Hotel Online  Special Report
.

advertisement

..
..
Marriott International Inc. 2nd Qtr Net Income Fell to
$138 million from $160 million in the 2nd Qtr of 2004
-
Cites Charges Related to CTF Transaction and New Bedding
Incentive Program for 14% Decline in Earnings 
Key Lodging Statistics

.

WASHINGTON, July 14, 2005 - Marriott International, Inc. (NYSE: MAR) today reported diluted earnings per share (EPS) of $0.59 in the second quarter of 2005 and net income of $138 million. Results included $94 million of pre-tax charges ($0.26 per share after-tax) primarily due to the non-cash write-off of management agreements in connection with the CTF transaction, $29 million of pre-tax costs ($0.08 per share after-tax) related to the company's new bedding incentive program, and $44 million of net income ($0.19 per share) from the synthetic fuel operations. EPS excluding the synthetic fuel operations, CTF transaction and bedding incentive program was $0.75 in the 2005 second quarter, up 39 percent from comparable EPS in the 2004 second quarter.
 
  • Worldwide, systemwide revenue per available room (REVPAR) increased 11.1 percent (10.4 percent using constant dollars) over second quarter 2004, driven by an 8.9 percent increase in average daily rate and a 1.5 percentage point increase in occupancy to over 75 percent;
  • Incentive management fees grew 44 percent to $52 million, driven by a 170 basis point increase in worldwide property level house profit margins; total fees rose 18 percent to $253 million;
  • The company opened nearly 6,000 rooms in the second quarter and increased its pipeline of hotels under construction, awaiting conversion, or approved for development to 60,000 rooms. 25,000 to 30,000 rooms are expected to open in 2005;
  • During the quarter, 7.2 million shares were repurchased for $457 million;
  • Notes receivable repayments and asset sales, including timeshare notes, yielded proceeds of nearly $700 million during the quarter;
  • The company expects North American systemwide REVPAR to increase 8 percent to 10 percent for the full year 2005 and expects earnings per share to total $2.68 to $2.78 (including $0.26 for charges associated with the CTF transaction, $0.10 for costs related to the bedding incentive program and $0.49 to $0.51 of income from synthetic fuel operations).

J.W. Marriott, Jr., chairman and chief executive officer of Marriott International, said, "The economy continues to be strong and so does our business. In the second quarter, surging U.S. travel demand drove occupancy and room rates higher in most markets, from New York and Seattle to New Orleans and San Francisco. Marriott's occupancy and room rates improved due to accelerating corporate demand, growing group meeting attendance and increasing global travel.

"Outside the U.S., international tourist and business travel demand also increased, driving Marriott's international managed REVPAR to historic highs. We continue to expand to meet that international demand with nearly 60 hotels in over 30 countries outside North America in our development pipeline. Globally, our pipeline of properties under construction, awaiting conversion or approved for development increased during the quarter to approximately 370 hotels and 60,000 rooms.

"While we are generating strong results today, we are setting the stage for an even better Marriott experience tomorrow. We and our owners and franchisees continue to invest in product - our new bedding package, our internet and technology offerings, and new room and public space designs. In 2005, we are rolling out new luxurious bedding for 628,000 beds at approximately 2,400 hotels, and renovating 331 company-operated hotels worldwide.

"With robust industry demand, our increasing share of expected low industry supply growth and the strength of our brand preference, we expect continued pricing power and strong financial results for the remainder of 2005 and beyond," said Mr. Marriott.

In the second fiscal quarter (12 week period from March 26, 2005 to June 17, 2005), REVPAR for the company's 2,250 comparable worldwide systemwide properties increased by 11.1 percent (10.4 percent using constant dollars). Company-operated comparable North American REVPAR increased by 10 percent in the second quarter of 2005; occupancy was up 1 percentage point to 76.2 percent. Robust demand for the company's brands in North America resulted in an 8.5 percent increase in average daily rate. When calculated for the calendar quarter (April 1 - June 30), North American company-operated REVPAR increased 11.5 percent. REVPAR at the comparable company-operated North American full-service hotels (including Marriott Hotels & Resorts, JW Marriott Hotels & Resorts, The Ritz-Carlton, and Renaissance Hotels & Resorts) increased by 10.3 percent during the quarter (12 percent for the calendar quarter), driven by an 8.2 percent increase in average daily rate and a 1.4 percentage point occupancy gain to 75.9 percent. North American company- operated REVPAR for comparable select-service and extended-stay brands (including Courtyard, Fairfield Inn, Residence Inn, TownePlace Suites, and SpringHill Suites) increased 9.2 percent (10.2 percent for the calendar quarter), driven by an 8.8 percent increase in average daily rate and a slight increase in occupancy to 76.6 percent.

International systemwide REVPAR increased 17.3 percent (13.4 percent using constant dollars), including a 13.6 percent increase in rate and a 2.4 percentage point increase in occupancy. The company experienced continued strength in Asia and the Middle East in the second quarter, with REVPAR in China up 23 percent and REVPAR in Egypt up 17 percent. Demand for the company's resorts in Mexico drove REVPAR up 14 percent in that market while REVPAR at the company's Caribbean hotels increased 16 percent.

The company added 34 hotels (5,932 rooms) to the worldwide lodging portfolio during the second quarter, including Marriott hotels in Okinawa and Beijing, the Renaissance Paris Vendome hotel and the Ritz-Carlton hotel in Jakarta. Five properties (670 rooms), all first generation Fairfield Inns, exited the system and one hotel (276 rooms) was closed for renovation. At quarter end, the company's lodging group encompassed 2,676 hotels and timeshare resorts (489,430 rooms).

MARRIOTT REVENUES totaled $2.7 billion in the second quarter of 2005, an 11 percent increase from 2004. Base management and franchise fees increased 13 percent to $201 million reflecting growth in units and REVPAR. Franchise fee growth was negatively impacted by the sale of the Ramada International franchise business in 2004, and the conversion of 46 hotels in the United Kingdom in the second quarter of 2005 from franchise to management agreements, which resulted in a shift from franchise to base management fees. With a nearly 10 percent increase in room rates at company-operated properties worldwide (using actual exchange rates), company-operated hotels generated house profit margins of 37.9 percent, a 170 basis point improvement over the prior year quarter. House profit margins for North American company-operated properties increased 120 basis points to 37.7 percent and house profit per available room increased nearly 12 percent. Property level EBITDA margins for North American company-operated properties, which include deductions for insurance and property taxes, but excludes management fees, increased 150 basis points.

Driven by the strong property level profits, incentive management fees rose 44 percent to $52 million. In the 2005 second quarter, including the 120 hotels in the Courtyard joint venture, 42 percent of the company's managed properties paid incentive fees, compared to 28 percent in the year ago quarter.

Property level room revenue booked through Marriott.com totaled $613 million during the second quarter, an increase of 43 percent over the prior year. Marriott.com represented 12 percent of total property level room reservations during the quarter.

Revenue from timeshare interval sales and services increased 19 percent during the second quarter of 2005, largely due to higher financially reportable development revenue. Timeshare contract sales, including sales made by joint venture projects declined 1 percent, primarily due to limited available inventory at the Ritz-Carlton fractional resorts in St. Thomas and Bachelor Gulch, Colorado. Those resorts experienced exceptional demand in 2004. Contract sales for the Marriott Vacation Club resorts rose 11 percent.

LODGING OPERATING INCOME benefited from higher fees and strong timeshare profits but showed a decline of 48 percent in the second quarter to $77 million, largely as a result of a $94 million charge associated with the CTF transaction, primarily related to the non-cash write-off of management agreements, which were replaced by new long-term management agreements, $29 million of incentives paid to owners and franchisees to accelerate the roll- out of the new bedding program, $6 million in expense related to guarantees at two hotels, and a $12 million payment made to retain a management agreement, offset in part by the receipt of a $10 million fee for the termination of a hotel management agreement.

SYNTHETIC FUEL. Net income generated from the synthetic fuel joint ventures totaled $44 million in the second quarter. The ventures contributed earnings per share of $0.19 compared to $0.13 in the prior year quarter. Following initiation of an IRS challenge to the placed-in-service date of three of the four synthetic fuel plants, the company amended the agreement with the joint venture partner, and Marriott received a larger allocation of the tax credits generated by the joint venture in the second quarter of 2005 compared to the 2004 second quarter. After the close of the second quarter the IRS ruled that the synthetic fuel plants met the placed-in-service requirement under Section 29 of the Internal Revenue Code. Subsequently, the company entered into an amended agreement with the joint venture partner and the allocation of tax credits returned to approximately 50 percent effective June 1, 2005. The company's tax benefit for the quarter was $20 million, including the $68 million tax benefit from the synthetic fuel operations.

GAINS AND OTHER INCOME (excluding synthetic fuel) in the second quarter included the $29 million gain on the sale of timeshare mortgage notes, $22 million of gains resulting from the sale or refinancing of real estate loans and $4 million of other gains. In the second quarter of 2004, gains from the timeshare note sale totaled $27 million and other gains totaled $12 million.

INTEREST EXPENSE declined $3 million to $21 million. The company retired its $275 million Series D senior notes in April 2005 and issued $350 million in new Series F senior notes in June 2005.

INTEREST INCOME was down $14 million to $25 million in the second quarter of 2005 due to lower notes receivable balances. Since the 2004 second quarter, the company's loan associated with the Ramada Two Flags joint venture was repaid, the company sold two real estate notes and as a result of refinancing, several notes were paid off, including the notes receivable associated with the Courtyard joint venture.

In the second quarter, the company received nearly $700 million in proceeds from notes receivable repayments and asset sales, including timeshare notes.

Adjusted earnings before interest expense, taxes, depreciation and amortization (Adjusted EBITDA) rose 20 percent to $334 million in the second quarter. Total debt at the end of the second quarter of 2005 was $1,432 million and the cash balance totaled $471 million, compared to $1,325 million of debt and $770 million of cash at the end of 2004. As a result of cash flows generated from strong operations and capital recycling, the company was able to repurchase $785 million of stock in the first half of 2005 and make substantial investments in its lodging business, while increasing debt, net of cash, only $400 million.

The company repurchased 7.2 million shares of common stock in the second quarter of 2005 at a cost of $457 million and has repurchased a total of 13.6 million shares year-to-date through July 13, 2005, at a cost of $872 million. The current remaining share repurchase authorization totals approximately 5 million shares.

OUTLOOK

Given the strong results year to date, the company continues to estimate 2005 systemwide North American REVPAR growth of 8 percent to 10 percent, primarily driven by rate. The company plans to open 25,000 to 30,000 new rooms. Under these assumptions, fees should grow to $1,020 million to $1,030 million in 2005, an increase of 17 to 18 percent over 2004.

Timeshare interval sales and services revenues, net of direct expenses, should increase approximately 25 to 28 percent for the year, to $261 million to $267 million. The company plans to complete another timeshare mortgage note sale transaction in the fourth quarter.

As part of the new bedding program that will add new luxurious bedding to 628,000 beds at approximately 2,400 hotels across eight brands worldwide, Marriott offered owners and franchisees an incentive to ensure that guests can enjoy the comfort and luxury of the new bedding by year-end 2005. In the second quarter, Marriott incurred a $29 million charge for bedding incentives and expects to incur additional costs of approximately $5 million in the third quarter.

The company expects general, administrative and other expenses to decrease from $607 million in 2004 to a range of $593 million to $599 million in 2005, excluding roughly $35 million for the bedding incentive program and the $94 million charge associated with the CTF transaction.

Given the above items, the company estimates that lodging operating income will total $710 million to $720 million in 2005 (including roughly $35 million of costs for the bedding incentives and the $94 million charge associated with the CTF transaction), an increase of 23 to 25 percent, or 46 to 48 percent without the impact of the bedding incentives and CTF charges.

The company's EPS guidance for 2005 includes roughly $0.49 to $0.51 of after tax earnings per share from the synthetic fuel business.

The company expects the notes receivable balance to continue to decline and anticipates reinvesting the cash in attractive investment opportunities, including share repurchases. With the reduction in the notes receivable balance, the company anticipates net interest (interest expense, interest income and provision for loan losses) will decline to an expense of roughly $45 million to $50 million in 2005 from income of $55 million in 2004.

In total, the company estimates full year 2005 EPS to range from $2.68 to $2.78 (including $0.10 of after-tax earnings per share impact for costs associated with the company's new bedding incentives, $0.49 to $0.51 of after- tax earnings per share benefit from the synthetic fuel business, and $0.26 of after-tax earnings per share impact from the charge associated with the CTF transaction).

In the third quarter 2005, the company anticipates North American systemwide REVPAR growth of 7 percent to 9 percent, with an approximately 1.5 to 2.0 percentage point improvement in house profit margins.

Under the above assumptions, the company currently estimates the following results for the third quarter and full year 2005:

                           Third Quarter           Fiscal Year 2005
   Total fee revenue      $215 million to          $1,020 million to
                           $220 million             $1,030 million

   Timeshare interval
    sales and services,
    net of direct
    expenses              $62 million to          $261 million to
                           $66 million              $267 million

   General, administrative
    & other expense       $137 million to          $720 million to
                           $141 million             $730 million

   Lodging operating
    income                $170 million to          $710 million to
                           $175 million             $720 million

   Gains (excluding
    synthetic fuel)       $15 million to           $106 million to
                           $20 million              $113 million

   Net interest expense  $15 million to           $45 million to
                           $20 million              $50 million

   Earnings per share
    from synthetic fuel   Approximately $0.12      $0.49 to $0.51

   Earnings per share     $0.61 to $0.65           $2.68 to $2.78

The company expects investment spending in 2005 to total approximately $1.4 billion including $50 million for maintenance capital spending, $800 million for capital expenditures, property acquisitions and timeshare inventory (including $426 million for the acquisition of 17 CTF Holding hotels), $150 million in new mezzanine financing and mortgage loans for hotels developed by owners and franchisees and approximately $350 million to $400 million in equity and other investments (including $170 million investment in the joint venture with Whitbread).
 
 

MARRIOTT INTERNATIONAL, INC.
Financial Highlights
(in millions, except per share amounts)

                                 12 Weeks Ended       12 Weeks Ended
                                 June 17, 2005        June 18, 2004
                               -------------------- ------------------
                                       Synth-              Synth-      Percent
                                        etic                etic       Better/
                                Lodging Fuel  Total Lodging Fuel Total (Worse)
                               -------------------- ------------------ -------
    REVENUES
    Base management fees          $123    $-   $123   $106    $-  $106     16
    Franchise fees                  78     -     78     72     -    72      8
    Incentive management fees       52     -     52     36     -    36     44
    Owned, leased, corporate
     housing and other (1)         180     -    180    182     -   182     (1)
    Timeshare interval sales
     and services (2)              335     -    335    281     -   281     19
    Cost reimbursements (3)      1,795     -  1,795  1,614     - 1,614     11
    Synthetic fuel                   -    98     98      -   111   111    (12)
                                ------ ----- ------  ----- ----- -----
       Total Revenues            2,563    98  2,661  2,291   111 2,402     11

    OPERATING COSTS AND EXPENSES
    Owned, leased and corporate
     housing - direct (4)          138     -    138    157     -   157     12
    Timeshare - direct             269     -    269    245     -   245    (10)
    Reimbursed costs             1,795     -  1,795  1,614     - 1,614    (11)
    General, administrative and
     other (5)                     284     -    284    127     -   127   (124)
    Synthetic fuel                   -   134    134      -   141   141      5
                                ------ ----- ------  ----- ----- -----
       Total Expenses            2,486   134  2,620  2,143   141 2,284    (15)
                                ------ ----- ------  ----- ----- -----
    OPERATING INCOME (LOSS)     $77  $(36)    41   $148  $(30)  118    (65)
                                ====== =====         ===== =====

    Gains and other income (6)                   63                 48     31
    Interest expense                            (21)               (24)    13
    Interest income                              25                 39    (36)
    Provision for loan losses                     -                 (3)   100
    Equity in earnings -
     Other (7)                                    6                  1    500
                                             ------              -----
    INCOME BEFORE INCOME TAXES
     AND MINORITY INTEREST                      114                179    (36)
    Benefit/(Provision) for
     income taxes                                20                (33)   161
                                             ------              -----
    INCOME BEFORE MINORITY
     INTEREST                                   134                146     (8)
    Minority interest -
     Synthetic fuel                               4                 14    (71)
                                             ------              -----
    NET INCOME                                 $138               $160    (14)
                                             ======              =====
    EARNINGS PER SHARE - Basic                $0.63              $0.71    (11)
                                             ======              =====
    EARNINGS PER SHARE - Diluted              $0.59              $0.67    (12)
                                             ======              =====
    Basic Shares                              220.5              226.9
    Diluted Shares                            234.5              240.3
 

    1 - Owned, leased, corporate housing and other revenue includes revenue
        from the properties we own or lease, revenue from our ExecuStay
        business, land rent income and other revenue.
    2 - Timeshare interval sales and services includes total timeshare revenue
        except for base fees, cost reimbursements, note sale gains, and joint
        venture earnings (losses).
    3 - Cost reimbursements include reimbursements from lodging properties for
        Marriott funded operating expenses.
    4 - Owned, leased and corporate housing -- direct expenses include
        operating expenses related to our owned or leased hotels, including
        lease payments, pre-opening expenses and depreciation, plus expenses
        related to our ExecuStay business.
    5 - General, administrative and other expenses include the overhead costs
        allocated to our lodging business segments (including ExecuStay and
        timeshare) and our unallocated corporate overhead costs and general
        expenses.
    6 - Gains and other income includes gains on the sale of real estate.  In
        addition, gains and other income also include the earn-out payments we
        made to the previous owner of the synthetic fuel operations and earn-
        out payments we received from our synthetic fuel joint venture
        partner.
    7 - Equity in earnings -- Other includes our equity in earnings of
        unconsolidated joint ventures.
 
 

                         MARRIOTT INTERNATIONAL, INC.
                             Financial Highlights
                   (in millions, except per share amounts)

                                 24 Weeks Ended       24 Weeks Ended
                                 June 17, 2005        June 18, 2004
                               -------------------- ------------------
                                       Synth-              Synth-      Percent
                                        etic                etic       Better/
                                Lodging Fuel  Total Lodging Fuel Total (Worse)
                                ------- ----  ----- ------- ---- ----- -------
    REVENUES
    Base management fees          $234    $-   $234   $205    $-  $205    14
    Franchise fees                 148     -    148    133     -   133    11
    Incentive management fees      102     -    102     69     -    69    48
    Owned, leased, corporate
     housing and other (1)         347     -    347    338     -   338     3
    Timeshare interval sales
     and services (2)              681     -    681    599     -   599    14
    Cost reimbursements (3)      3,477     -  3,477  3,199     - 3,199     9
    Synthetic fuel                   -   206    206      -   111   111    86
                                ------- ----  ----- ------- ---- -----
       Total Revenues            4,989   206  5,195  4,543   111 4,654    12

    OPERATING COSTS AND EXPENSES
    Owned, leased and corporate
     housing - direct (4)          283     -    283    289     -   289     2
    Timeshare - direct             541     -    541    497     -   497    (9)
    Reimbursed costs             3,477     -  3,477  3,199     - 3,199    (9)
    General, administrative
     and other (5)                 408     -    408    259     -   259   (58)
    Synthetic fuel                   -   287    287      -   141   141  (104)
                                ------- ----  ----- ------- ---- -----
       Total Expenses            4,709   287  4,996  4,244   141 4,385   (14)
                                ------- ----  ----- ------- ---- -----
    OPERATING INCOME (LOSS)       $280  $(81)   199   $299  $(30)  269   (26)
                                ======= ====        ======= ====

    Gains and other income (6)                   58                 52    12
    Interest expense                            (45)               (46)    2
    Interest income                              52                 65   (20)
    Provision for loan losses                   (11)                 -    *
    Equity in earnings/(losses)
     - Synthetic fuel (7)                         -                (28)  100
                   - Other (8)                    1                 (1)  200
                                              -----              -----
    INCOME BEFORE INCOME TAXES
     AND MINORITY INTEREST                      254                311   (18)
    Benefit/(Provision) for
     income taxes                                15                (51)  129
                                              -----              -----
    INCOME BEFORE MINORITY
     INTEREST                                   269                260     3
    Minority interest -
     Synthetic fuel                              14                 14     -
                                              -----              -----
    NET INCOME                                 $283               $274     3
                                              =====              =====
    EARNINGS PER SHARE - Basic                $1.27              $1.20     6
                                              =====              =====
    EARNINGS PER SHARE - Diluted              $1.19              $1.14     4
                                              =====              =====
    Basic Shares                              223.0              228.2
    Diluted Shares                            237.8              241.5
 

    *  Percent can not be calculated.

    1 - Owned, leased, corporate housing and other revenue includes revenue
        from the properties we own or lease, revenue from our ExecuStay
        business, land rent income and other revenue.
    2 - Timeshare interval sales and services includes total timeshare revenue
        except for base fees, cost reimbursements, note sale gains, and joint
        venture earnings (losses).
    3 - Cost reimbursements include reimbursements from lodging properties for
        Marriott funded operating expenses.
    4 - Owned, leased and corporate housing - direct expenses include
        operating expenses related to our owned or leased hotels, including
        lease payments, pre-opening expenses and depreciation, plus expenses
        related to our ExecuStay business.
    5 - General, administrative and other expenses include the overhead costs
        allocated to our lodging business segments (including ExecuStay and
        timeshare) and our unallocated corporate overhead costs and general
        expenses.
    6 - Gains and other income includes gains on the sale of real estate.  In
        addition, gains and other income for the first half of 2005 also
        include the earn-out payments we made to the previous owner of the
        synthetic fuel operations and earn-out payments we received from our
        synthetic fuel joint venture partner.
    7 - Equity in earnings/(losses) - Synthetic fuel includes our share of the
        equity in earnings of the synthetic fuel joint ventures and the net
        earn-out payments made to our synthetic fuel joint venture partner
        from January 3, 2004 through March 25, 2004. Beginning March 26, 2004,
        the synthetic fuel operations were consolidated as a result of
        adopting FIN 46®, "Consolidation of Variable Interest Entities."
    8 - Equity in earnings/(losses) - Other includes our equity in earnings
        (losses) of unconsolidated joint ventures.
 
 

                         MARRIOTT INTERNATIONAL, INC.
                              Business Segments
                               ($ in millions)
 

                                        Twelve Weeks Ended            Percent
                                   ----------------------------       Better/
                                   June 17, 2005  June 18, 2004       (Worse)
                                   -------------  -------------       -------
    REVENUES

    Full-Service                        $1,751         $1,548           13%
    Select-Service                         293            264           11%
    Extended-Stay                          136            129            5%
    Timeshare                              383            350            9%
                                   -------------  -------------
      Total Lodging (1)                  2,563          2,291           12%
    Synthetic Fuel                          98            111          -12%
                                   -------------  -------------
      Total                             $2,661         $2,402           11%
                                   =============  =============
 

    NET INCOME

    Full-Service                           $30           $113          -73%
    Select-Service                          48             39           23%
    Extended-Stay                           13             18          -28%
    Timeshare                               80             51           57%
                                   -------------  -------------
      Total Lodging financial
       results (1)                         171            221          -23%
    Synthetic Fuel (after-tax)              44             31           42%
    Unallocated corporate expenses         (33)           (33)           -
    Interest income, provision for
     loan losses and interest expense        4             12          -67%
    Income taxes (excluding Synthetic
     Fuel)                                 (48)           (71)          32%
                                   -------------  -------------
      Total                               $138           $160          -14%
                                   =============  =============
 

    1 We consider lodging revenues and lodging financial results to be
      meaningful indicators of our performance because they measure our growth
      in profitability as a lodging company and enable investors to compare
      the sales and results of our lodging operations to those of other
      lodging companies.
 
 
 

                           MARRIOTT INTERNATIONAL, INC.
                              Business Segments
                               ($ in millions)
 

                                     Twenty-Four Weeks Ended          Percent
                                   ----------------------------       Better/
                                   June 17, 2005  June 18, 2004       (Worse)
                                   -------------  -------------       -------

    REVENUES

    Full-Service                        $3,380         $3,053           11%
    Select-Service                         565            511           11%
    Extended-Stay                          262            244            7%
    Timeshare                              782            735            6%
                                   -------------  -------------
      Total Lodging (1)                  4,989          4,543           10%
    Synthetic Fuel                         206            111           86%
                                   -------------  -------------
      Total                             $5,195         $4,654           12%
                                   =============  =============
 

    NET INCOME

    Full-Service                          $146           $213          -31%
    Select-Service                          81             62           31%
    Extended-Stay                           29             28            4%
    Timeshare                              143            101           42%
                                   -------------  -------------
      Total Lodging financial
       results (1)                         399            404           -1%
    Synthetic Fuel (after-tax)              62             42           48%
    Unallocated corporate expenses         (59)           (63)           6%
    Interest income, provision for
     loan losses and interest expense       (4)            19         -121%
    Income taxes (excluding Synthetic
     Fuel)                                (115)          (128)          10%
                                   -------------  -------------
      Total                               $283           $274            3%
                                   =============  =============
 

    1 We consider lodging revenues and lodging financial results to be
      meaningful indicators of our performance because they measure our growth
      in profitability as a lodging company and enable investors to compare
      the sales and results of our lodging operations to those of other
      lodging companies.
 
 
 

                          MARRIOTT INTERNATIONAL, INC.
 

                            Total Lodging Products(1)
    --------------------------------------------------------------------------
                                            Number of       Number of
                                           Properties      Rooms/Suites

                                                  Change              Change
                                                    vs.                 vs.
                                       June 17,  June 18,  June 17,  June 18,
    Brand                                2005      2004      2005      2004
    ---------------------------------  --------  --------  --------  ---------
    Full-Service Lodging
        Marriott Hotels & Resorts           499       17    181,184     4,203
        The Ritz-Carlton                     58        1     18,931       287
        Renaissance Hotels & Resorts        136        6     48,129     1,302
        Bulgari Hotel & Resort                1        -         58         -
        Ramada International                  4     (202)       724   (27,139)
    Select-Service Lodging
        Courtyard                           668       30     96,239     4,795
        Fairfield Inn                       515      (15)    47,397    (2,794)
        SpringHill Suites                   134       18     15,557     2,072
    Extended-Stay Lodging
        Residence Inn                       475       21     56,458     2,439
        TownePlace Suites                   118        6     11,935       473
        Marriott Executive Apartments        16        2      2,809       338
    Timeshare(2)
        Marriott Vacation Club
         International                       44        1      9,160       786
        Horizons by Marriott Vacation
         Club International                   2        -        328        72
        The Ritz-Carlton Club                 4        -        273        21
        Marriott Grand Residence Club         2        -        248         -
                                       ------------------  -------------------
    Total                                 2,676     (115)   489,430   (13,145)
                                       ==================  ===================

    1 Total Lodging Products excludes the 1,817 corporate housing rental
      units.
    2 Includes products in active sales which are not ready for occupancy.
 
 

MARRIOTT INTERNATIONAL, INC.
                            KEY LODGING STATISTICS
 

              North American Comparable Company-Operated Properties(1)
    --------------------------------------------------------------------------
                            Twelve Weeks Ended June 17, 2005 and June 18, 2004
                            --------------------------------------------------
                                                               Average Daily
                               REVPAR          Occupancy            Rate
                               ------          ---------       -------------
     Brand                  2005 vs. 2004   2005  vs. 2004     2005 vs. 2004
    --------------------------------------------------------------------------
     Marriott Hotels and
      Resorts               $119.90   9.8%  76.5%  1.3% pts.  $156.77   7.9%
     The Ritz-Carlton (2)   $229.89  11.3%  74.5%  0.4% pts.  $308.59  10.7%
     Renaissance Hotels and
      Resorts               $110.14  11.7%  74.2%  2.7% pts.  $148.38   7.6%
     Composite - Full-
      Service               $129.06  10.3%  75.9%  1.4% pts.  $169.98   8.2%
     Residence Inn           $88.56   7.6%  81.7%  0.4% pts.  $108.45   7.1%
     Courtyard               $79.14   9.4%  74.1% -0.1% pts.  $106.85   9.5%
     TownePlace Suites       $54.41   7.6%  77.8% -0.3% pts.   $69.93   8.1%
     SpringHill Suites       $74.38  17.3%  77.9%  4.8% pts.   $95.54  10.1%
     Composite - Select-
      Service & Extended-
      Stay                   $79.76   9.2%  76.6%  0.3% pts.  $104.09   8.8%
     Composite - All        $109.88  10.0%  76.2%  1.0% pts.  $144.20   8.5%
 
 

                 North American Comparable Systemwide Properties(1)
    --------------------------------------------------------------------------
                            Twelve Weeks Ended June 17, 2005 and June 18, 2004
                            --------------------------------------------------
                                                               Average Daily
                               REVPAR          Occupancy            Rate
                               ------          ---------       -------------
     Brand                  2005 vs. 2004   2005  vs. 2004     2005 vs. 2004
     -------------------------------------------------------------------------
     Marriott Hotels and
      Resorts               $107.36   9.4%  73.9%   1.4% pts.   $145.34   7.3%
     The Ritz-Carlton(2)    $229.89  11.3%  74.5%   0.4% pts.   $308.59  10.7%
     Renaissance Hotels and
      Resorts               $102.42  12.0%  73.4%   2.9% pts.   $139.54   7.6%
     Composite - Full-
      Service               $114.68  10.0%  73.8%   1.6% pts.   $155.31   7.7%
     Residence Inn           $85.05   7.6%  81.1%   0.5% pts.   $104.89   7.0%
     Courtyard               $79.97   9.2%  75.4%   0.7% pts.   $106.09   8.1%
     Fairfield Inn           $53.72  11.8%  72.3%   2.1% pts.    $74.26   8.6%
     TownePlace Suites       $56.08  10.4%  78.0%  -0.1% pts.    $71.89  10.5%
     SpringHill Suites       $70.00  14.6%  76.7%   3.6% pts.    $91.31   9.2%
     Composite - Select-
      Service & Extended-
      Stay                   $73.54   9.5%  76.4%   1.1% pts.    $96.19   7.9%
     Composite - All         $91.12   9.8%  75.3%   1.3% pts.   $120.96   7.9%
 

    1 Composite -- All statistics include properties for the Marriott Hotels &
      Resorts, Renaissance Hotels & Resorts, The Ritz-Carlton, Courtyard,
      Residence Inn, TownePlace Suites, Fairfield Inn, and SpringHill Suites
      brands. Full-Service composite statistics include properties for
      Marriott Hotels & Resorts, Renaissance Hotels & Resorts and The Ritz
      Carlton brands. Select-Service and Extended-Stay composite statistics
      include properties for the Courtyard, Residence Inn, TownePlace Suites,
      Fairfield Inn and SpringHill Suites brands.
    2 Statistics for The Ritz-Carlton are for March through May.

                         MARRIOTT INTERNATIONAL, INC.
                            KEY LODGING STATISTICS

              North American Comparable Company-Operated Properties(1)
    --------------------------------------------------------------------------
                            Twenty Four Weeks Ended June 17, 2005 and
                                             June 18, 2004
                            --------------------------------------------------
                                                               Average Daily
                              REVPAR           Occupancy            Rate
                              ------           ---------       -------------
     Brand                  2005 vs. 2004   2005  vs. 2004     2005 vs. 2004
     -----------------------------------------------------------------------
     Marriott Hotels and
      Resorts               $114.22   8.0%  73.1%  0.7% pts.  $156.20   7.0%
     The Ritz-Carlton(2)    $221.86  12.4%  71.7%  0.4% pts.  $309.36  11.8%
     Renaissance Hotels and
      Resorts               $105.80  11.1%  71.8%  2.9% pts.  $147.37   6.6%
     Composite - Full-
      Service               $121.62   9.0%  72.8%  1.0% pts.  $167.07   7.5%
     Residence Inn           $84.76   8.7%  79.2%  1.5% pts.  $107.08   6.6%
     Courtyard               $75.82   9.1%  71.1% -0.5% pts.  $106.70   9.8%
     TownePlace Suites       $51.31   7.1%  74.1% -0.3% pts.   $69.24   7.6%
     SpringHill Suites       $70.43  19.8%  74.3%  5.9% pts.   $94.81  10.3%
     Composite - Select-
      Service &
      Extended-Stay          $76.32   9.5%  73.7%  0.5% pts.  $103.57   8.7%
     Composite - All        $103.80   9.1%  73.1%  0.8% pts.  $141.91   7.9%
 
 

                 North American Comparable Systemwide Properties(1)
    --------------------------------------------------------------------------
                            Twenty Four Weeks Ended June 17, 2005 and
                                             June 18, 2004
                            --------------------------------------------------
                                                               Average Daily
                              REVPAR           Occupancy            Rate
                              ------           ---------       -------------
     Brand                  2005 vs. 2004   2005  vs. 2004     2005 vs. 2004
    --------------------------------------------------------------------------
     Marriott Hotels and
      Resorts               $103.15   7.9%  71.0%  0.9% pts.  $145.19   6.5%
     The Ritz-Carlton(2)    $221.86  12.4%  71.7%  0.4% pts.  $309.36  11.8%
     Renaissance Hotels and
      Resorts                $98.38  11.3%  70.6%  2.7% pts.  $139.29   7.0%
     Composite - Full-
      Service               $108.93   8.8%  71.0%  1.2% pts.  $153.39   7.0%
     Residence Inn           $81.75   8.3%  78.5%  1.2% pts.  $104.11   6.6%
     Courtyard               $75.78   8.9%  72.0%  0.5% pts.  $105.27   8.1%
     Fairfield Inn           $49.93  11.4%  68.1%  1.9% pts.   $73.36   8.3%
     TownePlace Suites       $53.27  11.0%  74.5%  0.7% pts.   $71.48  10.0%
     SpringHill Suites       $66.77  14.9%  73.4%  3.7% pts.   $90.99   9.1%
     Composite - Select-
      Service &
      Extended-Stay          $69.81  9.5%   73.1%  1.2% pts.   $95.52   7.7%
     Composite - All         $86.39  9.2%   72.2%  1.2% pts.   $119.63  7.3%
 

     (1) Composite - All statistics include properties for the Marriott Hotels
         & Resorts, Renaissance Hotels & Resorts, The Ritz-Carlton,
         Courtyard, Residence Inn, TownePlace Suites, Fairfield Inn, and
         SpringHill Suites brands.  Full-Service composite statistics include
         properties for Marriott Hotels & Resorts, Renaissance Hotels &
         Resorts and The Ritz Carlton.  Select-Service and Extended-Stay
         composite statistics include properties for the Courtyard, Residence
         Inn, TownePlace Suites, Fairfield Inn and SpringHill Suites brands.

     (2) Statistics for The Ritz-Carlton are for January through May.
 
 

                         MARRIOTT INTERNATIONAL, INC.
                            KEY LODGING STATISTICS
                                 (Constant $)

             International Comparable Company-Operated Properties (1)(2)
    --------------------------------------------------------------------------
                             Three Months Ended May 31, 2005 and May 31, 2004
                             -------------------------------------------------
                                                               Average Daily
                              REVPAR           Occupancy           Rate
                              ------           ---------       -------------
     Region/Brand            2005 vs. 2004  2005  vs. 2004     2005 vs. 2004
    --------------------------------------------------------------------------
     Caribbean & Latin
      America               $115.98  14.9%  74.5%  2.6% pts.  $155.67  10.9%
     Continental Europe     $101.18   0.2%  70.2% -1.1% pts.  $144.10   1.7%
     United Kingdom         $145.21   5.6%  76.6% -0.5% pts.  $189.64   6.4%
     Middle East & Africa    $84.37  32.3%  80.2%  7.5% pts.  $105.17  19.9%
     Asia Pacific(3)         $90.14  17.7%  76.7%  1.9% pts.  $117.59  14.8%

     The Ritz-Carlton
      International         $164.08  22.6%  75.6%  6.1% pts.  $217.09  12.8%

     Total International(4) $106.78  12.2%  74.9%  1.8% pts.  $142.50   9.5%

     Worldwide(5)           $109.07  10.5%  75.9%  1.2% pts.  $143.76   8.8%
 
 

                International Comparable Systemwide Properties (1)(2)
    --------------------------------------------------------------------------
                             Three Months Ended May 31, 2005 and May 31, 2004
                             -------------------------------------------------
                                                               Average Daily
                              REVPAR           Occupancy           Rate
                              ------           ---------       -------------
     Region/Brand            2005 vs. 2004  2005  vs. 2004     2005 vs. 2004
    --------------------------------------------------------------------------
     Caribbean & Latin
      America               $112.67  17.4%  74.0%  3.0% pts.  $152.18  12.6%
     Continental Europe      $97.99   3.4%  68.1%  0.6% pts.  $143.96   2.6%
     United Kingdom         $126.11   3.8%  73.6% -2.0% pts.  $171.43   6.6%
     Middle East & Africa    $81.06  31.3%  77.8%  7.5% pts.  $104.25  18.6%
     Asia Pacific(3)         $92.52  18.1%  77.5%  2.5% pts.  $119.35  14.3%

     The Ritz-Carlton
      International         $164.08  22.6%  75.6%  6.1% pts.  $217.09  12.8%

     Total International(4) $104.53  13.4%  74.2%  2.4% pts.  $140.95   9.8%
     Worldwide(5)            $93.41  10.4%  75.1%  1.5% pts.  $124.33   8.3%

     (1) International financial results are reported on a period basis,
         while International statistics are reported on a monthly basis.
     (2) Statistics are in constant dollars and include results for March
         through May.  Excludes North America (except for Worldwide).
     (3) Excludes Hawaii.
     (4) Includes Hawaii.
     (5) Worldwide includes international statistics for March through May
         and North American statistics for the twelve weeks ending June 17,
         2005 and June 18, 2004.
 

                         MARRIOTT INTERNATIONAL, INC.
                            KEY LODGING STATISTICS
                                 (Constant $)

             International Comparable Company-Operated Properties (1)(2)
    --------------------------------------------------------------------------
                             Five Months Ended May 31, 2005 and May 31, 2004
                             -------------------------------------------------
                                                               Average Daily
                              REVPAR           Occupancy           Rate
                              ------           ---------       -------------
     Region/Brand            2005 vs. 2004  2005  vs. 2004     2005 vs. 2004
    --------------------------------------------------------------------------
     Caribbean & Latin
      America               $122.04  16.2%  75.7%  4.2% pts.  $161.19   9.7%
     Continental Europe      $93.80   2.5%  65.8%  0.2% pts.  $142.55   2.2%
     United Kingdom         $138.77   4.8%  74.0% -0.9% pts.  $187.49   6.2%
     Middle East & Africa    $84.03  30.9%  78.4%  7.8% pts.  $107.24  17.9%
     Asia Pacific(3)         $84.51  17.3%  74.7%  2.1% pts.  $113.12  14.0%

     The Ritz-Carlton
      International         $160.26  25.8%  74.0%  7.6% pts.  $216.42  12.9%

     Total International(4) $103.13  13.2%  72.9%  2.5% pts.  $141.50   9.3%

     Worldwide(5)           $103.65  10.0%  73.1%  1.2% pts.  $141.82   8.2%
 
 

                International Comparable Systemwide Properties 1,2
    --------------------------------------------------------------------------
                             Five Months Ended May 31, 2005 and May 31, 2004
                             -------------------------------------------------
                                                               Average Daily
                              REVPAR           Occupancy           Rate
                              ------           ---------       -------------
     Region/Brand            2005 vs. 2004  2005  vs. 2004     2005 vs. 2004
    --------------------------------------------------------------------------
     Caribbean & Latin
      America               $113.74  15.1%  73.2%  3.0% pts.  $155.45  10.4%
     Continental Europe      $90.26   4.8%  63.7%  1.0% pts.  $141.70   3.2%
     United Kingdom         $117.04   1.8%  68.9% -3.0% pts.  $169.81   6.3%
     Middle East & Africa    $80.69  30.0%  76.0%  7.6% pts.  $106.15  16.9%
     Asia Pacific(3)         $87.05  16.7%  75.4%  2.6% pts.  $115.47  12.8%

     The Ritz-Carlton
      International         $160.26  25.8%  74.0%  7.6% pts.  $216.42  12.9%

     Total International(4)  $99.83  13.1%  71.6%  2.5% pts.  $139.45   9.2%

     Worldwide(5)            $88.35   9.8%  72.1%  1.4% pts.  $122.51   7.7%

    (1) International financial results are reported on a period basis, while
        International statistics are reported on a monthly basis.
    (2) Statistics are in constant dollars and include results for January
        through May.  Excludes North America (except for Worldwide).
    (3) Excludes Hawaii.
    (4) Includes Hawaii.
    (5) Worldwide includes international statistics for January through May
        and North American statistics for the twenty-four weeks ending June
        17, 2005 and June 18, 2004.
 
 
 

                          MARRIOTT INTERNATIONAL, INC.
                    Non-GAAP Financial Measure Reconciliation
                                 ($ in millions)

    We consider lodging operating income to be a meaningful indicator of
    our performance because it measures our growth in profitability as a
    lodging company and enables investors to compare the operating income
    related to our lodging segments to the operating income of other lodging
    companies. However, lodging operating income is a non-GAAP financial
    measure and is not an alternative to operating income or any other
    operating measure prescribes by Unites States generally accepted
    accounting principles.

    The reconciliation of operating income to lodging operating income is
    as follows:
 

                                                  Fiscal Year 2005
                                          ------------------------------
                                           First       Second
                                          Quarter     Quarter      Total
                                          -------     -------      -----

    Operating income as reported            $158         $41        $199

      Add back: Synthetic fuel
       operating loss                         45          36          81
                                          -------     -------      -----
    Lodging operating income                $203         $77        $280
                                          =======     =======      =====

                                                 Fiscal Year 2004
                                        -------------------------------------
                                         First  Second  Third   Fourth
                                        Quarter Quarter Quarter Quarter Total
                                        ------- ------- ------- ------- -----

    Operating income as reported           $151    $118     $99    $109  $477

     Add back: Synthetic fuel
      operating loss                          -      30      31      37    98
                                        ------- ------- ------- ------- -----
    Lodging operating income               $151    $148    $130    $146  $575
                                        ======= ======= ======= ======= =====
 

                           MARRIOTT INTERNATIONAL, INC.
                    Non-GAAP Financial Measure Reconciliation
                     (in millions, except per share amounts)
 

    We consider net income and earnings per share, both excluding the impact
    of the synthetic fuel operations, the charge associated with the
    agreements we entered into with CTF Holdings Ltd ("the CTF transaction")
    and the bedding incentive program costs, to be meaningful performance
    indicators because they allow for additional comparisons relative to our
    on-going lodging operations before material charges.  The $94 million
    charge recorded in connection with the CTF transaction is primarily non
    cash and due to the write-off of deferred contract acquisition costs
    associated with the termination of management agreements.  In addition, we
    incurred a material charge of $29 million associated with our new bedding
    incentive program.  Management believes the above items should be excluded
    from net income and earnings per share in order to be able to compare the
    past and current results.  The exclusion of the synthetic fuel operations
    allows investors to compare the results of our operations to that of other
    lodging companies.

    However, net income and earnings per share, both excluding our synthetic
    fuel operations, the charge associated with the CTF transaction and the
    material bedding charge are non-GAAP financial  measures, and are not
    alternatives to net income, earnings per share or any other operating
    measure prescribed by United States generally accepted accounting
    principles.

    The reconciliation of net income and earnings per share, both excluding
    the impact of the synthetic fuel operations, the charge associated with
    the CTF transaction and the bedding program incentive costs is as follows:
 

                                     Twelve Weeks ending June 17, 2005
                            -------------------------------------------------
                                                                      Exclu-
                                                                      ding
                                                                      Synth-
                                                                      etic
                                                                      Fuel,
                                                                      CTF
                                                             Bedd-    Acqui-
                                            Exclu-           ing      sition
                                    Synth-  ding     CTF     Incen-   and
                                    etic    Synth-  Acqui-   tive     Bedd-
                             Net    Fuel    etic    sition   Program  ing
                             Income Impact  Fuel    Charge   Charge   Charges
                             ------ ------  ----    ------   ------   -------
    Operating income (loss)  $  41  $ (36)  $ 77    $ (94)   $  (29)  $  200
    Gains and other income      63      8     55        -         -       55
    Interest income,
     (provision for loan
    losses) and (interest
     expense)                    4      -      4        -         -        4
    Equity in earnings           6      -      6        -         -        6
                             ------ ------  ----    ------   ------   -------
    Pre-tax income (loss)      114    (28)   142      (94)      (29)     265
                             ------ ------  ----    ------   ------   -------
     Tax (Provision)/Benefit   (39)     9    (48)      32        10      (90)
     Tax Credits                59     59      -        -         -        -
                             ------ ------  ----    ------   ------   -------
     Total Tax
      Benefit/(Provision)       20     68    (48)      32        10      (90)
                             ------ ------  ----    ------   ------   -------
     Income before Minority
      Interest                 134     40     94      (62)      (19)     175

     Minority Interest -
      Synthetic fuel             4      4      -        -         -        -
                             ------ ------  ----    ------   ------   -------
     Net Income               $138  $  44  $  94    $ (62)   $  (19)  $  175
                             ====== ======  ====    ======   ======   =======
     Diluted Shares          234.5  234.5  234.5    234.5     234.5    234.5

     Earnings per Share -
      Diluted(1)             $0.59  $0.19  $0.40   ($0.26)   ($0.08)   $0.75

     Tax Rate                -17.5%         33.8%                      34.0%

     1 The sum of earnings per share as reported plus the individual earnings
       per share impacts associated with Synthetic Fuel, CTF, and Bedding
       differs from earnings per share excluding Synthetic Fuel, CTF and
       Bedding by $.01 due to rounding.
 
 

                                      Twelve Weeks ending June 18, 2004
                            -------------------------------------------------
                                                                      Exclu-
                                                                      ding
                                                                      Synth-
                                                                      etic
                                                                      Fuel,
                                                                      CTF
                                                             Bedd-    Acqui-
                                            Exclu-           ing      sition
                                    Synth-  ding     CTF     Incen-   and
                                    etic    Synth-  Acqui-   tive     Bedd-
                             Net    Fuel    etic    sition   Program  ing
                             Income Impact  Fuel    Charge   Charge   Charges
                             ------ ------  ----    ------   ------   -------
    Operating income (loss)  $ 118  $ (30)  $148   $    -    $   -    $  148
    Gains and other income      48      9     39        -        -        39
    Interest income,
     (provision for loan
     losses) and (interest
     expense)                   12      -     12        -        -        12
    Equity in earnings           1      -      1        -        -         1
                             ------ ------  ----    ------   ------   -------
    Pre-tax income (loss)      179    (21)   200        -        -       200
                             ------ ------  ----    ------   ------   -------
     Tax (Provision)/Benefit   (68)     3    (71)       -        -       (71)
     Tax Credits                35     35      -        -        -         -
                             ------ ------  ----    ------   ------   -------
     Total Tax
      Benefit/(Provision)      (33)    38    (71)       -        -       (71)
                             ------ ------  ----    ------   ------   -------
     Income before Minority
      Interest                 146     17    129        -        -       129

     Minority Interest -
      Synthetic fuel            14     14      -        -        -         -
                             ------ ------  ----    ------   ------   -------
     Net Income              $ 160  $  31  $ 129    $   -     $  -     $ 129
                             ====== ======  ====    ======   ======   =======
     Diluted Shares          240.3  240.3  240.3    240.3    240.3     240.3

     Earnings per Share
      - Diluted              $0.67  $0.13  $0.54     $0.00  $0.00      $0.54

     Tax Rate                 18.4%         35.4%                       35.4%
 
 

                           MARRIOTT INTERNATIONAL, INC.
                    Non-GAAP Financial Measure Reconciliation
                     (in millions, except per share amounts)

    We consider net income and earnings per share, both excluding the impact
    of the synthetic fuel operations, the charge associated with the
    agreements we entered into with CTF Holdings Ltd ("the CTF transaction")
    and the bedding incentive program costs, to be meaningful performance
    indicators because they allow for additional comparisons relative to our
    on-going lodging operations before material charges.  The $94 million
    charge recorded in connection with the CTF transaction is primarily non
    cash and due to the write-off of deferred contract acquisition costs
    associated with the termination of management agreements.  In addition, we
    incurred a material charge of $29 million associated with our new bedding
    incentive program.  Management believes the above items should be excluded
    from net income and earnings per share in order to be able to compare the
    past and current results.  The exclusion of the synthetic fuel operations
    allows investors to compare the results of our operations to that of other
    lodging companies.

    However, net income and earnings per share, both excluding our synthetic
    fuel operations, the charge associated with the CTF transaction and the
    material bedding charge are non-GAAP financial  measures, and are not
    alternatives to net income, earnings per share or any other operating
    measure prescribed by United States generally accepted accounting
    principles.

    The reconciliation of net income and earnings per share, both excluding
    the impact of the synthetic fuel operations, the charge associated with
    the CTF transaction and the bedding program incentive costs is as follows:
 

                                    Twenty four weeks ending June 17, 2005
                            -------------------------------------------------
                                                                      Exclu-
                                                                      ding
                                                                      Synth-
                                                                      etic
                                                                      Fuel,
                                                                      CTF
                                                             Bedd-    Acqui-
                                            Exclu-           ing      sition
                                    Synth-  ding     CTF     Incen-   and
                                    etic    Synth-  Acqui-   tive     Bedd-
                             Net    Fuel    etic    sition   Program  ing
                             Income Impact  Fuel    Charge   Charge   Charges
                             ------ ------  ----    ------   ------   -------
    Operating income (loss)  $ 199  $ (81)  $280    $ (94)   $ (29)  $   403
    Gains and other income
     (expense)                  58     (1)    59        -        -        59
    Interest income,
     (provision for loan
     losses) and (interest
     expense)                   (4)     -     (4)       -        -        (4)
    Equity in earnings/
     (losses)                    1      -      1        -        -         1
                             ------ ------  ----    ------   ------   ------
    Pre-tax income (loss)      254    (82)   336      (94)     (29)      459
                             ------ ------  ----    ------   ------   ------
     Tax (Provision)/Benefit   (91)    24   (115)      32       10      (157)
     Tax Credits               106    106      -        -        -         -
                             ------ ------  ----    ------   ------   ------
     Total Tax
      Benefit/(Provision)       15    130   (115)      32       10      (157)
                             ------ ------  ----    ------   ------   ------
     Income before Minority
      Interest                 269     48    221      (62)     (19)      302

     Minority Interest -
      Synthetic Fuel            14     14      -        -        -         -
                             ------ ------  ----    ------   ------   ------
     Net Income               $283    $62   $221    $ (62)   $ (19)  $   302
                             ====== ======  ====    ======   ======   ======
     Diluted Shares          237.8  237.8  237.8    237.8    237.8     237.8

     Earnings per Share
      - Diluted              $1.19  $0.26  $0.93   ($0.26)  ($0.08)  $  1.27

     Tax Rate                -5.9%          34.2%                       34.2%
 
 

                    Twenty four weeks ending June 18, 2004
  -------------------------------------------------------------------------
                                                                      Exclu-
                                                                      ding
                                                                      Synth-
                                                                      etic
                                                                      Fuel,
                                                                      CTF
                                                             Bedd-    Acqui-
                                            Exclu-           ing      sition
                                    Synth-  ding     CTF     Incen-   and
                                    etic    Synth-  Acqui-   tive     Bedd-
                             Net    Fuel    etic    sition   Program  ing
                             Income Impact  Fuel    Charge   Charge   Charges
                             ------ ------  ----    ------   ------   -------
    Operating income (loss)  $ 269  $ (30)  $299    $   -    $   -    $  299
    Gains and other income
     (expense)                  52      9     43        -        -        43
    Interest income,
     (provision for loan
     losses) and (interest
     expense)                   19      -     19        -        -        19
    Equity in earnings/
     (losses)                  (29)   (28)    (1)       -        -        (1)
                             ------ ------  ----    ------   ------   ------
    Pre-tax income (loss)      311    (49)   360        -        -       360
                             ------ ------  ----    ------   ------   ------
     Tax (Provision)/Benefit  (115)    13   (128)       -        -      (128)
     Tax Credits                64     64      -        -        -         -
                             ------ ------  ----    ------   ------   ------
     Total Tax Benefit/
      (Provision)              (51)    77   (128)       -        -      (128)

     Income before Minority
      Interest                 260     28    232        -        -       232

     Minority Interest -
      Synthetic Fuel            14     14      -        -        -         -
                             ------ ------  ----    ------   ------   ------
     Net Income              $ 274    $42   $232    $   -    $   -   $   232
                             ====== ======  ====    ======   ======   ======

     Diluted Shares          241.5  241.5  241.5    241.5    241.5     241.5

     Earnings per Share -
      Diluted                $1.14  $0.17  $0.97    $0.00    $0.00   $  0.97

     Tax Rate                 16.4%         35.5%                       35.5%
 
 

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

    We consider earnings before interest, taxes, depreciation and
    amortization, adjusted to eliminate the impact of our synthetic fuel
    segment and other material items (Adjusted EBITDA), to be an indicator of
    operating performance from on-going operations because it can be used to
    measure our ability to service debt, fund capital expenditures, and expand
    our business, and reflects our belief that the synthetic fuel segment will
    no longer have a material impact on our business after the Section 29
    synthetic fuel tax credits expire at the end of 2007.  In addition, the
    $94 million charge associated with the agreements we entered into with CTF
    Holdings Ltd ("the CTF acquisition") and the bedding incentive charge of
    $29

    However, EBITDA and Adjusted EBITDA are non-GAAP financial measures, and
    are not alternatives to net income, financial results, cash flow from
    operations, or any other operating measure prescribed by United States
    generally accepted accounting principles.  Additionally, our calculation
    of EBITDA and Adjusted EBITDA may be different from the calculations used
    by other companies and as a result comparability may be limited.
 

                                             Fiscal Year 2005
                                           -----------------------
                                            First       Second
                                           Quarter     Quarter      Total
                                           -------     -------      -----
    Net income                             $   145     $   138      $ 283
    Interest expense                            24          21         45
    Tax provision/ (benefit)                     5         (20)       (15)
    Depreciation                                30          29         59
    Amortization                                 7           7         14
    Interest expense from unconsolidated
     joint ventures                             11           6         17
    Depreciation and amortization from
     unconsolidated joint ventures              12           9         21
                                           -------     -------      -----
    EBITDA                                 $   234     $   190      $ 424

    Synthetic fuel adjustment                   42          21         63
    CTF acquisition charge                       -          94         94
    Bedding incentive program                    -          29         29
                                           -------     -------      -----
    Adjusted EBITDA                        $   276     $   334      $ 610
                                           =======     =======      =====
    Increase over 2004 Adjusted EBITDA          14%         20%        17%

    The following items make up the
     synthetic fuel adjustment:
    Pre-tax synthetic fuel operating
     losses                                $    54     $    28      $  82
    Pre-tax minority interest - synthetic
     fuel                                      (10)         (5)       (15)
    Synthetic fuel depreciation                 (2)         (2)        (4)
                                           -------     -------      -----
    EBITDA adjustment for synthetic fuel       $42         $21        $63
                                           =======     =======      =====
 

                                               Fiscal Year 2004
                                       --------------------------------------
                                       First   Second  Third   Fourth
                                       Quarter Quarter Quarter Quarter  Total
                                       ------- ------- ------- -------  -----

    Net income                         $  114  $  160  $  133  $  189   $ 596
    Interest expense                       22      24      23      30      99
    Tax provision continuing operations    18      33      28      21     100
    Tax provision discontinued
     operations                             -       -       1       -       1
    Depreciation                           32      29      32      40     133
    Amortization                            7       8       7      11      33
    Interest expense from
     unconsolidated joint ventures         10      11       9      15      45
    Depreciation and amortization from
     unconsolidated joint ventures         13       9      13      17      52
                                       ------- ------- ------- -------  -----
    EBITDA                            $   216  $  274  $  246  $  323  $1,059

    Synthetic fuel adjustment              28       5      (6)     21      48
    Pre-tax gain discontinued
     operations                            (1)      -      (1)     (1)     (3)
                                       ------- ------- ------- -------  -----
    Adjusted EBITDA                   $   243  $  279  $  239  $  343  $1,104
                                       ======= ======= ======= =======  =====
    The following items make up the
     synthetic fuel adjustment:
    Pre-tax synthetic fuel operating
     losses                           $     -  $   21  $   12  $   37  $   70
    Pre-tax synthetic fuel equity
     losses                                28       -       -       -      28
    Pre-tax minority interest -
     synthetic fuel                         -     (14)    (15)    (11)    (40)
    Synthetic fuel depreciation             -      (2)     (3)     (5)    (10)
                                       ------- ------- ------- -------  -----
    EBITDA adjustment for synthetic
     fuel                             $    28  $    5  $   (6) $   21  $   48
                                       ======= ======= ======= =======  =====

This press release contains "forward-looking statements" within the meaning of federal securities laws, including REVPAR, profit margin and earning trends; statements concerning the number of lodging properties we expect to add in future years; our expected investment spending; our anticipated results from synthetic fuel operations; and similar statements concerning anticipated future events and expectations that are not historical facts.

.
Contact:

Marriott International
www.marriott.com
.
Also See: Marriott Closes Purchase and Sale Transactions with CTF, Walton Street Capital, Sunstone, and Tarsadia; Involves 29 Renaissance Hotels and three Courtyard Hotels / June 2005
Marriott International, Inc. Reports Net Income for the 1st Qtr of $145 million, Up 27% Over Prior Year; 35% of 4,500 Rooms Added Were Conversions from Competitor Brands / Key Lodging Statistics / April 2005

To search Hotel Online data base of News and Trends Go to Hotel.Online Search

Home | Welcome! | Hospitality News | Classifieds | Catalogs & Pricing | Viewpoint Forum | Ideas/Trends
Please contact Hotel.Online with your comments and suggestions.