.
Thursday April 17, 6:30 am ET
BETHESDA, Md., April 17, 2008 -
First Quarter Highlights:
-
Worldwide company-operated comparable revenue per available room (REVPAR)
rose 6.0 percent (4.5 percent using constant dollars) for the first quarter
ended March 21, 2008;
-
Outside North America, company-operated comparable REVPAR increased 18.5
percent (11.5 percent using constant dollars) with double-digit growth
in Central and Southeast Asia, Latin America, Continental Europe and the
Middle East;
-
First quarter total fee revenue rose to $318 million, 7 percent over the
prior year;
-
The company's worldwide pipeline of hotels under construction, awaiting
conversion or approved for development increased to a record 130,000 rooms
compared to 100,000 rooms a year ago and 125,000 rooms at the end of 2007;
-
Over 5,900 rooms opened during the first quarter, including almost 1,500
rooms converted from competitor brands;
-
Marriott repurchased 6.2 million shares of the company's common stock for
$208 million during the first quarter.
Marriott International, Inc. (NYSE: MAR) today reported diluted earnings
per share (EPS) from continuing operations of $0.33 in the first quarter
of 2008, down 18 percent from the first quarter of 2007. The company's
EPS guidance for the 2008 first quarter, disclosed on February 14, 2008,
totaled $0.32 to $0.36.
J.W. Marriott, Jr., Marriott International's chairman and chief executive
officer, said, "Marriott's first quarter results demonstrated the company's
strength. Leading brands and a focus on bottom line results delivered strong,
on-target earnings in the first quarter. Business and leisure travel demand
remains robust in most markets around the world. REVPAR at our international
properties expanded by 19 percent, along with solid margin improvement
and growing incentive fees.
"While performance at our U.S. hotels reflected slowing economic growth,
few markets have witnessed discounting and full service room rates rose
4 percent during the quarter. With the U.S. on sale through a lower dollar,
international guest arrivals are energizing demand in several key markets.
"Attendance at group meetings was on track during the quarter and group
cancellations remained lower than 2007 levels. Group meeting bookings for
the remainder of 2008 are strong. Given these trends, we remain cautiously
optimistic about 2008 demand trends.
"We expect to meet our hotel development goals in 2008. Our pipeline
of hotels under construction, awaiting conversion or approved for development
increased to over 130,000 rooms in the first quarter. Our record pipeline
of limited-service hotels demonstrates how our owners and franchisees see
great opportunity as we continue to remake these brands, generating significant
REVPAR premiums and attractive long-term owner returns.
"As a global company, we're a global neighbor. We recently signed an
agreement to help protect 1.4 million acres of endangered Amazon rainforest
in Brazil and we're taking new steps to reduce our consumption of the earth's
resources."
In the 2008 first quarter (12-week period from December 29, 2007 to
March 21, 2008), REVPAR for the company's comparable worldwide systemwide
properties increased 4.4 percent (3.5 percent using constant dollars).
REVPAR at comparable worldwide company-operated properties rose 6.0 percent
(4.5 percent using constant dollars) over the year-ago quarter and average
daily rates increased 6.3 percent (4.8 percent using constant dollars).
In North America, company-operated comparable REVPAR rose 2.3 percent
in the first quarter of 2008. REVPAR at the company's comparable company-
operated North American full-service and luxury hotels (including Marriott
Hotels & Resorts, The Ritz-Carlton and Renaissance Hotels & Resorts)
increased 2.7 percent driven by a 3.9 percent increase in average daily
rates. REVPAR growth was particularly strong in Manhattan, Los Angeles,
Orlando and Seattle.
For North American hotels, the first quarter ended on March 21, 2008
and included the negative impact of the week preceding Easter. Excluding
this week, North American company-operated comparable REVPAR growth would
have been approximately 100 basis points higher. In 2007, the week prior
to and the week after the holiday were included in the second quarter.
In the 2008 first quarter, international company-operated comparable
REVPAR increased 18.5 percent (11.5 percent using constant dollars), including
a 16.0 percent increase in average daily rate (9.2 percent using constant
dollars) and a 1.5 percentage point improvement in occupancy to 70.5 percent.
Singapore, Moscow, Paris, Panama and Dubai were particularly strong markets.
Marriott added 40 new properties (5,948 rooms) to its worldwide lodging
portfolio in the first quarter, including the Renaissance Boston Waterfront
and the Denver Ritz-Carlton. Seven hotels (1,450 rooms) were converted
from competitor brands and 20 properties (3,101 rooms) exited the system
during the quarter. At quarter-end, the company's lodging group encompassed
3,019 properties and timeshare resorts for a total of nearly 538,000 rooms.
MARRIOTT REVENUES totaled $2.9 billion in the first quarter, a 4 percent
increase from the same period in 2007. Base management and franchise fees
rose 8 percent to $244 million as a result of REVPAR improvement and unit
expansion. Incentive management fees rose 4 percent to $74 million.
Worldwide company-operated comparable house profit margins grew 40 basis
points. House profit margins for comparable company-operated properties
outside North America grew 350 basis points and house profit per available
room increased over 21 percent. North American company-operated comparable
house profit margins declined 70 basis points from the year ago quarter
and house profit per available room increased 1 percent.
In the first quarter, owned, leased, corporate housing and other revenue,
net of direct expenses, decreased $5 million, to $26 million, reflecting
start-up costs at the new Renaissance Boston Waterfront hotel, the impact
of properties under renovation and lower termination fees.
Timeshare sales and services revenue decreased 12 percent to $326 million
in the 2008 first quarter primarily due to unfavorable year-over-year reportability
at several projects. In the 2008 quarter, timeshare sales and services
revenue, net of direct expenses, totaled $13 million, which reflected start-up
costs and low reportability at new projects on Marco and Singer Islands
in Florida and the impact of other projects nearing sell-out. In the 2007
quarter, a significant amount of contract sales associated with a Hawaiian
project became financially reportable. The company stated in February 2008
that it expected first quarter timeshare sales and services revenue, net
of direct expenses, to total $7 million to $12 million.
Timeshare segment results include timeshare sales and services revenue,
net of direct expenses, as well as base fees, equity earnings, minority
interest and general, administrative and other expenses associated with
the timeshare business. Timeshare segment results totaled $4 million and
reflected unfavorable year-over-year reportability, start-up costs associated
with new projects, projects nearing sell-out and higher timeshare administrative
costs offset by increased equity earnings from the Kapalua joint venture.
First quarter timeshare contract sales increased 2 percent to $333 million
as a result of timeshare sales at new projects in Florida, higher sales
from the Asia Pacific points program, and higher residential sales at the
Kapalua joint venture, partially offset by declining contract sales at
projects near sell-out and lower sales of fractional products. Contract
sales for the first quarter were expected to be flat to up 5 percent.
GENERAL, ADMINISTRATIVE and OTHER expenses for the first quarter totaled
$162 million, a 10 percent increase compared to the prior year quarter
reflecting higher spending related to unit growth, development, systems
improvements, brand initiatives and legal expenses. The 2008 first quarter
included an $8 million favorable impact associated with deferred compensation
while the 2007 first quarter benefited from reversal of reserves totaling
$9 million established several years earlier that were no longer required.
GAINS AND OTHER INCOME totaled $3 million largely generated by preferred
returns from joint venture investments. A $4 million loss on the sale of
a new hotel due to higher construction costs was also reflected in the
total for the quarter. The prior year's first quarter gains totaled $35
million and included $10 million from the sale of an interest in a joint
venture, $2 million of gains from the sale of real estate, $9 million of
gains associated with the forgiveness of debt, an $11 million gain on the
sale of a stock investment and $3 million of preferred returns from joint
venture investments.
INTEREST EXPENSE, net of INTEREST INCOME and PROVISION FOR LOAN LOSSES,
increased $5 million to $29 million, primarily due to higher average borrowings,
partially offset by lower interest rates.
EQUITY IN EARNINGS (LOSSES) totaled $27 million reflecting Marriott's
share of income in equity joint venture investments. The increase in equity
earnings was primarily driven by a $15 million gain on the sale of a joint
venture's assets, insurance proceeds of $6 million received through a joint
venture and $6 million of improved results at a timeshare joint venture
project in Kapalua, Hawaii.
PROVISION FOR INCOME TAXES reflects a 38.4 percent effective tax rate,
in part reflecting an $8 million unfavorable impact associated with deferred
compensation.
BALANCE SHEET
At the end of first quarter 2008, total debt was $3,395 million and
cash balances totaled $314 million, compared to $2,965 million in debt
and $332 million of cash at the end of 2007. The company repurchased 6.2
million shares of common stock in the first quarter of 2008 at a cost of
$208 million. Weighted average fully diluted shares outstanding totaled
371.9 million at the end of the first quarter compared to 411.3 million
at the end of the year-ago quarter. The remaining share repurchase authorization,
as of March 21, 2008, totaled approximately 27 million shares.
OUTLOOK
The company expects worldwide systemwide comparable REVPAR and North
American company-operated comparable REVPAR to increase 3 to 5 percent
in 2008, with modest increases in North American house profit margins and
roughly 30,000 new room openings. For the full year 2008, the company expects
timeshare sales and services revenue, net of direct expenses, to total
$300 million to $315 million reflecting approximately $70 million of timeshare
note sale gains. Timeshare segment results in 2008 are expected to be $280
million to $295 million with contract sales growth of 15 to 20 percent.
Assuming roughly $1 billion of share repurchases during the year, the
company believes that net interest expense will approximate $135 million
for the full year.
For the second quarter of 2008, the company expects worldwide systemwide
comparable REVPAR and North American company-operated comparable REVPAR
to also increase 3 to 5 percent. Comparable North American house profit
margins are expected to be flat in the quarter.
In the second quarter, the company expects timeshare sales and services
revenue, net of direct expenses, to total $55 million to $60 million reflecting
$15 million to $20 million of timeshare note sale gains. The company expects
timeshare segment results of $45 million to $50 million in the quarter.
Second quarter contract sales are expected to grow approximately 5 percent
over the year ago quarter.
Second Quarter 2008 Full Year 2008
Total fee revenue
$380 million to $1,490 million to
$385 million $1,520 million
Owned, leased,
$45 million to $170 million to
corporate housing
$50 million $180
million
and other revenue,
net of direct expenses
Timeshare sales and
$55 million to $300 million to
services revenue, net
$60 million $315
million
of direct expenses (1)
General, administrative Approx
$180 million $765 million to
and other expenses
$775 million
Operating income
$300 million to $1,185 million to
$315 million $1,250 million
Gains and other income Approx
$5 million Approx $20 million
Net interest expense (2) $30 million
to Approx $135 million
$35 million
Equity in earnings
Approx $5 million Approx $55 million
(losses)
After-tax minority
Approx $2 million Approx $8 million
interest
Earnings per share
$0.48 to $0.52 $1.98 to $2.08
Tax rate
35 to 36 percent 35 to 36 percent
(1) Includes an estimated $15 million to $20 million
of timeshare note
sale gains in the second
quarter and approximately $70 million of
timeshare note sale gains
for full year 2008
(2) Net of interest income
The company expects investment spending in 2008 to total approximately
$1.0 billion to $1.1 billion, including $75 million for maintenance capital
spending, $400 million to $450 million for capital expenditures and acquisitions,
$175 million to $200 million for timeshare development, $15 million to
$25 million in new mezzanine financing and mortgage loans for hotels developed
by owners and franchisees, and $290 million to $310 million in equity and
other investments (including timeshare equity investments).
MARRIOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
Twelve Weeks Ended
---------------------
Percent
March 21, March 23, Better/
2008 2007
(Worse)
------ -----
-------
REVENUES
Base management fees
$148 $134
10
Franchise fees
96 91
5
Incentive management fees
74 71
4
Owned, leased, corporate housing and
other revenue (1)
270 250
8
Timeshare sales and services (2)
326 369
(12)
Cost reimbursements (3)
2,033 1,921
6
------ -----
Total Revenues
2,947 2,836
4
OPERATING COSTS AND EXPENSES
Owned, leased and corporate housing
-
direct (4)
244 219
(11)
Timeshare - direct
313 312
-
Reimbursed costs
2,033 1,921
(6)
General, administrative and other
(5) 162
147 (10)
------ -----
Total Expenses
2,752 2,599
(6)
------ -----
OPERATING INCOME
195 237
(18)
Gains and other income (6)
3 35
(91)
Interest expense
(42) (33)
(27)
Interest income
11 9
22
(Provision for) reversal of loan losses
2 -
*
Equity in earnings (losses) (7)
27 2
1,250
------ -----
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES AND MINORITY INTEREST
196 250
(22)
Provision for income taxes
(75) (86)
13
Minority interest, net of tax
1 -
*
------ -----
INCOME FROM CONTINUING OPERATIONS
122 164
(26)
Discontinued operations - Synthetic
Fuel, net of tax (8)
(1) 18
(106)
NET INCOME
$121 $182
(34)
====== =====
EARNINGS PER SHARE - Basic
Earnings from continuing
operations $0.34
$0.42 (19)
Earnings from discontinued
operations
(8)
- 0.05
(100)
------ -----
Earnings per share
$0.34 $0.47
(28)
====== =====
EARNINGS PER SHARE - Diluted
Earnings from continuing
operations $0.33
$0.40 (18)
Earnings from discontinued
operations
(8)
- 0.04
(100)
------ -----
Earnings per share
$0.33 $0.44
(25)
====== =====
Basic Shares
354.3 388.1
Diluted Shares
371.9 411.3
* Percent can not be calculated.
(1) - Owned, leased, corporate housing
and other revenue includes revenue
from the properties we own or lease, revenue from our corporate
housing business, termination fees and other revenue.
(2) - Timeshare sales and services
includes total timeshare revenue except
for base fees, cost reimbursements, real estate gains and joint
venture earnings. Timeshare sales and services includes gains on
the sale of timeshare note receivable securitizations.
(3) - Cost reimbursements include
reimbursements from lodging properties
for Marriott funded operating expenses.
(4) - Owned, leased and corporate
housing - direct expenses include
operating expenses related to our owned or leased hotels, including
lease payments, pre-opening expenses and depreciation, plus expenses
related to our corporate housing business.
(5) - General, administrative and
other expenses include the overhead
costs allocated to our segments, and our corporate overhead costs
and general expenses.
(6) - Gains and other income includes
net gains on the sale of real
estate, gains on note sales or repayments (except timeshare note
securitizations gains), gains on the sale of joint ventures, and
income from cost method joint ventures.
(7) - Equity in earnings (losses)
includes our equity in earnings
(losses) of unconsolidated equity method joint ventures.
(8) - Discontinued operations relates
to our Synthetic Fuel business which
was shut down and substantially all the assets liquidated at
December 28, 2007.
Marriott International, Inc.
Business Segments
($ in millions)
Twelve Weeks Ended
----------------------
Percent
March 21, March 23, Better/
2008 2007
(Worse)
------- -------- -------
REVENUES
North American Full-Service
$1,307 $1,244
5
North American Limited-Service
488 463
5
International
352 331
6
Luxury
387 339
14
Timeshare
402 443
(9)
------- --------
Total segment revenues
(1)
2,936 2,820
4
Other unallocated corporate
11 16
(31)
------- --------
Total
$2,947 $2,836
4
======= ========
INCOME FROM CONTINUING OPERATIONS
North American Full-Service
$95 $114
(17)
North American Limited-Service
86 87
(1)
International
64 50
28
Luxury
26 11
136
Timeshare (2)
4 44
(91)
------- --------
Total segment financial
results (1) 275
306 (10)
Other unallocated corporate
(48) (32)
(50)
Interest income, provision for loan
losses
and interest expense
(29) (24)
(21)
Income taxes (2)
(76) (86)
12
------- --------
Total
$122 $164
(26)
======= ========
(1) We consider segment revenues and
segment 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
revenues and results of our lodging operations to those of
other lodging
companies.
(2) We allocate minority interest of
our consolidated subsidiaries to our
segments.
Accordingly, minority interest of our consolidated
subsidiaries
of $1 million for the 2008 first quarter as reflected in
our income
statement, was allocated as follows: $2 million to our
Timeshare
segment and $(1) million to Provision for income taxes.
MARRIOTT INTERNATIONAL, INC.
Total Lodging Products (1)
-------------------------------------------------------------------------
Number of Properties Number of Rooms/Suites
-------------------- ----------------------
March March March March March
March
21, 23, 23, 21,
23, 23,
Brand
2008 2007 vs. 2007 2008 2007 vs. 2007
-------------------------------------------------------------------------
Domestic Full-Service
---------------------
Marriott Hotels
&
Resorts
343 341 2 136,875
136,290 585
Renaissance
Hotels &
Resorts
75 65 10 27,456
24,372 3,084
Domestic Limited-Service
------------------------
Courtyard
697 657 40 97,141
92,219 4,922
Fairfield
Inn
527 508 19 46,601
45,226 1,375
SpringHill
Suites 186
156 30 21,457 18,160
3,297
Residence
Inn
529 504 25 63,019
60,056 2,963
TownePlace
Suites 145
123 22 14,522 12,366
2,156
International
-------------
Marriott Hotels
&
Resorts
178 178 - 51,966
51,872 94
Renaissance
Hotels &
Resorts
68 73 (5) 22,400
23,488 (1,088)
Courtyard
73 82 (9) 13,827
14,148 (321)
Fairfield
Inn
8 6 2
949 640 309
SpringHill
Suites
1 1 -
124 124
-
Residence
Inn
18 17 1
2,611 2,313 298
Marriott Executive
Apartments
18 19 (1) 2,887
3,099 (212)
Ramada
- 2 (2)
- 332 (332)
Luxury
------
The Ritz-Carlton
-
Domestic
36 34 2 11,437
11,343 94
The Ritz-Carlton
-
International
32 27 5
9,754 7,992 1,762
Bulgari Hotels
& Resorts 2 2
- 117 117
-
The Ritz-Carlton
Residential
19 15 4
1,823 1,424 399
The Ritz-Carlton
Services
Apartments 2
- 2 387
- 387
Timeshare (2)
-------------
Marriott Vacation
Club 47 45
2 10,948 10,534 414
The Ritz-Carlton
Club -
Fractional
7 7 -
388 388
-
The Ritz-Carlton
Club -
Residential
3 2 1
144 79
65
Grand Residences
by
Marriott
- Fractional 2
2 - 248
248 -
Grand Residences
by
Marriott
- Residential 1
- 1 65
- 65
Horizons by
Marriott
Vacation
Club
2 2 -
444 372 72
------------------ ------------------------
Sub Total Timeshare
62 58 4 12,237
11,621 616
------------------ ------------------------
Total
3,019 2,868 151 537,590 517,202 20,388
================== ========================
Number of Timeshare
Interval, Fractional and Residential Resorts (2)
--------------------------------------------------------------------
In Active
Total (3) Sales
--------- -----
100% Company-Developed
----------------------
Marriott Vacation
Club 47
25
The Ritz-Carlton
Club
and
Residences
7 5
Grand Residences
by
Marriott
and Residences 3
3
Horizons by
Marriott
Vacation
Club
2 2
Joint Ventures
--------------
The Ritz-Carlton
Club
and
Residences
3 3
---------------
Total
62 38
===============
(1) Total Lodging Products excludes
the 2,153 and 1,909 corporate
housing rental
units as of March 21, 2008 and March 23, 2007,
respectively.
(2) Includes products in active sales
which may not be ready for
occupancy.
(3) Includes resorts that are in active
sales and those that are sold
out.
Residential properties are added once they possess a
certificate
of occupancy.
Marriott
International, Inc.
Key Lodging Statistics
Comparable Company-Operated International Properties (1)
-------------------------------------------------------------------------
Two Months Ended February 29, 2008
and February 28, 2007
-----------------------------------------------
Average
REVPAR Occupancy
Daily Rate
-----------------------------------------------
Region
2008 vs. 2007 2008 vs. 2007 2008 vs.
2007
-------------------------------------------------------------------------
Caribbean & Latin America $163.74
14.0% 77.4% 3.6% pts $211.49 8.7%
Continental Europe
$122.42 11.5% 64.1% 1.3% pts $191.13
9.2%
United Kingdom
$126.56 1.5% 68.3% -2.6% pts $185.23
5.3%
Middle East & Africa
$130.20 13.9% 75.2% 2.0% pts $173.22 10.8%
Asia Pacific (2)
$118.47 9.6% 72.6% 0.4% pts $163.29
9.0%
Regional Composite (3)
$129.13 10.0% 70.3% 0.8% pts $183.69
8.7%
International Luxury (4) $234.48
18.2% 72.0% 6.7% pts $325.62 7.3%
Total International (5)
$141.08 11.5% 70.5% 1.5% pts $200.14
9.2%
Worldwide (6)
$116.56 4.5% 68.1% -0.2% pts $171.06
4.8%
Comparable Systemwide International Properties (1)
-------------------------------------------------------------------------
Two Months Ended February 29, 2008
and February 28, 2007
-----------------------------------------------
Average
REVPAR Occupancy
Daily Rate
-----------------------------------------------
Region
2008 vs. 2007 2008 vs. 2007 2008 vs.
2007
-------------------------------------------------------------------------
Caribbean & Latin America $135.57
9.8% 70.0% 1.4% pts $193.63 7.6%
Continental Europe
$118.85 13.5% 62.1% 2.8% pts $191.53
8.4%
United Kingdom
$124.26 1.2% 67.7% -2.5% pts $183.63
5.0%
Middle East & Africa
$130.20 13.9% 75.2% 2.0% pts $173.22 10.8%
Asia Pacific (2)
$116.13 6.6% 71.3% -0.8% pts $162.99
7.7%
Regional Composite (3)
$123.26 9.2% 68.0% 0.8% pts $181.17
8.0%
International Luxury (4) $234.48
18.2% 72.0% 6.7% pts $325.62 7.3%
Total International (5)
$133.45 10.7% 68.4% 1.3% pts $195.10
8.5%
Worldwide (6)
$97.67 3.5% 66.8% -0.7% pts $146.14
4.6%
(1) International financial results
are reported on a period basis, while
International
statistics are reported on a monthly basis. Statistics
are in constant
dollars for January through February. Excludes North
America (except
for Worldwide).
(2) Does not include Hawaii.
(3) Regional information includes
the Marriott Hotels & Resorts,
Renaissance
Hotels & Resorts and Courtyard properties. Includes
Hawaii.
(4) International Luxury includes
The Ritz-Carlton properties outside of
North America
and Bulgari Hotels & Resorts.
(5) Includes Regional Composite and
International Luxury.
(6) Includes international statistics
for the two calendar months ended
February 29,
2008 and February 28, 2007, and North American statistics
for the twelve
weeks ended March 21, 2008 and March 23, 2007. Includes
the Marriott
Hotels & Resorts, Renaissance Hotels & Resorts, The
Ritz-Carlton,
Bulgari Hotels & Resorts, Residence Inn, Courtyard,
TownePlace
Suites, Fairfield Inn and SpringHill Suites properties.
Marriott International, Inc.
Key Lodging Statistics
Comparable Company-Operated North American Properties
------------------------------------------------------------------------
Twelve Weeks Ended March 21, 2008
and March 23, 2007
-----------------------------------------------
Average
REVPAR Occupancy
Daily Rate
-----------------------------------------------
Brand
2008 vs. 2007 2008 vs. 2007 2008 vs. 2007
-------------------------------------------------------------------------
Marriott Hotels & Resorts
$122.85 2.2% 67.7% -1.2% pts $181.45 4.0%
Renaissance Hotels &
Resorts
$118.29 3.1% 68.9% 0.1% pts $171.70
3.0%
Composite North American
Full-Service (1)
$122.05 2.3% 67.9% -1.0% pts $179.73 3.8%
The Ritz-Carlton (2)
$246.27 4.6% 69.9% 1.4% pts $352.12
2.5%
Composite North American
Full-Service & Luxury (3)
$130.22 2.7% 68.0% -0.8% pts $191.39 3.9%
Residence Inn
$92.58 1.7% 71.9% -0.4% pts $128.78 2.2%
Courtyard
$85.68 1.0% 64.7% -0.5% pts $132.41 1.9%
TownePlace Suites
$58.60 -1.0% 65.1% -3.0% pts $90.06 3.6%
SpringHill Suites
$75.84 5.5% 66.8% 1.9% pts $113.49
2.4%
Composite North American
Limited-Service (4)
$85.46 1.5% 66.9% -0.4% pts $127.75 2.1%
Composite - All (5)
$110.18 2.3% 67.5% -0.6% pts $163.16 3.3%
Comparable Systemwide North American Properties
Twelve Weeks Ended March 21, 2008
and March 23, 2007
-----------------------------------------------
Average
REVPAR Occupancy
Daily Rate
-----------------------------------------------
Brand
2008 vs. 2007 2008 vs. 2007 2008 vs. 2007
-------------------------------------------------------------------------
Marriott Hotels & Resorts
$110.10 1.6% 65.7% -1.5% pts $167.58 3.9%
Renaissance Hotels &
Resorts
$108.17 2.1% 67.7% -0.4% pts $159.90 2.6%
Composite North American
Full-Service (1)
$109.79 1.7% 66.0% -1.3% pts $166.33 3.7%
The Ritz-Carlton (2)
$246.27 4.6% 69.9% 1.4% pts $352.12
2.5%
Composite North American
Full-Service & Luxury (3)
$115.03 2.0% 66.2% -1.2% pts $173.87 3.9%
Residence Inn
$92.13 2.7% 72.5% -0.5% pts $127.02 3.4%
Courtyard
$84.20 1.8% 65.5% -0.8% pts $128.64 3.0%
Fairfield Inn
$57.54 3.2% 62.3% -1.5% pts $92.33
5.7%
TownePlace Suites
$60.82 0.4% 66.9% -1.2% pts $90.89
2.2%
SpringHill Suites
$75.20 2.7% 67.2% -0.5% pts $111.89 3.5%
Composite North American
Limited-Service (4)
$79.12 2.3% 66.9% -0.9% pts $118.21 3.6%
Composite - All (5)
$92.97 2.2% 66.6% -1.0% pts $139.53 3.7%
(1) Includes the Marriott Hotels &
Resorts and Renaissance Hotels &
Resorts properties.
(2) Statistics for The Ritz-Carlton
properties are for January through
February.
(3) Includes the Marriott Hotels &
Resorts, Renaissance Hotels & Resorts
and The Ritz-Carlton
properties.
(4) Includes the Residence Inn, Courtyard,
Fairfield Inn, TownePlace
Suites, and
SpringHill Suites properties.
(5) Includes the Marriott Hotels &
Resorts, Renaissance Hotels & Resorts,
The Ritz-Carlton,
Residence Inn, Courtyard, Fairfield Inn, TownePlace
Suites, and
SpringHill Suites properties.
MARRIOTT INTERNATIONAL, INC.
TIMESHARE SEGMENT
($ in millions)
Segment Results
---------------
Twelve Weeks Ended
-----------------------
Percent
March 21, March 23, Better/
2008 2007
(Worse)
---------- --------- --------
Base fees revenue
$11 $10
10
Timeshare sales and services
revenue, net of
direct expense
13 57
(77)
Joint venture equity income
(loss) 5
- *
Minority interest
2 -
*
General, administrative
and other
expense
(27) (23)
(17)
----------- --------- ---------
Segment results
$4 $44
(91)
=========== ========= =========
Sales and Services Revenue
--------------------------
Twelve Weeks Ended
-----------------------
Percent
March 21, March 23, Better/
2008 2007
(Worse)
----------- --------- ---------
Development
$205 $264
(22)
Services
84 76
11
Financing
27 23
17
Other revenue
10 6
67
----------- --------- ---------
Sales and services revenue
$326 $369
(12)
=========== ========= =========
Contract Sales (1)
------------------
Twelve Weeks Ended
------------------------
Percent
March 21, March 23, Better/
2008 2007
(Worse)
----------- --------- ---------
Company:
Timeshare
$285 $275
4
Fractional
8 9
(11)
Residential
12 -
*
----------- --------- ---------
Total company
305 284
7
Joint ventures:
Timeshare
- 8
(100)
Fractional
5 18
(72)
Residential
23 16
44
----------- --------- ---------
Total joint ventures
28 42
(33)
----------- --------- ---------
Total contract sales,
including joint ventures
$333 $326
2
=========== ========= =========
* Percent can not be calculated.
(1) - Timeshare contract sales represent gross sales of timeshare,
fractional, and residential products from both our
wholly-owned and joint venture projects, before the adjustment
for percentage-of-completion accounting.
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measures
In our press release and schedules, and related conference
call, we report certain financial measures that are not prescribed or authorized
by United States generally accepted accounting principles ("GAAP"). We
discuss management's reasons for reporting these non-GAAP measures below,
and the tables on the following page reconcile the most directly comparable
GAAP measures to the non-GAAP measures (identified by a double asterisk
on the following page) that we refer to in our press release and related
conference call. Although management evaluates and presents these non-GAAP
measures for the reasons described below, please be aware that these non-GAAP
measures are not alternatives to revenue, operating income, income from
continuing operations, net income, earnings per share or any other comparable
operating measure prescribed by GAAP. In addition, these non-GAAP financial
measures may be calculated and/or presented differently than measures with
the same or similar names that are reported by other companies, and as
a result, the non- GAAP measures we report may not be comparable to those
reported by others.
Earnings Before Interest, Taxes, Depreciation and Amortization.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
reflects earnings excluding the impact of interest expense, tax expense,
depreciation and amortization. Our management considers EBITDA to be an
indicator of operating performance because it can be used to measure our
ability to service debt, fund capital expenditures, and expand our business.
EBITDA is used by analysts, lenders, investors and others, as well as by
us, to evaluate companies because it excludes certain items that can vary
widely across different industries or among companies within the same industry.
For example, interest expense can be dependent on a company's capital structure,
debt levels and credit ratings. Accordingly, the impact of interest expense
on earnings can vary significantly among companies. Additionally, the tax
positions of companies can vary because of their differing abilities to
take advantage of tax benefits and because of the tax policies of the jurisdictions
in which they operate. As a result, effective tax rates and tax expense
can vary considerably among companies. EBITDA also excludes depreciation
and amortization because companies utilize productive assets of different
ages and use different methods of both acquiring and depreciating productive
assets. These differences can result in considerable variability in the
relative costs of productive assets and the depreciation and amortization
expense among companies.
ESOP Settlement Charge. Management evaluates non-GAAP
measures that exclude the charge associated with the 2007 settlement of
issues raised during the IRS' and Department of Labor's examination of
the employee stock ownership plan ("ESOP") feature of our Employees' Profit
Sharing, Retirement and Savings Plan and Trust, including adjusted earnings
per share and adjusted earnings before interest, taxes, depreciation and
amortization, because these measures allow for period-over-period comparisons
relative to our on-going operations before material charges. Additionally,
these non-GAAP measures facilitate management's comparison of our results
relative to on-going operations before material charges with that of other
lodging companies. The settlement resulted in an after-tax charge of $54
million in the second quarter 2007 reflecting $35 million of excise taxes
(impacting General, Administrative, and Other Expenses), $13 million of
interest expense on those excise taxes and $6 million of income tax expense
primarily reflecting additional interest.
Adjusted EBITDA. Our management also evaluates adjusted
EBITDA which excludes the synthetic fuel business for 2007, as well as
the $35 million charge in 2007 for excise taxes associated with the ESOP
settlement. The synthetic fuel operations, discontinued in 2007, are not
related to our core business, which is lodging. Accordingly, our management
evaluates non-GAAP measures which exclude the impact of the synthetic fuel
business because those measures allow for period-over-period comparisons
of our on-going core lodging operations. In addition, these non-GAAP measures
facilitate management's comparison of our results with the results of other
lodging companies. Our management excludes the excise taxes associated
with the ESOP settlement for the reasons noted above in the "ESOP Settlement
Charge" caption.
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure
EBITDA and Adjusted EBITDA
($ in millions)
Fiscal Year 2008
----------------
First
Quarter
-------
Net income
$121
Interest expense
42
Tax provision, continuing operations
75
Tax provision, minority interest
1
Depreciation and amortization
41
Less: Depreciation reimbursed by
third-party owners
(3)
Interest expense from unconsolidated
joint ventures
4
Depreciation and amortization from
unconsolidated joint ventures
5
-----
EBITDA**
$286
Discontinued operations adjustment
(synthetic fuel)
1
-----
Adjusted EBITDA**
$287
=====
Increase (Decrease) over 2007
Adjusted EBITDA
-14%
The following items make up the
discontinued operations adjustment
(synthetic fuel)
Pre-tax Synthetic Fuel losses (income)
$1
-----
EBITDA adjustment for discontinued
operations (synthetic fuel)
$1
=====
Fiscal Year 2007
--------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
------- ------- ------- ------- ------
Net income
$182 $207 $131 $176
$696
Interest expense
33 52 42
57 184
Tax provision, continuing operations
86 128 93 134
441
Tax (benefit) provision, synthetic
fuel
(72) (86) (41) 73
(126)
Depreciation and amortization
46 45 43
63 197
Less: Depreciation reimbursed by
third-party owners
(4) (4) (4) (6)
(18)
Interest expense from unconsolidated
joint ventures
5 5 8
6 24
Depreciation and amortization from
unconsolidated joint ventures
6 7 6
9 28
------- ------- ------- ------ ------
EBITDA**
$282 $354 $278 $512 $1,426
ESOP Settlement - Excise Tax
- 35 -
- 35
Discontinued operations adjustment
(synthetic fuel)
52 52 30
(15) 119
------- ------- ------- ------ ------
Adjusted EBITDA**
$334 $441 $308 $497 $1,580
======= ======= ======= ====== ======
The following items make up the
discontinued operations adjustment
(synthetic fuel)
Pre-tax Synthetic Fuel losses
(income)
$54 $54 $32 $(13)
$127
Synthetic Fuel depreciation
(2) (2) (2) (2)
(8)
------- ------- ------- ------ ------
EBITDA adjustment for discontinued
operations (synthetic fuel)
$52 $52 $30 $(15)
$119
======= ======= ======= ====== ======
** Denotes non-GAAP financial
measures.
Source: Marriott International, Inc.
|
Note: This press release contains "forward-looking statements"
within the meaning of federal securities laws, including REVPAR, profit
margin and earnings trends; statements concerning the number of lodging
properties we expect to add in the future; our expected share repurchases
and 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 the uncertain
environment in the lodging industry and the economy generally; supply and
demand changes for hotel rooms, vacation ownership, condominiums, and corporate
housing; competitive conditions in the lodging industry; relationships
with clients and property owners; the availability of capital to finance
hotel growth and refurbishment; and other risk factors identified in our
most recent annual or quarterly report on Form 10-K or 10-Q; any of which
could cause actual results to differ materially from those expressed in
or implied by the statements herein. These statements are made as of the
date of this press release, and we undertake no obligation to publicly
update or revise any forward-looking statement, whether as a result of
new information, future events or otherwise.
MARRIOTT INTERNATIONAL, INC. (NYSE: MAR - News) is a leading
lodging company with over 3,000 lodging properties in the United States
and 66 other countries and territories. Marriott International operates
and franchises hotels under the Marriott, JW Marriott, The Ritz-Carlton,
Renaissance, Residence Inn, Courtyard, TownePlace Suites, Fairfield Inn,
SpringHill Suites and Bulgari brand names; develops and operates vacation
ownership resorts under the Marriott Vacation Club, Horizons, The Ritz-Carlton
Club and Grand Residences by Marriott brands; operates Marriott Executive
Apartments; provides furnished corporate housing through its Marriott ExecuStay
division; and operates conference centers. The company is headquartered
in Bethesda, Md., and had approximately 151,000 employees at 2007 year-end.
It is ranked as the lodging industry's most admired company and one of
the best companies to work by FORTUNE®. The company is also a 2007
U.S. Environmental Protection Agency (EPA) ENERGY STAR® Partner. In
fiscal year 2007, Marriott International, Inc. reported sales from continuing
operations of $13 billion. For more information or reservations, please
visit our Web site at www.marriott.com. |
