Hotel Online
News for the Hospitality Executive
advertisement


Marriott Reports 2nd Qtr Profit of $37 million, Down 76% from a Year Earlier;
Revpar Falls 23.6% in 2nd Qtr / Hotel Operating Statistics



BETHESDA, Md., July 16, 2009 - Marriott International, Inc. ("Marriott") (NYSE:MAR) today reported second quarter 2009 adjusted income from continuing operations attributable to Marriott of $84 million, a 56 percent decline over the year-ago quarter, and adjusted diluted earnings per share ("EPS") from continuing operations attributable to Marriott shareholders of $0.23, down 55 percent. The company's EPS guidance for the 2009 second quarter, disclosed on April 23, 2009, totaled $0.20 to $0.23.

The reported income from continuing operations attributable to Marriott was $37 million in the second quarter of 2009 compared to reported income from continuing operations attributable to Marriott of $153 million in the year-ago quarter. Reported diluted EPS from continuing operations attributable to Marriott shareholders was $0.10 in the second quarter of 2009 compared to diluted EPS from continuing operations attributable to Marriott shareholders of $0.41 in the second quarter of 2008.

Adjusted results for the 2009 second quarter exclude $57 million pretax ($30 million after-tax and $0.08 per diluted share) of restructuring costs and other charges resulting from the continued soft lodging and timeshare demand environment. Restructuring costs totaled $33 million pretax and primarily included severance costs and timeshare facilities exit costs. Other charges totaled $24 million pretax primarily reflecting revaluation of residual interests from prior timeshare note sales, reserves for loan losses and guarantees and other charges. Of the total restructuring costs and other charges, cash payments are expected to be $31 million. See the table on page A-13 of the accompanying schedules for the detail of these restructuring costs and other charges and their placement on the Consolidated Statements of Income.

Adjusted results for the 2009 second quarter also exclude $17 million of non-cash charges ($0.05 per diluted share) in the provision for income taxes primarily related to the treatment of funds received from certain foreign subsidiaries that is in ongoing discussions with the Internal Revenue Service ("IRS").

Adjusted results for the 2008 second quarter exclude the $36 million ($0.10 per diluted share) impact of non-cash items included in the tax provision. These prior year items included a $24 million tax reserve related to the treatment of funds received from certain foreign subsidiaries with the remaining $12 million expense due primarily to prior years' tax adjustments, including a settlement with the IRS associated with a 1995 leasing transaction.

J.W. Marriott, Jr., chairman and chief executive officer of Marriott International, said, "In the midst of a continued difficult environment for the travel and tourism industry, our company retains its focus on driving revenue, reducing costs and strengthening the balance sheet.

"In the second quarter, we delivered impressive house profit margins as a result of ongoing cost controls and operational improvements, despite a significant decline in revenue per available room. Our efficient delivery of high quality products and services continues to get solid reviews from owners and franchisees as we manage through the difficult economy. Our 110,000-room global hotel development pipeline demonstrates owners' and franchisees' ongoing confidence in our brands and management expertise.

"Across the enterprise our lodging brands continue to show significant REVPAR premiums as our teams launch quick-to-market and focused revenue generation initiatives. Our timeshare business rolled out a successful 25th Anniversary stimulus promotion in the second quarter, which significantly improved timeshare contract sales compared to first quarter levels, while significant cost reductions helped the bottom line. We expect timeshare to deliver positive cash flow in 2009.

"Most importantly, both customer and associate satisfaction levels remain high in both our lodging and timeshare businesses. As a result, we remain confident in the long term prospects for our company."

In the 2009 second quarter (12-week period from March 28, 2009 to June 19, 2009), REVPAR for the company's worldwide comparable company-operated properties declined 26.1 percent (23.0 percent using constant dollars) and REVPAR for the company's worldwide comparable systemwide properties declined 23.6 percent (21.4 percent using constant dollars).

Markets outside North America were impacted by the difficult economic climate as well as concerns about the H1N1 flu. International comparable company-operated REVPAR declined 31.5 percent (22.1 percent using constant dollars), including a 22.3 percent decline in average daily rate (11.6 percent using constant dollars) in the second quarter of 2009.

In North America comparable company-operated REVPAR declined 23.4 percent and comparable systemwide REVPAR declined 21.2 percent. REVPAR at the company's comparable company-operated North American full-service and luxury hotels (including Marriott Hotels & Resorts, The Ritz-Carlton and Renaissance Hotels & Resorts) was down 23.5 percent driven by a 14.7 percent decline in average daily rate.

Marriott added 62 new properties (8,462 rooms) to its worldwide lodging portfolio in the 2009 second quarter, including the 118-room Renaissance Paris Arc de Triomphe. Three properties (861 rooms) exited the system during the quarter. At quarter-end, the company's lodging group encompassed 3,286 properties and timeshare resorts for a total of nearly 577,000 rooms. As of the end of the second quarter, the company's worldwide pipeline of hotels under construction, awaiting conversion or approved for development totaled over 110,000 rooms.

Reported results for the 2009 second quarter, the adjusted results and the associated reconciliations are shown on pages A-1 and A-13 of the accompanying schedules. The following paragraphs reflect adjusted results where indicated.

MARRIOTT REVENUES totaled approximately $2.6 billion in the 2009 second quarter compared to $3.2 billion for the second quarter of 2008. Base management and franchise fees declined 19 percent to $219 million reflecting worldwide declines in REVPAR in all brands offset in part by fees from new hotels. With continued soft lodging demand trends worldwide, second quarter incentive management fees declined 66 percent. The percentage of company-operated hotels earning incentive management fees declined to 23 percent in the 2009 second quarter compared to 58 percent in the year-ago quarter. Sixty-one percent of incentive management fees came from hotels outside of North America in the 2009 quarter compared to 37 percent in the 2008 quarter.

Worldwide comparable company-operated house profit margins declined 450 basis points in the second quarter reflecting weak REVPAR offset by continued efficiency improvements at the property level. House profit margins for comparable company-operated properties outside North America declined 310 basis points. North American comparable company-operated house profit margins declined 530 basis points from the year-ago quarter.

Owned, leased, corporate housing and other revenue, net of direct expenses, declined 54 percent in the 2009 second quarter, to $21 million, primarily reflecting weaker operating results at owned and leased properties, lower termination fees, and the impact of four hotels converting to management agreements during the second quarter of 2008, partially offset by higher branding fees.

Second quarter adjusted Timeshare segment contract sales declined 37 percent to $212 million excluding the $3 million allowance for fractional and residential contract cancellations recorded in the quarter. While demand remains soft, particularly in fractional and residential products, Marriott Vacation Club's 25th Anniversary marketing program was successful. Second quarter 2009 adjusted contract sales were $55 million higher than adjusted first quarter 2009 levels.

In the second quarter of 2009, adjusted Timeshare sales and services revenue declined 24 percent to $295 million and, net of expenses, declined to $16 million from $77 million in the 2008 second quarter. Adjusted results reflected lower development profit due to continued soft demand for timeshare, fractional, and residential products and an $8 million charge related to an issue with a state tax authority. Financing profit declined largely as a result of the absence of a note sale in the second quarter of 2009, compared to a $29 million note sale gain recognized in the second quarter of 2008.

Adjusted Timeshare segment results, which includes Timeshare sales and services revenue, net of direct expenses, as well as base management fees, equity earnings, noncontrolling interest and general, administrative and other expenses associated with the timeshare business, totaled $15 million in the 2009 second quarter compared to $70 million in the prior year quarter.

ADJUSTED GENERAL, ADMINISTRATIVE AND OTHER expenses for the 2009 second quarter totaled $136 million, a 26 percent decline from the year-ago quarter reflecting cost reductions throughout the organization as well as an $8 million reversal of incentive compensation accruals.

GAINS AND OTHER INCOME totaled $3 million largely related to gains on the sale of real estate. The prior year's second quarter gains totaled $9 million and included $5 million of gains on the sale of real estate, a $1 million gain from the sale of the company's interest in a joint venture and $3 million of returns from joint venture investments.

INTEREST EXPENSE decreased $10 million in the second quarter primarily due to lower interest rates on short-term borrowings and lower debt balances.

BALANCE SHEET

At the end of second quarter 2009, total debt was $2,849 million and cash balances totaled $125 million, compared to $3,095 million in debt and $134 million of cash at year-end 2008. As of the end of the second quarter 2009, Marriott had unused capacity of approximately $1.4 billion under its $2.4 billion bank revolver.

COMMON STOCK

Weighted average fully diluted shares outstanding totaled 363.5 million in the 2009 second quarter compared to 371.3 million in the year-ago quarter. The remaining share repurchase authorization, as of June 19, 2009, totaled 21.3 million shares. No share repurchases are planned in 2009.

On May 1, 2009, the Board of Directors declared the issuance of a stock dividend payable on July 30, 2009, to shareholders of record on June 25, 2009. For periods prior to the stock dividend, all share and per share data in our condensed consolidated financial statements and related notes have been retroactively adjusted to reflect the stock dividend.

OUTLOOK

While Marriott typically provides a range of guidance for future performance, the current global economic and financial climate continues to make predictions very difficult. Therefore, the company is unable to give its typical guidance. Instead, the company is providing the following assumptions which it is using for internal planning purposes. For the third quarter, the company assumes North American comparable systemwide hotel REVPAR declines of 20 to 23 percent. For comparable systemwide hotels outside North America, the company assumes REVPAR declines of 22 to 24 percent on a constant dollar basis. Total fee revenue could total $210 million to $220 million, including incentive fees of only $0 to $10 million. Owned, leased, corporate housing and other revenue, net of direct expenses, could total $0 to $5 million.

In the third quarter, the company assumes Timeshare sales and services revenue, net of direct expenses, totals about $15 million. Third quarter Timeshare contract sales could total $165 million to $175 million.

The company anticipates that general, administrative and other expenses will total about $135 million to $145 million in the third quarter of 2009, a roughly 15 percent decline from the 2008 third quarter.

Based upon the above assumptions and a 39 percent tax rate, adjusted diluted EPS from continuing operations attributable to Marriott shareholders for the 2009 third quarter could total $0.09 to $0.14.

For the full year 2009, the company expects the business climate, particularly the pricing environment, to remain very unpredictable. In addition, booking windows remain very short. For comparable systemwide hotels in North America, the company continues to assume a 17 to 20 percent decline in REVPAR for full year 2009. With continued concerns regarding the H1N1 virus and weakening economies in most international markets, the company assumes full year 2009 REVPAR declines of 17 to 20 percent for comparable systemwide hotels outside North America on a constant dollar basis.

The company expects to open over 30,000 rooms in 2009 as most hotels expected to open are already under construction or undergoing conversion from other brands. All in all, fee revenue under these assumptions could total roughly $1,030 million to $1,060 million in 2009. The company estimates that incentive management fees in 2009 would derive largely from international markets. Owned, leased, corporate housing and other revenue, net of direct expenses, could total $55 million to $60 million in 2009. The company estimates that, on a full-year basis, one point of worldwide systemwide REVPAR impacts total fees by approximately $15 million to $20 million and one point of REVPAR impacts owned, leased, corporate housing and other revenue, net of direct expenses, by roughly $4 million.

Similar to lodging, timeshare demand is difficult to predict and the business is more complex to forecast and model, particularly in this weak economic environment. In 2009, if adjusted Timeshare segment contract sales total roughly $800 million, then adjusted Timeshare sales and services revenue, net of direct expenses, could total approximately $45 million. Base management fees associated with the timeshare business are likely to increase and timeshare site, regional and corporate overhead is likely to decline in 2009. In contrast, rental rates remain weak and maintenance fees on unsold units are likely to increase. While the company expects to complete an additional timeshare note sale in 2009, pricing is likely to remain unfavorable, so no note sale gain is assumed. Under this scenario, adjusted Timeshare segment results for 2009 could total approximately $25 million. The company estimates that a $50 million change in Timeshare segment contract sales could impact Timeshare segment pretax earnings by $5 million to $10 million.

The company anticipates that adjusted general, administrative and other expenses will decline from $751 million in 2008 to about $585 million to $605 million in 2009. Further, the company anticipates a 39 percent tax rate for the second half of the year.

While the company cannot forecast results with any certainty, based upon the above assumptions, adjusted diluted EPS from continuing operations attributable to Marriott shareholders for 2009 could total $0.76 to $0.86. Assuming the investment spending levels shown below, debt levels, net of cash, are expected to decline $600 million to $650 million during 2009.

The company expects investment spending in 2009 will decline by more than 50 percent from 2008 levels to approximately $325 million to $375 million. This investment spending estimate includes $145 million to $155 million for capital expenditures and maintenance capital spending, $25 million to $35 million for net timeshare development, $80 million to $90 million in new mezzanine financing and mortgage loans, $35 million to $45 million for contract acquisition costs and $40 million to $50 million in equity and other investments (including timeshare equity investments).
 
 
 
 

MARRIOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)

                                         Adjustments
                         ------------------------------------------------
                                                                   As
                                                                Adjusted
                          As Reported   Restructuring            12 Weeks
                            12 Weeks         Costs      Certain   Ended
                             Ended         & Other        Tax   June 19,
                         June 19, 2009     Charges(5)    Items    2009**
                         -------------  --------------  ------- ---------
 

  REVENUES
  Base management
   fees                        $126              $-       $-      $126
  Franchise fees                 93               -        -        93
  Incentive
   management fees               35               -        -        35
  Owned, leased,
   corporate
   housing and
   other revenue (1)            238               -        -       238
  Timeshare sales
   and services (2)             283              12        -       295
  Cost
   reimbursements (3)         1,787               -        -     1,787
                              -----             ---      ---     -----
     Total Revenues           2,562              12        -     2,574

  OPERATING COSTS
   AND EXPENSES
  Owned, leased
   and corporate
   housing - direct (4)         217               -        -       217
  Timeshare - direct            279               -        -       279
  Reimbursed costs            1,787               -        -     1,787
  Restructuring costs            33             (33)       -         -
  General,
   administrative and
   other (6)                    146             (10)       -       136
                                ---             ---      ---       ---
     Total Expenses           2,462             (43)       -     2,419
                              -----             ---      ---     -----

  OPERATING INCOME              100              55        -       155

  Gains and
   other income (7)               3               -        -         3
  Interest expense              (28)              -        -       (28)
  Interest income                 9               -        -         9
  (Provision for)
   reversal of loan
   losses                        (1)              1        -         -
  Equity in (losses)
   earnings (8)                  (4)              1        -        (3)
                                 --             ---      ---        --

  INCOME FROM CONTINUING
   OPERATIONS BEFORE
   INCOME TAXES                  79              57        -       136

  Provision for
   income taxes                 (44)            (27)      17       (54)
                                ---             ---       --       ---

  INCOME FROM
   CONTINUING OPERATIONS         35              30       17        82

  Discontinued operations -
   Synthetic Fuel, net of
   tax (9)                        -               -        -         -
                                ---             ---      ---       ---

  NET INCOME                     35              30       17        82

  Add: Net losses
   attributable to
   noncontrolling
   interests, net of tax          2               -        -         2
                                ---             ---      ---       ---

  NET INCOME
   ATTRIBUTABLE TO
   MARRIOTT                     $37             $30      $17       $84
                                ===             ===      ===       ===

  EARNINGS PER
   SHARE - Basic
     Earnings from
      continuing
      operations
      attributable to
      Marriott
      shareholders (10)       $0.10           $0.08    $0.05     $0.24
     Earnings from
      discontinued
      operations (9)              -               -        -         -
                                ---             ---      ---       ---
     Earnings per
      share
      attributable to
      Marriott
      shareholders (10)       $0.10           $0.08    $0.05     $0.24
                              =====           =====    =====     =====

  EARNINGS PER
   SHARE - Diluted
     Earnings from
      continuing
      operations
      attributable to
      Marriott
      shareholders (10)       $0.10           $0.08    $0.05     $0.23
     Earnings from
      discontinued
      operations (9)              -               -        -         -
                                ---             ---      ---       ---
     Earnings per
      share
      attributable to
      Marriott
      shareholders (10)       $0.10           $0.08    $0.05     $0.23
                              =====           =====    =====     =====
 

  Basic Shares (11)           353.7           353.7    353.7     353.7
  Diluted Shares (11)         363.5           363.5    363.5     363.5

  Reconciliation of
   Income from
   Continuing
   Operations
   Attributable to
   Marriott:
  -----------------

  CONSOLIDATED
   INCOME FROM
   CONTINUING
   OPERATIONS                   $35             $30      $17       $82
  Add: Losses
   attributable to
   noncontrolling
   interests, net of tax          2               -        -         2
                                ---             ---      ---       ---
  INCOME FROM
   CONTINUING
   OPERATIONS
   ATTRIBUTABLE
   TO MARRIOTT                  $37             $30      $17       $84
                                ===             ===      ===       ===
 
 

                                            Adjustments
                               ------------------------------------------
                                                                Percent
                                 As                             Better/
                               Reported             As          (Worse)
                                 12               Adjusted      Adjusted
                                Weeks             12 Weeks        2009
                                Ended     Certain   Ended          vs.
                               June 13,     Tax   June 13,       Adjusted
                                 2008      Items    2008**         2008
                               ---------  ------- ---------     ---------
 

  REVENUES
  Base management fees            $161       $-      $161          (22)
  Franchise fees                   110        -       110          (15)
  Incentive management
   fees                            103        -       103          (66)
  Owned, leased,
   corporate
   housing and
   other revenue (1)               319        -       319          (25)
  Timeshare
   sales and
   services (2)                    388        -       388          (24)
  Cost
   reimbursements (3)            2,104        -     2,104          (15)
                                 -----      ---     -----
     Total
      Revenues                   3,185        -     3,185          (19)

  OPERATING COSTS AND
   EXPENSES
  Owned, leased
   and corporate
   housing - direct (4)            273        -       273           21
  Timeshare - direct               311        -       311           10
  Reimbursed costs               2,104        -     2,104           15
  Restructuring costs                -        -         -            *
  General, administrative
   and other (6)                   184        -       184           26
                                   ---      ---       ---
     Total Expenses              2,872        -     2,872           16
                                 -----      ---     -----

  OPERATING INCOME                 313        -       313          (50)

  Gains and
   other income (7)                  9        -         9          (67)
  Interest expense                 (38)       -       (38)          26
  Interest income                    9        -         9            -
  (Provision
   for) reversal
   of loan losses                    -        -         -            *
  Equity in
   (losses)
   earnings (8)                     (3)       -        (3)           -
                                   ---      ---       ---

  INCOME FROM CONTINUING
   OPERATIONS BEFORE INCOME
   TAXES                           290        -       290          (53)

  Provision for income taxes      (139)      36      (103)          48
                                  ----      ---      ----

  INCOME FROM
   CONTINUING OPERATIONS           151       36       187          (56)

  Discontinued
   operations -
   Synthetic
   Fuel, net of
   tax (9)                           4        -         4         (100)
                                   ---      ---       ---

  NET INCOME                       155       36       191          (57)

  Add: Net losses
   attributable to
   noncontrolling
   interests, net
   of tax                            2        -         2            -
                                   ---      ---       ---

  NET INCOME
   ATTRIBUTABLE
   TO MARRIOTT                    $157      $36      $193          (56)
                                  ====      ===      ====

  EARNINGS PER
   SHARE -
   Basic
     Earnings from
      continuing
      operations
      attributable
      to Marriott
      shareholders
      (10)                       $0.43    $0.10     $0.53          (55)
     Earnings from
      discontinued
      operations (9)              0.01        -      0.01         (100)
                                  ----      ---      ----
     Earnings per
      share
      attributable
      to Marriott
      shareholders
      (10)                       $0.44    $0.10     $0.54          (56)
                                 =====    =====     =====

  EARNINGS PER
   SHARE - Diluted
     Earnings from
      continuing
      operations
      attributable
      to Marriott
      shareholders
      (10)                       $0.41    $0.10     $0.51          (55)
     Earnings from
      discontinued
      operations (9)              0.01        -      0.01         (100)
                                  ----      ---      ----
     Earnings per
      share
      attributable
      to Marriott
      shareholders
      (10)                       $0.42    $0.10     $0.52          (56)
                                 =====    =====     =====
 

  Basic Shares (11)              354.8    354.8     354.8
  Diluted Shares (11)            371.3    371.3     371.3

  Reconciliation of
   Income from
   Continuing
   Operations
   Attributable to
   Marriott:
  -----------------

  CONSOLIDATED
   INCOME FROM
   CONTINUING
   OPERATIONS                     $151      $36      $187          (56)
  Add: Losses
   attributable to
   noncontrolling
   interests, net of
   tax                               2        -         2            -
                                   ---      ---       ---
  INCOME FROM
   CONTINUING
   OPERATIONS
   ATTRIBUTABLE
   TO MARRIOTT                    $153      $36      $189          (56)
                                  ====      ===      ====

  *   Percent can not be calculated.
  **  Denotes non-GAAP financial measures.  Please see page A-17 for
      additional information about our reasons for providing these
      alternative financial measures and the limitations on their use.

  (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 management fees, cost reimbursements, real estate
         gains and joint venture earnings.  Timeshare sales and services
         also includes gains / (losses) 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)  - See page A-13 for information regarding Restructuring Costs
         and Other Charges.
  (6)  - General, administrative and other expenses include the
         overhead costs allocated to our segments, and our corporate
         overhead costs and general expenses.
  (7)  - Gains and other income includes gains and losses on the sale
         of real estate, gains on note sales or repayments (except
         timeshare note securitizations gains), sale of joint ventures,
         gains on debt extinguishment and income from cost method joint
         ventures.
  (8)  - Equity in (losses) earnings includes our equity in (losses) /
         earnings of unconsolidated equity method joint ventures.
  (9)  - Discontinued operations relates to our Synthetic Fuel business
         which was shut down and substantially all the assets liquidated at
         December 28, 2007.
  (10) - Earnings per share attributable to Marriott shareholders plus
         adjustment items may not equal earnings per share attributable to
         Marriott shareholders as adjusted due to rounding.
  (11) - All share numbers and per share amounts have been
         retroactively adjusted to reflect the stock dividend that will be
         distributed on July 30, 2009.

                         MARRIOTT INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF INCOME
                   (in millions, except per share amounts)

                                               Adjustments
                              ---------------------------------------------
                                 As                                  As
                               Reported                           Adjusted
                              24 Weeks   Restructuring            24 Weeks
                                Ended         Costs      Certain   Ended
                              June 19,      & Other        Tax     June 19,
                                 2009       Charges (5)   Items     2009**
                              ---------  --------------  -------  ---------
 

  REVENUES
  Base management fees             $251              $-       $-      $251
  Franchise fees                    181               -        -       181
  Incentive management fees          78               -        -        78
  Owned, leased, corporate
   housing and other revenue (1)    458               -        -       458
  Timeshare sales and
   services (2)                     492              29        -       521
  Cost reimbursements (3)         3,597               -        -     3,597
                                  -----             ---      ---     -----
     Total Revenues               5,057              29        -     5,086

  OPERATING COSTS AND
   EXPENSES
  Owned, leased and
   corporate housing -
   direct (4)                       424               -        -       424
  Timeshare - direct                499               1        -       500
  Reimbursed costs                3,597               -        -     3,597
  Restructuring costs                35             (35)       -         -
  General, administrative and
   other (6)                        320             (48)       -       272
                                    ---             ---      ---       ---
     Total Expenses               4,875             (82)       -     4,793
                                  -----             ---      ---     -----

  OPERATING INCOME                  182             111        -       293

  Gains and other income (7)         28               -        -        28
  Interest expense                  (57)              -        -       (57)
  Interest income                    15               -        -        15
  (Provision for) reversal of
   loan losses                      (43)             43        -         -
  Equity in (losses)
   earnings  (8)                    (38)             32        -        (6)
                                    ---             ---      ---       ---

  INCOME FROM CONTINUING
   OPERATIONS BEFORE INCOME
   TAXES                             87             186        -       273

  Provision for income taxes        (77)            (72)      43      (106)
                                    ---             ---       --      ----

  INCOME FROM CONTINUING
   OPERATIONS                        10             114       43       167

  Discontinued operations -
   Synthetic Fuel, net of tax
   (9)                                -               -        -         -
                                    ---             ---      ---       ---

  NET INCOME                         10             114       43       167

  Add: Net losses
   attributable to
   noncontrolling interests,
   net of tax                         4               -        -         4
                                    ---             ---      ---       ---

  NET INCOME ATTRIBUTABLE TO
   MARRIOTT                         $14            $114      $43      $171
                                    ===            ====      ===      ====

  EARNINGS PER SHARE - Basic
     Earnings from
      continuing operations
      attributable to
      Marriott shareholders
      (10)                        $0.04           $0.32    $0.12     $0.48
     Earnings from
      discontinued
      operations (9)                  -               -        -         -
                                    ---             ---      ---       ---
     Earnings per share
      attributable to
      Marriott
      shareholders (10)           $0.04           $0.32    $0.12     $0.48
                                  =====           =====    =====     =====

  EARNINGS PER SHARE -
   Diluted
     Earnings from
      continuing operations
      attributable to
      Marriott shareholders (10)  $0.04           $0.31    $0.12     $0.47
     Earnings from
      discontinued
      operations (9)                  -               -        -         -
                                    ---             ---      ---       ---
     Earnings per share
      attributable to
      Marriott
      shareholders (10)           $0.04           $0.31    $0.12     $0.47
                                  =====           =====    =====     =====
 

  Basic Shares (11)               352.7           352.7    352.7     352.7
  Diluted Shares (11)             361.6           361.6    361.6     361.6

  Reconciliation of Income
   from Continuing
   Operations Attributable
   to Marriott:
  ------------------------

  CONSOLIDATED INCOME
   FROM CONTINUING
   OPERATIONS                       $10            $114      $43      $167
  Add: Losses attributable
   to noncontrolling
   interests, net of tax              4               -        -         4
                                    ---             ---      ---       ---
  INCOME FROM CONTINUING
   OPERATIONS ATTRIBUTABLE TO
   MARRIOTT                         $14            $114      $43      $171
                                    ===            ====      ===      ====
 
 

                                                Adjustments
                                  -----------------------------------------
                                                                  Percent
                                     As                 As        Better/
                                  Reported           Adjusted     (Worse)
                                  24 Weeks           24 Weeks     Adjusted
                                    Ended    Certain   Ended      2009 vs.
                                   June 13,     Tax   June 13,    Adjusted
                                     2008     Items    2008**       2008
                                  ---------  ------- ---------    ---------
 

  REVENUES
  Base management fees               $309       $-      $309          (19)
  Franchise fees                      206        -       206          (12)
  Incentive management fees           177        -       177          (56)
  Owned, leased,
   corporate housing and
   other revenue (1)                  589        -       589          (22)
  Timeshare sales and
   services (2)                       714        -       714          (27)
  Cost reimbursements (3)           4,137        -     4,137          (13)
                                    -----      ---     -----
     Total Revenues                 6,132        -     6,132          (17)

  OPERATING COSTS AND EXPENSES
  Owned, leased and
   corporate housing -
   direct (4)                         517        -       517           18
  Timeshare - direct                  624        -       624           20
  Reimbursed costs                  4,137        -     4,137           13
  Restructuring costs                   -        -         -            *
  General, administrative and
   other (6)                          346        -       346           21
                                      ---      ---       ---
     Total Expenses                 5,624        -     5,624           15
                                    -----      ---     -----

  OPERATING INCOME                    508        -       508          (42)

  Gains and other income (7)           12        -        12          133
  Interest expense                    (80)       -       (80)          29
  Interest income                      20        -        20          (25)
  (Provision for)
   reversal of loan
   losses                               2        -         2         (100)
  Equity in (losses)
   earnings (8)                        24        -        24         (125)
                                      ---      ---       ---

  INCOME FROM CONTINUING
   OPERATIONS BEFORE
   INCOME TAXES                       486        -       486          (44)

  Provision for income taxes         (214)      36      (178)          40
                                     ----       --      ----

  INCOME FROM CONTINUING
   OPERATIONS                         272       36       308          (46)

  Discontinued operations -
    Synthetic Fuel, net of
     tax (9)                            3        -         3         (100)
                                      ---      ---       ---

  NET INCOME                          275       36       311          (46)

  Add: Net losses
   attributable to
   noncontrolling interests,
   net of tax                           3        -         3           33
                                      ---      ---       ---

  NET INCOME ATTRIBUTABLE TO
   MARRIOTT                          $278      $36      $314          (46)
                                     ====      ===      ====

  EARNINGS PER SHARE - Basic
     Earnings from
      continuing operations
      attributable to
      Marriott shareholders
      (10)                          $0.77    $0.10     $0.87          (45)
     Earnings from
      discontinued
      operations (9)                 0.01        -      0.01         (100)
                                     ----      ---      ----
     Earnings per share
      attributable to Marriott
      shareholders (10)             $0.78    $0.10     $0.88          (45)
                                    =====    =====     =====

  EARNINGS PER SHARE - Diluted
     Earnings from
      continuing operations
      attributable to
      Marriott shareholders (10)    $0.74    $0.10     $0.83          (43)
     Earnings from
      discontinued
      operations (9)                 0.01        -      0.01         (100)
                                     ----      ---      ----
     Earnings per share
      attributable to Marriott
      shareholders (10)             $0.75    $0.10     $0.84          (44)
                                    =====    =====     =====
 

  Basic Shares (11)                 355.2    355.2     355.2
  Diluted Shares (11)               372.5    372.5     372.5

  Reconciliation of Income from
   Continuing Operations
   Attributable to Marriott:
  -----------------------------

  CONSOLIDATED INCOME
   FROM CONTINUING
   OPERATIONS                        $272      $36      $308          (46)
  Add: Losses attributable to
   noncontrolling interests,
   net of tax                           3        -         3           33
                                      ---      ---       ---
  INCOME FROM CONTINUING
   OPERATIONS ATTRIBUTABLE
   TO MARRIOTT                       $275      $36      $311          (45)
                                     ====      ===      ====

  *   Percent can not be calculated.
  **  Denotes non-GAAP financial measures.  Please see page A-17 for
      additional information about our reasons for providing these
      alternative financial measures and the limitations on their use.

  (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 management fees, cost reimbursements, real estate
         gains and joint venture earnings.  Timeshare sales and services
         also includes gains / (losses) 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)  - See page A-13 for information regarding Restructuring Costs and
         Other Charges.
  (6)  - General, administrative and other expenses include the overhead
         costs allocated to our segments, and our corporate overhead costs
         and general expenses.
  (7)  - Gains and other income includes gains and losses on the sale of
         real estate, gains on note sales or repayments (except timeshare
         note securitizations gains), sale of joint ventures, gains on debt
         extinguishment and income from cost method joint ventures.
  (8)  - Equity in (losses) earnings includes our equity in (losses) /
         earnings of unconsolidated equity method joint ventures.
  (9)  - Discontinued operations relates to our Synthetic Fuel business
         which was shut down and substantially all the assets liquidated at
         December 28, 2007.
  (10) - Earnings per share attributable to Marriott shareholders plus
         adjustment items may not equal earnings per share attributable to
         Marriott shareholders as adjusted due to rounding.
  (11) - All share numbers and per share amounts have been retroactively
         adjusted to reflect the stock dividend that will be distributed on
         July 30, 2009.

                         MARRIOTT INTERNATIONAL, INC.
                               BUSINESS SEGMENTS
                                ($ IN MILLIONS)
 

                                              Twelve Weeks
                                                  Ended
                                            -----------------   Percent
                                            June 19, June 13,   Better/
                                              2009    2008      (Worse)
                                            -------- --------   -------

  REVENUES

  North American Full-Service               $1,142  $1,371        (17)
  North American Limited-Service               471     538        (12)
  International                                250     399        (37)
  Luxury                                       324     403        (20)
  Timeshare                                    355     461        (23)
                                               ---     ---
    Total segment revenues (1)               2,542   3,172        (20)
  Other unallocated corporate                   20      13         54
                                               ---     ---
    Total                                   $2,562  $3,185        (20)
                                            ======  ======
 

  INCOME / (LOSS) FROM CONTINUING OPERATIONS

  North American Full-Service                  $71    $129        (45)
  North American Limited-Service                72     112        (36)
  International (2)                             27      65        (58)
  Luxury                                        15      23        (35)
  Timeshare (2)                                (35)     70       (150)
                                               ---     ---
    Total segment financial results 1          150     399        (62)
  Other unallocated corporate                  (47)    (77)        39
  Interest income, provision for loan losses
    and interest expense                       (20)    (29)        31
  Income taxes (2)                             (46)   (140)        67
                                               ---    ----
    Total                                      $37    $153        (76)
                                               ===    ====

  (1)  We consider segment revenues and segment financial results to be
       meaningful indicators of our performance because they
       measure changes in our 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 noncontrolling interests of our consolidated
       subsidiaries to our segments.  Accordingly, we allocated $2 million
       of noncontrolling interests of our consolidated subsidiaries for the
       2009 second quarter as reflected in our income statement
       as follows: $4 million to our Timeshare segment and $(2) million to
       provision for income taxes.  For the 2008 second quarter,
       we allocated $2 million of noncontrolling interests 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 19, June 13,   Better/
                                             2009    2008      (Worse)
                                           -------- --------   -------

  REVENUES

  North American Full-Service               $2,308  $2,678        (14)
  North American Limited-Service               912   1,026        (11)
  International                                497     751        (34)
  Luxury                                       675     790        (15)
  Timeshare                                    632     863        (27)
                                               ---     ---
    Total segment revenues (1)               5,024   6,108        (18)
  Other unallocated corporate                   33      24         38
                                               ---     ---
    Total                                   $5,057  $6,132        (18)
                                            ======  ======
 

  INCOME / (LOSS) FROM CONTINUING OPERATIONS

  North American Full-Service                 $140    $224        (38)
  North American Limited-Service               105     198        (47)
  International (2)                             64     129        (50)
  Luxury                                        (7)     49       (114)
  Timeshare (2)                                (52)     74       (170)
                                               ---     ---
    Total segment financial results (1)        250     674        (63)
  Other unallocated corporate                  (71)   (125)        43
  Interest income, provision for loan losses
    and interest expense                       (85)    (58)       (47)
  Income taxes (2)                             (80)   (216)        63
                                               ---    ----
    Total                                      $14    $275        (95)
                                               ===    ====

  (1)  We consider segment revenues and segment financial results to be
       meaningful indicators of our performance because they measure
       changes in our 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 noncontrolling interests of our consolidated
       subsidiaries to our segments.  Accordingly, we allocated $4 million
       of noncontrolling interests of our consolidated subsidiaries for the
       2009 second quarter year-to-date as reflected in our income
       statement as follows: $7 million to our Timeshare segment and $(3)
       million to provision for income taxes. For the 2008 second quarter
       year-to-date, we allocated noncontrolling interests of $3 million 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
                                      ------------------------------------
                                       June 19,  June 13,    vs. June 13,
  Brand                                 2009      2008           2008
  -----                               --------- ---------    -------------

  Domestic Full-Service
  ---------------------
      Marriott Hotels & Resorts           349       344             5
      Renaissance Hotels & Resorts         77        76             1
  Domestic Limited-Service
  ------------------------
      Courtyard                           747       708            39
      Fairfield Inn                       589       536            53
      SpringHill Suites                   226       195            31
      Residence Inn                       567       534            33
      TownePlace Suites                   173       152            21
  International
  -------------
      Marriott Hotels & Resorts           187       179             8
      Renaissance Hotels & Resorts         67        64             3
      Courtyard                            87        77            10
      Fairfield Inn                         9         9             -
      SpringHill Suites                     1         1             -
      Residence Inn                        18        18             -
      Marriott Executive Apartments        21        19             2
  Luxury
  ------
      The Ritz-Carlton - Domestic          37        36             1
      The Ritz-Carlton - International     33        33             -
      Bulgari Hotels & Resorts              2         2             -
      The Ritz-Carlton Residential         24        21             3
      The Ritz-Carlton
       Serviced Apartments                  3         2             1
  Timeshare (2)
  -------------
      Marriott Vacation Club (3)           52        50             2
      The Ritz-Carlton
       Club -Fractional                    10         7             3
      The Ritz-Carlton
       Club -Residential                    3         3             -
      Grand Residences
       by Marriott -
       Fractional                           2         2             -
      Grand Residences
       by Marriott - Residential            2         1             1
                                          ---       ---           ---
  Sub Total Timeshare                      69        63             6
                                          ---       ---           ---

  Total                                 3,286     3,069           217
                                        =====     =====           ===
 
 

                                              Number of Rooms/Suites
                                              ----------------------
                                       June 19,      June 13,   vs. June 13
  Brand                                  2009          2008        2008
  -----                               ----------    ----------   ---------

  Domestic Full-Service
  ---------------------
      Marriott Hotels & Resorts         138,945       137,130       1,815
      Renaissance Hotels & Resorts       28,197        27,721         476
  Domestic Limited-Service
  ------------------------
      Courtyard                         104,657        98,901       5,756
      Fairfield Inn                      52,450        47,572       4,878
      SpringHill Suites                  26,044        22,718       3,326
      Residence Inn                      67,814        63,843       3,971
      TownePlace Suites                  17,359        15,195       2,164
  International
  -------------
      Marriott Hotels & Resorts          56,514        52,457       4,057
      Renaissance Hotels & Resorts       22,698        21,118       1,580
      Courtyard                          17,110        14,576       2,534
      Fairfield Inn                       1,109         1,111          (2)
      SpringHill Suites                     124           124           -
      Residence Inn                       2,604         2,611          (7)
      Marriott Executive Apartments       3,412         3,029         383
  Luxury
  ------
      The Ritz-Carlton - Domestic        11,549        11,437         112
      The Ritz-Carlton - International   10,117        10,171         (54)
      Bulgari Hotels & Resorts              117           117           -
      The Ritz-Carlton
       Residential                        2,539         2,122         417
      The Ritz-Carlton
       Serviced Apartments                  474           387          87
  Timeshare (2)
  -------------
      Marriott Vacation Club (3)         11,858        11,625         233
      The Ritz-Carlton
       Club -Fractional                     461           388          73
      The Ritz-Carlton
       Club -Residential                    150           145           5
      Grand Residences by
       Marriott -Fractional                 241           248          (7)
      Grand Residences
       by Marriott - Residential             91            65          26
                                            ---           ---         ---
  Sub Total Timeshare                    12,801        12,471         330
                                         ------        ------         ---

  Total                                 576,634       544,811      31,823
                                        =======       =======      ======
 
 

      Number of Timeshare Interval, Fractional and Residential
                               Resorts
      --------------------------------------------------------
                                              Total       Properties in
                                           Properties (2) Active Sales (4)
                                           -------------  ---------------
  100% Company-Developed
  ----------------------
      Marriott Vacation Club (3)                 52             29
      The Ritz-Carlton Club and
       Residences                                10              8
      Grand Residences by Marriott and
       Residences                                 4              4

  Joint Ventures
  --------------
      The Ritz-Carlton Club and Residences        3              3
                                                ---            ---

  Total                                          69             44
                                                ===            ===
 

  (1)  Total Lodging Products excludes the 2,142 and 2,225 corporate
       housing rental units as of June 19, 2009 and June 13, 2008,
       respectively.
  (2)  Includes products that are in active sales as well as those that are
       sold out.  We include residential products once they possess a
       certificate of occupancy.
  (3)  Marriott Vacation Club includes Horizons by Marriott Vacation Club
       products that were previously reported separately.
  (4)  Products in active sales may not be ready for occupancy.
 

                            MARRIOTT INTERNATIONAL, INC.
                               KEY LODGING STATISTICS
                                     Constant $
 

         Comparable Company-Operated International Properties (1)
         -------------------------------------------------------

                          Three Months Ended May 31, 2009 and May 31, 2008
                            --------------------------------------------
                                  REVPAR                Occupancy
                            ------------------    ----------------------
  Region                     2009   vs. 2008       2009     vs. 2008
  ------                    ------------------    ----------------------
  Caribbean & Latin America $124.51    -23.5%      67.9%    -11.2% pts.
  Continental Europe        $102.98    -18.6%      66.6%     -5.9% pts.
  United Kingdom             $92.61    -15.2%      72.1%     -5.3% pts.
  Middle East & Africa      $100.59    -22.2%      72.8%    -12.7% pts.
  Asia Pacific (2)           $73.57    -28.9%      59.6%    -12.0% pts.

  Regional Composite (3)     $97.23    -21.2%      66.8%     -8.5% pts.

  International Luxury (4)  $188.29    -26.1%      57.5%    -11.8% pts.

  Total International (5)   $106.80    -22.1%      65.8%     -8.9% pts.

  Worldwide (6)             $100.67    -23.0%      66.9%     -8.2% pts.
 
 

                                    Three Months
                          Ended May 31, 2009 and May 31, 2008
                                  -----------------
                                  Average Daily Rate
                                  -----------------
  Region                           2009   vs. 2008
  ------                          -----------------
  Caribbean & Latin America       $183.40    -10.8%
  Continental Europe              $154.59    -11.4%
  United Kingdom                  $128.51     -9.0%
  Middle East & Africa            $138.09     -8.7%
  Asia Pacific (2)                $123.43    -14.5%

  Regional Composite (3)          $145.61    -11.1%

  International Luxury (4)        $327.22    -10.9%

  Total International (5)         $162.31    -11.6%

  Worldwide (6)                   $150.59    -13.6%
 
 

             Comparable Systemwide International Properties (1)
             -------------------------------------------------

                           Three Months Ended May 31, 2009 and May 31, 2008
                             ------------------------------------------
                                  REVPAR               Occupancy
                             ----------------      --------------------
  Region                     2009   vs. 2008        2009     vs. 2008
  ------                     ----------------      --------------------
  Caribbean & Latin America $108.33    -23.4%      64.3%    -10.2% pts.
  Continental Europe        $100.57    -19.6%      64.3%     -7.0% pts.
  United Kingdom             $90.20    -15.6%      70.7%     -5.6% pts.
  Middle East & Africa      $100.59    -22.2%      72.8%    -12.7% pts.
  Asia Pacific (2)           $78.31    -26.7%      61.5%    -11.0% pts.

  Regional Composite (3)     $95.22    -21.4%      65.4%     -8.6% pts.

  International Luxury (4)  $188.29    -26.1%      57.5%    -11.8% pts.

  Total International (5)   $103.26    -22.2%      64.7%     -8.9% pts.

  Worldwide (6)              $86.09    -21.4%      66.1%     -7.5% pts.
 
 

                               Three Months
                               Ended May 31,
                             2009 and May 31,
                                   2008
                            ------------------
                              Average Daily
                                   Rate
                            ------------------
  Region                      2009   vs. 2008
  ------                    ------------------
  Caribbean & Latin America $168.35    -11.3%
  Continental Europe        $156.52    -10.9%
  United Kingdom            $127.66     -9.0%
  Middle East & Africa      $138.09     -8.7%
  Asia Pacific (2)          $127.39    -13.6%

  Regional Composite(3)     $145.56    -11.1%

  International Luxury (4)  $327.22    -10.9%

  Total International (5)   $159.51    -11.5%

  Worldwide (6)             $130.17    -12.4%
 

  (1)  We report international results on a period basis, and international
       statistics on a monthly basis.  Statistics are in constant dollars
       for March through May.  International includes properties located
       outside the Continental United States and Canada, except for
       Worldwide which also includes North America.
  (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, 2009 and May 31, 2008, and North American statistics for the
       twelve weeks ended June 19, 2009 and June 13, 2008.  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.
 
 

          Comparable Company-Operated International Properties (1)
          -------------------------------------------------------

                          Five Months Ended May 31, 2009 and May 31, 2008
                            -------------------------------------------
                                 REVPAR                Occupancy
                            -----------------     ---------------------
  Region                      2009  vs. 2008       2009     vs. 2008
  ------                    -----------------     ---------------------
  Caribbean & Latin America $131.99    -19.9%      68.4%    -10.2% pts.
  Continental Europe         $96.30    -18.9%      61.4%     -7.1% pts.
  United Kingdom             $88.25    -15.0%      68.5%     -5.4% pts.
  Middle East & Africa      $101.69    -17.9%      70.4%    -11.5% pts.
  Asia Pacific (2)           $75.17    -26.2%      59.2%    -11.1% pts.

  Regional Composite (3)     $96.22    -19.7%      64.3%     -8.4% pts.

  International Luxury (4)  $189.56    -22.8%      57.0%    -10.7% pts.

  Total International (5)   $106.04    -20.2%      63.5%     -8.7% pts.

  Worldwide (6)              $97.82    -20.7%      63.8%     -7.9% pts.
 
 

                               Five Months
                               Ended May 31,
                             2009 and May 31,
                                   2008
                            -----------------
                              Average Daily
                                   Rate
                            -----------------
  Region                      2009  vs. 2008
  ------                    -----------------
  Caribbean & Latin America $192.99     -7.9%
  Continental Europe        $156.88     -9.6%
  United Kingdom            $128.88     -8.3%
  Middle East & Africa      $144.49     -4.5%
  Asia Pacific (2)          $127.02    -12.4%

  Regional Composite (3)    $149.68     -9.1%

  International Luxury (4)  $332.67     -8.2%

  Total International (5)   $166.94     -9.3%

  Worldwide (6)             $153.32    -11.0%
 
 

                            MARRIOTT INTERNATIONAL, INC.
                               KEY LODGING STATISTICS
                                     Constant $
 

             Comparable Systemwide International Properties (1)
             -------------------------------------------------

                          Five Months Ended May 31, 2009 and May 31, 2008
                            -------------------------------------------
                                  REVPAR                Occupancy
                            -----------------     ---------------------
  Region                      2009  vs. 2008       2009     vs. 2008
  ------                    -----------------     ---------------------
  Caribbean & Latin America $112.86    -19.8%      64.0%     -8.9% pts.
  Continental Europe         $94.11    -19.2%      59.4%     -7.7% pts.
  United Kingdom             $86.00    -15.4%      67.1%     -5.7% pts.
  Middle East & Africa      $101.69    -17.9%      70.4%    -11.5% pts.
  Asia Pacific (2)           $80.52    -23.8%      60.5%    -10.3% pts.

  Regional Composite (3)     $94.13    -19.6%      62.8%     -8.4% pts.

  International Luxury (4)  $189.56    -22.8%      57.0%    -10.7% pts.

  Total International (5)   $102.33    -20.1%      62.3%     -8.6% pts.

  Worldwide (6)              $83.43    -19.1%      63.2%     -6.9% pts.
 

                               Five Months
                               Ended May 31,
                             2009 and May 31,
                                   2008
                            -----------------
                              Average Daily
                                   Rate
                            -----------------
  Region                      2009  vs. 2008
  ------                    -----------------
  Caribbean & Latin America $176.23     -8.6%
  Continental Europe        $158.38     -8.8%
  United Kingdom            $128.19     -8.2%
  Middle East & Africa      $144.49     -4.5%
  Asia Pacific (2)          $133.06    -10.8%

  Regional Composite (3)    $149.82     -8.8%

  International Luxury (4)  $332.67     -8.2%

  Total International (5)   $164.19     -9.0%

  Worldwide (6)             $132.00    -10.2%
 

  (1)  We report international results on a period basis, and international
       statistics on a monthly basis.  Statistics are in constant dollars
       for January through May.  International includes properties located
       outside the Continental United States and Canada, except for
       Worldwide which also includes North America.
  (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, 2009 and May 31, 2008, and North American statistics for the
       twenty-four weeks ended June 19, 2009 and June 13, 2008.  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 (1)
       --------------------------------------------------------

                             Twelve Weeks Ended June 19, 2009 and
                                         June 13, 2008
                            --------------------------------------
                                  REVPAR           Occupancy
                            ----------------   -------------------
  Brand                      2009  vs. 2008     2009   vs. 2008
  -----                     ----------------   -------------------
  Marriott Hotels & Resorts $109.81  -22.0%     68.6%   -7.2% pts.
  Renaissance Hotels &
   Resorts                  $107.73  -20.8%     68.1%   -7.1% pts.
  Composite North American
   Full-Service (2)         $109.45  -21.8%     68.5%   -7.1% pts.
  The Ritz-Carlton (3)      $185.34  -31.4%     61.9%  -13.9% pts.
  Composite North American
   Full-Service &
   Luxury (4)               $117.05  -23.5%     67.9%   -7.8% pts.
  Residence Inn              $82.78  -18.9%     71.8%   -7.6% pts.
  Courtyard                  $70.91  -25.8%     64.2%   -8.5% pts.
  TownePlace Suites          $49.42  -20.8%     63.6%   -8.0% pts.
  SpringHill Suites          $65.26  -21.9%     65.9%   -9.3% pts.
  Composite North American
   Limited-Service (5)       $72.58  -23.3%     66.5%   -8.2% pts.
  Composite - All (6)        $98.17  -23.4%     67.3%   -8.0% pts.
 

                                                     Twelve Weeks
                                                    Ended June 19,
                                                     2009 and June
                                                       13, 2008
                                                  -----------------
                                                    Average Daily
                                                         Rate
                                                  -----------------
  Brand                                            2009   vs. 2008
  -----                                           -----------------
  Marriott Hotels & Resorts                       $159.98    -13.8%
  Renaissance Hotels & Resorts                    $158.24    -12.6%
  Composite North American Full-Service (2)       $159.69    -13.6%
  The Ritz-Carlton (3)                            $299.28    -16.1%
  Composite North American Full-Service &
   Luxury (4)                                     $172.45    -14.7%
  Residence Inn                                   $115.31    -10.4%
  Courtyard                                       $110.53    -16.0%
  TownePlace Suites                                $77.69    -10.8%
  SpringHill Suites                                $99.00    -10.9%
  Composite North American Limited-Service (5)    $109.19    -13.9%
  Composite - All (6)                             $145.91    -14.4%
 
 

               Comparable Systemwide North American Properties (1)
               --------------------------------------------------

                                  Twelve Weeks Ended June 19, 2009 and June
                                                   13, 2008
                                 -------------------------------------------
                                       REVPAR              Occupancy
                                 -----------------     ---------------------
  Brand                            2009  vs. 2008       2009      vs. 2008
  -----                          -----------------     ---------------------
  Marriott Hotels & Resorts       $96.16    -22.1%      65.5%     -7.3% pts.
  Renaissance Hotels & Resorts    $95.05    -20.6%      66.0%     -6.8% pts.
  Composite North American
   Full-Service (2)               $95.97    -21.8%      65.6%     -7.2% pts.
  The Ritz-Carlton (3)           $185.34    -31.4%      61.9%    -13.9% pts.
  Composite North American Full-
   Service & Luxury (4)          $101.30    -23.0%      65.4%     -7.6% pts.
  Residence Inn                   $82.71    -17.4%      72.3%     -6.6% pts.
  Courtyard                       $73.68    -22.0%      65.8%     -7.3% pts.
  Fairfield Inn                   $54.60    -17.1%      63.9%     -6.8% pts.
  TownePlace Suites               $53.43    -18.0%      65.1%     -7.5% pts.
  SpringHill Suites               $65.71    -18.2%      65.5%     -7.2% pts.
  Composite North American
   Limited-Service (5)            $70.60    -19.5%      67.1%     -7.1% pts.
  Composite - All (6)             $82.63    -21.2%      66.4%     -7.3% pts.
 

                                                     Twelve Weeks
                                                    Ended June 19,
                                                     2009 and June
                                                       13, 2008
                                                   ---------------
                                                    Average Daily
                                                         Rate
                                                  -----------------
  Brand                                              2009 vs. 2008
  -----                                           -----------------
  Marriott Hotels & Resorts                       $146.79    -13.4%
  Renaissance Hotels & Resorts                    $143.92    -12.3%
  Composite North American Full-Service (2)       $146.31    -13.3%
  The Ritz-Carlton (3)                            $299.28    -16.1%
  Composite North American Full-Service &
   Luxury (4)                                     $154.95    -14.1%
  Residence Inn                                   $114.39     -9.9%
  Courtyard                                       $111.93    -13.3%
  Fairfield Inn                                    $85.46     -8.2%
  TownePlace Suites                                $82.05     -8.6%
  SpringHill Suites                               $100.29     -9.2%
  Composite North American Limited-Service (5)    $105.23    -11.0%
  Composite - All (6)                             $124.41    -12.6%
 

  (1)  North America includes properties located in the Continental
       United States and Canada.
  (2)  Includes the Marriott Hotels & Resorts, and Renaissance Hotels
       & Resorts brands.
  (3)  Statistics for The Ritz-Carlton are for March through May.
  (4)  Includes the Marriott Hotels & Resorts, Renaissance Hotels &
       Resorts and The Ritz-Carlton brands.
  (5)  Includes the Residence Inn, Courtyard, Fairfield Inn,
       TownePlace Suites and SpringHill Suites brands.
  (6)  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 (1)
            --------------------------------------------------------

                                  Twenty-four Weeks Ended June 19, 2009 and
                                                 June 13, 2008
                                 -------------------------------------------
                                      REVPAR                Occupancy
                                 -----------------     ---------------------
  Brand                            2009  vs. 2008       2009   vs.   2008
  -----                          -----------------     ---------------------
  Marriott Hotels & Resorts      $106.72    -19.2%      65.2%     -6.6% pts.
  Renaissance Hotels & Resorts   $106.46    -16.9%      65.3%     -6.6% pts.
  Composite North American
   Full-Service (2)              $106.68    -18.8%      65.2%     -6.6% pts.
  The Ritz-Carlton (3)           $185.85    -29.6%      59.9%    -13.5% pts.
  Composite North American Full-
   Service & Luxury (4)          $113.31    -20.5%      64.8%     -7.2% pts.
  Residence Inn                   $80.68    -17.8%      68.2%     -7.6% pts.
  Courtyard                       $69.19    -23.8%      60.4%     -8.2% pts.
  TownePlace Suites               $49.09    -18.8%      60.3%     -8.0% pts.
  SpringHill Suites               $62.61    -21.7%      60.9%     -9.8% pts.
  Composite North American
   Limited-Service (5)            $70.74    -21.7%      62.7%     -8.1% pts.
  Composite - All (6)             $95.05    -20.9%      63.9%     -7.6% pts.
 
 

                                                     Twenty-four
                                                   Weeks Ended June
                                                     19, 2009 and
                                                     June 13, 2008
                                                  -----------------
                                                    Average Daily
                                                         Rate
                                                  -----------------
  Brand                                              2009 vs. 2008
  -----                                           -----------------
  Marriott Hotels & Resorts                       $163.64    -11.0%
  Renaissance Hotels & Resorts                    $163.04     -8.5%
  Composite North American Full-Service (2)       $163.53    -10.6%
  The Ritz-Carlton (3)                            $310.14    -13.7%
  Composite North American Full-Service &
   Luxury (4)                                     $174.89    -11.7%
  Residence Inn                                   $118.35     -8.6%
  Courtyard                                       $114.46    -13.4%
  TownePlace Suites                                $81.38     -8.1%
  SpringHill Suites                               $102.73     -9.1%
  Composite North American Limited-Service (5)    $112.80    -11.6%
  Composite - All (6)                             $148.74    -11.5%
 
 

          Comparable Systemwide North American Properties (1)
          --------------------------------------------------

                        Twenty-four Weeks Ended June 19, 2009 and
                                       June 13, 2008
                       -------------------------------------------
                             REVPAR              Occupancy
                       -----------------    ----------------------
  Brand                  2009  vs. 2008       2009    vs. 2008
  -----                -----------------    ----------------------
  Marriott Hotels &
   Resorts              $94.22    -19.4%      62.6%     -6.6% pts.
  Renaissance Hotels &
   Resorts              $94.07    -17.3%      63.2%     -6.5% pts.
  Composite North
   American Full-
   Service (2)          $94.19    -19.1%      62.7%     -6.6% pts.
  The Ritz-Carlton (3) $185.85    -29.6%      59.9%    -13.5% pts.
  Composite North
   American Full-
   Service & Luxury (4) $98.74    -20.2%      62.6%     -6.9% pts.
  Residence Inn         $81.04    -15.5%      69.5%     -6.0% pts.
  Courtyard             $71.43    -19.7%      62.4%     -6.6% pts.
  Fairfield Inn         $51.97    -16.0%      60.3%     -6.3% pts.
  TownePlace Suites     $52.38    -16.4%      61.9%     -7.3% pts.
  SpringHill Suites     $64.02    -16.3%      62.4%     -6.6% pts.
  Composite North
   American Limited-
   Service (5)          $68.54    -17.5%      63.8%     -6.4% pts.
  Composite - All (6)   $80.28    -18.8%      63.4%     -6.6% pts.
 
 

                                                     Twenty-four
                                                   Weeks Ended June
                                                     19, 2009 and
                                                     June 13, 2008
                                                  -----------------
                                                    Average Daily
                                                         Rate
                                                  -----------------
  Brand                                            2009   vs. 2008
  -----                                           -----------------
  Marriott Hotels & Resorts                       $150.39    -11.0%
  Renaissance Hotels & Resorts                    $148.80     -8.8%
  Composite North American Full-Service (2)       $150.12    -10.6%
  The Ritz-Carlton (3)                            $310.14    -13.7%
  Composite North American Full-Service &
   Luxury (4)                                     $157.73    -11.4%
  Residence Inn                                   $116.61     -8.2%
  Courtyard                                       $114.40    -11.2%
  Fairfield Inn                                    $86.24     -7.2%
  TownePlace Suites                                $84.68     -6.5%
  SpringHill Suites                               $102.64     -7.5%
  Composite North American Limited-Service (5)    $107.38     -9.2%
  Composite - All (6)                             $126.71    -10.3%
 

  (1) North America includes properties located in the Continental United
      States and Canada.
  (2) Includes the Marriott Hotels & Resorts, and Renaissance Hotels &
      Resorts brands.
  (3) Statistics for The Ritz-Carlton are for January through May.
  (4) Includes the Marriott Hotels & Resorts, Renaissance Hotels & Resorts
      and The Ritz-Carlton brands.
  (5) Includes the Residence Inn, Courtyard, Fairfield Inn, TownePlace
      Suites and SpringHill Suites brands.
  (6) 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)
 
 
 

                                               Adjustments
                                               ------------

                               As Reported   Restructuring    As Adjusted
                             12 Weeks Ended  Costs & Other   12 Weeks Ended
                              June 19, 2009     Charges     June 19, 2009**
  ----------------            -------------   -----------    --------------
  Segment Revenues
  ----------------
    Segment revenues                $355              $12           $367
                                    ====              ===           ====
 

  ---------------
  Segment Results
  ---------------
    Base fees revenue                 $11              $-            $11
    Timeshare sales and
     services, net                      4              12             16
    Restructuring costs               (30)             30              -
    Joint venture equity
     earnings                          (1)              1              -
    Noncontrolling interest             4               -              4
    General, administrative
     and other expense                 (23)             7            (16)
                                       ---            ---            ---
    Segment results                   $(35)           $50            $15
                                      ====            ===            ===
 
 

  --------------------------
  Sales and Services Revenue
  --------------------------
    Development                       $182             $-           $182
    Services                            80              -             80
    Financing                           14             12             26
    Other revenue                        7              -              7
                                       ---            ---            ---
    Sales and services
     revenue                          $283            $12           $295
                                      ====            ===           ====
 
 

  --------------
  Contract Sales
  --------------
    Company:
      Timeshare                       $200             $-           $200
      Fractional                         8              1              9
      Residential                        2              -              2
                                       ---            ---            ---
          Total company                210              1            211
    Joint ventures:
      Timeshare                          -              -              -
      Fractional                       (18)            19              1
      Residential                       17            (17)             -
                                        --            ---            ---
          Total joint ventures          (1)             2              1
                                        --            ---            ---
      Total contract sales,
       including joint ventures       $209             $3           $212
                                      ====            ===           ====
 
 

  ---------------------------
  (Loss) / Gain on Notes Sold
  ---------------------------
    (Loss) / gain on notes sold         $-             $-             $-
                                        ==             ==             ==
 

                                                          Percent Better /
                                          As Reported    (Worse) as Adjusted
                                        12 Weeks Ended      2009 vs. 2008
                                         June 13, 2008       As Reported
  ----------------                        -------------       -----------
  Segment Revenues
  ----------------
    Segment revenues                          $461                (20)
                                              ====
 

  ---------------
  Segment Results
  ---------------
    Base fees revenue                          $12                 (8)
    Timeshare sales and
     services, net                              77                (79)
    Restructuring costs                          -                  *
    Joint venture equity earnings                2               (100)
    Noncontrolling interest                      4                  -
    General, administrative and
     other expense                             (25)                36
                                               ---
    Segment results                            $70                (79)
                                               ===
 
 

  --------------------------
  Sales and Services Revenue
  --------------------------
    Development                               $252                (28)
    Services                                    79                  1
    Financing                                   49                (47)
    Other revenue                                8                (13)
                                                 -
    Sales and services revenue                $388                (24)
                                              ====

  --------------
  Contract Sales
  --------------
    Company:
      Timeshare                               $291                (31)
      Fractional                                 8                 13
      Residential                               27                (93)
                                               ---
          Total company                        326                (35)
    Joint ventures:
      Timeshare                                  -                  *
      Fractional                                 6                (83)
      Residential                                2               (100)
                                               ---
          Total joint ventures                   8                (88)
                                               ---
      Total contract sales, including
       joint ventures                         $334                (37)
                                              ====
 
 

  ---------------------------
  (Loss) / Gain on Notes Sold
  ---------------------------
    (Loss) / gain on notes sold                $29               (100)
                                               ===
  *   Percent can not be calculated.
  **  Denotes non-GAAP financial measures.  Please see page A-17 for
      additional information about our reasons for providing these
      alternative financial measures and the limitations on their use.
 

                         MARRIOTT INTERNATIONAL, INC.
                               TIMESHARE SEGMENT
                                ($ in millions)
 

                                               Adjustments
                                              -------------

                                As Reported   Restructuring   As Adjusted
                              24 Weeks Ended  Costs & Other  24 Weeks Ended
                              June 19, 2009     Charges    June 19, 2009 **
    ----------------          --------------   ----------- ----------------
    Segment Revenues
    ----------------
      Segment revenues               $632          $29             $661
                                     ====          ===             ====
 

    ---------------
    Segment Results
    ---------------
      Base fees revenue               $21           $-              $21
      Timeshare sales and
       services, net                   (7)          28               21
      Restructuring costs             (31)          31                -
      Joint venture
       equity earnings                 (2)           2                -
      Noncontrolling
       interest                         7            -                7
      General,
       administrative and
       other expense                  (40)           7              (33)
                                      ---            -              ---
      Segment results                $(52)         $68              $16
                                     ====          ===              ===
 
 

    ------------------
    Sales and Services
     Revenue
    ------------------
      Development                    $303           $4             $307
      Services                        150            -              150
      Financing                        27           25               52
      Other revenue                    12            -               12
                                      ---          ---              ---
      Sales and services revenue     $492          $29             $521
                                     ====          ===             ====
 
 

    --------------
    Contract Sales
    --------------
      Company:
        Timeshare                    $338           $-             $338
        Fractional                     18            1               19
        Residential                    (3)           4                1
                                      ---          ---              ---
            Total company             353            5              358
      Joint ventures:
        Timeshare                       -            -                -
        Fractional                     (5)          16               11
        Residential                   (10)          10                -
                                      ---           --               --
            Total joint
             ventures                 (15)          26               11
                                      ---           --               --
        Total contract
         sales, including
         joint ventures              $338          $31             $369
                                     ====          ===             ====
 
 

    ---------------------------
    (Loss) / Gain on Notes Sold
    ---------------------------
      (Loss) / gain on notes sold     $(1)          $-              $(1)
                                      ===           ==              ===
 
 

                                                         Percent Better /
                                         As Reported    (Worse) As Adjusted
                                       24 Weeks Ended      2009 vs. 2008
                                        June 13, 2008       As Reported
    ----------------                    -------------       -----------
    Segment Revenues
    ----------------
      Segment revenues                         $863             (23)
                                               ====

    ---------------
    Segment Results
    ---------------
      Base fees revenue                         $23              (9)
      Timeshare sales and
       services, net                             90             (77)
      Restructuring costs                         -               *
      Joint venture equity earnings               7            (100)
      Noncontrolling
       interest                                   6              17
      General, administrative
       and other expense                        (52)             37
                                                ---
      Segment results                           $74             (78)
                                                ===

    --------------------------
    Sales and Services Revenue
    --------------------------
      Development                              $457             (33)
      Services                                  163              (8)
      Financing                                  76             (32)
      Other revenue                              18             (33)
                                                 --
      Sales and services revenue               $714             (27)
                                               ====

    --------------
    Contract Sales
    --------------
      Company:
        Timeshare                              $576             (41)
        Fractional                               16              19
        Residential                              39             (97)
                                                 --
            Total company                       631             (43)
      Joint ventures:
        Timeshare                                 -               *
        Fractional                               11               -
        Residential                              25            (100)
                                                 --
            Total joint ventures                 36             (69)
                                                 --
        Total contract sales,
         including joint ventures              $667             (45)
                                               ====

    ---------------------------
    (Loss) / Gain on Notes Sold
    ---------------------------
      (Loss) / gain on notes sold               $29            (103)
                                                ===

  *   Percent can not be calculated.
  **  Denotes non-GAAP financial measures.  Please see page A-17 for
      additional information about our reasons for providing these
      alternative financial measures and the limitations on their use.
 
 

                         MARRIOTT INTERNATIONAL, INC.
                         Non-GAAP Financial Measure
                          EBITDA and Adjusted EBITDA
                               ($ in millions)
 

                                                   Fiscal Year 2009
                                          ----------------------------------
                                           First       Second     Total Year
                                          Quarter      Quarter      to Date
                                          --------     --------    ---------
  Net (Loss) / Income
   attributable to Marriott                 $(23)         $37          $14
  Interest expense                            29           28           57
  Tax provision, continuing
   operations                                 33           44           77
  Tax provision, noncontrolling
   interest                                    1            2            3
  Depreciation and amortization               39           42           81
  Less: Depreciation
   reimbursed by third-party
   owners                                     (2)          (2)          (4)
  Interest expense from
   unconsolidated joint ventures               3            6            9
  Depreciation and amortization
   from unconsolidated joint
   ventures                                    6            6           12
                                              --           --           --
  EBITDA **                                  $86         $163         $249

  Restructuring costs and other
   charges
         Severance                             2           10           12
         Facilities exit costs                 -           22           22
         Development
          cancellations                        -            1            1
                                              --           --           --
            Total restructuring costs          2           33           35
                                              --           --           --
         Impairment of investments
          and other, net of prior
          year reserves                       68            3           71
         Reserves for loan
          losses                              42            1           43
         Contract cancellation
          allowances                           4            1            5
         Residual interests
          valuation                           13           12           25
         System development write-off          -            7            7
                                              --           --           --
            Total other charges              127           24          151
                                             ---           --          ---
  Total restructuring costs and
   other charges                             129           57          186
                                             ---           --          ---

  Adjusted EBITDA **                        $215         $220         $435
                                            ====         ====         ====

  Decrease over 2008 Adjusted EBITDA        -25%         -43%         -35%
 
 

                                           Fiscal Year 2008
                      ------------------------------------------------------
                       First       Second        Third       Fourth
                      Quarter      Quarter      Quarter     Quarter    Total
                      -------     --------      --------    --------   -----
  Net Income/
   (Loss)
   attributable to
   Marriott             $121         $157          $94         $(10)   $362
  Interest expense        42           38           33           50     163
  Tax provision,
   continuing
   operations             75          139          103           33     350
  Tax provision,
   minority
   interest                1            1            5            2       9
  Tax benefit,
   synthetic fuel          -           (6)          (1)           -      (7)
  Depreciation and
   amortization           41           47           42           60     190
  Less:
   Depreciation
   reimbursed by
   third-party
   owners                 (3)          (3)          (2)          (2)    (10)
  Interest expense
   from
   unconsolidated
   joint ventures          4            4            5            5      18
  Depreciation and
   amortization from
   unconsolidated
   joint ventures          5            6            6           10      27
                         ---          ---          ---           --      --
  EBITDA **             $286         $383         $285         $148  $1,102

  Discontinued
   operations
   adjustment
   (synthetic fuel)        1            2            1            -       4
  Restructuring costs
   and other charges
         Severance         -            -            -           19      19
         Facilities
          exit costs       -            -            -            5       5
         Development
          cancellations    -            -            -           31      31
                         ---          ---          ---           --      --
            Total
             restructuring
             costs         -            -            -           55      55
                         ---          ---          ---           --      --
         Reserves for
          expected
          fundings         -            -            -           16      16
         Inventory
          write-downs      -            -            -            9       9
         Contract
          cancellation
          allowances       -            -            -           12      12
         Accounts
          receivable-
          bad debts        -            -            -            4       4
         Residual
          interests
          valuation        -            -            -           32      32
         Hedge
          ineffectiveness  -            -            -           12      12
         Impairment of
          investments
          and other        -            -            -           30      30
         Reserves
          for loan
          losses           -            -            -           22      22
                         ---          ---          ---           --      --
            Total
             other
             charges       -            -            -          137     137
                         ---          ---          ---          ---     ---
  Total
   restructuring
   costs and
   other charges           -            -            -          192     192
                         ---          ---          ---          ---     ---

  Adjusted EBITDA **    $287         $385         $286         $340  $1,298
                        ====         ====         ====         ====  ======

  The following
   items make up the
   discontinued
   operationsadjustment
   (synthetic fuel)
  Pre-tax Synthetic
   Fuel losses            $1           $2           $1           $-      $4
                          --           --           --           --      --
  EBITDA adjustment for
   discontinued
   operations
   (synthetic fuel)       $1           $2           $1           $-      $4
                          ==           ==           ==           ==      ==

  ** Denotes non-GAAP financial measures.  Please see page A-17 for
     additional information about our reasons for providing these
     alternative financial measures and the limitations on their use.
 
 

                          Marriott International, Inc.
                Summary of Restructuring Costs and Other Charges
               Second Quarter and Second Quarter Year-to-Date 2009
                                 ($ in millions)
 

                                                              Q2     Q2 YTD
    External Line            Description                    Amount   Amount
    -------------            -----------                    ------   ------

    Timeshare sales and      Mark-to-market of residual
     services revenue         interests                        $12      $25
                             Contract sale cancellation
                              allowances                         -        4

                                                               ---       --
                                      Timeshare sales and
                                       services revenue         12       29

    Timeshare - direct       Contract sale cancellation
     expenses                 allowances                         -       (1)
                                                               ---       --
                                      Timeshare - direct
                                       expenses                  -       (1)

    Restructuring costs      Severance                          10       12
                             Facilities exit costs              22       22
                             Development cancellations           1        1
                                                                 -        -
                                      Restructuring costs       33       35

    General, administrative
     and other               System development write-down       7        7
                             Accounts receivable and
                              guarantee charges                  3        3
                             Reserves for security
                              deposits, net of prior year
                              reserves                           -       38

                                                                --       --
                                      General, administrative
                                       and other                10       48

    Provision for loan
     losses                  Loan impairments                    1       43

                                                                --       --
                                      Provision for loan
                                       losses                    1       43

    Equity in (earnings)     Contract sale cancellation
     losses                   allowances                         1        2
                             Investment impairment               -       30
                                                                --       --
                                Equity in (earnings) losses      1       32
                                                                --       --

                                      Restructuring Costs &
                                       Other Charges Total     $57     $186

                                                 Tax Impact    (27)     (72)
                                                               ---      ---

                                Restructuring Costs & Other
                                 Charges Net of Tax            $30     $114
                                                               ===     ====
 
 

                      MARRIOTT INTERNATIONAL, INC.
                       Non-GAAP Financial Measure
                         Total Debt Net of Cash
                             ($ in millions)
 

                       Balance at     Balance at    Better/
                       End of 2009     Year-End     (Worse)
                      Second Quarter    2008        Change
                      --------------  -----------   -------
  Total debt              $2,849       $3,095        $246
  Cash and cash
   equivalents              (125)        (134)        $(9)
                            ----         ----         ---
  Total debt net
   of cash**              $2,724       $2,961        $237
                          ======       ======        ====
 
 

                                  Range                   Range
                        -----------------------   ----------------------
                                                      As Compared
                                                      to Balance at
                                                      Year-End 2008
                        Estimated     Estimated   ----------------------
                         Balance       Balance      Better/     Better/
                        Year-End       Year-End    (Worse)     (Worse)
                        2009 (a)       2009 (b)   Change (a)  Change (b)
                        ---------     ---------   ----------  ----------
  Total debt              $2,476       $2,426        $619        $669
  Cash and cash
   equivalents              (115)        (115)        (19)        (19)
                            ----         ----         ---         ---
  Total debt net
   Of cash**              $2,361       $2,311        $600        $650
                          ======       ======        ====        ====

  (a)   Assumes $619M debt repayment in 2009 and $19M reduction in cash
  (b)   Assumes $669M debt repayment in 2009 and $19M reduction in cash
 

  **  Denotes non-GAAP financial measures.  Please see page A-17 for
      additional information about our reasons for providing these
      alternative financial measures and the limitations on their use.
 

                       MARRIOTT INTERNATIONAL, INC.
                 Non-GAAP Financial Measure Reconciliation
    Measures that Exclude Restructuring Costs and Other Charges in 2008
                              ($ in millions)
 
 

                                                          Full Year 2008
                                                          --------------
    General, administrative and other expenses                      $783
    Less: Restructuring costs and other charges                      (32)
                                                                     ---
    General, administrative and other expenses
     excluding restructuring costs and other charges**              $751
                                                                    ====

     ** Denotes non-GAAP financial measures.  Please see page A-17 for
        additional information about our reasons for providing these
        alternative financial measures and the limitations on their use.
 
 

                         MARRIOTT INTERNATIONAL, INC.
                  Non-GAAP Financial Measure Reconciliation
            Internal Planning Assumptions and Related Estimates that
    Exclude Restructuring Costs and Other Charges and Certain Tax Items in
                                     2009
                  ($ in millions, except per share amounts)

                                                          Assumed/Estimated
                                                            Full Year 2009
                                                          -----------------
    Timeshare sales and services revenue net
     of Timeshare direct expenses                                       $14
    Add back: Restructuring costs and other charges                      31
                                                                         --
    Timeshare sales and services (net)
     excluding restructuring costs and other charges**                  $45
                                                                        ===
 
 

                                                     Range
                                         -----------------------------
                                            Assumed/       Assumed/
                                            Estimated      Estimated
                                         Full Year 2009 Full Year 2009
                                         -------------- --------------
    General, administrative and other
     expenses                                      $633           $653
    Less: Restructuring costs and other
     charges                                        (48)           (48)
                                                     --             --
    General, administrative and other
     expenses excluding restructuring
     costs and other charges**                     $585           $605
                                                   ====           ====
 
 

                                   Range                      Range
                      -----------------------------------------------------
                          Assumed/        Assumed/     Assumed/   Assumed/
                         Estimated       Estimated     Estimated  Estimated
                       Third Quarter   Third Quarter  Full Year  Full Year
                            2009            2009         2009       2009
                      --------------- --------------- ---------- ----------
    Earnings per
     share
     attributable
     to Marriott
     shareholders               $0.07           $0.12      $0.31      $0.41
    Add back:
     Restructuring
     costs and other
     charges and
     certain tax
     items                       0.02            0.02       0.45       0.45
                                 ----            ----       ----       ----
    Earnings per
     share
     attributable to
     Marriott
     shareholders
     excluding
     restructuring
     costs and other
     charges and
     certain tax
     items**                    $0.09           $0.14      $0.76      $0.86
                                =====           =====      =====      =====
 
 

                                                  Assumed/Estimated
                                                    Full Year 2009
                                                   -----------------
    Timeshare segment results                                  $(53)
    Add back: Restructuring costs and other charges              78
                                                                 --
    Timeshare segment results excluding
     restructuring costs and other charges**                    $25
                                                                ===

    ** Denotes non-GAAP financial measures.  Please see page A-17 for
       additional information about our reasons for providing these
       alternative financial measures and the limitations on their use.
 

                          MARRIOTT INTERNATIONAL, INC.
                           Non-GAAP Financial Measure

  In our press release and schedules, and on the 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 press release schedules reconcile the most directly comparable
  GAAP measure to each non-GAAP measure that we refer to (identified by a
  double asterisk on the preceding pages).  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.

  Measures That Exclude Restructuring Costs and Other Charges and Certain
  Tax Expenses.  Management evaluates non-GAAP measures that exclude the
  impact of restructuring costs and other charges and certain tax expenses
  incurred in the 2009 first quarter and 2009 and 2008 second quarters as
  well as estimated restructuring costs and other charges expected to be
  incurred in the third quarter of 2009 and full year 2009 because those
  non-GAAP measures allow for period-over-period comparisons of our on-going
  core operations before material charges.  These non-GAAP measures also
  facilitate management's comparison of results from our on-going operations
  before material charges with results from other lodging companies.

  During the latter part of 2008 and particularly the fourth quarter, we
  experienced a significant decline in demand for hotel rooms both
  domestically and internationally due, in part, to the failures and near
  failures of several large financial service companies and the dramatic
  downturn in the economy.  Our capital intensive Timeshare business was
  also hurt by the downturn in market conditions and particularly, the
  significant deterioration in the credit markets, which resulted in our
  decision not to complete a note sale in the fourth quarter of 2008
  (although we did complete a note sale in the first quarter of 2009).
  These declines resulted in reduced management and franchise fees,
  cancellation of development projects, reduced timeshare contract sales,
  contract cancellation allowances, and charges and reserves associated with
  expected fundings, loans, Timeshare inventory, accounts receivable,
  contract cancellation allowances, valuation of Timeshare residual
  interests, hedge ineffectiveness, and asset impairments.  We responded by
  implementing various cost saving measures, beginning in the fourth quarter
  of 2008 and which continued in the first quarter of 2009 and second
  quarter of 2009, and resulted in first quarter 2009 restructuring costs of
  $2 million and second quarter 2009 restructuring costs of $33 million that
  were directly related to the downturn.  We also incurred other first
  quarter 2009 and second quarter 2009 charges totaling $127 million and $24
  million, respectively, that were directly related to the downturn,
  including asset impairment charges, accounts receivable and guarantee
  charges, reserves associated with loans, reversal of the liability related
  to expected fundings, Timeshare contract cancellation allowances, and
  charges related to the valuation of Timeshare residual interests.
  Currently, we expect to incur $9 to $11 million (our calculation assumes
  $10 million) in restructuring costs and other charges in the 2009 third
  quarter.  For full year 2009, we expect restructuring costs and other
  charges to total $197 million to $202 million (our calculation assumes
  $201 million) as a result of our restructuring efforts and the economic
  downturn, which includes $186 million of restructuring costs and other
  charges already incurred in the first half of 2009.  These estimates are
  subject to change.

  Certain tax expenses included $26 million in the 2009 first quarter, $17
  million in the 2009 second quarter and $24 million in the 2008 second
  quarter of non-cash charges primarily related to the treatment of funds
  received from certain foreign subsidiaries that is in ongoing discussion
  with the Internal Revenue Service ("IRS"). Additionally, certain tax
  expenses in the 2008 second quarter also reflected $12 million of tax
  expense due primarily 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.

  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. 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. The tax positions of companies can also 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.

  Adjusted EBITDA.  Management also evaluates adjusted EBITDA which
  excludes: (1) the 2009 second quarter restructuring costs and other
  charges totaling $57 million; (2) the 2009 first quarter restructuring
  costs and other charges totaling $129 million; (3) the 2008 fourth quarter
  restructuring costs and other charges totaling $192 million; and (4) the
  first and second quarter 2008 impact of the synthetic fuel business.
  Management excludes the restructuring costs and other charges incurred in
  the 2009 first and second quarters and in the 2008 fourth quarter for the
  reasons noted above under "Measures That Exclude Restructuring Costs and
  Other Charges and Certain Tax Expenses." Fourth quarter 2008 restructuring
  costs and other charges included $55 million of restructuring costs and
  $137 million of other charges, including charges and reserves associated
  with expected fundings, loans, Timeshare inventory, accounts receivable,
  contract cancellation allowances, valuation of Timeshare residual
  interests, hedge ineffectiveness, and asset impairments. Management also
  excludes the first and second quarter 2008 impact of the synthetic fuel
  business, which was discontinued in 2007 and which did not relate to our
  core lodging business, to allow for period-over-period comparisons of our
  on-going core lodging operations and facilitate management's comparison of
  our results with those of other lodging companies.

  Total Debt, Net of Cash (or, "Net Debt"). Total debt net of cash
  reflects total debt less cash and cash equivalents.  Management considers
  total debt net of cash to be a more accurate indicator of the net debt
  that must be repaid or refinanced at maturity (as it gives consideration
  to cash resources available to retire a portion of the debt when due).
  Additionally, management believes that this financial measure provides a
  clearer picture of the future demands on cash to repay debt.  Management
  uses this financial measure in making decisions regarding its borrowing capacity and future refinancing needs.

Marriott International, Inc. (NYSE:MAR) will conduct its quarterly earnings review for the investment community and news media on Thursday, July 16, 2009 at 10 a.m. Eastern Time (ET). The conference call will be webcast simultaneously via Marriott's investor relations website at http://www.marriott.com/investor, click the "Recent and Upcoming Events" tab and click on the quarterly conference call link. A replay will be available at that same website until July 16, 2010. The webcast will also be available as a podcast from the same site.

The telephone dial-in number for the conference call is 719-325-4805. A telephone replay of the conference call will be available from 1 p.m. ET, Thursday, July 16, 2009 until 8 p.m. ET, Thursday, July 23, 2009. To access the replay, call 719-457-0820. The reservation number for the recording is 8493117.

Note: This press release and accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including REVPAR, profit margin and earnings trends, estimates and assumptions; statements concerning the number of lodging properties we expect to add in the future; our expected cost savings, investment spending and share repurchases; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including the depth and duration of the current recession; supply and demand changes for hotel rooms, vacation ownership, condominiums, and corporate housing; competitive conditions in the lodging industry; relationships with clients and property owners; the availability of capital to finance hotel growth and refurbishment; and other risk factors identified in our most recent quarterly report on Form 10-Q; any of which could cause actual results to differ materially from those expressed in or implied by the statements herein. These statements are made as of the date of this press release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

MARRIOTT INTERNATIONAL, INC. (NYSE:MAR) is a leading lodging company with more than 3,200 lodging properties in 66 countries and territories. Marriott International operates and franchises hotels under the Marriott, JW Marriott, The Ritz-Carlton, Renaissance, Residence Inn, Courtyard, TownePlace Suites, Fairfield Inn, SpringHill Suites and Bulgari brand names; develops and operates vacation ownership resorts under the Marriott Vacation Club, The Ritz-Carlton Destination Club and Grand Residences by Marriott brands; operates Marriott Executive Apartments; provides furnished corporate housing through its Marriott ExecuStay division; and operates conference centers. The company is headquartered in Bethesda, Maryland, USA and had approximately 146,000 employees at 2008 year-end. It is recognized by BusinessWeek as one of the 100 best global brands, by FORTUNE as one of the best companies to work for, and by the U.S. Environmental Protection Agency (EPA) as Partner of the Year since 2004. In fiscal year 2008, Marriott International reported sales from continuing operations of nearly $13 billion. For more information or reservations, please visit our web site at www.marriott.com. For an interactive online version of Marriott's 2008 Annual Report, which includes a short video message from Chairman and CEO J.W. Marriott, Jr., visit www.marriott.com/investor.
 
.
Contact:

Tom Marder of Marriott International, Inc., 
+1-301-380-2553,
[email protected]
http://www.marriott.com/ 
.
.
 
Also See: Marriott International Inc. Reports a 24% Decrease in 2nd Qtr Net income, $157 million from $207 million a Year Earlier; Hotels Outside the U.S. Report Strong Revenue Growth in the Quarter, Some Deterioration in the U.S / Hotel Operating Statistics / July 2008
.

.

 

To search Hotel Online data base of News and Trends Go to Hotel.OnlineSearch
Home | Welcome| Hospitality News | Classifieds| One-on-One |
Viewpoint Forum | Industry Resources | Press Releases
Please contact Hotel.Onlinewith your comments and suggestions.