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Marriott 4th Qtr 2011 Net Income Drops to $141 million Compared to
$173 million in the Year-Ago Quarter Due to One-Time
Charge for Timeshare Spin-off

REVPAR Climbs 6.3%, New
Rooms in Pipeline Over 110,000

BETHESDA, Md., Feb. 15, 2012

FOURTH QUARTER HIGHLIGHTS

  • Fourth quarter adjusted diluted earnings per share (EPS) totaled $0.46, a 31 percent increase over prior year adjusted results;
  • Fourth quarter worldwide comparable systemwide REVPAR rose 6.3 percent using actual dollars. Average daily rate rose 3.7 percent using actual dollars;
  • At year-end, the company’s worldwide pipeline of hotels under construction, awaiting conversion or approved for development totaled over 110,000 rooms, including over 52,000 rooms outside North America;
  • Over 6,900 rooms opened during the quarter, including over 1,800 rooms converted from competitor brands and nearly 3,500 rooms in international markets;
  • For full year 2011, Marriott repurchased 43.4 million shares of the company’s common stock for $1.4 billion;
  • For full year 2012, Marriott expects comparable systemwide REVPAR on a constant dollar basis to increase 5 to 7 percent in North America, outside North America and worldwide.
  • At year-end 2011, group revenue bookings for 2012 North American comparable Marriott Hotels & Resorts properties were 9 percent higher than group revenue bookings at year-end 2010 for stays in 2011.

Marriott International, Inc. (NYSE: MAR) today reported fourth quarter and full year 2011 results.

The company completed the spin-off of its Timeshare segment on November 21, 2011. Because of Marriott’s significant continuing involvement in the business after the spin-off through licensing and other agreements, Timeshare segment results for periods prior to the spin-off date continue to be included in the company’s historical financial results. However, to evaluate the performance of the company excluding the impact of the timeshare business, the company is adjusting results and previously provided guidance as if the spin-off had occurred on the first day of fiscal 2010. Timeshare spin-off adjustments include items such as the removal of timeshare business operating results and spin-off transaction costs, as well as the addition of license fees and other related items. See pages A-1 through A-6 for reported results, the timeshare spin-off adjustments and adjusted results.

FOURTH QUARTER 2011 RESULTS

Fourth quarter 2011 adjusted net income totaled $159 million, an 18 percent increase compared to fourth quarter 2010 adjusted net income. Adjusted diluted EPS totaled $0.46, a 31 percent increase from adjusted diluted EPS in the year-ago quarter. On October 5, 2011, the company forecasted fourth quarter diluted EPS of $0.45 to $0.50, which assumed the timeshare spin-off would occur at year-end 2011. Adjusting for the timeshare spin-off as if the spin-off had occurred the first day of fiscal 2010, the company’s guidance would have been $0.40 to $0.44 as shown on page A-18.

Reported net income totaled $141 million in the fourth quarter of 2011 compared to $173 million in the year-ago quarter. Reported diluted EPS was $0.41 in the fourth quarter of 2011 compared to $0.46 in the fourth quarter of 2010.

Adjusted net income and adjusted diluted EPS for the fourth quarter of 2011 exclude $14 million ($18 million after-tax and $0.05 per diluted share) of timeshare spin-off adjustments.

Adjusted net income and adjusted diluted EPS for the fourth quarter of 2010 exclude $22 million ($13 million after-tax and $0.04 per diluted share) of timeshare spin-off adjustments. Adjusted results for the fourth quarter of 2010 also exclude $25 million after-tax ($0.07 per diluted share) of impairment charges and certain tax items, including an $85 million ($0.22 per diluted share) non-cash benefit in the provision for income taxes.

J.W. Marriott, Jr., chairman and chief executive officer of Marriott International, said, “2011 was a great year. Occupancies and room rates improved at our hotels in most markets around the world. We increased our global hotel distribution and spun off our timeshare business as Marriott Vacations Worldwide Corporation, a new separately traded public company. Return on invested capital increased dramatically and meaningful top line growth in our lodging business helped drive base and franchise fees beyond their prior peak in 2008. Adjusted earnings per share was outstanding and we returned over $1.5 billion to our shareholders through share repurchases and dividends.

“Our system has never looked better. We opened 210 properties with nearly 32,000 rooms during the year, including 80 hotels flying our new AC Hotels by Marriott flag in Europe. With great momentum in international markets, the growth rate for our hotel rooms outside the U.S. was higher than within the U.S. The Autograph Collection made its debut in Europe adding nine properties, including the four spectacular Boscolo hotels. And our EDITION brand kicked into high gear with new hotel announcements, including the iconic Clock Tower building in New York. In total, our hotel development pipeline increased to over 110,000 rooms as we signed new management and franchise agreements for more than 320 hotels with over 50,000 rooms in 2011, most for hotels yet to open.

“We are bullish about the long-term growth prospects for both Marriott and the global lodging industry. With a growing middle class and rapid economic growth in many emerging markets, global demand is increasing steadily. In the U.S., supply growth remains modest. As a result, we expect revenue per available room to continue to improve in most markets. Marriott is well positioned to benefit from these global macro trends. Our products are high quality, our guest satisfaction is very high, and our brands are preferred by owners and franchisees. New hotel openings and renovations of existing hotels continue to energize our brands, and with new designs and services, we continue to find new ways to engage our guests. We expect 2012 to be an exciting year.”

For the 2011 fourth quarter, REVPAR for worldwide comparable systemwide properties increased 5.9 percent (a 6.3 percent increase using actual dollars). Excluding the Middle East and Japan markets, worldwide comparable systemwide REVPAR rose 6.2 percent (a 6.5 percent increase using actual dollars).

International comparable systemwide REVPAR rose 4.1 percent (a 5.9 percent increase using actual dollars), including a 4.5 percent increase in average daily rate (a 6.3 percent increase using actual dollars) in the fourth quarter of 2011. Excluding the Middle East and Japan markets, international comparable systemwide REVPAR increased 5.6 percent (a 6.9 percent increase using actual dollars).

In North America, comparable systemwide REVPAR increased 6.4 percent in the fourth quarter of 2011, including a 3.2 percent increase in average daily rate. REVPAR for comparable systemwide North American full-service and luxury hotels (including Marriott Hotels & Resorts, The Ritz-Carlton and Renaissance Hotels) increased 5.8 percent with a 3.4 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 7.0 percent in the fourth quarter with a 3.4 percent increase in average daily rate.

Marriott added 40 new properties (6,925 rooms) to its worldwide lodging portfolio in the 2011 fourth quarter, including Shanghai Marriott City Centre, the Renaissance and Courtyard Doha City Center hotels and the Scrub Island Resort, Spa and Marina, an Autograph Collection hotel in the British Virgin Islands. Nine properties (1,946 rooms) exited the system during the quarter. At year-end, the company’s lodging group encompassed 3,718 properties and timeshare resorts for a total of 643,196 rooms.

The company’s worldwide pipeline of hotels under construction, awaiting conversion or approved for development totaled nearly 700 properties with over 110,000 rooms at year-end. During 2011, the company signed new management and franchise agreements for more than 320 hotels with over 50,000 rooms.

MARRIOTT ADJUSTED REVENUES totaled $3.4 billion in the 2011 fourth quarter compared to approximately $3.2 billion for the fourth quarter of 2010. Adjusted base management and franchise fees rose 9 percent to $346 million reflecting higher REVPAR and fees from new hotels. Incentive fees declined 1 percent reflecting lower incentive fees in the Middle East and continued weakness in the greater Washington, DC market. In the fourth quarter, 27 percent of worldwide company-managed hotels earned incentive management fees compared to 26 percent in the year-ago quarter.

Worldwide comparable company-operated house profit margins increased 60 basis points in the fourth quarter reflecting higher occupancy, rate increases and strong productivity. House profit margins for comparable company-operated properties outside North America increased 20 basis points and North American comparable company-operated house profit margins increased 100 basis points from the year-ago quarter.

Owned, leased, corporate housing and other revenue, net of direct expenses, increased $15 million in the 2011 fourth quarter, to $56 million, largely due to higher credit card and residential branding fee revenues and improved operating results at owned and leased hotels.

ADJUSTED GENERAL, ADMINISTRATIVE and OTHER expenses for the 2011 fourth quarter increased 2 percent to $219 million, compared to adjusted expenses of $215 million in the year-ago quarter.

ADJUSTED GAINS AND OTHER INCOME totaled $1 million compared to $8 million in the year-ago quarter, primarily reflecting net gains on the sale of real estate in the 2010 fourth quarter.

Adjusted Earnings before Interest Expense, Taxes, Depreciation and Amortization (EBITDA)

Adjusted EBITDA totaled $316 million in the 2011 fourth quarter, a 12 percent increase over 2010 fourth quarter adjusted EBITDA of $282 million. See pages A-12 for the EBITDA and adjusted EBITDA calculations.

FULL YEAR 2011 RESULTS

For the full year 2011, adjusted net income totaled $475 million, a 23 percent increase over full year 2010 adjusted net income. Adjusted diluted EPS totaled $1.31, an increase of 28 percent from adjusted diluted EPS a year ago.

Reported net income totaled $198 million for full year 2011 compared to reported net income of $458 million a year ago. Reported diluted EPS was $0.55 for 2011 compared to reported diluted EPS of $1.21 for 2010.

Adjusted net income and adjusted diluted EPS for full year 2011 exclude $300 million ($260 million after-tax and $0.72 per diluted share) of timeshare spin-off adjustments. Adjusted results for the full year 2011 also exclude $28 million pretax ($17 million after-tax and $0.05 per diluted share) of non-cash impairment and other charges.

Adjusted net income and adjusted diluted EPS for full year 2010 exclude $76 million ($47 million after-tax and $0.12 per diluted share) of timeshare spin-off adjustments. Adjusted results for full year 2010 also exclude $25 million after-tax ($0.07 per diluted share) of impairment charges and certain tax items, including an $85 million ($0.23 per diluted share) non-cash benefit in the provision for income taxes.

REVPAR for the company’s worldwide comparable systemwide properties increased 6.4 percent (a 7.1 percent increase using actual dollars) in 2011. Excluding the Middle East and Japan markets, worldwide comparable systemwide REVPAR rose 6.9 percent (a 7.4 percent increase using actual dollars).

International comparable systemwide REVPAR for 2011 increased 6.3 percent (a 9.6 percent increase using actual dollars), including a 0.9 percent increase in occupancy and a 4.9 percent increase in average daily rate (an 8.1 percent increase using actual dollars). Excluding the Middle East and Japan markets, international comparable systemwide REVPAR increased 8.9 percent (an 11.9 percent increase using actual dollars).

In North America, comparable systemwide REVPAR increased 6.5 percent in 2011. REVPAR at the company’s comparable systemwide North American full-service and luxury hotels (including Marriott Hotels & Resorts, The Ritz-Carlton and Renaissance Hotels) increased 5.8 percent with a 1.3 percent increase in occupancy and an average daily rate increase of 3.7 percent. REVPAR for comparable systemwide North American limited-service hotels (including Courtyard, Residence Inn, SpringHill Suites, TownePlace Suites and Fairfield Inn & Suites) increased 7.0 percent with a 3.0 percent increase in average daily rate.

MARRIOTT ADJUSTED REVENUES totaled nearly $11.0 billion in 2011 compared to $10.2 billion in 2010. Total adjusted fees in 2011 were $1,307 million, an increase of 10 percent from the prior year. Stronger base management and franchise fees reflected the increase in worldwide REVPAR and unit growth across the system. Incentive management fees increased 7 percent reflecting higher property-level profit due to worldwide REVPAR increases and continued cost control, as well as international unit growth. For full year 2011, 29 percent of company-operated hotels earned incentive management fees compared to 27 percent in the prior year. Approximately two-thirds of incentive management fees came from hotels outside North America in both 2011 and 2010.

Owned, leased, corporate housing and other revenue, net of direct expenses, totaled $140 million in 2011 compared to $91 million in 2010. Results were primarily impacted by an increase in credit card and residential branding fees, stronger results at owned and leased hotels and an increase in termination fees net of property closing costs.

ADJUSTED GENERAL, ADMINISTRATIVE and OTHER expenses in 2011 increased $50 million to $643 million, an 8 percent increase compared to adjusted expenses in 2010, largely due to higher compensation costs, higher costs associated with growth in international markets and a year-over-year increase in legal expenses.

ADJUSTED GAINS AND OTHER INCOME totaled $8 million in 2011 primarily reflecting net gains on the sale of real estate. Adjusted gains and other income of $15 million in 2010 included $13 million of net gains on the sale of real estate.

Adjusted EBITDA

Adjusted EBITDA totaled $992 million in 2011 compared to 2010 adjusted EBITDA of $885 million, a 12 percent increase. See pages A-13 for the EBITDA and adjusted EBITDA calculations.

BALANCE SHEET

At year-end 2011, total debt was $2,171 million and cash balances totaled $102 million, compared to $2,829 million in debt and $505 million of cash at year-end 2010. The $658 million decline in total debt from year-end 2010 primarily resulted from the spin-off of the Timeshare segment and the transfer of its non-recourse debt, which was partially offset by a $331 million increase in commercial paper borrowings.

COMMON STOCK

Weighted average fully diluted shares outstanding used to calculate adjusted diluted EPS totaled 346.4 million in the 2011 fourth quarter compared to 382.0 million in the year-ago quarter.

The company repurchased 6.9 million shares of common stock in the fourth quarter at a cost of $200 million. For the full year 2011, the company repurchased 43.4 million shares of common stock at a cost of $1.4 billion. On February 10, 2012, the board of directors increased the company’s authorization to repurchase shares by 35 million shares to yield a total share authorization of 40.5 million shares.

FIRST QUARTER 2012 OUTLOOK

For the first quarter, the company expects comparable systemwide REVPAR on a constant dollar basis will increase 5 to 6 percent in North America, 4 to 5 percent outside North America and 5 to 6 percent worldwide.

2012 OUTLOOK

The company expects full year 2012 comparable systemwide REVPAR on a constant dollar basis will increase 5 to 7 percent in North America, outside North America and worldwide.

The company expects to open about 30,000 rooms in 2012 as most hotels expected to open are already under construction or undergoing conversion from other brands.

For 2012, assuming a strong U.S. dollar and modest fee revenue growth in hotels in Washington, DC, the company expects full year fee revenue could total $1,410 million to $1,450 million, growth of 8 to 11 percent over 2011 adjusted total fee revenue. The company expects owned, leased, corporate housing and other revenue, net of direct expense, could total $130 million to $140 million in 2012.

Compared to prior assumptions for 2012 operating profit provided by the company on October 5, 2011, expectations today reflect 2011 actual results and greater precision resulting from the property-level budgeting process completed in the fourth quarter.

The company estimates that, on a full year basis, one point of worldwide systemwide REVPAR impacts total fees by approximately $20 million pretax and owned, leased, corporate housing and other revenue, net of direct expense, by approximately $5 million pretax.

For 2012, the company expects general, administrative and other expenses to total $660 million to $670 million, an increase of 3 to 4 percent over 2011 adjusted expenses of $643 million.

Given these assumptions, 2012 diluted EPS could total $1.52 to $1.64.


First Quarter 2012

Full Year 2012


Total fee revenue

$295 million to $305 million

$1,410 million to $1,450 million


Owned, leased, corporate housing and other revenue, net of direct expenses

$20 million to $25 million

$130 million to $140 million


General, administrative and other expenses

$150 million to $155 million

$660 million to $670 million


Operating income

$160 million to $180 million

$870 million to $930 million


Gains and other income

Approx $2 million

Approx $10 million


Net interest expense(1)

Approx $25 million

Approx $105 million


Equity in earnings (losses)

Approx $(5) million

Approx $(5) million


Earnings per share

$0.26 to $0.30

$1.52 to $1.64


Tax rate


33.0 percent


(1) Net of interest income







The company expects investment spending in 2012 will total approximately $550 million to $750 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. Assuming additional investment opportunities do not appear, roughly $1 billion could be returned to shareholders through share repurchases and dividends.

Based upon the assumptions above, full year 2012 EBITDA is expected to total $1,090 million to $1,150 million, a 10 to 16 percent increase over the prior year’s adjusted EBITDA. Adjusted EBITDA for full year 2011 totaled $992 million and is shown on page A-13.

Marriott International, Inc. (NYSE: MAR) will conduct its quarterly earnings review for the investment community and news media on Thursday, February 16, 2012 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 February 16, 2013.

The telephone dial-in number for the conference call is 706-679-3455 and the conference ID is 42170477. A telephone replay of the conference call will be available from 1 p.m. ET, Thursday, February 16, 2012 until 8 p.m. ET, Thursday, February 23, 2012. To access the replay, call 706-645-9291. The reservation number for the recording is 42170477.

Note on forward-looking statements : 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; 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 annual report on Form 10-K or 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; competitive conditions in the lodging industry; relationships with clients and property owners; and the availability of capital to finance hotel growth and refurbishment. 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 February 15, 2012. 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 over 3,700 lodging properties in 73 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; licenses the development and operation of vacation ownership resorts under the Marriott Vacation Club and Grand Residences by Marriott brands and licenses the development of The Ritz-Carlton Destination Club brand to the newly independent Marriott Vacations Worldwide Corporation; 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 120,000 employees at 2011 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 2011, Marriott International reported revenues of over $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 4, 2011


TABLE OF CONTENTS





Consolidated Statements of Income

A-1





Consolidated Statements of Income for Prior Periods

A-3





Total Lodging Products

A-7





Key Lodging Statistics

A-8





EBITDA and Adjusted EBITDA

A-12





EBITDA and Adjusted EBITDA for Prior Periods

A-14





EBITDA and Adjusted EBITDA Forecast

A-17





Fourth Quarter 2011 Guidance Adjusted for the Impact of the Timeshare Spin-off

A-18





Adjusted Pretax Margin Excluding Adjusted Reimbursed Costs

A-19





Adjusted 2007 EPS Excluding the Timeshare Segment and Including the Timeshare License Fee

A-20





Non-GAAP Financial Measures

A-21






MARRIOTT INTERNATIONAL, INC.


NON-GAAP FINANCIAL MEASURES


ADJUSTED CONSOLIDATED STATEMENTS OF INCOME


FOURTH QUARTER 2011 AND 2010


(in millions, except per share amounts)

















As Reported
16 Weeks Ended
December 30, 2011

Timeshare
Spin-off
Adjustments ( 10)

As Adjusted
16 Weeks Ended
December 30, 2011 **


As Reported
16 Weeks Ended
December 31, 2010

Timeshare
Spin-off
Adjustments ( 10)

Other Charges
and
Certain Tax Items

As Adjusted
16 Weeks Ended
December 31, 2010 **


Percent
Better (Worse)
Adjusted 2011
vs. Adjusted 2010




























REVENUES













Base management fees


$ 183

$ (12)

$ 171


$ 178

$ (18)

$ -

$ 160


7


Franchise fees


159

16

175


136

20

-

156


12


Incentive management fees


74

-

74


75

-

-

75


(1)


Owned, leased, corporate housing and other revenue (1 )


356

-

356


342

-

-

342


4


Timeshare sales and services (2)


238

(238)

-


372

(372)

-

-


-


Cost reimbursements (3 )


2,683

(58)

2,625


2,539

(78)

-

2,461


7


Total Revenues


3,693

(292)

3,401


3,642

(448)

-

3,194


6















OPERATING COSTS AND EXPENSES













Owned, leased and corporate housing - direct (4 )


300

-

300


301

-

-

301


-


Timeshare - direct


209

(209)

-


329

(329)

-

-


-


Timeshare strategy - impairment charges (5 )


-

-

-


-

-

-

-


-


Reimbursed costs


2,683

(58)

2,625


2,539

(78)

-

2,461


(7)


General, administrative and other (6 )


254

(35)

219


351

(38)

(98)

215


(2)


Total Expenses


3,446

(302)

3,144


3,520

(445)

(98)

2,977


(6)















OPERATING INCOME (LOSS)


247

10

257


122

(3)

98

217


18















Gains (losses) and other income (7 )


4

(3)

1


28

(20)

-

8


(88)


Interest expense


(47)

5

(42)


(50)

11

-

(39)


(8)


Interest income


5

2

7


8

3

-

11


(36)


Equity in (losses) earnings (8 )


(7)

-

(7)


2

(13)

-

(11)


36















INCOME (LOSS) BEFORE INCOME TAXES


202

14

216


110

(22)

98

186


16















(Provision) benefit for income taxes


(61)

4

(57)


63

9

(123)

(51)


(12)















NET INCOME (LOSS)


$ 141

$ 18

$ 159


$ 173

$ (13)

$ (25)

$ 135


18















EARNINGS (LOSSES) PER SHARE - Basic













Earnings (losses) per share (9 )


$ 0.42

$ 0.05

$ 0.47


$ 0.48

$ (0.04)

$ (0.07)

$ 0.37


27















EARNINGS (LOSSES) PER SHARE - Diluted













Earnings (losses) per share (9 )


$ 0.41

$ 0.05

$ 0.46


$ 0.46

$ (0.04)

$ (0.07)

$ 0.35


31




























Basic Shares


335.6

335.6

335.6


365.6

365.6

365.6

365.6




Diluted Shares


346.4

346.4

346.4


382.0

382.0

382.0

382.0






























See page A-6 for footnote references.






















A-1
















MARRIOTT INTERNATIONAL, INC.


NON-GAAP FINANCIAL MEASURES


ADJUSTED CONSOLIDATED STATEMENTS OF INCOME


FULL YEAR 2011 AND 2010


(in millions, except per share amounts)


















As Reported
52 Weeks Ended
December 30, 2011

Timeshare
Spin-off
Adjustments ( 10)

Other Charges
and
Certain Tax Items

As Adjusted
52 Weeks Ended
December 30, 2011 **


As Reported
52 Weeks Ended
December 31, 2010

Timeshare
Spin-off
Adjustments ( 10)

Other Charges
and
Certain Tax Items

As Adjusted
52 Weeks Ended
December 31, 2010 **


Percent
Better (Worse)
Adjusted 2011
vs. Adjusted 2010






























REVENUES














Base management fees


$ 602

$ (56)

$ -

$ 546


$ 562

$ (60)

$ -

$ 502


9


Franchise fees


506

60

-

566


441

64

-

505


12


Incentive management fees


195

-

-

195


182

-

-

182


7


Owned, leased, corporate housing and other revenue (1 )


1,083

-

-

1,083


1,046

-

-

1,046


4


Timeshare sales and services (2)


1,088

(1,088)

-

-


1,221

(1,221)

-

-


-


Cost reimbursements (3 )


8,843

(268)

-

8,575


8,239

(251)

-

7,988


7


Total Revenues


12,317

(1,352)

-

10,965


11,691

(1,468)

-

10,223


7
















OPERATING COSTS AND EXPENSES














Owned, leased and corporate housing - direct (4 )


943

-

-

943


955

-

-

955


1


Timeshare - direct


929

(929)

-

-


1,022

(1,022)

-

-


-


Timeshare strategy - impairment charges (5 )


324

(324)

-

-


-

-

-

-


-


Reimbursed costs


8,843

(268)

-

8,575


8,239

(251)

-

7,988


(7)


General, administrative and other (6 )


752

(99)

(10)

643


780

(89)

(98)

593


(8)


Total Expenses


11,791

(1,620)

(10)

10,161


10,996

(1,362)

(98)

9,536


(7)
















OPERATING INCOME (LOSS)


526

268

10

804


695

(106)

98

687


17
















(Losses) gains and other income (7 )


(7)

(3)

18

8


35

(20)

-

15


(47)


Interest expense


(164)

29

-

(135)


(180)

43

-

(137)


1


Interest income


14

10

-

24


19

10

-

29


(17)


Equity in losses (8 )


(13)

(4)

-

(17)


(18)

(3)

-

(21)


19
















INCOME (LOSS) BEFORE INCOME TAXES


356

300

28

684


551

(76)

98

573


19
















(Provision) benefit for income taxes


(158)

(40)

(11)

(209)


(93)

29

(123)

(187)


(12)
















NET INCOME (LOSS)


$ 198

$ 260

$ 17

$ 475


$ 458

$ (47)

$ (25)

$ 386


23
















EARNINGS (LOSSES) PER SHARE - Basic














Earnings (losses) per share (9 )


$ 0.56

$ 0.74

$ 0.05

$ 1.36


$ 1.26

$ (0.13)

$ (0.07)

$ 1.07


27
















EARNINGS (LOSSES) PER SHARE - Diluted














Earnings (losses) per share (9 )


$ 0.55

$ 0.72

$ 0.05

$ 1.31


$ 1.21

$ (0.12)

$ (0.07)

$ 1.02


28






























Basic Shares


350.1

350.1

350.1

350.1


362.8

362.8

362.8

362.8




Diluted Shares


362.3

362.3

362.3

362.3


378.3

378.3

378.3

378.3
































See page A-6 for footnote references.























A-2

















MARRIOTT INTERNATIONAL, INC.


NON-GAAP FINANCIAL MEASURES


ADJUSTED CONSOLIDATED STATEMENTS OF INCOME


FIRST QUARTER 2011 AND 2010


(in millions, except per share amounts)
















As Reported
12 Weeks Ended
March 25, 2011

Timeshare
Spin-off
Adjustments ( 10)

As Adjusted
12 Weeks Ended
March 25, 2011 **


As Reported
12 Weeks Ended
March 26, 2010

Timeshare
Spin-off
Adjustments ( 10)

As Adjusted
12 Weeks Ended
March 26, 2010 **


Percent
Better (Worse)
Adjusted 2011
vs. Adjusted 2010


























REVENUES












Base management fees


$ 134

$ (14)

$ 120


$ 125

$ (14)

$ 111


8


Franchise fees


103

14

117


91

14

105


11


Incentive management fees


42

-

42


40

-

40


5


Owned, leased, corporate housing and other revenue (1 )


224

-

224


229

-

229


(2)


Timeshare sales and services (2)


276

(276)

-


285

(285)

-


-


Cost reimbursements (3 )


1,999

(62)

1,937


1,860

(57)

1,803


7


Total Revenues


2,778

(338)

2,440


2,630

(342)

2,288


7














OPERATING COSTS AND EXPENSES












Owned, leased and corporate housing - direct (4 )


204

-

204


217

-

217


6


Timeshare - direct


225

(225)

-


235

(235)

-


-


Timeshare strategy - impairment charges (5 )


-

-

-


-

-

-


-


Reimbursed costs


1,999

(62)

1,937


1,860

(57)

1,803


(7)


General, administrative and other (6 )


159

(18)

141


138

(19)

119


(18)


Total Expenses


2,587

(305)

2,282


2,450

(311)

2,139


(7)














OPERATING INCOME (LOSS)


191

(33)

158


180

(31)

149


6














Gains and other income (7 )


2

-

2


1

-

1


100


Interest expense


(41)

9

(32)


(45)

11

(34)


6


Interest income


4

3

7


4

2

6


17


Equity in (losses) earnings (8 )


(4)

-

(4)


(11)

5

(6)


33














INCOME (LOSS) BEFORE INCOME TAXES


152

(21)

131


129

(13)

116


13














(Provision) benefit for income taxes


(51)

8

(43)


(46)

4

(42)


(2)














NET INCOME (LOSS)


$ 101

$ (13)

$ 88


$ 83

$ (9)

$ 74


19














EARNINGS (LOSSES) PER SHARE - Basic












Earnings (losses) per share (9 )


$ 0.27

$ (0.04)

$ 0.24


$ 0.23

$ (0.02)

$ 0.21


14














EARNINGS (LOSSES) PER SHARE - Diluted












Earnings (losses) per share (9 )


$ 0.26

$ (0.03)

$ 0.23


$ 0.22

$ (0.02)

$ 0.20


15


























Basic Shares


367.1

367.1

367.1


359.4

359.4

359.4




Diluted Shares


381.8

381.8

381.8


373.3

373.3

373.3




See page A-6 for footnote references.




















A-3















MARRIOTT INTERNATIONAL, INC.


NON-GAAP FINANCIAL MEASURES


ADJUSTED CONSOLIDATED STATEMENTS OF INCOME


SECOND QUARTER 2011 AND 2010


(in millions, except per share amounts)
















As Reported
12 Weeks Ended
June 17, 2011

Timeshare
Spin-off
Adjustments ( 10)

As Adjusted
12 Weeks Ended
June 17, 2011 **


As Reported
12 Weeks Ended
June 18, 2010

Timeshare
Spin-off
Adjustments ( 10)

As Adjusted
12 Weeks Ended
June 18, 2010 **


Percent
Better (Worse)
Adjusted 2011
vs. Adjusted 2010


























REVENUES












Base management fees


$ 149

$ (14)

$ 135


$ 136

$ (14)

$ 122


11


Franchise fees


120

15

135


105

15

120


13


Incentive management fees


50

-

50


46

-

46


9


Owned, leased, corporate housing and other revenue (1)


249

-

249


255

-

255


(2)


Timeshare sales and services (2)


288

(288)

-


289

(289)

-


-


Cost reimbursements (3)


2,116

(80)

2,036


1,940

(57)

1,883


8


Total Revenues


2,972

(367)

2,605


2,771

(345)

2,426


7














OPERATING COSTS AND EXPENSES












Owned, leased and corporate housing - direct (4)


220

-

220


224

-

224


2


Timeshare - direct


245

(245)

-


239

(239)

-


-


Timeshare strategy - impairment charges (5)


-

-

-


-

-

-


-


Reimbursed costs


2,116

(80)

2,036


1,940

(57)

1,883


(8)


General, administrative and other (6)


159

(19)

140


142

(14)

128


(9)


Total Expenses


2,740

(344)

2,396


2,545

(310)

2,235


(7)














OPERATING INCOME (LOSS)


232

(23)

209


226

(35)

191


9














Gains (losses) and other income (7)


3

(1)

2


3

-

3


(33)


Interest expense


(37)

8

(29)


(44)

11

(33)


12


Interest income


3

2

5


3

3

6


(17)


Equity in (losses) earnings (8)


-

-

-


(4)

3

(1)


100














INCOME (LOSS) BEFORE INCOME TAXES


201

(14)

187


184

(18)

166


13














(Provision) benefit for income taxes


(66)

5

(61)


(65)

8

(57)


(7)














NET INCOME (LOSS)


$ 135

$ (9)

$ 126


$ 119

$ (10)

$ 109


16














EARNINGS (LOSSES) PER SHARE - Basic












Earnings (losses) per share (9)


$ 0.38

$ (0.02)

$ 0.35


$ 0.33

$ (0.03)

$ 0.30


17














EARNINGS (LOSSES) PER SHARE - Diluted












Earnings (losses) per share (9)


$ 0.37

$ (0.02)

$ 0.34


$ 0.31

$ (0.03)

$ 0.29


17


























Basic Shares


356.9

356.9

356.9


362.1

362.1

362.1




Diluted Shares


369.4

369.4

369.4


377.4

377.4

377.4




See page A-6 for footnote references.




















A-4















MARRIOTT INTERNATIONAL, INC.


NON-GAAP FINANCIAL MEASURES


ADJUSTED CONSOLIDATED STATEMENTS OF INCOME


THIRD QUARTER 2011 AND 2010


(in millions, except per share amounts)

















As Reported
12 Weeks Ended
September 9, 2011

Timeshare
Spin-off
Adjustments ( 10)

Other Charges
and
Certain Tax Items

As Adjusted
12 Weeks Ended
September 9, 2011 **


As Reported
12 Weeks Ended
September 10, 2010

Timeshare
Spin-off
Adjustments ( 10)

As Adjusted
12 Weeks Ended
September 10, 2010 **


Percent
Better (Worse)
Adjusted 2011
vs. Adjusted 2010




























REVENUES













Base management fees


$ 136

$ (16)

$ -

$ 120


$ 123

$ (14)

$ 109


10


Franchise fees


124

15

-

139


109

15

124


12


Incentive management fees


29

-

-

29


21

-

21


38


Owned, leased, corporate housing and other revenue (1)


254

-

-

254


220

-

220


15


Timeshare sales and services (2)


286

(286)

-

-


275

(275)

-


-


Cost reimbursements (3)


2,045

(68)

-

1,977


1,900

(59)

1,841


7


Total Revenues


2,874

(355)

-

2,519


2,648

(333)

2,315


9















OPERATING COSTS AND EXPENSES













Owned, leased and corporate housing - direct (4)


219

-

-

219


213

-

213


(3)


Timeshare - direct


250

(250)

-

-


219

(219)

-


-


Timeshare strategy - impairment charges (5)


324

(324)

-

-


-

-

-


-


Reimbursed costs


2,045

(68)

-

1,977


1,900

(59)

1,841


(7)


General, administrative and other (6)


180

(27)

(10)

143


149

(18)

131


(9)


Total Expenses


3,018

(669)

(10)

2,339


2,481

(296)

2,185


(7)















OPERATING (LOSS) INCOME


(144)

314

10

180


167

(37)

130


38















(Losses) gains and other income (7)


(16)

1

18

3


3

-

3


-


Interest expense


(39)

7

-

(32)


(41)

10

(31)


(3)


Interest income


2

3

-

5


4

2

6


(17)


Equity in (losses) earnings (8)


(2)

(4)

-

(6)


(5)

2

(3)


(100)















(LOSS) INCOME BEFORE INCOME TAXES


(199)

321

28

150


128

(23)

105


43















Benefit (provision) for income taxes


20

(57)

(11)

(48)


(45)

8

(37)


(30)















NET (LOSS) INCOME


$ (179)

$ 264

$ 17

$ 102


$ 83

$ (15)

$ 68


50















(LOSSES) EARNINGS PER SHARE - Basic













(Losses) earnings per share (9)


$ (0.52)

$ 0.76

$ 0.05

$ 0.30


$ 0.23

$ (0.04)

$ 0.19


58















(LOSSES) EARNINGS PER SHARE - Diluted













(Losses) earnings per share (9)


$ (0.52)

$ 0.76

$ 0.05

$ 0.29


$ 0.22

$ (0.04)

$ 0.18


61




























Basic Shares


345.4

345.4

345.4

345.4


363.1

363.1

363.1




Diluted Shares 11


345.4

345.4

345.4

346.4


378.1

378.1

378.1




See page A-6 for footnote references.





















A-5
















MARRIOTT INTERNATIONAL, INC.


NON-GAAP FINANCIAL MEASURES


ADJUSTED CONSOLIDATED STATEMENTS OF INCOME


(in millions, except per share amounts)




** 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) – Reflects the following 2011 third quarter impairments: inventory $256 million, land $62 million, and other impairments $6 million, all of which are allocated to the Timeshare segment.


(6) – General, administrative and other expenses include the overhead costs allocated to our segments, and our corporate overhead costs and general expenses.


(7) – Gains (losses) 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) earnings 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 due to rounding.


(10) – The adjusted consolidated statements of income are presented as if the Timeshare spin-off had occurred on January 2, 2010.


(11) – 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-6





MARRIOTT INTERNATIONAL, INC.


TOTAL LODGING PRODUCTS (1)


































Number of Properties


Number of Rooms/Suites


Brand


December 30,
2011

December 31,
2010

vs. December 31,
2010


December 30,
2011

December 31,
2010

vs. December 31,
2010












Domestic Full-Service










Marriott Hotels & Resorts


353

357

(4)


142,881

143,349

(468)


Renaissance Hotels


80

78

2


29,229

28,288

941


Autograph Collection


17

13

4


5,207

3,828

1,379


Domestic Limited-Service










Courtyard


805

795

10


113,413

111,634

1,779


Fairfield Inn & Suites


667

648

19


60,392

58,510

1,882


SpringHill Suites


285

273

12


33,466

31,961

1,505


Residence Inn


597

595

2


72,076

71,571

505


TownePlace Suites


200

192

8


20,048

19,320

728


International










Marriott Hotels & Resorts


202

197

5


62,714

60,670

2,044


Renaissance Hotels


74

68

6


23,737

22,720

1,017


Autograph Collection


5

-

5


548

-

548


Courtyard


108

97

11


21,306

19,435

1,871


Fairfield Inn & Suites


13

10

3


1,568

1,235

333


SpringHill Suites


2

1

1


299

124

175


Residence Inn


20

18

2


2,791

2,559

232


TownePlace Suites


1

1

-


105

105

-


Marriott Executive Apartments


23

23

-


3,700

3,775

(75)


Luxury










The Ritz-Carlton - Domestic


39

39

-


11,587

11,587

-


The Ritz-Carlton - International


39

35

4


11,996

10,457

1,539


Bulgari Hotels & Resorts


2

2

-


117

117

-


Edition


1

1

-


78

353

(275)


The Ritz-Carlton Residential


32

28

4


3,838

3,085

753


The Ritz-Carlton Serviced Apartments


4

3

1


579

458

121


Unconsolidated Joint Ventures










AC Hotels by Marriott


80

-

80


8,371

-

8,371


Autograph Collection


5

-

5


350

-

350


Timeshare (2 )


64

71

(7)


12,800

12,963

(163)












Total


3,718

3,545

173


643,196

618,104

25,092






















(1) Total Lodging Products excludes the 2,166 and 2,043 corporate housing rental units as of December 30, 2011 and December 31, 2010, respectively.


(2) The methodology used to report the number of timeshare properties and rooms/suites changed in Q4 2011 as a result of the Timeshare spin-off.




A-7













MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

Constant $



Comparable Company-Operated International Properties(1)






Four Months Ended December 31, 2011 and December 31, 2010




REVPAR


Occupancy


Average Daily Rate


Region


2011

vs. 2010


2011

vs. 2010


2011

vs. 2010


Caribbean & Latin America


$128.66

10.9%


69.8%

2.1%

pts.


$184.44

7.5%


Europe


$131.66

1.3%


73.7%

-1.6%

pts.


$178.72

3.5%


Middle East & Africa


$89.50

-8.4%


62.5%

-9.5%

pts.


$143.11

5.5%


Asia Pacific


$108.11

11.1%


75.2%

4.0%

pts.


$143.78

5.3%














Regional Composite(2)


$120.51

4.2%


72.6%

-0.2%

pts.


$166.01

4.5%














International Luxury(3)


$204.50

5.5%


63.7%

-1.7%

pts.


$321.28

8.4%














Total International(4)


$130.93

4.5%


71.5%

-0.4%

pts.


$183.16

5.0%














Worldwide(5 )


$112.21

5.6%


69.0%

1.2%

pts.


$162.69

3.7%


























Comparable Systemwide International Properties(1)






Four Months Ended December 31, 2011 and December 31, 2010




REVPAR


Occupancy


Average Daily Rate


Region


2011

vs. 2010


2011

vs. 2010


2011

vs. 2010


Caribbean & Latin America


$107.09

9.4%


66.6%

1.3%

pts.


$160.74

7.3%


Europe


$127.56

1.6%


73.5%

-1.2%

pts.


$173.65

3.3%


Middle East & Africa


$86.04

-8.5%


61.5%

-9.1%

pts.


$139.83

5.1%


Asia Pacific


$117.75

8.4%


75.2%

3.4%

pts.


$156.56

3.4%














Regional Composite(2)


$118.25

3.9%


71.9%

-0.1%

pts.


$164.44

4.1%














International Luxury(3 )


$204.50

5.5%


63.7%

-1.7%

pts.


$321.28

8.4%














Total International(4 )


$126.88

4.1%


71.1%

-0.3%

pts.


$178.49

4.5%














Worldwide(5 )


$91.90

5.9%


67.5%

1.6%

pts.


$136.12

3.3%


























(1) We report financial results on a period basis and international statistics on a monthly basis. Statistics are in constant dollars for September through December. 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 four calendar months ended December 31, 2011 and December 31, 2010, and the United States statistics for the sixteen weeks ended December 30, 2011 and December 31, 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-8















MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

Constant $



Comparable Company-Operated International Properties(1)






Twelve Months Ended December 31, 2011 and December 31, 2010




REVPAR


Occupancy


Average Daily Rate


Region


2011

vs. 2010


2011

vs. 2010


2011

vs. 2010


Caribbean & Latin America


$133.29

10.6%


72.6%

2.8%

pts.


$183.64

6.4%


Europe


$128.21

5.0%


73.2%

0.1%

pts.


$175.20

4.8%


Middle East & Africa


$83.11

-9.3%


58.8%

-11.0%

pts.


$141.22

7.6%


Asia Pacific


$100.69

14.8%


73.1%

5.6%

pts.


$137.80

5.9%














Regional Composite(2)


$116.67

7.0%


71.8%

1.1%

pts.


$162.58

5.4%














International Luxury(3)


$199.53

6.2%


63.8%

-0.5%

pts.


$312.52

7.0%














Total International(4)


$126.96

6.9%


70.8%

0.9%

pts.


$179.38

5.5%














Worldwide(5)


$111.26

6.4%


70.3%

1.5%

pts.


$158.15

4.1%


























Comparable Systemwide International Properties(1)






Twelve Months Ended December 31, 2011 and December 31, 2010




REVPAR


Occupancy


Average Daily Rate


Region


2011

vs. 2010


2011

vs. 2010


2011

vs. 2010


Caribbean & Latin America


$113.14

9.9%


69.3%

2.3%

pts.


$163.29

6.2%


Europe


$123.95

5.3%


72.3%

0.5%

pts.


$171.34

4.6%


Middle East & Africa


$80.55

-8.5%


58.4%

-9.7%

pts.


$137.92

6.7%


Asia Pacific


$106.97

10.3%


72.6%

4.4%

pts.


$147.36

3.6%














Regional Composite(2)


$114.03

6.4%


70.8%

1.1%

pts.


$161.01

4.7%














International Luxury(3)


$199.53

6.2%


63.8%

-0.5%

pts.


$312.52

7.0%














Total International(4)


$122.59

6.3%


70.1%

0.9%

pts.


$174.82

4.9%














Worldwide(5)


$92.69

6.4%


69.6%

2.0%

pts.


$133.26

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 December. 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 twelve calendar months ended December 31, 2011 and December 31, 2010, and the United States statistics for the fifty-two weeks ended December 30, 2011 and December 31, 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-9















MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS



Comparable Company-Operated North American Properties(1)






Sixteen Weeks Ended December 30, 2011 and December 31, 2010




REVPAR


Occupancy


Average Daily Rate


Brand


2011

vs. 2010


2011

vs. 2010


2011

vs. 2010


Marriott Hotels & Resorts


$116.45

5.0%


68.9%

1.7%

pts.


$169.06

2.4%


Renaissance Hotels


$112.91

6.6%


68.5%

3.1%

pts.


$164.80

1.7%


Composite North American Full-Service(2)


$115.79

5.3%


68.8%

2.0%

pts.


$168.27

2.3%


The Ritz-Carlton(3)


$203.45

9.3%


66.0%

1.1%

pts.


$308.44

7.5%


Composite North American Full-Service & Luxury(4)


$126.20

6.0%


68.5%

1.9%

pts.


$184.31

3.2%


Residence Inn


$84.60

4.6%


72.3%

0.7%

pts.


$117.02

3.6%


Courtyard


$73.08

7.5%


64.8%

2.4%

pts.


$112.85

3.5%


TownePlace Suites


$53.59

14.3%


70.4%

5.3%

pts.


$76.10

5.6%


SpringHill Suites


$63.60

5.5%


64.7%

1.4%

pts.


$98.29

3.2%


Composite North American Limited-Service(5)


$74.53

6.6%


67.2%

1.9%

pts.


$110.90

3.6%


Composite - All(6)


$104.52

6.2%


67.9%

1.9%

pts.


$153.84

3.2%


























Comparable Systemwide North American Properties(1)
















Sixteen Weeks Ended December 30, 2011 and December 31, 2010




REVPAR


Occupancy


Average Daily Rate


Brand


2011

vs. 2010


2011

vs. 2010


2011

vs. 2010


Marriott Hotels & Resorts


$100.36

5.0%


65.7%

1.4%

pts.


$152.67

2.8%


Renaissance Hotels


$100.60

6.2%


67.2%

2.1%

pts.


$149.60

2.8%


Composite North American Full-Service(2)


$100.41

5.2%