BETHESDA, Md., April
22, 2010 - Marriott
International, Inc. (NYSE: MAR)
today reported first quarter 2010 results, exceeding its revenue per
available room (REVPAR) and diluted earnings per share (EPS)
expectations.
FIRST
QUARTER 2010 RESULTS
First
quarter 2010 net income totaled $83
million, a 5 percent decline compared to first quarter 2009
adjusted net income. Diluted EPS totaled $0.22, down $0.02 from adjusted diluted EPS
in the year-ago quarter. On February
11, 2010, the company forecasted first quarter diluted EPS of $0.15 to $0.21.
Reported
net income was $83
million in the
first quarter of 2010 compared to a reported net loss of $23 million in the year-ago quarter.
Reported diluted EPS was $0.22 in the first quarter of
2010 compared to reported diluted losses per share of$0.06 in the first quarter of
2009.
Adjusted
results for the 2009 first quarter exclude $129 million pretax ($84
million after-tax
and $0.24 per diluted share) of
restructuring costs and other charges and $26 million of non-cash charges ($0.07 per diluted share) in the
provision for income taxes.
J.W.
Marriott, Jr., chairman and chief executive officer of Marriott
International, said, "In the first quarter we welcomed increasing
numbers of business guests to our hotels as travelers got back to work
in most markets around the world. Corporate roomnights for the
Marriott Hotels & Resort brand in North
America rose 16
percent in the first quarter as business demand strengthened
dramatically. At the same time, leisure demand remained solid as
vacationers continued to find memorable holiday experiences and good
values. While first quarter room rates were generally lower than
last year, as occupancy levels continue to improve, we see higher room
rates on the horizon. In fact, we anticipate that North American
systemwide REVPAR will increase by 3 to 6 percent for the full year
2010 with higher room rates by year end. International demand
trends are even stronger. We expect REVPAR outside North America will increase 4 to 7
percent on a constant dollar basis in 2010 reflecting strong demand in Europe, South America and Asia.
Over
8,000 new rooms joined our system during the first quarter including
the JW Marriott Los Angeles L.A. LIVE, the JW Marriott Hill Country
Resort and Spa in San
Antonio, and the Shanghai Marriott Hotel Changfeng Park, our
47th hotel inChina.
We also launched our newest brand, The Autograph Collection, with
two new properties, Casa Monica Hotel in St. Augustine Florida and the Grand Bohemian
Hotel in Asheville,
North Carolina.
With
stronger demand and meaningful unit growth, fee revenue and earnings
per share exceeded our expectations. 2010 is shaping up to be a
good year."
REVPAR
for the company's worldwide comparable company-operated properties was
flat (a 1.0 percent decline using constant dollars) in the 2010 first
quarter and REVPAR for the company's worldwide comparable systemwide
properties declined 0.7 percent (a 1.3 percent decline using constant
dollars).
International
comparable company-operated REVPAR rose 5.8 percent (a 1.5 percent
increase using constant dollars), including a 4.5 percent decline in
average daily rate (a 8.3 percent decline using constant dollars) in
the first quarter of 2010.
In North America,
comparable company-operated REVPAR declined 1.9 percent in the first
quarter of 2010. 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)
was down 1.2 percent with a 7.8 percent decline in average daily rate.
Marriott
added 44 new properties (8,361 rooms) to its worldwide lodging
portfolio in the 2010 first quarter and seven properties (1,146 rooms)
exited the system during the quarter. At quarter-end, the
company's lodging group encompassed 3,457 properties and timeshare
resorts for a total of over 603,000 rooms.
The
company's worldwide pipeline of hotels under construction, awaiting
conversion or approved for development totaled over 95,000 rooms in
more than 600 hotels at quarter-end.
MARRIOTT
REVENUES totaled over $2.6
billion in the
2010 first quarter compared to approximately $2.5 billion for the first quarter of
2009. Base management and franchise fees rose 1 percent to $216 million reflecting fees from new
hotels offset by slightly lower REVPAR. First quarter incentive
management fees declined 7 percent to $40
million. In the first quarter, 23 percent of
company-managed hotels earned incentive management fees compared to 25
percent in the year-ago quarter. Approximately 60 percent of
incentive management fees came from hotels outside North America in the 2010 quarter
compared to 54 percent in the 2009 quarter.
Worldwide
comparable company-operated house profit margins declined 110 basis
points in the first quarter reflecting increasing occupancy and
declining rate partially offset by efficiency improvements at the
property level. House profit margins for comparable
company-operated properties outside North
America increased
40 basis points and North American comparable company-operated house
profit margins declined 180 basis points from the year-ago quarter.
Owned,
leased, corporate housing and other revenue, net of direct expenses,
declined $1
million in the
2010 first quarter, to $12
million, primarily reflecting the impact of lower operating
results in owned and leased hotels partially offset by $4 million of termination fees.
First
quarter adjusted Timeshare segment contract sales increased 10 percent
to $172
million excluding
an $8
millionallowance for fractional and residential contract
cancellations recorded in the quarter. In the prior year's
quarter, adjusted Timeshare segment contract sales totaled $157 million excluding a $28 million allowance for contract
cancellations.
In
the first quarter, timeshare sales and services revenue totaled $285 million and, net of expenses,
totaled $50
million for the
quarter. Adjusting for restructuring and other charges, as well
as the impact of consolidation of securitized loans as if such
consolidation had occurred at the beginning of 2009, first quarter 2009
timeshare sales and services revenue would have totaled $254 million and, net of direct
expenses, would have totaled $25
million. These adjustments for the 2009 quarter are shown
on page A-14.
Timeshare
development revenue, net of expense, benefited from stronger demand,
higher closing efficiency, favorable reportability and lower marketing
and sales costs.
Timeshare
segment results include Timeshare sales and services revenue, net of
direct expenses, as well as base management fees, equity earnings
(losses), noncontrolling interest, interest expense and general,
administrative and other expenses associated with the timeshare
business. Timeshare segment results for the 2010 first quarter,
shown on page A-6, totaled $25
million, including $14
million of
interest expense related to the consolidation of securitized Timeshare
notes. On February
11, 2010, the company provided Timeshare segment guidance of $30 million to $40
million, excluding interest expense associated with securitized
Timeshare notes.
GENERAL,
ADMINISTRATIVE and OTHER expenses for the 2010 first quarter increased
1 percent to $138
million, compared to adjusted expenses of $136 million in the year-ago quarter.
The 2010 first quarter benefited from $6 million in guarantee reserve
reversals and $4
million of lower
receivable reserves partially offset by higher legal expenses of $3 million.
The 2009 first quarter benefited from $8 million of incentive compensation
and other accrual reversals and a $5
million favorable
impact associated with deferred compensation.
GAINS
AND OTHER INCOME totaled $1
million primarily
reflecting gains on the sale of real estate. The prior year's
first quarter gains and other income totaled $25 million and included a $21 million gain on the extinguishment
of debt, $3
million of gains
on the sale of real estate and other income and $1 million of preferred returns from
joint venture investments.
INTEREST
EXPENSE increased $16
million to $45 million in
the first quarter primarily due to $14
million of
interest expense related to the consolidation of debt associated with
securitized Timeshare notes, lower capitalized interest and interest
associated with deferred compensation partially offset by lower debt
balances and interest rates. Adjusting for the impact of
consolidation of securitized loans as if such consolidation had
occurred at the beginning of 2009, first quarter 2009 interest expense
would have totaled $45
million, flat with 2010 first quarter interest expense.
EQUITY
IN (LOSSES) EARNINGS totaled an $11
million loss in
the quarter compared to a $3
million adjusted
loss in the year-ago quarter. The $8 million decline primarily reflected
a $4 million increase in cancellation
reserves at one Timeshare joint venture and impairment charges of $3 million associated with two
investments.
Earnings
before Interest Expense, Taxes, Depreciation and Amortization (EBITDA)
EBITDA
totaled $221
million in the
2010 first quarter. In the 2009 first quarter, adjusted EBITDA
totaled $215
million. If the consolidation of securitized timeshare
notes had occurred at the beginning of 2009, adjusted EBITDA in 2009
would have totaled $235
million.
BALANCE
SHEET
At
the end of the first quarter 2010, total debt was $3,269 million and cash balances totaled $118 million,
compared to$2,298 million in debt and $115 million of cash at year-end 2009.
The increase in debt included $1,043
million of debt
associated with securitized Timeshare mortgage notes now required to be
consolidated, as noted below. At the end of the first quarter
2010, Marriott had borrowings of $396
million outstanding
under its $2.4
billion bank
revolver.
COMMON
STOCK
Weighted
average fully diluted shares outstanding used to calculate diluted EPS
totaled 373.3 million in the 2010 first quarter compared to weighted
average fully diluted shares outstanding of 360.5 million used to
calculate adjusted diluted EPS in the year-ago quarter.
The
remaining share repurchase authorization, as of March 26, 2010,
totaled 21.3 million shares. No
share repurchases are planned for 2010.
IMPACT
OF ACCOUNTING CHANGES
The
company adopted ASU Nos. 2009-16 and 2009-17 (formerly referred to as
FAS 166 and 167) at the beginning of 2010, which required consolidation
of entities associated with securitized Timeshare notes and impacts the
ongoing accounting for those notes. With the consolidation of the
existing portfolio of securitized loans on the first day of fiscal
2010, assets increased by $970
million, liabilities increased by $1,116 million,
and shareholders' equity decreased by $146
million. No change in net cash flow is anticipated as a
result of the accounting changes. If the consolidation had
occurred at the beginning of 2009, first quarter 2009 adjusted revenue
would have increased to $2,540
million, first quarter 2009 adjusted EBITDA would have increased
to $235
million, first quarter 2009 interest expense would have
increased to $45
million and
first quarter 2009 adjusted pretax income would have increased to $141 million.
See the tables on pages A-14, A-15, A-16, A-17 and A-18 of the
accompanying schedules for 2009 quarterly and full year Timeshare
segment results adjusted as if the accounting changes had been made on
the first day of fiscal 2009.
SECOND
QUARTER 2010 OUTLOOK
For
the second quarter, the company assumes comparable systemwide REVPAR on
a constant dollar basis will increase 4 to 6 percent in North America,
8 to 10 percent outside North
America and 5 to
7 percent worldwide.
In
the 2010 second quarter, the company assumes Timeshare contract sales
will total $175
million to $185 million and
Timeshare sales and services revenue, net of direct expenses, will
total approximately $40
million to $45 million. With these assumptions, Timeshare
segment results for the second quarter, including interest expense
associated with securitized notes, are expected to total $20 million to $25
million.
FULL
YEAR 2010 OUTLOOK
For
the full year 2010, the company assumes comparable systemwide REVPAR on
a constant dollar basis will increase 3 to 6 percent in North America,
4 to 7 percent outside North
America and 3 to
6 percent worldwide.
The
company expects to open 25,000 to 30,000 rooms in 2010 as most hotels
expected to open are already under construction or undergoing
conversion from other brands.
The
company continues to estimate that, on a full-year basis, one point of
worldwide systemwide REVPAR impacts total fees by approximately $10 million to $15
million pretax
and owned, leased, corporate housing and other revenue, net of direct
expense, by roughly $4
million pretax.
For
its timeshare business, the company assumes 2010 timeshare contract
sales will be slightly higher than 2009 levels. For 2010,
Timeshare sales and services revenue, net of direct expenses, is
expected to total $185
million to $195 million. Timeshare segment results for
2010, including interest expense associated with previously securitized
notes, is expected to total $95
million to $105 million.
The
company expects its 2010 general, administrative and other expenses to
total $650
million to $660 million reflecting
higher incentive compensation.
|
|
|
Second
Quarter
2010
|
Full
Year
2010
|
|
Total
fee revenue
|
$275
million to $285 million
|
$1,145
million to $1,175 million
|
|
Owned,
leased, corporate housing and other revenue, net of direct expenses
|
Approx
$25 million
|
$75
million to $80 million
|
|
Timeshare
sales and services revenue, net of direct expenses
|
$40
million to $45 million
|
$185
million to $195 million
|
|
General,
administrative and other expenses
|
Approx
$150 million
|
$650
million to $660 million
|
|
Operating
income
|
$190
million to $205 million
|
$745
million to $800 million
|
|
Gains
and other income
|
$0
to $5 million
|
Approx
$15 million
|
|
Net
interest expense1
|
Approx
$40 million
|
$165
million to $170 million
|
|
Equity
in earnings (losses)
|
Approx
$0 million
|
Approx
$30 million
|
|
Earnings
per share
|
$0.25
to $0.29
|
$0.95
to $1.05
|
|
Tax
rate
|
36
percent
|
36
percent
|
|
1 Net
of interest income
|
|
|
|
|
Based
upon the assumptions above, full year 2010 EBITDA is expected to total $985 million to
$1,040 million. Assuming the investment spending levels
below, adjusted total debt is expected to decline $400 million to $500
million by year
end 2010.
The
company expects investment spending in 2010 will total approximately $500 million,
including capital expenditures totaling $150 million to $200
million, of which maintenance capital spending is expected to
total $50
million. Investment spending will also include new
mezzanine financing and mortgage loans, contract acquisition costs, and
equity and other investments. The investment in net timeshare
development is not included above as the company expects cost of goods
sold in the timeshare business will exceed timeshare inventory spending
in 2010.
Marriott
International, Inc. (NYSE: MAR)
will conduct its quarterly earnings review for the investment community
and news media on Thursday,
April 22, 2010 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 April
22, 2011.
The
telephone dial-in number for the conference call is 719-325-2122.
A telephone replay of the conference call will be available from 1 p.m. ET, Thursday, April 22,
2010 until 8 p.m. ET, Thursday, April 29,
2010. To access the replay, call 719-457-0820. The
reservation number for the recording is 7418222.
Definitions
All
references to net income or net loss, unless otherwise noted, reflect
net income or net loss attributable to Marriott. All references
to EPS or diluted losses per share, unless otherwise noted, reflect EPS
or diluted losses per share attributable to Marriott shareholders.
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 continuation and pace of the economic recovery; 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 annual or quarterly report on
Form 10-K or 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 3,400 lodging properties in
70 countries and territories. Marriott International operates and
franchises hotels under the Marriott, JW Marriott, The Ritz-Carlton, The Autograph Collection, 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;
licenses and manages whole-ownership residential brands, including The Ritz-Carlton
Residences, JW
Marriott Residences and Marriott
Residences; operatesMarriott 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 137,000 employees at 2009 year-end. It is
recognized by FORTUNE® as one of the best companies to work for,
and by Newsweekas
one of the greenest big companies in America. In fiscal year 2009,
Marriott International reported sales from continuing operations of
nearly $11
billion. For more information or reservations, please visit our
web site at www.marriott.com,
and for the latest company news, visit www.marriottnewscenter.com.
I
Marriott
International, Inc.
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|
Press
Release Schedules
|
|
Quarter
1, 2010
|
|
Table
of Contents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Income
|
|
A-1
|
|
|
|
|
|
Total
Lodging Products
|
|
A-3
|
|
|
|
|
|
Key
Lodging Statistics
|
|
A-4
|
|
|
|
|
|
Timeshare
Segment
|
|
A-6
|
|
|
|
|
|
EBITDA
|
|
A-7
|
|
|
|
|
|
Total
Debt
|
|
A-8
|
|
|
|
|
|
First
Quarter 2009 Revenue, Interest Expense and Income Before Income Taxes
As Adjusted Had ASU Nos. 2009-16 and 2009-17 Been Adopted on January 3,
2009
|
|
A-9
|
|
|
|
|
|
First
Quarter 2009 EBITDA As Adjusted Had ASU Nos. 2009-16 and 2009-17 Been
Adopted on January 3, 2009
|
|
A-10
|
|
|
|
|
|
2009
EBITDA As Adjusted Had ASU Nos. 2009-16 and 2009-17 Been Adopted on
January 3, 2009 and Forecasted 2010
|
|
A-11
|
|
|
|
|
|
Second
Quarter 2009 General, Administrative, and Other Expenses Excluding
Restructuring Costs and Other Charges
|
|
A-12
|
|
|
|
|
|
Timeshare
Inventory As Adjusted Had ASU Nos. 2009-16 and 2009-17 Been Adopted on
January 3, 2009
|
|
A-13
|
|
|
|
|
|
2009
Timeshare Segment As Adjusted Had ASU Nos. 2009-16 and 2009-17 Been
Adopted on January 3, 2009
|
|
A-14
|
|
|
|
|
|
Non-GAAP
Financial Measures
|
|
A-19
|
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
(in
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
As
Reported
12
Weeks
Ended
March
26, 2010
|
|
As
Reported
12
Weeks
Ended
March
27, 2009
|
Restructuring
Costs
&
Other Charges
|
Certain
Tax
Items
|
As
Adjusted
12
Weeks
Ended
March
27, 2009**
|
|
Percent
Better/(Worse)
2010
vs.
Adjusted
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
Base
management fees
|
$
125
|
|
$
125
|
$
-
|
$
-
|
$
125
|
|
-
|
|
Franchise
fees
|
91
|
|
88
|
-
|
-
|
88
|
|
3
|
|
Incentive
management fees
|
40
|
|
43
|
-
|
-
|
43
|
|
(7)
|
|
Owned,
leased, corporate housing and other revenue 1
|
229
|
|
220
|
-
|
-
|
220
|
|
4
|
|
Timeshare
sales and services (including net note sale losses of $1 for the twelve
weeks ended March 27, 2009) 2
|
285
|
|
209
|
17
|
-
|
226
|
|
26
|
|
Cost
reimbursements 3
|
1,860
|
|
1,810
|
-
|
-
|
1,810
|
|
3
|
|
Total Revenues
|
2,630
|
|
2,495
|
17
|
-
|
2,512
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
COSTS AND EXPENSES
|
|
|
|
|
|
|
|
|
|
Owned,
leased and corporate housing - direct 4
|
217
|
|
207
|
-
|
-
|
207
|
|
(5)
|
|
Timeshare
- direct
|
235
|
|
220
|
1
|
-
|
221
|
|
(6)
|
|
Reimbursed
costs
|
1,860
|
|
1,810
|
-
|
-
|
1,810
|
|
(3)
|
|
Restructuring
costs
|
-
|
|
2
|
(2)
|
-
|
-
|
|
-
|
|
General,
administrative and other 5
|
138
|
|
216
|
(80)
|
-
|
136
|
|
(1)
|
|
Total Expenses
|
2,450
|
|
2,455
|
(81)
|
-
|
2,374
|
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
180
|
|
40
|
98
|
-
|
138
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
Gains
and other income (including gain on debt extinguishment of $21 for the
twelve weeks ended March 27, 2009) 6
|
1
|
|
25
|
-
|
-
|
25
|
|
(96)
|
|
Interest
expense
|
(45)
|
|
(29)
|
-
|
-
|
(29)
|
|
(55)
|
|
Interest
income
|
4
|
|
6
|
-
|
-
|
6
|
|
(33)
|
|
Equity
in (losses) earnings 7
|
(11)
|
|
(34)
|
31
|
-
|
(3)
|
|
(267)
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
BEFORE INCOME TAXES
|
129
|
|
8
|
129
|
-
|
137
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes
|
(46)
|
|
(33)
|
(45)
|
26
|
(52)
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME / (LOSS)
|
83
|
|
(25)
|
84
|
26
|
85
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
Add:
Net losses attributable to noncontrolling interests, net of tax
|
-
|
|
2
|
-
|
-
|
2
|
|
(100)
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME / (LOSS) ATTRIBUTABLE TO MARRIOTT
|
$
83
|
|
$
(23)
|
$
84
|
$
26
|
$
87
|
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS
/ (LOSSES) PER SHARE - Basic 8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings / (losses) per share attributable to Marriott shareholders 9
|
$
0.23
|
|
$
(0.06)
|
$
0.24
|
$
0.07
|
$
0.25
|
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS
/ (LOSSES) PER SHARE - Diluted 8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings / (losses) per share attributable to Marriott shareholders 9
|
$
0.22
|
|
$
(0.06)
|
$
0.24
|
$
0.07
|
$
0.24
|
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
Shares 8
|
359.4
|
|
354.4
|
354.4
|
354.4
|
354.4
|
|
|
|
Diluted
Shares 8,10
|
373.3
|
|
354.4
|
354.4
|
354.4
|
360.5
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see pages A-19 and
A-20 for additional information about our reasons for providing these
alternative financial measures and the limitations on their use.
|
|
See
page A-2 for footnote references.
|
|
|
|
|
|
|
|
|
|
|
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 and cost reimbursements.
3 -
Cost reimbursements include reimbursements from properties for
Marriott-funded operating expenses.
4 -
Owned, leased and corporate housing - direct expenses include operating
expenses related to our owned or leased hotels, including lease
payments, pre-opening expenses and depreciation, plus expenses related
to our corporate housing business.
5 -
General, administrative and other expenses include the overhead costs
allocated to our segments and our corporate overhead costs and general
expenses.
6 -
Gains and other income includes gains and losses on: the sale of real
estate; note sales or repayments (except timeshare note
securitizations); the sale of joint ventures and investments; and debt
extinguishments, as well as income from cost method joint ventures.
7 -
Equity in (losses) earnings includes our equity in (losses) / earnings
of unconsolidated equity method joint ventures.
8 -
2009 share numbers and per share amounts have been retroactively
adjusted to reflect the stock dividends with distribution dates of July 30, 2009, September 3, 2009 and December 3, 2009.
9 -
Earnings / (Losses) per share attributable to Marriott shareholders
plus adjustment items may not equal earnings per share attributable to
Marriott shareholders as adjusted due to rounding.
10 -
Basic and fully diluted weighted average common shares outstanding used
to calculate earnings per share from continuing operations for the
periods in which we had a loss are the same because inclusion of
additional equivalents would be anti-dilutive.
A-2
MARRIOTT
INTERNATIONAL, INC.
|
|
TOTAL
LODGING PRODUCTS 1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
of Properties
|
|
Number
of Rooms/Suites
|
|
Brand
|
March
26, 2010
|
March
27, 2009
|
vs.
March 27, 2009
|
|
March
26, 2010
|
March
27, 2009
|
vs.
March 27, 2009
|
|
|
|
|
|
|
|
|
|
|
Domestic
Full-Service
|
|
|
|
|
|
|
|
|
Marriott Hotels & Resorts
|
356
|
349
|
7
|
|
142,282
|
138,931
|
3,351
|
|
Renaissance Hotels
|
79
|
76
|
3
|
|
28,914
|
28,047
|
867
|
|
Autograph
|
2
|
-
|
2
|
|
242
|
-
|
242
|
|
Domestic
Limited-Service
|
|
|
|
|
|
|
|
|
Courtyard
|
775
|
738
|
37
|
|
108,858
|
103,042
|
5,816
|
|
Fairfield Inn & Suites
|
632
|
574
|
58
|
|
56,948
|
51,052
|
5,896
|
|
SpringHill Suites
|
260
|
217
|
43
|
|
30,484
|
25,128
|
5,356
|
|
Residence Inn
|
588
|
558
|
30
|
|
70,723
|
66,730
|
3,993
|
|
TownePlace Suites
|
187
|
166
|
21
|
|
18,759
|
16,643
|
2,116
|
|
International
|
|
|
|
|
|
|
|
|
Marriott Hotels & Resorts
|
194
|
185
|
9
|
|
59,641
|
55,740
|
3,901
|
|
Renaissance Hotels
|
66
|
66
|
-
|
|
21,992
|
22,536
|
(544)
|
|
Courtyard
|
93
|
83
|
10
|
|
18,185
|
16,222
|
1,963
|
|
Fairfield Inn & Suites
|
9
|
9
|
-
|
|
1,109
|
1,109
|
-
|
|
SpringHill Suites
|
1
|
1
|
-
|
|
124
|
124
|
-
|
|
Residence Inn
|
17
|
16
|
1
|
|
2,418
|
2,389
|
29
|
|
Marriott Executive Apartments
|
23
|
21
|
2
|
|
3,903
|
3,337
|
566
|
|
Luxury
|
|
|
|
|
|
|
|
|
The Ritz-Carlton - Domestic
|
40
|
37
|
3
|
|
12,120
|
11,652
|
468
|
|
The Ritz-Carlton - International
|
34
|
34
|
-
|
|
10,171
|
10,477
|
(306)
|
|
Bulgari Hotels & Resorts
|
2
|
2
|
-
|
|
117
|
117
|
-
|
|
The Ritz-Carlton Residential
|
26
|
24
|
2
|
|
2,669
|
2,539
|
130
|
|
The Ritz-Carlton Serviced Apartments
|
3
|
3
|
-
|
|
458
|
478
|
(20)
|
|
Timeshare 2
|
|
|
|
|
|
|
|
|
Marriott Vacation Club 3
|
53
|
51
|
2
|
|
11,874
|
11,803
|
71
|
|
The Ritz-Carlton Destination Club
|
9
|
10
|
(1)
|
|
464
|
456
|
8
|
|
The Ritz-Carlton Residences
|
4
|
3
|
1
|
|
238
|
149
|
89
|
|
Grand Residences by Marriott - Fractional
|
2
|
2
|
-
|
|
248
|
241
|
7
|
|
Grand Residences by Marriott - Residential
|
2
|
2
|
-
|
|
68
|
91
|
(23)
|
|
Sub
Total Timeshare
|
70
|
68
|
2
|
|
12,892
|
12,740
|
152
|
|
|
|
|
|
|
|
|
|
|
Total
|
3,457
|
3,227
|
230
|
|
603,009
|
569,033
|
33,976
|
|
|
|
|
|
|
|
|
|
A-3
Number
of Timeshare Interval, Fractional and Residential Resorts
|
|
|
Total
|
Properties
in
|
|
|
Properties 2
|
Active
Sales 4
|
|
100%
Company-Developed
|
|
|
|
Marriott Vacation Club 3
|
53
|
30
|
|
The Ritz-Carlton Destination Club and Residences
|
9
|
8
|
|
Grand Residences by Marriott and Residences
|
4
|
4
|
|
|
|
|
|
Joint
Ventures
|
|
|
|
The Ritz-Carlton Destination Club and Residences
|
4
|
4
|
|
|
|
|
|
Total
|
70
|
46
|
|
|
|
|
|
|
|
|
|
1 Total
Lodging Products excludes the 1,781 and 2,157 corporate housing rental
units as of March 26, 2010 and March 27, 2009, respectively.
|
|
2 Includes products that are
in active sales as well as those that are sold out. Residential
products are included 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 Properties1
|
|
|
|
|
Two
Months Ended February 28, 2010 and February 28, 2009
|
|
|
REVPAR
|
|
Occupancy
|
|
Average
Daily Rate
|
|
Region
|
2010
|
vs.
2009
|
|
2010
|
|
vs.
2009
|
|
2010
|
vs.
2009
|
|
Caribbean
& Latin America
|
$145.17
|
-3.0%
|
|
73.4%
|
4.0%
|
pts.
|
|
$197.68
|
-8.3%
|
|
Continental
Europe
|
$90.47
|
1.5%
|
|
57.2%
|
4.8%
|
pts.
|
|
$158.20
|
-7.0%
|
|
United
Kingdom
|
$103.06
|
6.0%
|
|
66.4%
|
4.4%
|
pts.
|
|
$155.19
|
-1.1%
|
|
Middle
East & Africa
|
$92.29
|
-11.6%
|
|
67.6%
|
1.5%
|
pts.
|
|
$136.58
|
-13.6%
|
|
Asia
Pacific2
|
$72.52
|
15.8%
|
|
60.2%
|
12.5%
|
pts.
|
|
$120.42
|
-8.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Regional
Composite3
|
$96.54
|
2.1%
|
|
63.6%
|
6.4%
|
pts.
|
|
$151.73
|
-8.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Luxury4
|
$188.74
|
-0.7%
|
|
58.5%
|
3.6%
|
pts.
|
|
$322.47
|
-6.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
International5
|
$106.72
|
1.5%
|
|
63.1%
|
6.1%
|
pts.
|
|
$169.23
|
-8.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide6
|
$94.13
|
-1.0%
|
|
64.1%
|
4.6%
|
pts.
|
|
$146.86
|
-8.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
Systemwide International Properties1
|
|
|
|
|
Two
Months Ended February 28, 2010 and February 28, 2009
|
|
|
REVPAR
|
|
Occupancy
|
|
Average
Daily Rate
|
|
Region
|
2010
|
vs.
2009
|
|
2010
|
|
vs.
2009
|
|
2010
|
vs.
2009
|
|
Caribbean
& Latin America
|
$120.01
|
1.8%
|
|
67.4%
|
6.4%
|
pts.
|
|
$178.11
|
-7.9%
|
|
Continental
Europe
|
$87.50
|
0.4%
|
|
56.1%
|
4.8%
|
pts.
|
|
$156.03
|
-8.1%
|
|
United
Kingdom
|
$101.29
|
5.6%
|
|
65.6%
|
4.3%
|
pts.
|
|
$154.36
|
-1.2%
|
|
Middle
East & Africa
|
$92.29
|
-11.6%
|
|
67.6%
|
1.5%
|
pts.
|
|
$136.58
|
-13.6%
|
|
Asia
Pacific2
|
$76.86
|
8.2%
|
|
60.8%
|
10.6%
|
pts.
|
|
$126.47
|
-10.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Regional
Composite3
|
$93.73
|
1.6%
|
|
62.3%
|
6.3%
|
pts.
|
|
$150.52
|
-8.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Luxury4
|
$188.74
|
-0.7%
|
|
58.5%
|
3.6%
|
pts.
|
|
$322.47
|
-6.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
International5
|
$102.35
|
1.2%
|
|
61.9%
|
6.0%
|
pts.
|
|
$165.25
|
-8.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide6
|
$78.93
|
-1.3%
|
|
62.9%
|
3.6%
|
pts.
|
|
$125.48
|
-6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 We report
International results on a period basis, and international statistics
on a monthly basis. Statistics are in constant dollars for
January through February. 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 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 two calendar months ended February 28,
2010 and February 28, 2009, and North American statistics for the
twelve weeks ended March 26, 2010 and March 27, 2009. Includes
the Marriott Hotels & Resorts, Renaissance Hotels, The
Ritz-Carlton, Bulgari Hotels & Resorts, Residence Inn, Courtyard,
Fairfield Inn & Suites, TownePlace Suites and SpringHill Suites
brands.
|
|
|
|
|
|
|
|
|
|
|
|
A-4
MARRIOTT
INTERNATIONAL INC.
KEY LODGING STATISTICS
|
|
Comparable
Company-Operated North American Properties1
|
|
|
|
|
Twelve
Weeks Ended March 26, 2010 and March 27, 2009
|
|
|
REVPAR
|
|
Occupancy
|
|
Average
Daily Rate
|
|
Brand
|
2010
|
vs.
2009
|
|
2010
|
|
vs.
2009
|
|
2010
|
vs.
2009
|
|
Marriott
Hotels & Resorts
|
$101.05
|
-1.2%
|
|
66.2%
|
4.4%
|
pts.
|
|
$152.59
|
-7.7%
|
|
Renaissance
Hotels
|
$96.04
|
-4.6%
|
|
63.9%
|
3.3%
|
pts.
|
|
$150.21
|
-9.6%
|
|
Composite
North American Full-Service2
|
$100.12
|
-1.8%
|
|
65.8%
|
4.2%
|
pts.
|
|
$152.16
|
-8.0%
|
|
The
Ritz-Carlton3
|
$193.68
|
2.5%
|
|
64.2%
|
6.8%
|
pts.
|
|
$301.74
|
-8.4%
|
|
Composite
North American Full-Service & Luxury4
|
$107.58
|
-1.2%
|
|
65.7%
|
4.4%
|
pts.
|
|
$163.82
|
-7.8%
|
|
Residence
Inn
|
$78.90
|
-0.9%
|
|
69.4%
|
5.3%
|
pts.
|
|
$113.69
|
-8.4%
|
|
Courtyard
|
$64.74
|
-4.1%
|
|
60.3%
|
3.6%
|
pts.
|
|
$107.29
|
-9.9%
|
|
TownePlace
Suites
|
$43.32
|
-11.2%
|
|
58.0%
|
1.0%
|
pts.
|
|
$74.67
|
-12.7%
|
|
SpringHill
Suites
|
$58.16
|
-2.3%
|
|
59.8%
|
4.0%
|
pts.
|
|
$97.22
|
-8.9%
|
|
Composite
North American Limited-Service5
|
$66.83
|
-3.3%
|
|
62.7%
|
3.9%
|
pts.
|
|
$106.64
|
-9.3%
|
|
Composite
- All6
|
$90.36
|
-1.9%
|
|
64.4%
|
4.2%
|
pts.
|
|
$140.30
|
-8.2%
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
Systemwide North American Properties1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
Weeks Ended March 26, 2010 and March 27, 2009
|
|
|
REVPAR
|
|
Occupancy
|
|
Average
Daily Rate
|
|
Brand
|
2010
|
vs.
2009
|
|
2010
|
|
vs.
2009
|
|
2010
|
vs.
2009
|
|
Marriott
Hotels & Resorts
|
$89.79
|
-1.0%
|
|
63.5%
|
3.9%
|
pts.
|
|
$141.50
|
-7.1%
|
|
Renaissance
Hotels
|
$87.78
|
-2.2%
|
|
63.6%
|
4.7%
|
pts.
|
|
$138.12
|
-9.5%
|
|
Composite
North American Full-Service2
|
$89.43
|
-1.2%
|
|
63.5%
|
4.1%
|
pts.
|
|
$140.90
|
-7.6%
|
|
The
Ritz-Carlton3
|
$193.68
|
2.5%
|
|
64.2%
|
6.8%
|
pts.
|
|
$301.74
|
-8.4%
|
|
Composite
North American Full-Service & Luxury4
|
$94.31
|
-0.9%
|
|
63.5%
|
4.2%
|
pts.
|
|
$148.52
|
-7.4%
|
|
Residence
Inn
|
$78.22
|
-0.8%
|
|
70.6%
|
4.3%
|
pts.
|
|
$110.80
|
-6.8%
|
|
Courtyard
|
$66.99
|
-2.9%
|
|
61.4%
|
2.4%
|
pts.
|
|
$109.16
|
-6.7%
|
|
Fairfield
Inn & Suites
|
$46.59
|
-3.9%
|
|
56.4%
|
0.9%
|
pts.
|
|
$82.66
|
-5.4%
|
|
TownePlace
Suites
|
$49.27
|
-4.5%
|
|
61.3%
|
3.4%
|
pts.
|
|
$80.33
|
-9.7%
|
|
SpringHill
Suites
|
$58.95
|
-4.4%
|
|
61.1%
|
2.6%
|
pts.
|
|
$96.55
|
-8.5%
|
|
Composite
North American Limited-Service5
|
$64.15
|
-2.6%
|
|
62.8%
|
2.7%
|
pts.
|
|
$102.22
|
-6.7%
|
|
Composite
- All6
|
$75.63
|
-1.8%
|
|
63.0%
|
3.3%
|
pts.
|
|
$119.96
|
-6.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 North
America includes properties located in the Continental United States
and Canada.
|
|
2 Includes the Marriott
Hotels & Resorts and Renaissance Hotels brands.
|
|
3 Statistics for The
Ritz-Carlton are for January through February.
|
|
4 Includes the Marriott
Hotels & Resorts, Renaissance Hotels and The Ritz-Carlton brands.
|
|
5 Includes the Residence
Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites and
SpringHill Suites brands.
|
|
6 Includes the Marriott
Hotels & Resorts, Renaissance Hotels, The Ritz-Carlton, Residence
Inn, Courtyard,
|
|
Fairfield
Inn & Suites, TownePlace Suites, and SpringHill Suites brands.
|
|
|
|
|
|
|
|
|
|
|
|
A-5
MARRIOTT
INTERNATIONAL, INC.
|
|
TIMESHARE
SEGMENT
|
|
($
in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
As
Reported
12
Weeks Ended
March
26, 2010
|
|
As
Reported
12
Weeks Ended
March
27, 2009
|
|
Restructuring
Costs
& Other
Charges
|
|
Timeshare
Strategy - Impairment Charges
|
|
As
Adjusted
12
Weeks Ended
March
27, 2009**
|
|
Percent
Better/(Worse)
2010
vs.
Adjusted
2009
|
|
|
Segment
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
fees revenue
|
$
11
|
|
$
10
|
|
$
-
|
|
$
-
|
|
$
10
|
|
10
|
|
|
Sales
and services revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
|
147
|
|
121
|
|
4
|
|
-
|
|
125
|
|
18
|
|
|
Services
|
83
|
|
70
|
|
-
|
|
-
|
|
70
|
|
19
|
|
|
Financing
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income - non-securitized notes
|
9
|
|
13
|
|
-
|
|
-
|
|
13
|
|
(31)
|
|
|
Interest
income - securitized notes
|
36
|
|
-
|
|
-
|
|
-
|
|
-
|
|
*
|
|
|
Other
financing revenue 1
|
5
|
|
-
|
|
13
|
|
-
|
|
13
|
|
(62)
|
|
|
Total
financing revenue
|
50
|
|
13
|
|
13
|
|
-
|
|
26
|
|
92
|
|
|
Other
revenue
|
5
|
|
5
|
|
-
|
|
-
|
|
5
|
|
-
|
|
|
Total
sales and services revenue
|
285
|
|
209
|
|
17
|
|
-
|
|
226
|
|
26
|
|
|
Cost
reimbursements
|
62
|
|
58
|
|
-
|
|
-
|
|
58
|
|
7
|
|
|
Segment
revenues
|
$
358
|
|
$
277
|
|
$
17
|
|
$
-
|
|
$
294
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
fees revenue
|
$
11
|
|
$
10
|
|
$
-
|
|
$
-
|
|
$
10
|
|
10
|
|
|
Timeshare
sales and services, net
|
50
|
|
(11)
|
|
16
|
|
-
|
|
5
|
|
900
|
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
charges
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Restructuring
costs
|
-
|
|
(1)
|
|
1
|
|
-
|
|
-
|
|
-
|
|
|
General,
administrative and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense
|
(17)
|
|
(17)
|
|
-
|
|
-
|
|
(17)
|
|
-
|
|
|
Gains
and other income
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Joint
venture equity earnings
|
(5)
|
|
(1)
|
|
1
|
|
-
|
|
-
|
|
*
|
|
|
Interest
expense
|
(14)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
*
|
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
charges (non-operating)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Noncontrolling
interest
|
-
|
|
3
|
|
-
|
|
-
|
|
3
|
|
(100)
|
|
|
Segment
results
|
$
25
|
|
$
(17)
|
|
$
18
|
|
$
-
|
|
$
1
|
|
2,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
$
151
|
|
$
138
|
|
$
-
|
|
$
-
|
|
$
138
|
|
9
|
|
|
Fractional
|
8
|
|
10
|
|
-
|
|
-
|
|
10
|
|
(20)
|
|
|
Residential
|
4
|
|
(5)
|
|
4
|
|
-
|
|
(1)
|
|
(500)
|
|
|
Total company
|
163
|
|
143
|
|
4
|
|
-
|
|
147
|
|
11
|
|
|
Joint
ventures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Fractional
|
1
|
|
13
|
|
(3)
|
|
-
|
|
10
|
|
(90)
|
|
|
Residential
|
-
|
|
(27)
|
|
27
|
|
-
|
|
-
|
|
-
|
|
|
Total joint ventures
|
1
|
|
(14)
|
|
24
|
|
-
|
|
10
|
|
(90)
|
|
|
Total
contract sales 2
|
$
164
|
|
$
129
|
|
$
28
|
|
$
-
|
|
$
157
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Percent cannot be calculated.
|
|
**Denotes
non-GAAP financial measures. Please see pages A-19 and A-20 for
additional information about our reasons for providing these
alternative financial measures and the limitations on their use.
|
|
|
|
1
As Reported 12 Weeks Ended March 27, 2009 and As Adjusted 12
Weeks Ended March 27, 2009 include gain/(loss) on notes sold of ($1)
million and ($1) million, respectively.
|
|
2
As Reported 12 Weeks Ended March 26, 2010 includes fractional and
residential contract cancellation allowances of ($4) million and ($4)
million, respectively. Gross contract sales for the 2010 first
quarter were $172 million before the contract cancellation reserves of
$8 million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A-6
MARRIOTT
INTERNATIONAL, INC.
|
|
Non-GAAP
Financial Measure
|
|
EBITDA
and Adjusted EBITDA
|
|
($
in millions)
|
|
|
|
|
|
|
|
Fiscal
Year 2010
|
|
|
First
Quarter
|
|
Net
Income attributable to Marriott
|
$
83
|
|
Interest
expense
|
45
|
|
Tax
provision
|
46
|
|
Tax
provision, noncontrolling interest
|
-
|
|
Depreciation
and amortization
|
39
|
|
Less:
Depreciation reimbursed by third-party owners
|
(3)
|
|
Interest
expense from unconsolidated joint ventures
|
5
|
|
Depreciation
and amortization from unconsolidated joint ventures
|
6
|
|
EBITDA
**
|
221
|
|
|
|
|
Increase
over 2009 Adjusted EBITDA
|
3%
|
|
|
|
|
Fiscal
Year 2009
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
|
|
Net
Income / (Loss) attributable to Marriott
|
$
(23)
|
|
$
37
|
|
$
(466)
|
|
$
106
|
|
$
(346)
|
|
Interest
expense
|
29
|
|
28
|
|
27
|
|
34
|
|
118
|
|
Tax
provision
|
33
|
|
44
|
|
(210)
|
|
68
|
|
(65)
|
|
Tax
provision, noncontrolling interest
|
1
|
|
2
|
|
1
|
|
-
|
|
4
|
|
Depreciation
and amortization
|
39
|
|
42
|
|
43
|
|
61
|
|
185
|
|
Less:
Depreciation reimbursed by third-party owners
|
(2)
|
|
(2)
|
|
(2)
|
|
(3)
|
|
(9)
|
|
Interest
expense from unconsolidated joint ventures
|
3
|
|
6
|
|
4
|
|
6
|
|
19
|
|
Depreciation
and amortization from unconsolidated joint ventures
|
6
|
|
6
|
|
6
|
|
9
|
|
27
|
|
EBITDA
**
|
86
|
|
163
|
|
(597)
|
|
281
|
|
(67)
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs and other charges
|
|
|
|
|
|
|
|
|
|
|
Severance
|
2
|
|
10
|
|
4
|
|
5
|
|
21
|
|
Facilities exit costs
|
-
|
|
22
|
|
5
|
|
2
|
|
29
|
|
Development cancellations
|
-
|
|
1
|
|
-
|
|
-
|
|
1
|
|
Total restructuring costs
|
2
|
|
33
|
|
9
|
|
7
|
|
51
|
|
Impairment of investments and other, net of prior year
reserves
|
68
|
|
3
|
|
1
|
|
11
|
|
83
|
|
Reserves for loan losses
|
42
|
|
1
|
|
-
|
|
-
|
|
43
|
|
Contract cancellation allowances
|
4
|
|
1
|
|
1
|
|
3
|
|
9
|
|
Residual interests valuation
|
13
|
|
12
|
|
(3)
|
|
(2)
|
|
20
|
|
System development write-off
|
-
|
|
7
|
|
-
|
|
-
|
|
7
|
|
Total other charges
|
127
|
|
24
|
|
(1)
|
|
12
|
|
162
|
|
Total
restructuring costs and other charges
|
129
|
|
57
|
|
8
|
|
19
|
|
213
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
strategy - impairment charges
|
|
|
|
|
|
|
|
|
|
|
Operating impairments
|
-
|
|
-
|
|
614
|
|
-
|
|
614
|
|
Non-operating impairments
|
-
|
|
-
|
|
138
|
|
-
|
|
138
|
|
Total
timeshare strategy - impairment charges
|
-
|
|
-
|
|
752
|
|
-
|
|
752
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA **
|
$
215
|
|
$
220
|
|
$
163
|
|
$
300
|
|
$
898
|
|
|
|
|
|
|
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see pages A-19 and
A-20 for additional information about our reasons for providing these
alternative financialmeasures
and the limitations on their use.
|
|
|
|
|
|
|
|
|
|
|
|
A-7
MARRIOTT
INTERNATIONAL, INC.
|
|
Non-GAAP
Financial Measure
|
|
Total
Debt
|
|
($
in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at
End
of 2010
First
Quarter
|
|
Balance
at
Year-End
2009
|
|
Better/
(Worse)
Change
|
|
Total
debt
|
$
3,269
|
|
$
2,298
|
|
$
(971)
|
|
Less
the impact of ASU Nos. 2009-16 and 2009-17
|
(1,043)
|
|
-
|
|
1,043
|
|
Adjusted
total debt** (a)
|
$
2,226
|
|
$
2,298
|
|
$
72
|
|
|
|
|
|
|
|
|
Range
|
|
Range
|
|
|
Estimated
Balance
|
|
Estimated
Balance
|
|
As
Compared to Balance
at
Year-End 2009
|
|
|
Year-End
2010 (b)
|
|
Year-End
2010 (c)
|
|
Better/(Worse)
Change (b)
|
|
Better/(Worse)
Change (c)
|
|
Total
debt
|
$
2,854
|
|
$
2,754
|
|
$
(556)
|
|
$
(456)
|
|
Less
the impact of ASU Nos. 2009-16 and 2009-17
|
(956)
|
|
(956)
|
|
956
|
|
956
|
|
Adjusted
total debt** (a)
|
$
1,898
|
|
$
1,798
|
|
$
400
|
|
$
500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Excludes
the impact of the update to ASU Nos. 2009-16 and 2009-17.
(b) Assumes
$400 debt repayment in 2010.
(c) Assumes
$500 debt repayment in 2010.
**Denotes
non-GAAP financial measures. Please see pages A-19 and A-20 for
additional information about our reasons
|
|
|
|
|
|
|
|
|
|
A-8
MARRIOTT
INTERNATIONAL, INC.
|
|
Non-GAAP
Financial Measure
|
|
Revenue,
Interest Expense and Income Before Income Taxes
|
|
As
Adjusted Had ASU Nos. 2009-16 and 2009-17 (Formerly Referred to as FAS
166 & 167) Been Adopted on January 3, 2009
|
|
First
Quarter 2009
|
|
($
in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
2009
As
Reported
|
|
First
Quarter
2009
Restructuring
Costs and Other Charges
|
|
First
Quarter
2009
As
Adjusted For Restructuring Costs and Other Charges**
|
|
ASU
Nos.
2009-16
and
2009-17
Adjustments
|
|
First
Quarter
2009
As
Adjusted For
ASU
Nos. 2009-16
and
2009-17**
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
2,495
|
|
$
17
|
|
$
2,512
|
|
$
28
|
|
$
2,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense
|
$
(29)
|
|
$
-
|
|
$
(29)
|
|
$
(16)
|
|
$
(45)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Before
Income
Taxes
|
$
8
|
|
$
129
|
|
$
137
|
|
$
4
|
|
$
141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see pages A-19 and
A-20 for additional information about our reasons for providing these
alternative financial measures and the limitations on their use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A-9
MARRIOTT
INTERNATIONAL, INC.
|
|
Non-GAAP
Financial Measure
|
|
EBITDA
and Adjusted EBITDA
|
|
As
Adjusted Had ASU Nos. 2009-16 and 2009-17 (Formerly Referred to as FAS
166 & 167) Been Adopted on January 3, 2009
|
|
First
Quarter 2009
|
|
($
in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter 2009
|
|
ASU
Nos.
2009-16
and
2009-17
Adjustments
|
|
As
Adjusted For
ASU
Nos.
2009-16
and
2009-17
First
Quarter
2009**
|
|
Net
(Loss) / Income attributable to Marriott
|
$
(23)
|
|
$
2
|
|
$
(21)
|
|
Interest
expense
|
29
|
|
16
|
|
45
|
|
Tax
provision
|
33
|
|
2
|
|
35
|
|
Tax
provision, noncontrolling interest
|
1
|
|
-
|
|
1
|
|
Depreciation
and amortization
|
39
|
|
-
|
|
39
|
|
Less:
Depreciation reimbursed by third-party owners
|
(2)
|
|
-
|
|
(2)
|
|
Interest
expense from unconsolidated joint ventures
|
3
|
|
-
|
|
3
|
|
Depreciation
and amortization from unconsolidated joint ventures
|
6
|
|
-
|
|
6
|
|
EBITDA
**
|
86
|
|
20
|
|
106
|
|
|
|
|
|
|
|
|
Restructuring
costs and other charges
|
|
|
|
|
|
|
Severance
|
2
|
|
-
|
|
2
|
|
Facilities exit costs
|
-
|
|
-
|
|
-
|
|
Development cancellations
|
-
|
|
-
|
|
-
|
|
Total restructuring costs
|
2
|
|
-
|
|
2
|
|
Impairment of investments and other, net of prior year
reserves
|
68
|
|
-
|
|
68
|
|
Reserves for loan losses
|
42
|
|
-
|
|
42
|
|
Contract cancellation allowances
|
4
|
|
-
|
|
4
|
|
Residual interests valuation
|
13
|
|
-
|
|
13
|
|
System development write-off
|
-
|
|
-
|
|
-
|
|
Total other charges
|
127
|
|
-
|
|
127
|
|
Total
restructuring costs and other charges
|
129
|
|
-
|
|
129
|
|
|
|
|
|
|
|
|
Timeshare
strategy - impairment charges
|
|
|
|
|
|
|
Operating impairments
|
-
|
|
-
|
|
-
|
|
Non-operating impairments
|
-
|
|
-
|
|
-
|
|
Total
timeshare strategy - impairment charges
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA **
|
$
215
|
|
$
20
|
|
$
235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see pages A-19 and
A-20 for additional information about our reasons for providing these
alternative financial measures and the limitations on their use
|
|
.
|
|
|
|
|
|
|
|
A-10
MARRIOTT
INTERNATIONAL, INC.
|
|
Non-GAAP
Financial Measure
|
|
EBITDA
and Adjusted EBITDA
|
|
2009
As Adjusted Had ASU Nos. 2009-16 and 2009-17 Been Adopted on January 3,
2009 and Forecasted 2010
|
|
($
in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Range
|
|
|
2009
Fiscal Year
|
|
ASU
Nos.
2009-16
and
2009-17
Adjustments
|
|
As
Adjusted For
ASU
Nos.
2009-16
and
2009-17
Fiscal
Year
2009**
|
|
Estimated
EBITDA
Full
Year 2010
|
|
Net
(Loss) / Income attributable to Marriott
|
$
(346)
|
|
$
(1)
|
|
$
(347)
|
|
$
358
|
|
$
397
|
|
Interest
expense
|
118
|
|
77
|
|
195
|
|
195
|
|
190
|
|
Tax
provision
|
(65)
|
|
-
|
|
(65)
|
|
202
|
|
223
|
|
Tax
provision, noncontrolling interest
|
4
|
|
-
|
|
4
|
|
-
|
|
-
|
|
Depreciation
and amortization
|
185
|
|
-
|
|
185
|
|
185
|
|
185
|
|
Less:
Depreciation reimbursed by third-party owners
|
(9)
|
|
-
|
|
(9)
|
|
(10)
|
|
(10)
|
|
Interest
expense from unconsolidated joint ventures
|
19
|
|
-
|
|
19
|
|
25
|
|
25
|
|
Depreciation
and amortization from unconsolidated joint ventures
|
27
|
|
-
|
|
27
|
|
30
|
|
30
|
|
EBITDA
**
|
(67)
|
|
76
|
|
9
|
|
985
|
|
1,040
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs and other charges
|
|
|
|
|
|
|
|
|
|
|
Severance
|
21
|
|
-
|
|
21
|
|
-
|
|
-
|
|
Facilities exit costs
|
29
|
|
-
|
|
29
|
|
-
|
|
-
|
|
Development cancellations
|
1
|
|
-
|
|
1
|
|
-
|
|
-
|
|
Total restructuring costs
|
51
|
|
-
|
|
51
|
|
-
|
|
-
|
|
Impairment of investments and other, net of prior year
reserves
|
83
|
|
-
|
|
83
|
|
-
|
|
-
|
|
Reserves for loan losses
|
43
|
|
-
|
|
43
|
|
-
|
|
-
|
|
Contract cancellation allowances
|
9
|
|
-
|
|
9
|
|
-
|
|
-
|
|
Residual interests valuation
|
20
|
|
-
|
|
20
|
|
-
|
|
-
|
|
System development write-off
|
7
|
|
-
|
|
7
|
|
-
|
|
-
|
|
Total other charges
|
162
|
|
-
|
|
162
|
|
-
|
|
-
|
|
Total
restructuring costs and other charges
|
213
|
|
-
|
|
213
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
strategy - impairment charges
|
|
|
|
|
|
|
|
|
|
|
Operating impairments
|
614
|
|
-
|
|
614
|
|
-
|
|
-
|
|
Non-operating impairments
|
138
|
|
-
|
|
138
|
|
-
|
|
-
|
|
Total
timeshare strategy - impairment charges
|
752
|
|
-
|
|
752
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA **
|
$
898
|
|
$
76
|
|
$
974
|
|
$
985
|
|
$
1,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see pages A-19 and
A-20 for additional information about our reasons for providing these
alternative financial measures and the limitations on their use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A-11
MARRIOTT
INTERNATIONAL, INC.
|
|
Non-GAAP
Financial Measure Reconciliation
|
|
|
Second
Quarter 2009 General, Administrative, and Other Expenses
|
|
Excluding
Restructuring Costs and Other Charges
|
|
($
in millions)
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
Second
Quarter 2010
|
|
Second
Quarter 2009
|
|
Percent
Better/(Worse)
Estimated
Second
Quarter 2010 vs.
Second
Quarter 2009
|
|
|
General,
administrative and other expenses
|
$
150
|
|
$
146
|
|
|
|
|
Less:
Restructuring costs and other charges
|
-
|
|
(10)
|
|
|
|
|
General,
administrative and other expenses excluding restructuring costs and
other charges**
|
$
150
|
|
$
136
|
|
-10%
|
|
**
Denotes non-GAAP financial measures. Please see pages A-19 and
A-20 for additional information about our reasons for providing these
alternative financial measures and the limitations on their use.
|
|
|
|
|
|
|
|
|
A-12
MARRIOTT
INTERNATIONAL, INC.
|
|
Non-GAAP
Financial Measure
|
|
Timeshare
Inventory
|
|
As
Adjusted Had ASU Nos. 2009-16 and 2009-17 (Formerly Referred to as FAS
166 & 167) Been Adopted on January 3, 2009
|
|
($
in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
Balance
at
End
of 2010
First
Quarter
|
|
As
Reported
Balance
at
Year-End
2009
|
|
ASU
Nos. 2009-16
And
2009-17
Adjustments
|
|
As
Adjusted For
ASU
Nos. 2009-16
And
2009-17
Balance
at
Year-End
2009** 1
|
|
|
|
|
|
|
|
|
|
|
Finished
goods 2
|
$
797
|
|
$
721
|
|
$
100
|
|
821
|
|
Work-in-process
|
168
|
|
198
|
|
-
|
|
198
|
|
Land
and infrastructure
|
520
|
|
507
|
|
-
|
|
507
|
|
Total
inventory
|
$
1,485
|
|
$
1,426
|
|
$
100
|
|
$
1,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see pages A-19 and
A-20 for additional information about our reasons for providing these
alternative financial measures and the limitations on their use.
|
|
|
|
1
As
Adjusted had ASU Nos. 2009-16 and 2009-17 (formerly referred to as FAS
166 & 167) been adopted on January 3, 2009.
|
|
2 Includes completed
inventory as well as an estimate of inventory we expect to acquire when
we foreclose on defaulted notes. The estimate of inventory we
expect to acquire when we foreclose on defaulted notes for As Adjusted
2009 and As Reported 2010 include securitized and non-securitized
notes, and As Reported 2009 includes non-securitized notes.
|
|
|
|
|
|
|
|
|
|
A-13
MARRIOTT
INTERNATIONAL, INC.
|
|
TIMESHARE
SEGMENT
|
|
AS
ADJUSTED HAD ASU NOS. 2009-16 AND 2009-17 (FORMERLY REFERRED TO AS FAS
166 & 167) BEEN ADOPTED ON JANUARY 3, 2009
|
|
FIRST
QUARTER 2009
|
|
($
in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
As
Reported
12
Weeks Ended
March
27, 2009
|
|
Restructuring
Costs & Other Charges
|
|
Timeshare
Strategy - Impairment Charges
|
|
As
Adjusted
12
Weeks Ended
March
27, 2009**
|
|
ASU
Nos. 2009-16
And
2009-17
Adjustments
|
|
As
Adjusted For
ASU
Nos. 2009-16
And
2009-17
12
Weeks Ended March 27, 2009**
|
|
|
Segment
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
fees revenue
|
$
10
|
|
$
-
|
|
$
-
|
|
$
10
|
|
$
-
|
|
$
10
|
|
|
Sales
and services revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
|
121
|
|
4
|
|
-
|
|
125
|
|
2
|
|
127
|
|
|
Services
|
70
|
|
-
|
|
-
|
|
70
|
|
-
|
|
70
|
|
|
Financing
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income - non-securitized notes
|
13
|
|
-
|
|
-
|
|
13
|
|
-
|
|
13
|
|
|
Interest
income - securitized notes
|
-
|
|
-
|
|
-
|
|
-
|
|
35
|
|
35
|
|
|
Other
financing revenue
|
-
|
|
13
|
|
-
|
|
13
|
|
(8)
|
|
5
|
|
|
Total
financing revenue
|
13
|
|
13
|
|
-
|
|
26
|
|
27
|
|
53
|
|
|
Other
revenue
|
5
|
|
-
|
|
-
|
|
5
|
|
(1)
|
|
4
|
|
|
Total
sales and services revenue
|
209
|
|
17
|
|
-
|
|
226
|
|
28
|
|
254
|
|
|
Cost
reimbursements
|
58
|
|
-
|
|
-
|
|
58
|
|
-
|
|
58
|
|
|
Segment
revenues
|
$
277
|
|
$
17
|
|
$
-
|
|
$
294
|
|
$
28
|
|
$
322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
fees revenue
|
$
10
|
|
$
-
|
|
$
-
|
|
$
10
|
|
$
-
|
|
$
10
|
|
|
Timeshare
sales and services, net
|
(11)
|
|
16
|
|
-
|
|
5
|
|
20
|
|
25
|
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
charges
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Restructuring
costs
|
(1)
|
|
1
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
General,
administrative and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense
|
(17)
|
|
-
|
|
-
|
|
(17)
|
|
-
|
|
(17)
|
|
|
Gains
and other income
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Joint
venture equity earnings
|
(1)
|
|
1
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Interest
expense
|
-
|
|
-
|
|
-
|
|
-
|
|
(16)
|
|
(16)
|
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
charges (non-operating)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Noncontrolling
interest
|
3
|
|
-
|
|
-
|
|
3
|
|
-
|
|
3
|
|
|
Segment
results
|
$
(17)
|
|
$
18
|
|
$
-
|
|
$
1
|
|
$
4
|
|
$
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
$
138
|
|
$
-
|
|
$
-
|
|
$
138
|
|
$
-
|
|
$
138
|
|
|
Fractional
|
10
|
|
-
|
|
-
|
|
10
|
|
-
|
|
10
|
|
|
Residential
|
(5)
|
|
4
|
|
-
|
|
(1)
|
|
-
|
|
(1)
|
|
|
Total company
|
143
|
|
4
|
|
-
|
|
147
|
|
-
|
|
147
|
|
|
Joint
ventures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Fractional
|
13
|
|
(3)
|
|
-
|
|
10
|
|
-
|
|
10
|
|
|
Residential
|
(27)
|
|
27
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Total joint ventures
|
(14)
|
|
24
|
|
-
|
|
10
|
|
-
|
|
10
|
|
|
Total
contract sales, including joint ventures
|
$
129
|
|
$
28
|
|
$
-
|
|
$
157
|
|
$
-
|
|
$
157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
/ (Loss) on Notes Sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
/ (loss) on notes sold
|
$
(1)
|
|
$
-
|
|
$
-
|
|
$
(1)
|
|
$
1
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**Denotes
non-GAAP financial measures. Please see pages A-19 and A-20 for
additional information about our reasons for providing these
alternative financial measures and the limitations on their use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A-14
MARRIOTT
INTERNATIONAL, INC.
|
|
TIMESHARE
SEGMENT
|
|
AS
ADJUSTED HAD ASU NOS. 2009-16 AND 2009-17 (FORMERLY REFERRED TO AS FAS
166 & 167) BEEN ADOPTED ON JANUARY 3, 2009
|
|
SECOND
QUARTER 2009
|
|
($
in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
As
Reported
12
Weeks Ended
June
19, 2009
|
|
Restructuring
Costs & Other Charges
|
|
Timeshare
Strategy - Impairment Charges
|
|
As
Adjusted
12
Weeks Ended
June
19, 2009**
|
|
ASU
Nos. 2009-16
And
2009-17
Adjustments
|
|
As
Adjusted For
ASU
Nos. 2009-16
And
2009-17
12
Weeks Ended June 19, 2009**
|
|
|
Segment
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
fees revenue
|
$
11
|
|
$
-
|
|
$
-
|
|
$
11
|
|
$
-
|
|
$
11
|
|
|
Sales
and services revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
|
182
|
|
-
|
|
-
|
|
182
|
|
6
|
|
188
|
|
|
Services
|
80
|
|
-
|
|
-
|
|
80
|
|
-
|
|
80
|
|
|
Financing
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income - non-securitized notes
|
10
|
|
-
|
|
-
|
|
10
|
|
-
|
|
10
|
|
|
Interest
income - securitized notes
|
-
|
|
-
|
|
-
|
|
-
|
|
38
|
|
38
|
|
|
Other
financing revenue
|
4
|
|
12
|
|
-
|
|
16
|
|
(8)
|
|
8
|
|
|
Total
financing revenue
|
14
|
|
12
|
|
-
|
|
26
|
|
30
|
|
56
|
|
|
Other
revenue
|
7
|
|
-
|
|
-
|
|
7
|
|
-
|
|
7
|
|
|
Total
sales and services revenue
|
283
|
|
12
|
|
-
|
|
295
|
|
36
|
|
331
|
|
|
Cost
reimbursements
|
61
|
|
-
|
|
-
|
|
61
|
|
-
|
|
61
|
|
|
Segment
revenues
|
$
355
|
|
$
12
|
|
$
-
|
|
$
367
|
|
$
36
|
|
$
403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
fees revenue
|
$
11
|
|
$
-
|
|
$
-
|
|
$
11
|
|
$
-
|
|
$
11
|
|
|
Timeshare
sales and services, net
|
4
|
|
12
|
|
-
|
|
16
|
|
32
|
|
48
|
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
charges
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Restructuring
costs
|
(30)
|
|
30
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
General,
administrative and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense
|
(23)
|
|
7
|
|
-
|
|
(16)
|
|
-
|
|
(16)
|
|
|
Gains
and other income
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Joint
venture equity earnings
|
(1)
|
|
1
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Interest
expense
|
-
|
|
-
|
|
-
|
|
-
|
|
(18)
|
|
(18)
|
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
charges (non-operating)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Noncontrolling
interest
|
4
|
|
-
|
|
-
|
|
4
|
|
-
|
|
4
|
|
|
Segment
results
|
$
(35)
|
|
$
50
|
|
$
-
|
|
$
15
|
|
$
14
|
|
$
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
$
200
|
|
$
-
|
|
$
-
|
|
$
200
|
|
$
-
|
|
$
200
|
|
|
Fractional
|
8
|
|
1
|
|
-
|
|
9
|
|
-
|
|
9
|
|
|
Residential
|
2
|
|
-
|
|
-
|
|
2
|
|
-
|
|
2
|
|
|
Total company
|
210
|
|
1
|
|
-
|
|
211
|
|
-
|
|
211
|
|
|
Joint
ventures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Fractional
|
(18)
|
|
19
|
|
-
|
|
1
|
|
-
|
|
1
|
|
|
Residential
|
17
|
|
(17)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Total joint ventures
|
(1)
|
|
2
|
|
-
|
|
1
|
|
-
|
|
1
|
|
|
Total
contract sales, including joint ventures
|
$
209
|
|
$
3
|
|
$
-
|
|
$
212
|
|
$
-
|
|
$
212
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
/ (Loss) on Notes Sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
/ (loss) on notes sold
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**Denotes
non-GAAP financial measures. Please see pages A-19 and A-20 for
additional information about our reasons for providing these
alternative financial measures and the limitations on their use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A-15
MARRIOTT
INTERNATIONAL, INC.
|
|
TIMESHARE
SEGMENT
|
|
AS
ADJUSTED HAD ASU NOS. 2009-16 AND 2009-17 (FORMERLY REFERRED TO AS FAS
166 & 167) BEEN ADOPTED ON JANUARY 3, 2009
|
|
THIRD
QUARTER 2009
|
|
($
in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
As
Reported
12
Weeks Ended
September
11, 2009
|
|
Restructuring
Costs & Other Charges
|
|
Timeshare
Strategy - Impairment Charges
|
|
As
Adjusted
12
Weeks Ended
September
11, 2009**
|
|
ASU
Nos. 2009-16
And
2009-17
Adjustments
|
|
As
Adjusted For
ASU
Nos. 2009-16
And
2009-17
12
Weeks Ended September 11, 2009**
|
|
|
Segment
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
fees revenue
|
$
11
|
|
$
-
|
|
$
-
|
|
$
11
|
|
$
-
|
|
$
11
|
|
|
Sales
and services revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
|
138
|
|
-
|
|
-
|
|
138
|
|
11
|
|
149
|
|
|
Services
|
82
|
|
-
|
|
-
|
|
82
|
|
-
|
|
82
|
|
|
Financing
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income - non-securitized notes
|
11
|
|
-
|
|
-
|
|
11
|
|
-
|
|
11
|
|
|
Interest
income - securitized notes
|
-
|
|
-
|
|
-
|
|
-
|
|
36
|
|
36
|
|
|
Other
financing revenue
|
16
|
|
(3)
|
|
-
|
|
13
|
|
(8)
|
|
5
|
|
|
Total
financing revenue
|
27
|
|
(3)
|
|
-
|
|
24
|
|
28
|
|
52
|
|
|
Other
revenue
|
7
|
|
-
|
|
-
|
|
7
|
|
-
|
|
7
|
|
|
Total
sales and services revenue
|
254
|
|
(3)
|
|
-
|
|
251
|
|
39
|
|
290
|
|
|
Cost
reimbursements
|
65
|
|
-
|
|
-
|
|
65
|
|
-
|
|
65
|
|
|
Segment
revenues
|
$
330
|
|
$
(3)
|
|
$
-
|
|
$
327
|
|
$
39
|
|
$
366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
fees revenue
|
$
11
|
|
$
-
|
|
$
-
|
|
$
11
|
|
$
-
|
|
$
11
|
|
|
Timeshare
sales and services, net
|
16
|
|
(3)
|
|
-
|
|
13
|
|
32
|
|
45
|
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
charges
|
(614)
|
|
-
|
|
614
|
|
-
|
|
-
|
|
-
|
|
|
Restructuring
costs
|
(7)
|
|
7
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
General,
administrative and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense
|
(17)
|
|
-
|
|
-
|
|
(17)
|
|
-
|
|
(17)
|
|
|
Gains
and other income
|
1
|
|
-
|
|
-
|
|
1
|
|
-
|
|
1
|
|
|
Joint
venture equity earnings
|
(4)
|
|
1
|
|
-
|
|
(3)
|
|
-
|
|
(3)
|
|
|
Interest
expense
|
-
|
|
-
|
|
-
|
|
-
|
|
(17)
|
|
(17)
|
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
charges (non-operating)
|
(71)
|
|
-
|
|
71
|
|
-
|
|
-
|
|
-
|
|
|
Noncontrolling
interest
|
4
|
|
-
|
|
-
|
|
4
|
|
-
|
|
4
|
|
|
Segment
results
|
$
(681)
|
|
$
5
|
|
$
685
|
|
$
9
|
|
$
15
|
|
$
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
$
164
|
|
$
-
|
|
$
-
|
|
$
164
|
|
$
-
|
|
$
164
|
|
|
Fractional
|
7
|
|
-
|
|
-
|
|
7
|
|
-
|
|
7
|
|
|
Residential
|
2
|
|
-
|
|
-
|
|
2
|
|
-
|
|
2
|
|
|
Total company
|
173
|
|
-
|
|
-
|
|
173
|
|
-
|
|
173
|
|
|
Joint
ventures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Fractional
|
(4)
|
|
7
|
|
-
|
|
3
|
|
-
|
|
3
|
|
|
Residential
|
(17)
|
|
17
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Total joint ventures
|
(21)
|
|
24
|
|
-
|
|
3
|
|
-
|
|
3
|
|
|
Total
contract sales, including joint ventures
|
$
152
|
|
$
24
|
|
$
-
|
|
$
176
|
|
$
-
|
|
$
176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
/ (Loss) on Notes Sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
/ (loss) on notes sold
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**Denotes
non-GAAP financial measures. Please see pages A-19 and A-20 for
additional information about our reasons for providing these
alternative financial measures and the limitations on their use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A-16
MARRIOTT
INTERNATIONAL, INC.
|
|
TIMESHARE
SEGMENT
|
|
AS
ADJUSTED HAD ASU NOS. 2009-16 AND 2009-17 (FORMERLY REFERRED TO AS FAS
166 & 167) BEEN ADOPTED ON JANUARY 3, 2009
|
|
FOURTH
QUARTER 2009
|
|
($
in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
As
Reported
16
Weeks Ended
January
1, 2010
|
|
Restructuring
Costs & Other Charges
|
|
Timeshare
Strategy - Impairment Charges
|
|
As
Adjusted
16
Weeks Ended
January
1, 2010**
|
|
ASU
Nos. 2009-16
And
2009-17
Adjustments
|
|
As
Adjusted For
ASU
Nos. 2009-16
And
2009-17
16
Weeks Ended January 1, 2010**
|
|
|
Segment
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
fees revenue
|
$
15
|
|
$
-
|
|
$
-
|
|
$
15
|
|
$
-
|
|
$
15
|
|
|
Sales
and services revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
|
185
|
|
-
|
|
-
|
|
185
|
|
4
|
|
189
|
|
|
Services
|
98
|
|
-
|
|
-
|
|
98
|
|
-
|
|
98
|
|
|
Financing
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income - non-securitized notes
|
12
|
|
-
|
|
-
|
|
12
|
|
-
|
|
12
|
|
|
Interest
income - securitized notes
|
-
|
|
-
|
|
-
|
|
-
|
|
49
|
|
49
|
|
|
Other
financing revenue
|
64
|
|
(2)
|
|
-
|
|
62
|
|
(55)
|
|
7
|
|
|
Total
financing revenue
|
76
|
|
(2)
|
|
-
|
|
74
|
|
(6)
|
|
68
|
|
|
Other
revenue
|
18
|
|
-
|
|
-
|
|
18
|
|
-
|
|
18
|
|
|
Total
sales and services revenue
|
377
|
|
(2)
|
|
-
|
|
375
|
|
(2)
|
|
373
|
|
|
Cost
reimbursements
|
85
|
|
-
|
|
-
|
|
85
|
|
-
|
|
85
|
|
|
Segment
revenues
|
$
477
|
|
$
(2)
|
|
$
-
|
|
$
475
|
|
$
(2)
|
|
$
473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
fees revenue
|
$
15
|
|
$
-
|
|
$
-
|
|
$
15
|
|
$
-
|
|
$
15
|
|
|
Timeshare
sales and services, net
|
74
|
|
(2)
|
|
-
|
|
72
|
|
(8)
|
|
64
|
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
charges
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Restructuring
costs
|
(7)
|
|
7
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
General,
administrative and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense
|
(23)
|
|
-
|
|
-
|
|
(23)
|
|
-
|
|
(23)
|
|
|
Gains
and other income
|
1
|
|
-
|
|
-
|
|
1
|
|
-
|
|
1
|
|
|
Joint
venture equity earnings
|
(6)
|
|
3
|
|
-
|
|
(3)
|
|
-
|
|
(3)
|
|
|
Interest
expense
|
-
|
|
-
|
|
-
|
|
-
|
|
(26)
|
|
(26)
|
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
charges (non-operating)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Noncontrolling
interest
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Segment
results
|
$
54
|
|
$
8
|
|
$
-
|
|
$
62
|
|
$
(34)
|
|
$
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
$
183
|
|
$
-
|
|
$
-
|
|
$
183
|
|
$
-
|
|
$
183
|
|
|
Fractional
|
3
|
|
3
|
|
-
|
|
6
|
|
-
|
|
6
|
|
|
Residential
|
9
|
|
-
|
|
-
|
|
9
|
|
-
|
|
9
|
|
|
Total company
|
195
|
|
3
|
|
-
|
|
198
|
|
-
|
|
198
|
|
|
Joint
ventures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Fractional
|
(12)
|
|
17
|
|
-
|
|
5
|
|
-
|
|
5
|
|
|
Residential
|
(8)
|
|
8
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Total joint ventures
|
(20)
|
|
25
|
|
-
|
|
5
|
|
-
|
|
5
|
|
|
Total
contract sales, including joint ventures
|
$
175
|
|
$
28
|
|
$
-
|
|
$
203
|
|
$
-
|
|
$
203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
/ (Loss) on Notes Sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
/ (loss) on notes sold
|
$
38
|
|
$
-
|
|
$
-
|
|
$
38
|
|
$
(38)
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**Denotes
non-GAAP financial measures. Please see pages A-19 and A-20 for
additional information about our reasons for providing these
alternative financial measures and the limitations on their use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A-17
MARRIOTT
INTERNATIONAL, INC.
|
|
TIMESHARE
SEGMENT
|
|
AS
ADJUSTED HAD ASU NOS. 2009-16 AND 2009-17 (FORMERLY REFERRED TO AS FAS
166 & 167) BEEN ADOPTED ON JANUARY 3, 2009
|
|
FULL
YEAR 2009
|
|
($
in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
As
Reported
52
Weeks Ended
January
1, 2010
|
|
Restructuring
Costs & Other Charges
|
|
Timeshare
Strategy - Impairment Charges
|
|
As
Adjusted
52
Weeks Ended
January
1, 2010**
|
|
ASU
Nos. 2009-16
And
2009-17
Adjustments
|
|
As
Adjusted For
ASU
Nos. 2009-16
And
2009-17
52
Weeks Ended January 1, 2010**
|
|
|
Segment
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
fees revenue
|
$
47
|
|
$
-
|
|
$
-
|
|
$
47
|
|
$
-
|
|
$
47
|
|
|
Sales
and services revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
|
626
|
|
4
|
|
-
|
|
630
|
|
23
|
|
653
|
|
|
Services
|
330
|
|
-
|
|
-
|
|
330
|
|
-
|
|
330
|
|
|
Financing
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income - non-securitized notes
|
46
|
|
-
|
|
-
|
|
46
|
|
-
|
|
46
|
|
|
Interest
income - securitized notes
|
-
|
|
-
|
|
-
|
|
-
|
|
158
|
|
158
|
|
|
Other
financing revenue
|
84
|
|
20
|
|
-
|
|
104
|
|
(79)
|
|
25
|
|
|
Total
financing revenue
|
130
|
|
20
|
|
-
|
|
150
|
|
79
|
|
229
|
|
|
Other
revenue
|
37
|
|
-
|
|
-
|
|
37
|
|
(1)
|
|
36
|
|
|
Total
sales and services revenue
|
1,123
|
|
24
|
|
-
|
|
1,147
|
|
101
|
|
1,248
|
|
|
Cost
reimbursements
|
269
|
|
-
|
|
-
|
|
269
|
|
-
|
|
269
|
|
|
Segment
revenues
|
$
1,439
|
|
$
24
|
|
$
-
|
|
$
1,463
|
|
$
101
|
|
$
1,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
fees revenue
|
$
47
|
|
$
-
|
|
$
-
|
|
$
47
|
|
$
-
|
|
$
47
|
|
|
Timeshare
sales and services, net
|
83
|
|
23
|
|
-
|
|
106
|
|
76
|
|
182
|
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
charges
|
(614)
|
|
-
|
|
614
|
|
-
|
|
-
|
|
-
|
|
|
Restructuring
costs
|
(45)
|
|
45
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
General,
administrative and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense
|
(80)
|
|
7
|
|
-
|
|
(73)
|
|
-
|
|
(73)
|
|
|
Gains
and other income
|
2
|
|
-
|
|
-
|
|
2
|
|
-
|
|
2
|
|
|
Joint
venture equity earnings
|
(12)
|
|
6
|
|
-
|
|
(6)
|
|
-
|
|
(6)
|
|
|
Interest
expense
|
-
|
|
-
|
|
-
|
|
-
|
|
(77)
|
|
(77)
|
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
charges (non-operating)
|
(71)
|
|
-
|
|
71
|
|
-
|
|
-
|
|
-
|
|
|
Noncontrolling
interest
|
11
|
|
-
|
|
-
|
|
11
|
|
-
|
|
11
|
|
|
Segment
results
|
$
(679)
|
|
$
81
|
|
$
685
|
|
$
87
|
|
$
(1)
|
|
$
86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
$
685
|
|
$
-
|
|
$
-
|
|
$
685
|
|
$
-
|
|
$
685
|
|
|
Fractional
|
28
|
|
4
|
|
-
|
|
32
|
|
-
|
|
32
|
|
|
Residential
|
8
|
|
4
|
|
-
|
|
12
|
|
-
|
|
12
|
|
|
Total company
|
721
|
|
8
|
|
-
|
|
729
|
|
-
|
|
729
|
|
|
Joint
ventures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Fractional
|
(21)
|
|
40
|
|
-
|
|
19
|
|
-
|
|
19
|
|
|
Residential
|
(35)
|
|
35
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Total joint ventures
|
(56)
|
|
75
|
|
-
|
|
19
|
|
-
|
|
19
|
|
|
Total
contract sales, including joint ventures
|
$
665
|
|
$
83
|
|
$
-
|
|
$
748
|
|
$
-
|
|
$
748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
/ (Loss) on Notes Sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
/ (loss) on notes sold
|
$
37
|
|
$
-
|
|
$
-
|
|
$
37
|
|
$
(37)
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**Denotes
non-GAAP financial measures. Please see pages A-19 and A-20 for
additional information about our reasons for providing these
alternative financial measures and the limitations on their use.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
Non-GAAP
Financial Measures
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.
Adjusted
Measures That Exclude Certain Charges, Costs, and Other Expenses.
Management evaluates non-GAAP measures that exclude the impact of
Timeshare strategy - impairment charges incurred in the 2009 third
quarter, restructuring costs and other charges incurred in the 2009
first quarter through the 2009 fourth quarter, and certain tax expenses
incurred in the 2009 first quarter, 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.
Timeshare
Strategy - Impairment Charges. In
response to the difficult business conditions that the Timeshare
segment’s timeshare, luxury residential, and luxury fractional real
estate development businesses continued to experience, we evaluated our
entire Timeshare portfolio in the 2009 third quarter. In order to
adjust the business strategy to reflect current market conditions at
that time, on September
22, 2009, we approved plans for our Timeshare segment to take
the following actions: (1) for our luxury residential projects,
reduce prices, convert certain proposed projects to other uses, sell
some undeveloped land, and not pursue further Marriott-funded
residential development projects; (2) reduce prices for existing luxury
fractional units; (3) continue short-term promotions for our U.S.
timeshare business and defer the introduction of new projects and
development phases; and (4) for our European timeshare and fractional
resorts, continue promotional pricing and marketing incentives and not
pursue further development. As a result of these decisions, we recorded
third quarter 2009 pretax charges totaling $752 million in our Consolidated
Statements of Income ($502 millionafter-tax),
including $614
million of
pretax charges impacting operating income under the “Timeshare
strategy-impairment charges” caption, and $138 million of pretax charges impacting
non-operating income under the “Timeshare strategy-impairment charges
(non-operating)” caption.
Restructuring
Costs and Other Charges. 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. 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 2009, and resulted in first quarter 2009 restructuring
costs of $2
million, second quarter 2009 restructuring costs of $33 million,
third quarter 2009 restructuring costs of $9 million,
and 2009 fourth quarter restructuring costs of $7 million that were directly related
to the downturn. We also incurred other first quarter 2009,
second quarter 2009 and fourth quarter 2009 charges totaling $127 million, $24 million,
and $12
million respectively,
as well as $1
million in net
other credits in the 2009 third quarter, 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.
Certain
Tax Expenses. Certain tax expenses included $26 million in the 2009 first quarter
of non-cash charges primarily related to the treatment of funds
received from certain foreign subsidiaries, an issue we are contesting
with the Internal Revenue Service ("IRS").
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) Timeshare strategy - impairment charges of $752 million incurred in the 2009 third
quarter; (2) the 2009 fourth quarter restructuring costs and other
charges totaling $19
million; (3) the 2009 third quarter restructuring costs and
other charges totaling $8
million; (4) the 2009 second quarter restructuring costs and
other charges totaling $57
million; and (5) the 2009 first quarter restructuring costs and
other charges totaling $129
million. Management excludes the restructuring costs and
other charges incurred in the 2009 first through fourth quarters and
the Timeshare strategy-impairment charges recorded in the 2009 third
quarter for the reasons noted above under “Measures That Exclude
Certain Charges, Costs, and Other Expenses.”
MARRIOTT
INTERNATIONAL, INC.
Non-GAAP
Financial Measures
(cont.)
Adjusted
Measures that Exclude the Impact of New Accounting Standards or Reflect
Their Early Adoption. As
of the first day of fiscal year 2010, we adopted Accounting Standards
Update ("ASU") No. 2009-16 "Transfers and Servicing (Topic 860):
Accounting for Transfers of Financial Assets" (formerly known as FAS
No. 166, "Accounting for Transfers of Financial Assets-an amendment of
FASB Statement No. 140") and ASU No. 2009-17 "Consolidations (Topic
810); Improvements to Financial Reporting by Enterprises Involved with
Variable Interest Entities" (formerly known as FAS No. 167, “Amendments
to FASB Interpretation No. 46(R),” which required consolidating
previously securitized pools of Timeshare notes and impacts the ongoing
accounting for those notes. Management evaluates non-GAAP
measures that exclude the impact of these standards in the current year
or include the impact of these standards as if we had adopted them
early in order to better perform year-over-year comparisons on a
comparable basis.