
----------- ---------- ----------
Income (losses) from continuing
operations before income taxes
and minority interest
$290 $-
$290
Provision for income taxes
(139) (36)
(103)
Minority interest, net of tax
2 -
2
------ ------
------
Income from continuing operations
$153 $(36)
$189
====== ======
======
Diluted shares
370.0 370.0
370.0
Earnings per share from continuing
operations - diluted
$0.41 $(0.10)
$0.51
Tax rate
47.9%
35.5%
** Denotes non-GAAP financial measures. |