BETHESDA, Md., Oct. 5, 2011
THIRD QUARTER HIGHLIGHTS
- Adjusted diluted earnings per share (EPS) totaled $0.29, a 32 percent increase over prior year
results;
- Worldwide comparable systemwide revenue per available
room (REVPAR) rose 8.7 percent using actual dollars.
Average daily rate rose 5.3 percent using actual dollars;
- At the end of the third quarter, the company's
worldwide pipeline of hotels under construction, awaiting conversion or
approved for development increased to more than 105,000 rooms,
including over 47,000 rooms outside North
America and more than 26,000 rooms in Asia;
- Nearly 6,000 rooms were added to the worldwide
lodging portfolio during the third quarter, including approximately
3,000 rooms in international markets and nearly 1,100 rooms converting
from competitor brands;
- Marriott repurchased 18.0 million shares of the
company's common stock for $550 million
during the quarter. Year-to-date through September
9, 2011, the company repurchased 36.5 million shares for $1.2 billion.
Marriott International, Inc. (NYSE: MAR) today reported third
quarter 2011 results.
THIRD QUARTER 2011 RESULTS
Third quarter 2011 adjusted net income totaled $104 million, a 25 percent increase compared
to third quarter 2010 net income. Adjusted diluted EPS totaled $0.29, a 32 percent increase from diluted EPS
in the year-ago quarter. On July 13, 2011,
the company forecasted third quarter diluted EPS of $0.25 to $0.29.
The reported net loss was $179 million
in the third quarter of 2011 compared to net income of $83 million in the year-ago quarter. Reported
diluted losses per share was $0.52 in
the third quarter of 2011 compared to diluted EPS of $0.22 in the third quarter of 2010.
Adjusted results for the 2011 third quarter exclude $352 million pretax ($251
million after-tax and $0.73 per
diluted share) of non-cash other charges. Other charges include $324 million pretax of impairment charges,
which Marriott previously disclosed, related to the timeshare segment.
Other charges also include an $18 million
pretax impairment charge on an investment in equity securities due to a
recent decline in the market price of these securities and a $10 million pretax write-off of both deferred
contract acquisition costs and an accounts receivable balance related
to one property whose owner filed for bankruptcy. Adjusted results also
exclude $32 million ($0.09 per diluted share) of tax expense
recorded in the 2011 third quarter in conjunction with the write-off of
international deferred tax assets related to the timeshare segment that
Marriott determined were impaired, which the company also previously
disclosed.
J.W. Marriott, Jr., Marriott International chairman and chief
executive officer, said, "We were very pleased with our performance in
the third quarter. Despite continued economic uncertainty, revenue per
available room growth was very strong and adjusted EPS rose 32 percent.
"After reaching targeted debt levels in mid 2010, we have been
investing in growth while also returning substantial cash to our
shareholders. In the last 12 months, we have opened 33,000 new rooms
while returning $1.4 billion to our
shareholders through share repurchases and dividends. Third quarter
share repurchases alone totaled $550 million.
"The spin-off of our timeshare business is on track and we
expect to conclude the transaction in the 2011 fourth quarter. When
complete, Marriott will have taken another innovative step, leading the
industry as a manager and franchisor of the greatest lodging and
timeshare brand portfolio in the business.
"We are cautiously optimistic about 2012 and are
well-positioned for continued growth. We expect to add approximately
30,000 rooms in 2012, most of which are already under construction and
included in our 105,000 room development pipeline. While there is
considerable economic uncertainty, assuming worldwide systemwide REVPAR
growth of 3 to 7 percent, our earnings per share could total $1.48 to $1.68 per share and return on
invested capital could increase substantially."
For the 2011 third quarter, REVPAR for worldwide comparable
systemwide properties increased 6.9 percent (an 8.7 percent increase
using actual dollars). Excluding the Middle
East and Japan markets,
worldwide comparable systemwide REVPAR rose 7.4 percent (a 9.0 percent
increase using actual dollars).
International comparable systemwide REVPAR rose 6.9 percent (a
15.8 percent increase using actual dollars), including a 4.9 percent
increase in average daily rate (a 13.6 percent increase using actual
dollars) in the third quarter of 2011. Excluding the Middle East and Japan
markets, international comparable systemwide constant dollar REVPAR
increased 9.2 percent (an 18.7 percent increase using actual dollars).
In North America, comparable
systemwide REVPAR increased 6.9 percent in the third quarter of 2011,
including a 3.3 percent increase in average daily rate. Most North
American markets reflected both strong demand increases and modest
supply growth. REVPAR for comparable systemwide North American
full-service and luxury hotels (including Marriott Hotels &
Resorts, The Ritz-Carlton and Renaissance Hotels)
increased 6.5 percent in the third quarter with a 3.7 percent increase
in average daily rate. REVPAR for comparable systemwide North American
limited-service hotels (including Courtyard, Residence Inn,
SpringHill Suites, TownePlace Suites and Fairfield Inn
& Suites) increased 7.3 percent in the third quarter with a 3.2
percent increase in average daily rate.
Marriott added 38 new properties (5,969 rooms) to its
worldwide lodging portfolio in the 2011 third quarter, including the
Ritz-Carlton Oman, the Boscolo Palace Roma, Autograph Collection, in Rome and the Courtyard Pune City Centre in India. Five properties (1,234 rooms) exited
the system during the quarter. At quarter-end, the company's lodging
group encompassed nearly 3,700 properties and timeshare resorts for a
total of more than 638,000 rooms.
The company's worldwide pipeline of hotels under construction,
awaiting conversion or approved for development totaled nearly 650
properties with over 105,000 rooms at quarter-end.
MARRIOTT REVENUES totaled nearly $2.9
billion in the 2011 third quarter compared to over $2.6 billion for the third quarter of 2010.
Base management and franchise fees rose 12 percent to $260 million reflecting higher REVPAR at
existing hotels, fees from new hotels and, to a lesser extent,
favorable foreign exchange rates. Third quarter worldwide incentive
management fees increased 38 percent to $29
million. In the third quarter, 24 percent of company-managed
hotels earned incentive management fees compared to 23 percent in the
year-ago quarter. Incentive management fees largely came from hotels
outside of North America in both the
2011 and 2010 quarters.
North American comparable company-operated house profit
margins increased 130 basis points in the third quarter primarily
reflecting higher occupancy and rate increases. House profit margins
for comparable company-operated properties outside North America increased 40 basis points,
challenged by lower REVPAR in the Middle East
and Japan.
Owned, leased, corporate housing and other revenue, net of
direct expenses, increased from $7 million
in the 2010 third quarter to $35 million,
largely reflecting $13 million of higher
credit card and residential branding fees, $8
million of higher termination fees and improved operating
results at leased hotels.
In the third quarter, Timeshare segment contract sales
increased $15 million to $179 million from segment contract sales of $164 million in the year-ago quarter. In the
third quarter, 43 percent of timeshare contract sales came from new
customers compared to 37 percent in the year ago quarter. Average
contract price improved 45 percent year-over-year while volume per
guest increased 10 percent in the third quarter.
In the third quarter, Timeshare sales and services revenue,
net of expenses, declined $20 million to
$36 million largely due to the
year-over-year unfavorable impact of a $15
million adjustment to the Marriott Rewards liability recorded in
the year-ago quarter and, to a lesser extent, lower interest income on
a smaller mortgage portfolio.
Adjusted Timeshare segment results include Timeshare sales and
services revenue, net of direct expenses, as well as base management
fees, gains and other income, equity in earnings (losses), interest
expense and general, administrative and other expenses associated with
the timeshare business. Adjusted Timeshare segment results for the 2011
third quarter totaled $22 million and
included $10 million of interest expense
related to securitized Timeshare notes. The adjustments to reported
Timeshare segment results for the 2011 third quarter are shown on page
A-10. In the prior year quarter, Timeshare segment results totaled $38 million and included $12 million of interest expense related to
securitized Timeshare notes as shown on page A-10.
ADJUSTED GENERAL, ADMINISTRATIVE and OTHER expenses for the
2011 third quarter increased 14 percent to $170
million, compared to expenses of $149
million in the year-ago quarter. The adjustments to reported
general, administrative and other expenses for the 2011 third quarter
are shown on page A-1. The increase in adjusted expenses reflected
several non-routine items including $8 million
of transaction-related expenses associated with the spin-off of the
timeshare business, $5 million related
to the increase of a guarantee reserve for one hotel and the write-off
of deferred contract acquisition costs. Adjusted general,
administrative and other expenses also increased due to higher costs
associated with growth in international markets and incentive
compensation increases. The increase in adjusted expenses was partially
offset by $6 million of lower legal
expenses. The quarter-over-quarter variance also reflected the
unfavorable impact of the $4 million
reversal in the 2010 third quarter of an accrual related to a tax
settlement on a European asset.
INTEREST EXPENSE decreased $2 million
to $39 million in the third quarter,
primarily due to lower average interest rates on and a decline in the
outstanding balance of securitized Timeshare notes.
Adjusted Earnings before Interest Expense, Taxes,
Depreciation and Amortization (EBITDA)
Marriott International adjusted EBITDA totaled $240 million in the 2011 third quarter, a 9
percent increase over EBITDA of $220 million
in the year-ago quarter. Adjusted EBITDA for the Timeshare segment
declined 35 percent to $39 million in
the 2011 third quarter largely due to lower interest income and the
year-over-year unfavorable impact of a third quarter 2010 adjustment to
the Marriott Rewards liability. See pages A-12 and A-13 for the EBITDA
and adjusted EBITDA calculations.
BALANCE SHEET
At the end of the third quarter 2011, total debt was $3,103 million, including $830 million of debt associated with
securitized Timeshare mortgage notes, and cash balances totaled $220 million. At year-end 2010, total debt was
$2,829 million, including $1,016 million of debt associated with
securitized Timeshare mortgage notes, and cash balances totaled $505 million.
COMMON STOCK
Weighted average fully diluted shares outstanding used to
calculate adjusted diluted EPS totaled 356.8 million in the 2011 third
quarter compared to 378.1 million in the year-ago quarter.
The company repurchased 18.0 million shares of common stock in
the third quarter of 2011 at a cost of $550
million. Year-to-date through September
9, 2011, Marriott repurchased 36.5 million shares of its stock
for $1,225 million. The remaining share
repurchase authorization, as of September 9,
2011, totaled 12.4 million shares.
2011 OUTLOOK
The company's fourth quarter guidance assumes that the
spin-off occurs at year-end 2011 and does not include pro forma
adjustments or estimates of further transaction expenses. Such
transaction costs could be material in the fourth quarter of 2011.
For the fourth quarter, the company assumes North American
comparable systemwide REVPAR will increase 6 to 8 percent.
Outside North America, the
company assumes fourth quarter 2011 comparable systemwide REVPAR on a
constant dollar basis will increase 3 to 5 percent, or 5 to 7 percent
excluding the Middle East and Japan markets.
On a worldwide basis, the company expects fourth quarter 2011
comparable systemwide REVPAR on a constant dollar basis will increase 5
to 7 percent, or 6 to 8 percent excluding the Middle
East and Japan markets.
The company assumes fourth quarter 2011 Timeshare contract
sales will total $200 million to $210 million
and Timeshare sales and services revenue, net of direct expenses, will
total approximately $68 million to $73 million.
With these assumptions, Timeshare segment results, including interest
expense associated with securitized notes, are expected to total $45 million to $50 million for the 2011 fourth
quarter. Excluding the $324 million
impairment charge recorded in the third quarter, adjusted Timeshare
segment results, including interest expense associated with securitized
notes, are expected to total $131 million to
$136 million for full year 2011. The adjustments to full year
2011 estimated Timeshare segment results are shown on page A-18. The
company further assumes that the timeshare spin-off will occur at
year-end 2011.
|
|
|
Fourth
Quarter 2011 1
|
Full
Year 2011 1
|
|
Total
fee revenue
|
$420
million to $430 million
|
$1,307
million to $1,317 million
|
|
Owned,
leased, corporate housing and other revenue, net of direct expenses
|
Approx
$50 million
|
Approx
$134 million
|
|
Timeshare
sales and services revenue, net of direct expenses
|
$68
million to $73 million
|
$198
million to $203 million
|
|
General,
administrative and other expenses 2
|
$235
million to $245 million
|
$723
million to $733 million
|
|
Operating
income
|
$293
million to $318 million
|
$906
million to $931 million
|
|
Gains
and other income
|
Approx
$0
|
Approx
$7 million
|
|
Net
interest expense 3
|
Approx
$50 million
|
Approx
$158 million
|
|
Equity
in earnings (losses)
|
Approx
($5) million
|
Approx
($11) million
|
|
Earnings
per share
|
$0.45
to $0.50
|
$1.37
to $1.42
|
|
Tax
rate
|
|
33.0
percent
|
|
1.
Assumes the timeshare spin-off will occur at year-end 2011
2.
Fourth quarter 2011 General, administrative and other expenses does not
include an estimate of transaction costs related to the timeshare
spin-off. Full year 2011 General, administrative and other expenses
includes $13 million of transaction costs related to the timeshare
spin-off incurred in 2011 through the third quarter.
3. Net
of interest income
|
|
The company expects investment spending in 2011 will total
approximately $500 million to $600 million,
including $50 million to $100 million
for maintenance capital spending. Investment spending will also include
other capital expenditures (including property acquisitions), new
mezzanine financing and mortgage notes, contract acquisition costs, and
equity and other investments. The company does not expect material
investment spending associated with the Timeshare segment in 2011.
The company expects to add more than 30,000 rooms in 2011 as
most hotels expected to open are already under construction or
undergoing conversion from other brands.
Based upon the assumptions above, the company expects full
year 2011 adjusted EBITDA to total $1,112
million to $1,132 million, a 7 to 8 percent increase over the
prior year's adjusted EBITDA. This estimate of 2011 adjusted EBITDA
reflects $13 million of transaction
costs associated with the timeshare spin-off incurred in 2011 through
the third quarter, but does not include transaction costs that may be
incurred in the fourth quarter. Adjusted EBITDA for full year 2010
totaled $1,044 million and is shown on
page A-14.
2012 OUTLOOK
Given today's economic uncertainty regarding 2012, the company
is providing the following assumptions which investors may find useful
in making their own estimates of 2012 results. With the exception of
unit growth, these are not intended to be forecasts of future
performance.
The company assumes full year 2012 comparable systemwide
REVPAR on a constant dollar basis will increase 3 to 7 percent in North America, outside North America and worldwide.
The company expects to open approximately 30,000 rooms in 2012
as most hotels expected to open are already under construction or
undergoing conversion from other brands.
Given these assumptions, full year 2012 fee revenue could
total $1,420 million to $1,490 million.
The assumed 2012 fee revenue reflects no timeshare base fees but
includes $63 million to $65 million of
timeshare royalty fees. The company's 2011 estimate of fee revenue
totals $1,307 million to $1,317 million
and includes $58 million to $60 million
of timeshare base management fees, but does not reflect any timeshare
royalty fees.
Also given these assumptions, owned, leased, corporate housing
and other revenue, net of direct expense, could total $130 million to $150 million in 2012,
reflecting stronger results from owned and leased hotels and higher
credit card branding fees somewhat offset by lower termination fees.
For 2012, the company expects general, administrative and
other expenses to total $660 million to $675
million, an increase of 3 to 5 percent over 2011 levels
excluding Timeshare segment general, administrative and other expenses
and transaction costs related to the timeshare spin-off. Adjusted
general, administrative and other expenses for 2011 are expected to
total $723 million to $733 million
reflecting $70 million to $75 million of
Timeshare segment general, administrative and other expenses and $13 million of transaction costs incurred in
2011 through the third quarter related to the timeshare spin-off. The
adjustment to full year 2011 estimated general, administrative and
other expenses is shown on page A-16.
Given these assumptions, 2012 diluted EPS could total $1.48 to $1.68. The company estimates 2011
adjusted diluted EPS, excluding an estimated $0.10
to $0.11 diluted EPS impact from the Timeshare segment, could
total $1.27 to $1.31. The estimated
diluted EPS impact of the Timeshare segment on 2011 results is shown on
page A-18 and the estimated 2011 adjusted diluted EPS is shown on page
A-19.
Marriott International, Inc. (NYSE: MAR) will conduct its
quarterly earnings review for the investment community and news media
on Thursday, October 6, 2011 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 October 6, 2012.
The telephone dial-in number for the conference call is
706-679-3455 and the conference ID is 89671624. A telephone replay of
the conference call will be available from 1
p.m. ET, Thursday, October 6, 2011
until 8 p.m. ET, Thursday,
October 13, 2011. To access the replay, call 404-537-3406. The
reservation number for the recording is 89671624.
Note on forward-looking statements : This press
release and accompanying schedules contain "forward-looking statements"
within the meaning of federal securities laws, including statements
concerning the timing of the planned spin-off of our timeshare
operations and development business; REVPAR, profit margin and earnings
trends, estimates and assumptions; the number of lodging properties we
expect to add in the future; our expectations about investment
spending; 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 those we
identify below and other risk factors that we identify in our most
recent quarterly report on Form 10-Q. Risks that could affect
forward-looking statements in this press release include changes in
market conditions; the continuation and pace of the economic recovery;
supply and demand changes for hotel rooms, corporate housing and our
timeshare products; competitive conditions in the lodging industry;
relationships with clients and property owners; the availability of
capital to finance hotel growth and refurbishment; and unanticipated
developments that prevent, delay or otherwise negatively affect the
planned spin-off of our Timeshare segment. Any of these factors could
cause actual results to differ materially from the expectations we
express or imply in this press release. We make these forward-looking
statements as of October 5, 2011. 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 nearly 3,700 lodging properties in 72 countries and
territories. Marriott International operates and franchises hotels
under the Marriott, JW Marriott, The Ritz-Carlton, EDITION, Autograph
Collection, Renaissance, AC Hotels by Marriott, Residence Inn,
Courtyard, TownePlace Suites, Fairfield Inn & Suites, 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; 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 129,000 employees at 2010 year-end. It is ranked by
FORTUNE as the lodging industry's most admired company and one of the
best companies to work for. In fiscal year 2010, Marriott International
reported sales from continuing operations of nearly $12 billion. For more information or
reservations, please visit our website at www.marriott.com, and for the
latest company news, visit www.marriottnewscenter.com.
IRPR#1
Tables follow
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
PRESS
RELEASE SCHEDULES
|
|
QUARTER
3, 2011
|
|
TABLE
OF CONTENTS
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Income
|
A-1
|
|
|
|
|
Total
Lodging Products
|
A-5
|
|
|
|
|
Key
Lodging Statistics
|
A-6
|
|
|
|
|
Timeshare
Segment
|
A-10
|
|
|
|
|
EBITDA
and Adjusted EBITDA
|
A-12
|
|
|
|
|
EBITDA
and Adjusted EBITDA for Timeshare Segment
|
A-13
|
|
|
|
|
EBITDA
and Adjusted EBITDA Forecast
|
A-14
|
|
|
|
|
Adjusted
General, Administrative and Other Expenses
|
A-15
|
|
|
|
|
Forecasted
Adjusted General, Administrative and Other Expenses
|
A-16
|
|
|
|
|
Adjusted
Pretax Margin Excluding Reimbursed Costs
|
A-17
|
|
|
|
|
Estimated
2011 Impact on EPS of Removing the Timeshare Segment and Adding the
Royalty Fee
|
A-18
|
|
|
|
|
Earnings
Per Share Excluding Other Charges and Certain Tax Items
|
A-19
|
|
|
|
|
Adjusted
2007 EPS Excluding the Timeshare Segment and Including the Timeshare
Royalty Fee
|
A-20
|
|
|
|
|
Non-GAAP
Financial Measures
|
A-21
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
(in
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
12 Weeks Ended
September 9, 2011
|
Other
Charges
and
Certain Tax Items
|
As
Adjusted
12 Weeks Ended
September 9, 2011 **
|
|
As
Reported
12 Weeks Ended
September 10, 2010
|
|
Percent
Better (Worse)
Adjusted 2011
vs. Reported 2010
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
Base
management fees
|
|
$ 136
|
$ -
|
$ 136
|
|
$ 123
|
|
11
|
|
Franchise
fees
|
|
124
|
-
|
124
|
|
109
|
|
14
|
|
Incentive
management fees
|
|
29
|
-
|
29
|
|
21
|
|
38
|
|
Owned,
leased, corporate housing and other revenue 1
|
|
254
|
-
|
254
|
|
220
|
|
15
|
|
Timeshare
sales and services 2
|
|
286
|
-
|
286
|
|
275
|
|
4
|
|
Cost
reimbursements 3
|
|
2,045
|
-
|
2,045
|
|
1,900
|
|
8
|
|
Total
Revenues
|
|
2,874
|
-
|
2,874
|
|
2,648
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
COSTS AND EXPENSES
|
|
|
|
|
|
|
|
|
|
Owned,
leased and corporate housing - direct 4
|
|
219
|
-
|
219
|
|
213
|
|
(3)
|
|
Timeshare
- direct
|
|
250
|
-
|
250
|
|
219
|
|
(14)
|
|
Timeshare
strategy - impairment charges 5
|
|
324
|
(324)
|
-
|
|
-
|
|
*
|
|
Reimbursed
costs
|
|
2,045
|
-
|
2,045
|
|
1,900
|
|
(8)
|
|
General,
administrative and other 6
|
|
180
|
(10)
|
170
|
|
149
|
|
(14)
|
|
Total
Expenses
|
|
3,018
|
(334)
|
2,684
|
|
2,481
|
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
(LOSS) INCOME
|
|
(144)
|
334
|
190
|
|
167
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
(Losses)
gains and other income 7
|
|
(16)
|
18
|
2
|
|
3
|
|
(33)
|
|
Interest
expense
|
|
(39)
|
-
|
(39)
|
|
(41)
|
|
5
|
|
Interest
income
|
|
2
|
-
|
2
|
|
4
|
|
(50)
|
|
Equity
in losses 8
|
|
(2)
|
-
|
(2)
|
|
(5)
|
|
60
|
|
|
|
|
|
|
|
|
|
|
|
(LOSS)
INCOME BEFORE INCOME TAXES
|
|
(199)
|
352
|
153
|
|
128
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
Benefit
(provision) for income taxes
|
|
20
|
(69)
|
(49)
|
|
(45)
|
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
NET
(LOSS) INCOME
|
|
$ (179)
|
$ 283
|
$ 104
|
|
$ 83
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
(LOSSES)
EARNINGS PER SHARE - Basic
|
|
|
|
|
|
|
|
|
|
(Losses) earnings per share 9
|
|
$
(0.52)
|
$ 0.82
|
$ 0.30
|
|
$ 0.23
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
(LOSSES)
EARNINGS PER SHARE - Diluted
|
|
|
|
|
|
|
|
|
|
(Losses) earnings per share 9
|
|
$
(0.52)
|
$ 0.82
|
$ 0.29
|
|
$ 0.22
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
Shares
|
|
345.4
|
345.4
|
345.4
|
|
363.1
|
|
|
|
Diluted
Shares 10
|
|
345.4
|
345.4
|
356.8
|
|
378.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see pages A-21 and A-22 for
additional information about our reasons for providing these
alternative financial measures and limitations on their use.
See
page A-3 for footnote references.
|
|
A-1
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
(in
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
36 Weeks Ended
September 9, 2011
|
Other
Charges
and
Certain Tax Items
|
As
Adjusted
36 Weeks Ended
September 9, 2011 **
|
|
As
Reported
36 Weeks Ended
September 10, 2010
|
|
Percent
Better (Worse)
Adjusted 2011
vs. Reported 2010
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
Base
management fees
|
|
$ 419
|
$ -
|
$ 419
|
|
$ 384
|
|
9
|
|
Franchise
fees
|
|
347
|
-
|
347
|
|
305
|
|
14
|
|
Incentive
management fees
|
|
121
|
-
|
121
|
|
107
|
|
13
|
|
Owned,
leased, corporate housing and other revenue 1
|
|
727
|
-
|
727
|
|
704
|
|
3
|
|
Timeshare
sales and services 2
|
|
850
|
-
|
850
|
|
849
|
|
-
|
|
Cost
reimbursements 3
|
|
6,160
|
-
|
6,160
|
|
5,700
|
|
8
|
|
Total
Revenues
|
|
8,624
|
-
|
8,624
|
|
8,049
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
COSTS AND EXPENSES
|
|
|
|
|
|
|
|
|
|
Owned,
leased and corporate housing - direct 4
|
|
643
|
-
|
643
|
|
654
|
|
2
|
|
Timeshare
- direct
|
|
720
|
-
|
720
|
|
693
|
|
(4)
|
|
Timeshare
strategy - impairment charges 5
|
|
324
|
(324)
|
-
|
|
-
|
|
*
|
|
Reimbursed
costs
|
|
6,160
|
-
|
6,160
|
|
5,700
|
|
(8)
|
|
General,
administrative and other 6
|
|
498
|
(10)
|
488
|
|
429
|
|
(14)
|
|
Total
Expenses
|
|
8,345
|
(334)
|
8,011
|
|
7,476
|
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
279
|
334
|
613
|
|
573
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
(Losses)
gains and other income 7
|
|
(11)
|
18
|
7
|
|
7
|
|
-
|
|
Interest
expense
|
|
(117)
|
-
|
(117)
|
|
(130)
|
|
10
|
|
Interest
income
|
|
9
|
-
|
9
|
|
11
|
|
(18)
|
|
Equity
in losses 8
|
|
(6)
|
-
|
(6)
|
|
(20)
|
|
70
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
BEFORE INCOME TAXES
|
|
154
|
352
|
506
|
|
441
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes
|
|
(97)
|
(69)
|
(166)
|
|
(156)
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
|
$ 57
|
$ 283
|
$ 340
|
|
$ 285
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS
PER SHARE - Basic
|
|
|
|
|
|
|
|
|
|
Earnings per share 9
|
|
$ 0.16
|
$ 0.79
|
$ 0.95
|
|
$ 0.79
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS
PER SHARE - Diluted
|
|
|
|
|
|
|
|
|
|
Earnings per share 9
|
|
$ 0.15
|
$ 0.77
|
$ 0.92
|
|
$ 0.76
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
Shares
|
|
356.5
|
356.5
|
356.5
|
|
361.5
|
|
|
|
Diluted
Shares 10
|
|
369.8
|
369.8
|
369.8
|
|
376.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see page A-21 and A-22 for
additional information about our reasons for providing these
alternative financial measures and limitations on their use.
|
|
See
page A-3 for footnote references.
|
|
|
|
A-2
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
(in
millions, except per share amounts)
|
|
|
|
|
|
*
Percent cannot be calculated.
1 – Owned,
leased, corporate housing and other revenue includes
revenue from the properties we own or lease, revenue from our corporate
housing business, termination
fees, branding 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 –
Reflects the following 2011 third quarter Timeshare segment
impairments: inventory $256 million, land $62 million, and other
impairments $6 million.
6 –
General, administrative and other expenses
include the overhead costs allocated to our segments, and our corporate
overhead costs and general expenses.
7 –
(Losses) gains and other income includes
gains and losses on: the sale of real estate, note sales or repayments
(except timeshare note securitizations), the sale or
other-than-temporary impairment of joint ventures and investments, debt
extinguishments, and income from cost method joint ventures.
8 –
Equity in losses includes
our equity in earnings or losses of unconsolidated equity method joint
ventures.
9 –
Earnings per share plus adjustment items may not equal earnings per
share as adjusted.
10 –
Basic and fully diluted weighted average shares outstanding used to
calculate earnings per share for the period in which we had a loss are
the same because inclusion
of additional equivalents would be anti-dilutive.
A-3
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
FOURTH
QUARTER 2010 CONSOLIDATED STATEMENTS OF INCOME
|
|
(in
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
As
Reported
16 Weeks Ended
December 31, 2010
|
Other
Charges
|
Certain
Tax Items
|
As
Adjusted
16 Weeks Ended
December 31, 2010 **
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
Base
management fees
|
$ 178
|
$ -
|
$ -
|
$ 178
|
|
Franchise
fees
|
136
|
-
|
-
|
136
|
|
Incentive
management fees
|
75
|
-
|
-
|
75
|
|
Owned,
leased, corporate housing and other revenue 1
|
342
|
-
|
-
|
342
|
|
Timeshare
sales and services (including net note sale gains of $38 for
the sixteen weeks ended January 1, 2010) 2
|
372
|
-
|
-
|
372
|
|
Cost
reimbursements 3
|
2,539
|
-
|
-
|
2,539
|
|
Total
Revenues
|
3,642
|
-
|
-
|
3,642
|
|
|
|
|
|
|
|
OPERATING
COSTS AND EXPENSES
|
|
|
|
|
|
Owned,
leased and corporate housing - direct 4
|
301
|
-
|
-
|
301
|
|
Timeshare
- direct
|
329
|
-
|
-
|
329
|
|
Reimbursed
costs
|
2,539
|
-
|
-
|
2,539
|
|
Restructuring
costs
|
-
|
-
|
-
|
-
|
|
General,
administrative and other 5
|
351
|
(111)
|
-
|
240
|
|
Total
Expenses
|
3,520
|
(111)
|
-
|
3,409
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
122
|
111
|
-
|
233
|
|
|
|
|
|
|
|
Gains
and other income 6
|
28
|
-
|
-
|
28
|
|
Interest
expense
|
(50)
|
-
|
-
|
(50)
|
|
Interest
income
|
8
|
-
|
-
|
8
|
|
Equity
in earnings (losses) 7
|
2
|
(11)
|
-
|
(9)
|
|
|
|
|
|
|
|
INCOME
BEFORE INCOME TAXES
|
110
|
100
|
-
|
210
|
|
|
|
|
|
|
|
Benefit
(provision) for income taxes
|
63
|
(38)
|
(85)
|
(60)
|
|
|
|
|
|
|
|
NET
INCOME
|
$ 173
|
$ 62
|
$ (85)
|
$ 150
|
|
|
|
|
|
|
|
EARNINGS
PER SHARE - Basic
|
|
|
|
|
|
Earnings per share 8
|
$ 0.48
|
$ 0.17
|
$
(0.23)
|
$ 0.41
|
|
|
|
|
|
|
|
EARNINGS
PER SHARE - Diluted
|
|
|
|
|
|
Earnings per share 8
|
$ 0.46
|
$ 0.16
|
$
(0.22)
|
$ 0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
Shares
|
365.6
|
365.6
|
365.6
|
365.6
|
|
Diluted
Shares
|
382.0
|
382.0
|
382.0
|
382.0
|
|
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see pages A-21 and A-22 for
additional information about our reasons for providing these
alternative financial measures and 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, branding 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 earnings (losses) includes our equity in earnings (losses) of
unconsolidated equity method joint ventures.
8 –
Earnings per share attributable to Marriott shareholders plus
adjustment items may not equal earnings per share as
adjusted.
A-4
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
TOTAL
LODGING PRODUCTS 1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
of Properties
|
|
Number
of Rooms/Suites
|
|
Brand
|
|
September
9,
2011
|
September
10,
2010
|
vs.
September 10,
2010
|
|
September
9,
2011
|
September
10,
2010
|
vs.
September 10,
2010
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
Full-Service
|
|
|
|
|
|
|
|
|
|
Marriott Hotels & Resorts
|
|
355
|
355
|
-
|
|
143,579
|
142,277
|
1,302
|
|
Renaissance Hotels
|
|
78
|
79
|
(1)
|
|
28,446
|
28,790
|
(344)
|
|
Autograph Collection
|
|
16
|
11
|
5
|
|
4,860
|
1,646
|
3,214
|
|
Domestic
Limited-Service
|
|
|
|
|
|
|
|
|
|
Courtyard
|
|
802
|
785
|
17
|
|
112,578
|
110,325
|
2,253
|
|
Fairfield Inn & Suites
|
|
663
|
647
|
16
|
|
60,010
|
58,398
|
1,612
|
|
SpringHill Suites
|
|
283
|
271
|
12
|
|
33,234
|
31,772
|
1,462
|
|
Residence Inn
|
|
597
|
592
|
5
|
|
72,067
|
71,280
|
787
|
|
TownePlace Suites
|
|
197
|
192
|
5
|
|
19,770
|
19,320
|
450
|
|
International
|
|
|
|
|
|
|
|
|
|
Marriott Hotels & Resorts
|
|
202
|
195
|
7
|
|
62,404
|
59,936
|
2,468
|
|
Renaissance Hotels
|
|
74
|
67
|
7
|
|
23,740
|
22,622
|
1,118
|
|
Autograph Collection
|
|
4
|
-
|
4
|
|
495
|
-
|
495
|
|
Courtyard
|
|
104
|
97
|
7
|
|
20,496
|
19,307
|
1,189
|
|
Fairfield Inn & Suites
|
|
11
|
10
|
1
|
|
1,361
|
1,235
|
126
|
|
SpringHill Suites
|
|
2
|
1
|
1
|
|
299
|
124
|
175
|
|
Residence Inn
|
|
18
|
18
|
-
|
|
2,559
|
2,559
|
-
|
|
TownePlace Suites
|
|
1
|
-
|
1
|
|
105
|
-
|
105
|
|
Marriott Executive Apartments
|
|
22
|
23
|
(1)
|
|
3,562
|
3,775
|
(213)
|
|
Luxury
|
|
|
|
|
|
|
|
|
|
The
Ritz-Carlton - Domestic
|
|
39
|
39
|
-
|
|
11,587
|
11,587
|
-
|
|
The
Ritz-Carlton - International
|
|
38
|
35
|
3
|
|
11,503
|
10,457
|
1,046
|
|
Bulgari Hotels & Resorts
|
|
2
|
2
|
-
|
|
117
|
117
|
-
|
|
Edition
|
|
1
|
-
|
1
|
|
78
|
-
|
78
|
|
The
Ritz-Carlton Residential
|
|
31
|
26
|
5
|
|
3,780
|
2,715
|
1,065
|
|
The
Ritz-Carlton Serviced Apartments
|
|
4
|
3
|
1
|
|
579
|
458
|
121
|
|
Unconsolidated
Joint Ventures
|
|
|
|
|
|
|
|
|
|
AC
Hotels by Marriott
|
|
75
|
-
|
75
|
|
7,944
|
-
|
7,944
|
|
Autograph Collection
|
|
4
|
-
|
4
|
|
278
|
-
|
278
|
|
Timeshare
2
|
|
|
|
|
|
|
|
|
|
Marriott Vacation Club 3
|
|
53
|
53
|
-
|
|
11,988
|
11,866
|
122
|
|
The
Ritz-Carlton Destination Club
|
|
10
|
9
|
1
|
|
476
|
446
|
30
|
|
The
Ritz-Carlton Residences
|
|
4
|
4
|
-
|
|
238
|
238
|
-
|
|
Grand
Residences by Marriott - Fractional
|
|
2
|
2
|
-
|
|
248
|
248
|
-
|
|
Grand
Residences by Marriott - Residential
|
|
2
|
2
|
-
|
|
68
|
68
|
-
|
|
Sub
Total Timeshare
|
|
71
|
70
|
1
|
|
13,018
|
12,866
|
152
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
3,694
|
3,518
|
176
|
|
638,449
|
611,566
|
26,883
|
|
|
|
|
|
Number
of Timeshare Interval, Fr actional
and Residential Resorts
|
|
|
|
Total
|
Properties
in
|
|
|
|
Properties
2
|
Active
Sales 4
|
|
100%
Company-Developed
|
|
|
|
|
Marriott Vacation Club 4
|
|
53
|
27
|
|
The
Ritz-Carlton Destination Club and Residences
|
|
12
|
9
|
|
Grand
Residences by Marriott and Residences
|
|
4
|
3
|
|
|
|
|
|
|
Joint
Ventures
|
|
|
|
|
The
Ritz-Carlton Destination Club and Residences
|
|
2
|
2
|
|
|
|
|
|
|
Total
|
|
71
|
41
|
|
|
|
|
|
|
|
|
|
|
|
1
Total Lodging Products excludes the 2,165 and 1,993 corporate housing
rental units as of September 9, 2011 and September 10, 2010,
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 former Horizons by Marriott Vacation
Club products that were previously reported separately.
|
|
4
Products in active sales may not be ready for occupancy.
A-5
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
KEY
LODGING STATISTICS
Constant
$
|
|
Comparable
Company-Operated International Properties 1
|
|
|
|
|
|
Three
Months Ended August 31, 2011 and August 31, 2010
|
|
|
|
REVPAR
|
|
Occupancy
|
|
Average
Daily Rate
|
|
Region
|
|
2011
|
vs.
2010
|
|
2011
|
|
vs.
2010
|
|
2011
|
vs.
2010
|
|
Caribbean
& Latin America
|
|
$123.32
|
12.8%
|
|
73.5%
|
3.1%
|
pts.
|
|
$167.78
|
8.0%
|
|
Europe
|
|
$138.28
|
5.3%
|
|
78.1%
|
0.3%
|
pts.
|
|
$177.15
|
4.9%
|
|
Middle
East & Africa
|
|
$67.12
|
-10.1%
|
|
56.5%
|
-8.0%
|
pts.
|
|
$118.83
|
2.6%
|
|
Asia
Pacific
|
|
$95.77
|
13.9%
|
|
73.5%
|
6.0%
|
pts.
|
|
$130.27
|
4.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regional
Composite 2
|
|
$117.25
|
7.3%
|
|
74.2%
|
1.6%
|
pts.
|
|
$158.11
|
5.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Luxury 3
|
|
$185.06
|
8.5%
|
|
63.3%
|
0.4%
|
pts.
|
|
$292.33
|
7.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
International 4
|
|
$125.64
|
7.5%
|
|
72.8%
|
1.5%
|
pts.
|
|
$172.54
|
5.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide
5
|
|
$110.31
|
7.2%
|
|
73.3%
|
2.1%
|
pts.
|
|
$150.50
|
4.1%
|
|
|
|
Compa
rable Systemwide International Properties 1
|
|
|
|
|
|
Three
Months Ended August 31, 2011 and August 31, 2010
|
|
|
|
REVPAR
|
|
Occupancy
|
|
Average
Daily Rate
|
|
Region
|
|
2011
|
vs.
2010
|
|
2011
|
|
vs.
2010
|
|
2011
|
vs.
2010
|
|
Caribbean
& Latin America
|
|
$105.48
|
12.4%
|
|
70.1%
|
2.8%
|
pts.
|
|
$150.51
|
7.9%
|
|
Europe
|
|
$135.18
|
5.8%
|
|
77.7%
|
0.6%
|
pts.
|
|
$173.93
|
5.0%
|
|
Middle
East & Africa
|
|
$65.96
|
-9.1%
|
|
56.2%
|
-7.0%
|
pts.
|
|
$117.37
|
2.3%
|
|
Asia
Pacific
|
|
$103.24
|
8.5%
|
|
73.0%
|
4.5%
|
pts.
|
|
$141.48
|
1.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regional
Composite 2
|
|
$115.94
|
6.6%
|
|
73.5%
|
1.5%
|
pts.
|
|
$157.82
|
4.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Luxury 3
|
|
$185.06
|
8.5%
|
|
63.3%
|
0.4%
|
pts.
|
|
$292.33
|
7.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
International 4
|
|
$122.84
|
6.9%
|
|
72.4%
|
1.4%
|
pts.
|
|
$169.56
|
4.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide
5
|
|
$96.15
|
6.9%
|
|
73.9%
|
2.3%
|
pts.
|
|
$130.11
|
3.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 We
report financial results on a period basis and international statistics
on a monthly basis. Statistics are in constant dollars for June through
August. International includes properties located outside the United
States and Canada, except for Worldwide which includes the United
States.
|
|
2
Regional information includes the Marriott Hotels & Resorts,
Renaissance Hotels and Courtyard brands.
|
|
3
International Luxury includes The Ritz-Carlton properties outside of
the United States and Canada and Bulgari Hotels & Resorts.
|
|
4
Includes Regional Composite and International Luxury.
|
|
5
Includes international statistics for the three calendar months ended
August 31, 2011 and August 31, 2010, and the United States statistics
for the twelve weeks ended September 9, 2011 and September 10, 2010.
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-6
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
KEY
LODGING STATISTICS
Constant
$
|
|
Comparable
Company-Operated International Properties 1
|
|
|
|
|
|
Eight
Months Ended August 31, 2011 and August 31, 2010
|
|
|
|
REVPAR
|
|
Occupancy
|
|
Average
Daily Rate
|
|
Region
|
|
2011
|
vs.
2010
|
|
2011
|
|
vs.
2010
|
|
2011
|
vs.
2010
|
|
Caribbean
& Latin America
|
|
$135.62
|
10.5%
|
|
74.0%
|
3.1%
|
pts.
|
|
$183.25
|
5.8%
|
|
Europe
|
|
$126.47
|
7.1%
|
|
72.9%
|
1.0%
|
pts.
|
|
$173.42
|
5.6%
|
|
Middle
East & Africa
|
|
$79.90
|
-9.8%
|
|
57.0%
|
-11.7%
|
pts.
|
|
$140.19
|
8.8%
|
|
Asia
Pacific
|
|
$96.01
|
16.8%
|
|
71.8%
|
6.3%
|
pts.
|
|
$133.80
|
6.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regional
Composite 2
|
|
$114.36
|
8.6%
|
|
71.3%
|
1.7%
|
pts.
|
|
$160.46
|
6.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Luxury 3
|
|
$197.04
|
6.5%
|
|
63.9%
|
0.1%
|
pts.
|
|
$308.14
|
6.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
International 4
|
|
$124.59
|
8.1%
|
|
70.4%
|
1.5%
|
pts.
|
|
$177.06
|
5.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide
5
|
|
$110.54
|
6.7%
|
|
71.0%
|
1.7%
|
pts.
|
|
$155.80
|
4.2%
|
|
|
|
Comparable
Systemwide International Properties 1
|
|
|
|
|
|
Eight
Months Ended August 31, 2011 and August 31, 2010
|
|
|
|
REVPAR
|
|
Occupancy
|
|
Average
Daily Rate
|
|
Region
|
|
2011
|
vs.
2010
|
|
2011
|
|
vs.
2010
|
|
2011
|
vs.
2010
|
|
Caribbean
& Latin America
|
|
$115.78
|
10.0%
|
|
70.6%
|
2.9%
|
pts.
|
|
$163.93
|
5.6%
|
|
Europe
|
|
$122.13
|
7.3%
|
|
71.8%
|
1.4%
|
pts.
|
|
$170.15
|
5.3%
|
|
Middle
East & Africa
|
|
$77.80
|
-8.5%
|
|
56.8%
|
-10.0%
|
pts.
|
|
$136.88
|
7.6%
|
|
Asia
Pacific
|
|
$100.70
|
11.4%
|
|
71.1%
|
4.8%
|
pts.
|
|
$141.68
|
3.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regional
Composite 2
|
|
$111.56
|
7.7%
|
|
70.2%
|
1.7%
|
pts.
|
|
$158.86
|
5.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Luxury 3
|
|
$197.04
|
6.5%
|
|
63.9%
|
0.1%
|
pts.
|
|
$308.14
|
6.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
International 4
|
|
$120.10
|
7.5%
|
|
69.6%
|
1.5%
|
pts.
|
|
$172.56
|
5.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide
5
|
|
$92.87
|
6.7%
|
|
70.4%
|
2.1%
|
pts.
|
|
$131.83
|
3.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 We
report financial results on a period basis and international statistics
on a monthly basis. Statistics are in constant dollars for January
through August. International includes properties located outside the
United States and Canada, except for Worldwide which includes the
United States.
|
|
2
Regional information includes the Marriott Hotels & Resorts,
Renaissance Hotels and Courtyard brands.
|
|
3
International Luxury includes The Ritz-Carlton properties outside of
the United States and Canada and Bulgari Hotels & Resorts.
|
|
4
Includes Regional Composite and International Luxury.
|
|
5
Includes international statistics for the eight calendar months ended
August 31, 2011 and August 31, 2010, and the United States statistics
for the thirty-six weeks ended September 9, 2011 and September 10,
2010. 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-7
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
KEY
LODGING STATISTICS
Constant
$
|
|
Comparable
Company-Operated North American Properties 1
|
|
|
|
|
|
Twelve
Weeks Ended September 9, 2011 and September 10, 2010
|
|
|
|
REVPAR
|
|
Occupancy
|
|
Average
Daily Rate
|
|
Brand
|
|
2011
|
vs.
2010
|
|
2011
|
|
vs.
2010
|
|
2011
|
vs.
2010
|
|
Marriott
Hotels & Resorts
|
|
$113.06
|
4.4%
|
|
73.8%
|
1.2%
|
pts.
|
|
$153.22
|
2.8%
|
|
Renaissance
Hotels
|
|
$107.89
|
8.8%
|
|
72.3%
|
3.5%
|
pts.
|
|
$149.16
|
3.6%
|
|
Composite
North American Full-Service 2
|
|
$112.09
|
5.2%
|
|
73.5%
|
1.6%
|
pts.
|
|
$152.47
|
2.9%
|
|
The
Ritz-Carlton 3
|
|
$188.75
|
13.5%
|
|
69.9%
|
2.7%
|
pts.
|
|
$270.02
|
9.1%
|
|
Composite
North American Full-Service & Luxury 4
|
|
$121.24
|
6.6%
|
|
73.1%
|
1.7%
|
pts.
|
|
$165.89
|
4.1%
|
|
Residence
Inn
|
|
$93.26
|
3.8%
|
|
79.7%
|
0.9%
|
pts.
|
|
$117.03
|
2.6%
|
|
Courtyard
|
|
$78.07
|
9.5%
|
|
71.6%
|
4.1%
|
pts.
|
|
$109.06
|
3.2%
|
|
TownePlace
Suites
|
|
$60.96
|
11.5%
|
|
77.8%
|
5.0%
|
pts.
|
|
$78.33
|
4.4%
|
|
SpringHill
Suites
|
|
$67.05
|
8.1%
|
|
70.0%
|
3.2%
|
pts.
|
|
$95.76
|
3.3%
|
|
Composite
North American Limited-Service 5
|
|
$80.38
|
7.8%
|
|
74.1%
|
3.3%
|
pts.
|
|
$108.53
|
3.0%
|
|
Composite
- All 6
|
|
$103.99
|
7.0%
|
|
73.5%
|
2.4%
|
pts.
|
|
$141.49
|
3.5%
|
|
|
|
Comparable
Systemwide North American Properties 1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
Weeks Ended September 9, 2011 and September 10, 2010
|
|
|
|
REVPAR
|
|
Occupancy
|
|
Average
Daily Rate
|
|
Brand
|
|
2011
|
vs.
2010
|
|
2011
|
|
vs.
2010
|
|
2011
|
vs.
2010
|
|
Marriott
Hotels & Resorts
|
|
$102.04
|
5.1%
|
|
71.5%
|
1.6%
|
pts.
|
|
$142.68
|
2.8%
|
|
Renaissance
Hotels
|
|
$99.53
|
7.9%
|
|
72.0%
|
2.8%
|
pts.
|
|
$138.31
|
3.6%
|
|
Composite
North American Full-Service 2
|
|
$101.59
|
5.6%
|
|
71.6%
|
1.8%
|
pts.
|
|
$141.89
|
2.9%
|
|
The
Ritz-Carlton 3
|
|
$188.75
|
13.5%
|
|
69.9%
|
2.7%
|
pts.
|
|
$270.02
|
9.1%
|
|
Composite
North American Full-Service & Luxury 4
|
|
$107.80
|
6.5%
|
|
71.5%
|
1.9%
|
pts.
|
|
$150.81
|
3.7%
|
|
Residence
Inn
|
|
$95.99
|
5.4%
|
|
82.0%
|
1.6%
|
pts.
|
|
$117.00
|
3.3%
|
|
Courtyard
|
|
$82.46
|
7.7%
|
|
73.1%
|
3.2%
|
pts.
|
|
$112.80
|
3.0%
|
|
Fairfield
Inn & Suites
|
|
$66.91
|
8.7%
|
|
73.1%
|
3.1%
|
pts.
|
|
$91.55
|
4.1%
|
|
TownePlace
Suites
|
|
$66.25
|
8.0%
|
|
78.6%
|
2.9%
|
pts.
|
|
$84.32
|
4.0%
|
|
SpringHill
Suites
|
|
$74.30
|
8.5%
|
|
74.1%
|
4.2%
|
pts.
|
|
$100.24
|
2.3%
|
|
Composite
North American Limited-Service 5
|
|
$80.84
|
7.3%
|
|
75.8%
|
2.9%
|
pts.
|
|
$106.66
|
3.2%
|
|
Composite
- All 6
|
|
$90.89
|
6.9%
|
|
74.2%
|
2.5%
|
pts.
|
|
$122.52
|
3.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Statistics include only properties located in the United States.
2
Includes the Marriott Hotels & Resorts and Renaissance Hotels
brands.
3
Statistics for The Ritz-Carlton are for June through August.
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-8
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
KEY
LODGING STATISTICS
Constant
$
|
|
Comparable
Company-Operated North American Properties 1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirty-six
Weeks Ended September 9, 2011 and September 10, 2010
|
|
|
|
REVPAR
|
|
Occupancy
|
|
Average
Daily Rate
|
|
Brand
|
|
2011
|
vs.
2010
|
|
2011
|
|
vs.
2010
|
|
2011
|
vs.
2010
|
|
Marriott
Hotels & Resorts
|
|
$116.46
|
4.5%
|
|
71.9%
|
0.5%
|
pts.
|
|
$161.95
|
3.8%
|
|
Renaissance
Hotels
|
|
$112.39
|
6.8%
|
|
70.3%
|
2.0%
|
pts.
|
|
$159.93
|
3.8%
|
|
Composite
North American Full-Service 2
|
|
$115.69
|
4.9%
|
|
71.6%
|
0.8%
|
pts.
|
|
$161.58
|
3.8%
|
|
The
Ritz-Carlton 3
|
|
$211.94
|
10.6%
|
|
70.8%
|
3.1%
|
pts.
|
|
$299.45
|
5.7%
|
|
Composite
North American Full-Service & Luxury 4
|
|
$126.00
|
5.9%
|
|
71.5%
|
1.0%
|
pts.
|
|
$176.20
|
4.4%
|
|
Residence
Inn
|
|
$89.51
|
3.8%
|
|
76.3%
|
1.4%
|
pts.
|
|
$117.24
|
1.9%
|
|
Courtyard
|
|
$75.64
|
7.7%
|
|
68.3%
|
3.0%
|
pts.
|
|
$110.75
|
3.0%
|
|
TownePlace
Suites
|
|
$54.65
|
10.4%
|
|
71.7%
|
5.1%
|
pts.
|
|
$76.22
|
2.5%
|
|
SpringHill
Suites
|
|
$68.07
|
9.5%
|
|
67.9%
|
3.0%
|
pts.
|
|
$100.31
|
4.6%
|
|
Composite
North American Limited-Service 5
|
|
$77.65
|
6.8%
|
|
70.7%
|
2.7%
|
pts.
|
|
$109.83
|
2.7%
|
|
Composite
- All 6
|
|
$105.38
|
6.2%
|
|
71.2%
|
1.7%
|
pts.
|
|
$148.08
|
3.6%
|
|
|
|
|
|
Comparable
Systemwide North American Properties 1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirty-six
Weeks Ended September 9, 2011 and September 10, 2010
|
|
|
|
REVPAR
|
|
Occupancy
|
|
Average
Daily Rate
|
|
Brand
|
|
2011
|
vs.
2010
|
|
2011
|
|
vs.
2010
|
|
2011
|
vs.
2010
|
|
Marriott
Hotels & Resorts
|
|
$103.14
|
5.0%
|
|
69.3%
|
1.0%
|
pts.
|
|
$148.78
|
3.4%
|
|
Renaissance
Hotels
|
|
$101.53
|
6.3%
|
|
69.8%
|
1.8%
|
pts.
|
|
$145.52
|
3.6%
|
|
Composite
North American Full-Service 2
|
|
$102.85
|
5.2%
|
|
69.4%
|
1.2%
|
pts.
|
|
$148.19
|
3.5%
|
|
The
Ritz-Carlton 3
|
|
$211.94
|
10.6%
|
|
70.8%
|
3.1%
|
pts.
|
|
$299.45
|
5.7%
|
|
Composite
North American Full-Service & Luxury 4
|
|
$109.78
|
5.8%
|
|
69.5%
|
1.3%
|
pts.
|
|
$157.97
|
3.9%
|
|
Residence
Inn
|
|
$89.82
|
5.1%
|
|
77.8%
|
1.8%
|
pts.
|
|
$115.38
|
2.6%
|
|
Courtyard
|
|
$78.09
|
7.0%
|
|
69.2%
|
2.6%
|
pts.
|
|
$112.92
|
2.9%
|
|
Fairfield
Inn & Suites
|
|
$59.83
|
9.0%
|
|
67.0%
|
3.2%
|
pts.
|
|
$89.28
|
3.8%
|
|
TownePlace
Suites
|
|
$61.01
|
9.7%
|
|
73.3%
|
4.3%
|
pts.
|
|
$83.27
|
3.2%
|
|
SpringHill
Suites
|
|
$69.58
|
8.7%
|
|
69.8%
|
4.0%
|
pts.
|
|
$99.63
|
2.5%
|
|
Composite
North American Limited-Service 5
|
|
$75.40
|
7.0%
|
|
71.2%
|
2.8%
|
pts.
|
|
$105.83
|
2.8%
|
|
Composite
- All 6
|
|
$88.13
|
6.5%
|
|
70.6%
|
2.2%
|
pts.
|
|
$124.84
|
3.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Statistics include only properties located in the United States.
2
Includes the Marriott Hotels & Resorts and Renaissance Hotels
brands.
3
Statistics for The Ritz-Carlton are for June through August.
4
Includes the Marriott Hotels & Resorts, Renaissance Hotels and The
Ritz-Carlton brands.
5
Includes the Residence Inn, Courtyard, Fairfield Inn & Suites,
TownePlace Suites and SpringHill Suites brands.
6
Includes the Marriott Hotels & Resorts, Renaissance Hotels, The
Ritz-Carlton, Residence Inn, Courtyard, Fairfield Inn & Suites,
TownePlace Suites, and SpringHill Suites brands
A-9
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
TIMESHARE
SEGMENT
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
12 Weeks Ended
September 9, 2011
|
|
Timeshare
Strategy -
Impairment
Charges
|
|
As
Adjusted
12 Weeks Ended
September 9, 2011 **
|
|
As
Reported
12 Weeks Ended
September 10, 2010
|
|
Percent
Better / (Worse)
Adjusted 2011
vs. Reported 2010
|
|
|
Segment
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
management fees 1
|
|
$ 14
|
|
$ -
|
|
$ 14
|
|
$ 13
|
|
8
|
|
|
Sales
and services revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
|
|
147
|
|
-
|
|
147
|
|
135
|
|
9
|
|
|
Services
|
|
97
|
|
-
|
|
97
|
|
86
|
|
13
|
|
|
Financing
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income - non-securitized notes
|
|
8
|
|
-
|
|
8
|
|
11
|
|
(27)
|
|
|
Interest
income - securitized notes
|
|
29
|
|
-
|
|
29
|
|
30
|
|
(3)
|
|
|
Other
financing revenue
|
|
1
|
|
-
|
|
1
|
|
2
|
|
(50)
|
|
|
Total
financing revenue
|
|
38
|
|
-
|
|
38
|
|
43
|
|
(12)
|
|
|
Other
revenue
|
|
4
|
|
-
|
|
4
|
|
11
|
|
(64)
|
|
|
Total
sales and services revenue
|
|
286
|
|
-
|
|
286
|
|
275
|
|
4
|
|
|
Cost
reimbursements
|
|
77
|
|
-
|
|
77
|
|
64
|
|
20
|
|
|
Segment
revenues
|
|
$ 377
|
|
$ -
|
|
$ 377
|
|
$ 352
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
management fees 1
|
|
$ 14
|
|
$ -
|
|
$ 14
|
|
$ 13
|
|
8
|
|
|
Timeshare
sales and services, net
|
|
36
|
|
-
|
|
36
|
|
56
|
|
(36)
|
|
|
Timeshare
strategy - impairment charges
|
|
(324)
|
|
324
|
|
-
|
|
-
|
|
-
|
|
|
General,
administrative and other expense 1
|
|
(17)
|
|
-
|
|
(17)
|
|
(18)
|
|
6
|
|
|
Gains
and other income
|
|
(1)
|
|
-
|
|
(1)
|
|
-
|
|
*
|
|
|
Equity
in earnings (losses)
|
|
-
|
|
-
|
|
-
|
|
(1)
|
|
100
|
|
|
Interest
expense
|
|
(10)
|
|
-
|
|
(10)
|
|
(12)
|
|
17
|
|
|
Segment
results
|
|
$ (302)
|
|
$ 324
|
|
$ 22
|
|
$ 38
|
|
(42)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
|
$ 158
|
|
|
|
|
|
$ 157
|
|
1
|
|
|
Fractional
|
|
4
|
|
|
|
|
|
5
|
|
(20)
|
|
|
Residential
|
|
2
|
|
|
|
|
|
-
|
|
*
|
|
|
Total
company
|
|
164
|
|
|
|
|
|
162
|
|
1
|
|
|
Joint
ventures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
|
-
|
|
|
|
|
|
-
|
|
-
|
|
|
Fractional
|
|
2
|
|
|
|
|
|
2
|
|
-
|
|
|
Residential
|
|
13
|
|
|
|
|
|
-
|
|
*
|
|
|
Total
joint ventures
|
|
15
|
|
|
|
|
|
2
|
|
650
|
|
|
Total
contract sales 2,3
|
|
$ 179
|
|
|
|
|
|
$ 164
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Percent cannot be calculated.
**
Denotes non-GAAP financial measures. Please see pages A-21 and A-22 for
additional information about our reasons for providing these
alternative financial measures and limitations on their use.
1 In
2011, we changed the management reporting structure for properties
located in Hawaii. Some base management fees we previously recognized
under our International lodging segment we now recognize under our
Timeshare segment. For comparability, we have reclassified prior year
Timeshare segment revenues and segment results to reflect these
changes. These reclassifications only impacted certain segment
reporting (including the Timeshare segment) and did not change total
consolidated revenue, operating income, or net income.
2 For
the 12 Weeks Ended September 9, 2011 includes residential contract
cancellation allowance reversals $3 million. Gross contract sales for
the 2011 third quarter were $176 million before project specific
contract cancellation allowance reversals.
3 For
the 12 Weeks Ended September 10, 2010 includes fractional contract
cancellation allowances of ($1) million. Gross contract sales for the
2010 third quarter were $165 million before the contract cancellation
allowance.
A-10
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
TIMESHARE
SEGMENT
|
|
($ in
millions)
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
36 Weeks Ended September 9, 2011
|
|
Timeshare
Strategy -
Impairment
Charges
|
|
As
Adjusted
36 Weeks Ended
September 9, 2011 **
|
|
As
Reported
36 Weeks Ended
September 10, 2010
|
|
Percent
Better / (Worse)
Adjusted 2011
vs. Reported 2010
|
|
|
Segment
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
management fees 1
|
|
$ 40
|
|
$ -
|
|
$ 40
|
|
$ 38
|
|
5
|
|
|
Sales
and services revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
|
|
443
|
|
-
|
|
443
|
|
430
|
|
3
|
|
|
Services
|
|
275
|
|
-
|
|
275
|
|
253
|
|
9
|
|
|
Financing
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income - non-securitized notes
|
|
22
|
|
-
|
|
22
|
|
30
|
|
(27)
|
|
|
Interest
income - securitized notes
|
|
91
|
|
-
|
|
91
|
|
99
|
|
(8)
|
|
|
Other
financing revenue
|
|
4
|
|
-
|
|
4
|
|
5
|
|
(20)
|
|
|
Total
financing revenue
|
|
117
|
|
-
|
|
117
|
|
134
|
|
(13)
|
|
|
Other
revenue
|
|
15
|
|
-
|
|
15
|
|
32
|
|
(53)
|
|
|
Total
sales and services revenue
|
|
850
|
|
-
|
|
850
|
|
849
|
|
-
|
|
|
Cost
reimbursements
|
|
235
|
|
-
|
|
235
|
|
189
|
|
24
|
|
|
Segment
revenues
|
|
$ 1,125
|
|
$ -
|
|
$ 1,125
|
|
$ 1,076
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
management fees 1
|
|
$ 40
|
|
$ -
|
|
$ 40
|
|
$ 38
|
|
5
|
|
|
Timeshare
sales and services, net
|
|
130
|
|
-
|
|
130
|
|
156
|
|
(17)
|
|
|
Timeshare
strategy - impairment charges
|
|
(324)
|
|
324
|
|
-
|
|
-
|
|
-
|
|
|
General,
administrative and other expense 1
|
|
(50)
|
|
-
|
|
(50)
|
|
(49)
|
|
(2)
|
|
|
Gains
and other income
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Equity
in earnings (losses)
|
|
-
|
|
-
|
|
-
|
|
(9)
|
|
100
|
|
|
Interest
expense
|
|
(34)
|
|
-
|
|
(34)
|
|
(40)
|
|
15
|
|
|
Segment
results
|
|
$ (238)
|
|
$ 324
|
|
$ 86
|
|
$ 96
|
|
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
|
$ 444
|
|
|
|
|
|
$ 463
|
|
(4)
|
|
|
Fractional
|
|
19
|
|
|
|
|
|
21
|
|
(10)
|
|
|
Residential
|
|
4
|
|
|
|
|
|
6
|
|
(33)
|
|
|
Total
company
|
|
467
|
|
|
|
|
|
490
|
|
(5)
|
|
|
Joint
ventures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
|
-
|
|
|
|
|
|
-
|
|
-
|
|
|
Fractional
|
|
8
|
|
|
|
|
|
2
|
|
300
|
|
|
Residential
|
|
13
|
|
|
|
|
|
(3)
|
|
533
|
|
|
Total
joint ventures
|
|
21
|
|
|
|
|
|
(1)
|
|
2,200
|
|
|
Total
contract sales 2,3
|
|
$ 488
|
|
|
|
|
|
$ 489
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see pages A-21 and A-22 for
additional information about our reasons for providing these
alternative financial measures and limitations on their use.
1 In
2011, we changed the management reporting structure for properties
located in Hawaii. Some base management fees we previously recognized
under our International lodging segment we now recognize under our
Timeshare segment. For comparability, we have reclassified prior year
Timeshare segment revenues and segment results to reflect these
changes. These reclassifications only impacted certain segment
reporting (including the Timeshare segment) and did not change total
consolidated revenue, operating income, or net income.
2 For
the 36 Weeks Ended September 9, 2011 includes fractional and
residential contract cancellation allowance reversals of $1 million and
$3 million, respectively. Gross contract sales through the 2011 third
quarter were $484 million before project specific contract cancellation
allowance reversals.
3 For
the 36 Weeks Ended September 10, 2010 includes fractional and
residential contract cancellation allowances of ($8) million and ($7)
million, respectively. Gross contract sales through the
2010 third quarter were $504 million before project specific contract
cancellation allowances.
A-11
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
EBITDA
AND ADJUSTED EBITDA
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal
Year 2011
|
|
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Total
Year to Date
|
|
|
|
Net
Income (loss)
|
$ 101
|
|
$ 135
|
|
$ (179)
|
|
$ 57
|
|
|
|
Interest
expense
|
41
|
|
37
|
|
39
|
|
117
|
|
|
|
Tax
provision (benefit)
|
51
|
|
66
|
|
(20)
|
|
97
|
|
|
|
Depreciation
and amortization
|
35
|
|
41
|
|
40
|
|
116
|
|
|
|
Less:
Depreciation reimbursed by third-party owners
|
(4)
|
|
(3)
|
|
(4)
|
|
(11)
|
|
|
|
Interest
expense from unconsolidated joint ventures
|
4
|
|
4
|
|
5
|
|
13
|
|
|
|
Depreciation
and amortization from unconsolidated joint ventures
|
6
|
|
7
|
|
7
|
|
20
|
|
|
|
EBITDA
**
|
234
|
|
287
|
|
(112)
|
|
409
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
charges
|
|
|
|
|
|
|
|
|
|
|
Timeshare strategy - impairment charges and other
|
-
|
|
-
|
|
352
|
|
352
|
|
|
|
Total
other charges
|
-
|
|
-
|
|
352
|
|
352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA **
|
$ 234
|
|
$ 287
|
|
$ 240
|
|
$ 761
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
over 2010 Adjusted EBITDA
|
6%
|
|
3%
|
|
9%
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal
Year 2010
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
|
|
Net
Income
|
$ 83
|
|
$ 119
|
|
$ 83
|
|
$ 173
|
|
$ 458
|
|
Interest
expense
|
45
|
|
44
|
|
41
|
|
50
|
|
180
|
|
Tax
provision (benefit)
|
46
|
|
65
|
|
45
|
|
(63)
|
|
93
|
|
Depreciation
and amortization
|
39
|
|
42
|
|
40
|
|
57
|
|
178
|
|
Less:
Depreciation reimbursed by third-party owners
|
(3)
|
|
(3)
|
|
(2)
|
|
(3)
|
|
(11)
|
|
Interest
expense from unconsolidated joint ventures
|
5
|
|
5
|
|
6
|
|
3
|
|
19
|
|
Depreciation
and amortization from unconsolidated joint ventures
|
6
|
|
6
|
|
7
|
|
8
|
|
27
|
|
EBITDA
**
|
221
|
|
278
|
|
220
|
|
225
|
|
944
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
charges
|
|
|
|
|
|
|
|
|
|
|
Impairment of investments and other
|
-
|
|
-
|
|
-
|
|
100
|
|
100
|
|
Total
other charges
|
-
|
|
-
|
|
-
|
|
100
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA **
|
$ 221
|
|
$ 278
|
|
$ 220
|
|
$ 325
|
|
$ 1,044
|
|
|
|
|
|
|
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see pages A-21 and A-22 for
additional information about our reasons for providing these
alternative financial measures and the limitations on their use.
A-12
|
|
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
EBITDA
AND ADJUSTED EBITDA FOR TIMESHARE SEGMENT
|
|
THIRD
QUARTER 2011 AND FORECASTED 2011
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
Range
|
|
|
|
|
|
|
|
|
Estimated
EBITDA
Full Year 2011
|
|
Third
Quarter
2011
|
|
Third
Quarter
2010
|
|
Percent
Change
|
|
Timeshare
Segment Results 1
|
$ (193)
|
|
$ (188)
|
|
$ (302)
|
|
$ 38
|
|
|
|
Interest
expense
|
49
|
|
49
|
|
10
|
|
12
|
|
|
|
Tax
provision 2
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
Depreciation
and amortization
|
33
|
|
33
|
|
7
|
|
8
|
|
|
|
Less:
Depreciation reimbursed by third-party owners
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
Interest
expense from unconsolidated joint ventures
|
-
|
|
-
|
|
-
|
|
2
|
|
|
|
Depreciation
and amortization from unconsolidated joint ventures
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
Timeshare
Segment EBITDA **
|
(111)
|
|
(106)
|
|
(285)
|
|
60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
charges
|
|
|
|
|
|
|
|
|
|
|
Timeshare strategy - impairment charges
|
324
|
|
324
|
|
324
|
|
-
|
|
|
|
Total
other charges
|
324
|
|
324
|
|
324
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA **
|
$ 213
|
|
$ 218
|
|
$ 39
|
|
$ 60
|
|
(35)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. In
2011, we changed the management reporting structure for lodging
properties located in Hawaii. Some base management fees we previously
recognized under our International lodging segment we now recognize
under our Timeshare segment.
For
comparability, we have reclassified prior year Timeshare segment
results to reflect these changes. These reclassifications only impacted
certain segment reporting (including the Timeshare segment) and did not
change total consolidated revenue, operating income, or net income.
2.
Income taxes are not allocated to segment results.
**
Denotes non-GAAP financial measures. Please see pages A-21 and A-22 for
additional information about our reasons for providing these
alternative financial measures and the limitations on their use.
A-13
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
EBITDA
AND ADJUSTED EBITDA
|
|
FORECASTED
2011
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Range
|
|
|
|
|
|
Estimated
EBITDA
Full Year 2011
|
|
Full
Year 2010
|
|
Net
Income
|
|
$ 215
|
|
$ 230
|
|
$ 458
|
|
Interest
expense
|
|
160
|
|
160
|
|
180
|
|
Tax
provision
|
|
180
|
|
185
|
|
93
|
|
Depreciation
and amortization
|
|
170
|
|
170
|
|
178
|
|
Less:
Depreciation reimbursed by third-party owners
|
|
(15)
|
|
(15)
|
|
(11)
|
|
Interest
expense from unconsolidated joint ventures
|
|
20
|
|
20
|
|
19
|
|
Depreciation
and amortization from unconsolidated joint ventures
|
|
30
|
|
30
|
|
27
|
|
EBITDA
**
|
|
760
|
|
780
|
|
944
|
|
|
|
|
|
|
|
|
|
Other
charges
|
|
|
|
|
|
|
|
Timeshare strategy - impairment charges and other
|
|
352
|
|
352
|
|
100
|
|
Total
other charges
|
|
352
|
|
352
|
|
100
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA **
|
|
$ 1,112
|
|
$ 1,132
|
|
$ 1,044
|
|
|
|
|
|
|
|
|
|
Increase
over 2010 Adjusted EBITDA
|
|
7%
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see pages A-21 and A-22 for
additional information about
our reasons for providing these alternative financial measures and the
limitations on their use.
A-14
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
ADJUSTED
GENERAL, ADMINISTRATIVE, AND OTHER EXPENSES
|
|
EXCLUDING
OTHER CHARGES AND TIMESHARE SPIN-OFF
|
|
TRANSACTION
COSTS THIRD QUARTER 2011
|
|
($ in
millions)
|
|
|
|
|
|
|
|
Third
Quarter
2011
|
|
General,
administrative and other expenses
|
|
$ 180
|
|
Less:
Other charges
|
|
(10)
|
|
Less:
Timeshare spin-off transaction costs
|
|
(8)
|
|
|
|
|
|
Adjusted
General, administrative and other expenses**
|
|
$ 162
|
|
|
|
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see pages A-21 and A-22 for
additional information about
our reasons for providing these alternative financial measures and the
limitations on their use.
A-15
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
FORECASTED
ADJUSTED GENERAL, ADMINISTRATIVE, AND OTHER EXPENSES
|
|
EXCLUDING
OTHER CHARGES
|
|
ESTIMATED
FULL YEAR 2011
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
Range
|
|
|
|
Estimated
Full Year 2011 **
|
|
|
|
|
|
|
|
General,
administrative and other expenses
|
|
$ 733
|
|
$ 743
|
|
Less:
Other charges
|
|
(10)
|
|
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
General, administrative and other expenses**
|
|
$ 723
|
|
$ 733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see pages A-21 and A-22 for
additional information about
our reasons for providing these alternative financial measures and the
limitations on their use.
A-16
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
ADJUSTED
PRETAX MARGIN EXCLUDING REIMBURSED COSTS
|
|
($ in
millions)
|
|
|
|
Third
Quarter
2011
|
|
Third
Quarter
2010
|
|
(Loss)
income before income taxes as reported
|
$ (199)
|
|
$ 128
|
|
Timeshare
strategy - impairment charges and other
|
352
|
|
-
|
|
Income
before income taxes excluding other charges**
|
$ 153
|
|
$ 128
|
|
|
|
|
|
|
|
Total
revenues as reported
|
$ 2,874
|
|
$ 2,648
|
|
Less:
Cost reimbursements
|
(2,045)
|
|
(1,900)
|
|
Total
revenues excluding reimbursed costs
|
$ 829
|
|
$ 748
|
|
|
|
|
|
|
|
Adjusted
pretax margin, excluding the impact of reimbursed costs **
|
18.5%
|
|
17.1%
|
|
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see pages A-21 and A-22 for
additional information about
our reasons for providing these alternative financial measures and the
limitations on their use.
A-17
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
ESTIMATED
2011 IMPACT ON EPS OF REMOVING THE TIMESHARE SEGMENT
|
|
(BEFORE
THE 2011 THIRD QUARTER IMPAIRMENT CHARGES), REMOVING SPIN-OFF
TRANSACTION COSTS,
|
|
AND
INCLUDING AN ESTIMATED TIMESHARE ROYALTY FEE
|
|
($ in
millions except per share amounts)
|
|
|
|
|
|
|
|
|
|
Range
|
|
|
|
Estimated
Full Year 2011 **
|
|
|
|
|
|
|
|
Timeshare
Segment Results
|
|
$ (193)
|
|
$ (188)
|
|
Third
Quarter 2011 Timeshare Strategy - Impairment Charges as reported
|
|
324
|
|
324
|
|
Timeshare
Segment Results before Timeshare Strategy - Impairment Charges
|
|
(131)
|
|
(136)
|
|
Spin-off
transaction costs 1
|
|
13
|
|
13
|
|
Estimated
royalty fee
|
|
63
|
|
65
|
|
|
|
(55)
|
|
(58)
|
|
Benefit
for income taxes
|
|
18
|
|
19
|
|
Impact
of removing the timeshare segment and spin-off
transaction costs, and including an estimated
royalty fee
|
|
$ (37)
|
|
$ (39)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
EPS impact of removing the
Timeshare segment and spin-off transaction costs,
and
including an estimated royalty fee
|
|
$
(0.10)
|
|
$
(0.11)
|
|
|
|
|
|
|
|
Diluted
Shares
|
|
362.0
|
|
362.0
|
|
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see pages A-21 and A-22 for
additional information about our reasons for providing these
alternative financial measures and the limitations on their use.
|
|
|
|
1.
Reflects spin-off transaction costs incurred in 2011 through the third
quarter
|
|
|
|
Note:
Proformas to be published at time of the spin. Actuals will vary.
Excludes various proforma adjustments. Provided for directional
purposes only.
A-18
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
PLANNING
ASSUMPTIONS AND RELATED ESTIMATES THAT
|
|
EXCLUDE
OTHER CHARGES AND CERTAIN TAX ITEMS IN 2011 AND 2010
|
|
AND
FOR 2011 EXCLUDE THE IMPACT OF THE TIMESHARE SEGMENT
|
|
(BEFORE
THE THIRD QUARTER 2011 IMPAIRMENT CHARGES), EXCLUDE THIRD QUARTER
|
|
YEAR
TO DATE SPIN-OFF TRANSACTIONS COSTS, AND INCLUDE AN ESTIMATED ROYALTY
FEE
|
|
|
|
|
|
|
|
|
|
|
|
Range
|
|
|
|
|
|
Estimated
Full Year 2011 **
|
|
Full
Year 2010 1
|
|
Diluted
EPS
|
|
$ 0.59
|
|
$ 0.64
|
|
$ 1.21
|
|
Other
charges and certain tax items
|
|
0.78
|
|
0.78
|
|
(0.07)
|
|
Diluted
EPS excluding other charges and certain tax items**
|
|
1.37
|
|
1.42
|
|
$ 1.15
|
|
Diluted
EPS impact of removing the Timeshare segment
and third quarter year to date spin-off
transaction costs, and
including an estimated royalty fee
|
|
(0.10)
|
|
(0.11)
|
|
|
|
Diluted
EPS excluding other charges and certain tax
items and including the impact of removing the
Timeshare segment and third quarter year to date
spin-off transaction costs, and including an
estimated
royalty fee** 2
|
|
$ 1.27
|
|
$ 1.31
|
|
|
|
|
|
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see pages A-21 and A-22 for
additional information about our reasons for providing these
alternative financial measures and the limitations on their use.
|
|
|
|
1.
Earnings per share plus adjustment items does not equal Diluted
Earnings per share excluding other charges a nd
certain tax items due to rounding.
|
|
2. See
page A-18 for details.
A-19
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
ADJUSTED
2007 EPS EXCLUDING THE TIMESHARE SEGMENT,
|
|
INCLUDING
AN ESTIMATED TIMESHARE ROYALTY FEE,
|
|
AND
EXCLUDING THE ESOP CHARGE
|
|
($ in
millions except per share amounts)
|
|
|
|
|
|
|
|
Full
Year
2007 **
|
|
Impact
of removal of Timeshare segment results as reported
|
|
$ (306)
|
|
Estimated
royalty fee
|
|
78
|
|
|
|
(228)
|
|
Benefit
for income taxes
|
|
84
|
|
TIMESHARE
INCOME IMPACT OF ADJUSTMENTS
|
|
$ (144)
|
|
|
|
|
|
DILUTED
EPS FROM CONTINUING OPERATIONS AS REPORTED
|
|
$ 1.73
|
|
Diluted
EPS ESOP Charge Impact
|
|
0.14
|
|
DILUTED
EPS FROM CONTINUING OPERATIONS EXCLUDING ESOP IMPACT
|
|
1.87
|
|
Diluted
EPS Impact of Timeshare income impact of adjustments
|
|
(0.36)
|
|
|
|
|
|
DILUTED
EPS FROM CONTINUING OPERATIONS AS ADJUSTED
|
|
$ 1.51
|
|
|
|
|
|
Diluted
Shares
|
|
401.4
|
|
|
|
|
|
**
Denotes non-GAAP financial measures. Please see pages A-21 and A-22 for
additional information about
our reasons for providing these alternative financial measures and the
limitations on their use.
A-20
|
|
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 (or other reconciliations identified below)
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 have limitations and should not be considered
in isolation or as a substitute for 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
certain charges and tax items incurred in the 2011 third quarter,
including Timeshare strategy-impairment charges, certain other charges,
and Timeshare spin-off costs, and certain charges and tax items
incurred in the 2010 fourth quarter because those non-GAAP measures
allow for period-over-period comparisons of our on-going core
operations before the impact of 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 preparing our
Timeshare segment to operate as an independent, public company
following our proposed spin-off of the stock of Marriott Vacations
Worldwide Corporation ("MVW") management assessed the Timeshare
segment's intended use of excess undeveloped land and built inventory
and the current market conditions for those assets. On September 8, 2011, management approved a plan
for the Timeshare segment to accelerate cash flow through the
monetization of certain excess undeveloped land in the U.S., Mexico, and the Bahamas
over the next 18 to 24 months and to accelerate sales of excess built
luxury fractional and residential inventory over the next three years.
As a result, because the nominal cash flows from the planned land sales
and the estimated fair values of the land and excess built luxury
inventory were less than their respective carrying values, we recorded
a pre-tax non-cash impairment charge of $324
million in our 2011 third quarter Income Statements under the
"Timeshare strategy-impairment charges" caption. This charge was
allocated to the Timeshare segment.
Certain Other Charges - 2011. We recorded charges of $28 million in the 2011 third quarter, which
included an $18 million
other-than-temporary impairment of an investment in marketable
securities (recorded in the "(Losses) gains and other income" caption
of our Income Statement), not allocated to any of our segments, and a
charge totaling $10 million (recorded in
the "General, administrative and other" caption of our Income
Statements) related to the impairment of deferred contract acquisition
costs and an accounts receivable reserve both of which were associated
with a Luxury segment property whose owner filed for bankruptcy.
Timeshare Spin-off Costs - 2011. We recorded $8 million and $13
million of transaction-related expenses in the 2011 third
quarter and first
three quarters of 2011, respectively, (recorded in the
"General, administrative and other" caption of our Income Statements
and allocated to the Timeshare segment), related to the proposed
spin-off of the timeshare business.
Certain Tax Items. Certain tax items included $32 million in the 2011 third quarter and $85 million in the 2010 fourth quarter. The $32 million consisted of non-cash charges
related to the impairment of certain international deferred tax assets
that we expect to transfer to MVW in conjunction with the planned
spin-off of our timeshare operations and timeshare development
business. We impaired these assets because we consider it "more likely
than not" that MVW will be unable to realize the value of those
deferred tax assets. The $85 million
related to a settlement with the Appeals Division of the IRS that
resolved all issues that arose in the audit of tax years 2005 through
2008. This settlement resulted in a decrease in tax expense for 2010 of
approximately $85 million, which was due
to the release of previously established tax liabilities for the
treatment of funds received from certain non-U.S. subsidiaries. These
tax items were not allocated to any of our segments, as we don't
allocate taxes to segments.
Certain Other Charges - 2010. We recorded net charges
of $111 million in the 2010 fourth
quarter which included an $84 million
impairment charge associated with an internally developed software
asset and a $27 million impairment
charge associated with the anticipated disposition of a land parcel and
a golf course. Both of these charges were recorded in the "General,
administrative and other" caption of our Income Statements. These
charges were partially offset by an $11 million
reversal recorded in the 2010 fourth quarter of a funding liability
recorded in 2009. This reversal was recorded in the "Equity in losses"
caption of our Income Statements. Due to the significant impact of the
recent recession on hotel owner profitability, we agreed to absorb a
portion of the cost of the software asset and recorded an $84 million impairment charge on the
investment in the 2010 fourth quarter to reflect the expected
unrecovered cost. Except for the impairment charges totaling $27 million of which $13
million impacted our Timeshare Segment and $14 million impacted our North American
Limited-Service segment, the rest of the other charges in 2010 were not
allocated to any of our segments.
A-21
Earnings Before Interest, Taxes, and Depreciation and
Amortization. Earnings before interest, taxes, depreciation and
amortization ("EBITDA") reflects earnings excluding the impact of
interest expense, provision for income taxes, depreciation and
amortization. Management considers EBITDA to be an indicator of
operating performance because we use it to measure our ability to
service debt, fund capital expenditures, and expand our business. We
also use EBITDA, as do analysts, lenders, investors and others, 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 provision for income taxes 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.
Both EBITDA and Adjusted EBITDA (described below) exclude
certain cash expenses that we are obligated to make.
Adjusted EBITDA. Management also evaluates Adjusted
EBITDA as an indicator of operating performance. Adjusted EBITDA
excludes the $324 million of Timeshare
strategy-impairment charges and $28 million
of other charges recorded in the 2011 third quarter, as well as $100 million of net charges recorded in the
2010 fourth quarter for the reasons noted above under "Adjusted
Measures That Exclude Certain Charges, Costs and Other Expenses."
Timeshare Segment EBITDA and Adjusted EBITDA. Timeshare
segment EBITDA reflects Timeshare segment results excluding the impact
of interest expense, tax expense and depreciation and amortization.
Timeshare segment adjusted EBITDA reflects EBITDA excluding
Timeshare-strategy impairment charges recorded in the 2011 third
quarter. We do not allocate taxes to our Timeshare or other segments.
Management uses these non-GAAP measures for the reasons noted
previously under the "EBITDA" caption and "Adjusted Measures That
Exclude Certain Charges, Costs and Other Expenses" captions.
Adjusted Pretax Margin Excluding Reimbursed Costs. Cost
reimbursements revenue represents reimbursements of costs incurred on
behalf of managed and franchised properties and relates, predominantly,
to payroll costs at managed properties where we are the employer. As we
record cost reimbursements based upon costs incurred with no added
markup, this revenue and related expense has no impact on either our
operating income or net income because cost reimbursements revenue net
of reimbursed costs expense is zero. We consider total revenues
excluding costs reimbursements and therefore, adjusted pretax margin
excluding reimbursed costs to be meaningful metrics as they represent
that portion of revenue and pretax margin that impacts operating income
and net income.
Adjusted Measures that Exclude the Impact of the Timeshare
Segment and Include An Estimated Royalty Fee. On February 14, 2011,
we announced a plan to separate the company's businesses into two
separate, publicly traded companies. Under the plan, we expect to
spin-off our timeshare operations and timeshare development business as
a new independent company through a special tax-free dividend to our
shareholders in the 2011 fourth quarter. Management evaluates non-GAAP
measures that, for prior years and the forecasted full current year,
exclude the impact of the Timeshare segment and include the impact of
the payment of an estimated royalty fee (as if the spin-off had
occurred on either the first day of 2007 or 2011, as applicable) from
the new timeshare company for the use of the Marriott timeshare and
Ritz-Carlton fractional brands in order to better perform
year-over-year comparisons on a comparable basis.
2007 Results as Adjusted. Management evaluates these
non-GAAP measures that exclude the charge associated with the 2007
settlement of issues raised during the IRS' and Department of Labor's
examination of the employee stock ownership plan ("ESOP") feature of
our Employees' Profit Sharing, Retirement and Savings Plan and Trust,
assumes the spin-off occurred on the first day of 2007, and accordingly
exclude the Timeshare segment and include the payment of an estimated
royalty fee from MVW because these measures allows for
period-over-period comparisons for our on-going operations before
material charges and after giving effect to the anticipated spin-off.
These non-GAAP measures also facilitate management's comparison of
results from our on-going operations before material charges with those
of other lodging companies. The ESOP settlement resulted in an
after-tax charge of $54 million in the
second quarter of 2007 reflecting $35 million
of excise taxes (impacting general, administrative, and other
expenses), $13 million of interest
expense on those excise taxes and $6 million
of income tax expense primarily reflecting additional interest.
|