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Marriott Reports a 3rd Qtr Net Loss of $466 million, Takes $752
million Charge Related to its Timeshare Busines

Revenue Decreases 17% and Worldwide Revpar Down 22% from Privous Year


BETHESDA, Md., Oct. 8, 2009 - Marriott International, Inc. ("Marriott") (NYSE: MAR) today reported third quarter 2009 adjusted income from continuing operations attributable to Marriott of $53 million, a 57 percent decline over the year-ago quarter, and adjusted diluted earnings per share ("EPS") from continuing operations attributable to Marriott shareholders of $0.15, down 55 percent. The company's EPS guidance for the 2009 third quarter, disclosed on July 16, 2009, totaled $0.09 to $0.14.

The reported loss from continuing operations attributable to Marriott was $466 million in the third quarter of 2009 compared to reported income from continuing operations attributable to Marriott of $94 million in the year-ago quarter. Reported diluted losses per share from continuing operations attributable to Marriott shareholders was $1.31 in the third quarter of 2009 compared to diluted EPS from continuing operations attributable to Marriott shareholders of $0.25 in the third quarter of 2008.

Adjusted results for the 2009 third quarter exclude $752 million pretax ($502 million after-tax and $1.41 per diluted share) of impairment charges, which Marriott previously disclosed, related to the timeshare segment. See the table on page A-14 of the accompanying schedules for the detail of these impairment charges and their placement on the Consolidated Statements of Income.

Adjusted results for the 2009 third quarter also exclude $8 million pretax ($4 million after-tax and $0.01 per diluted share) of restructuring costs and other charges. Restructuring costs totaled $9 million pretax and primarily included severance costs and timeshare facilities exit costs. Other charges totaled $1 million of pretax earnings and primarily reflect the $3 million favorable impact of the revaluation of residual interests from prior timeshare note sales due to three default triggers curing in the quarter, partially offset by $2 million of reserves for guarantees and contract cancellations. Of the total restructuring costs and other charges in the third quarter, cash payments are expected to be $5 million. See the table on page A-13 of the accompanying schedules for the detail of these restructuring costs and other charges and their placement on the Consolidated Statements of Income.

Finally, adjusted results for the 2009 third quarter also exclude a $13 million after-tax non-cash charge ($0.03 per diluted share) in the provision for income taxes primarily related to the treatment of funds received from certain foreign subsidiaries that is in ongoing discussions with the Internal Revenue Service. Adjusted results for the 2008 third quarter exclude a $29 million after-tax non-cash charge ($0.08 per diluted share) in the provision for income taxes primarily related to a 1994 tax planning transaction.

J.W. Marriott, Jr., chairman and chief executive officer of Marriott International, said, "Revenue per available room across our North American system declined less than expected during the third quarter as leisure travelers responded to attractive promotions and great values in our hotels. With solid cost controls, our hotels translated better than expected occupancy rates to stronger than expected fee revenue and earnings.

"The hotel industry has been challenged by the economic environment. We've worked hard to rein in costs and right-size our businesses and those efforts are paying off. Our hotels are in great shape; owners and customers prefer our brands; and we enjoy very strong market share premiums. As we look ahead, while the recovery may be slow and perhaps uneven, our continued focus on driving revenue, controlling costs and strengthening our balance sheet will position us to benefit from an improving economy."

In the 2009 third quarter (12-week period from June 20, 2009 to September 11, 2009), REVPAR for the company's worldwide comparable company-operated properties declined 23.5 percent (21.1 percent using constant dollars) and REVPAR for the company's worldwide comparable systemwide properties declined 21.4 percent (19.9 percent using constant dollars).

Markets outside North America were impacted by the difficult economic climate, the Olympics, the timing of holidays and concerns about the H1N1 virus. International comparable company-operated REVPAR declined 28.9 percent (22.3 percent using constant dollars), including a 22.7 percent decline in average daily rate (15.5 percent using constant dollars) in the third quarter of 2009.

In North America comparable company-operated REVPAR declined 20.6 percent and comparable systemwide REVPAR declined 19.3 percent. 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) was down 20.2 percent driven by a 14.6 percent decline in average daily rate.

Marriott added 79 new properties (10,380 rooms) to its worldwide lodging portfolio in the 2009 third quarter, including over 8,600 North American limited-service rooms. Three properties (503 rooms) exited the system during the quarter. At quarter-end, the company's lodging group encompassed 3,362 properties and timeshare resorts for a total of over 586,000 rooms. As of the end of the third quarter, the company's worldwide pipeline of hotels under construction, awaiting conversion or approved for development totaled approximately 105,000 rooms. The company expects to open over 33,000 rooms in 2009.

Reported results for the 2009 third quarter, the adjusted results and the associated reconciliations are shown on pages A-1, A-11, A-13, A-14 and A-17 of the accompanying schedules. The following paragraphs reflect adjusted results where indicated.

MARRIOTT REVENUES totaled approximately $2.5 billion in the 2009 third quarter compared to $3.0 billion for the third quarter of 2008. Base management and franchise fees declined 14 percent to $216 million reflecting worldwide declines in REVPAR in all brands offset in part by fees from new hotels. With continued soft lodging demand trends worldwide, third quarter incentive management fees declined 67 percent. The percentage of company-operated hotels earning incentive management fees declined to 20 percent in the 2009 third quarter compared to 55 percent in the year-ago quarter. Year-to-date 25 percent of company-operated hotels earned incentive management fees compared to 62 percent in the prior year. Nearly all incentive management fees came from hotels outside of North America in the 2009 quarter compared to 68 percent in the 2008 quarter.

Worldwide comparable company-operated house profit margins declined 490 basis points in the third quarter reflecting weak REVPAR offset by continued efficiency improvements at the property level. House profit margins for comparable company-operated properties outside North America declined 430 basis points. North American comparable company-operated house profit margins declined 520 basis points from the year-ago quarter.

Owned, leased, corporate housing and other revenue, net of direct expenses, declined $8 million in the 2009 third quarter, to $12 million, primarily reflecting weaker operating results at owned and leased properties and lower corporate housing profits partially offset by a $6 million transaction cancellation fee.

Third quarter adjusted Timeshare segment contract sales declined 42 percent to $176 million excluding a $24 million allowance for fractional and residential contract cancellations recorded in the quarter. Contract sales of core one-week timeshare intervals totaled $164 million as marketing incentives encouraged demand.

In the third quarter of 2009, adjusted Timeshare sales and services revenue declined 35 percent to $251 million and, net of expenses, declined to $13 million from $47 million in the 2008 third quarter. Adjusted results reflected lower development profit due to continued soft demand for timeshare, fractional, and residential products, and unfavorable reportability. Services profit was also lower largely due to higher maintenance costs associated with unsold inventory and lower rental rates.

Adjusted Timeshare segment results, which includes Timeshare sales and services revenue, net of direct expenses, as well as base management fees, equity earnings, noncontrolling interest and general, administrative and other expenses associated with the timeshare business, totaled $9 million in the 2009 third quarter compared to $49 million in the prior year quarter. The 2008 third quarter segment results reflected a net $10 million pretax impairment charge for a fractional and residential consolidated joint venture project. The $10 million charge in 2008 included a $22 million negative adjustment in timeshare direct expenses partially offset by a $12 million pretax ($8 million after-tax) benefit associated with the joint venture partner's share, which is reflected in net losses attributable to noncontrolling interest, net of tax.

ADJUSTED GENERAL, ADMINISTRATIVE AND OTHER expenses for the 2009 third quarter totaled $143 million, a 14 percent decline from the year-ago quarter largely reflecting cost reductions throughout the organization. The quarter also included a $15 million unfavorable impact associated with deferred compensation compared to the 2008 quarter (offset by a similar decrease in the provision for taxes) and $5 million of certain litigation expenses. Excluding these items, general, administrative and other expenses for the third quarter of 2009 declined 25 percent compared to the third quarter of 2008.

(LOSSES) GAINS AND OTHER INCOME totaled a loss of $1 million and included a $5 million impairment charge on an investment partially offset by $3 million of gains on the sale of real estate and a $1 million gain on the extinguishment of debt. The prior year's third quarter gains totaled $7 million and included $2 million of gains on the sale of real estate, a $2 million gain from the sale of the company's interest in a joint venture and $3 million of returns from joint venture investments.

INTEREST EXPENSE decreased $6 million in the third quarter primarily due to lower interest rates on short-term borrowings and lower debt balances partially offset by lower capitalized interest associated with construction projects.

ADJUSTED EQUITY IN (LOSSES) EARNINGS totaled an $11 million loss in the quarter compared to $2 million in earnings in the year-ago quarter. Losses in the 2009 quarter primarily reflected losses in four joint ventures and the impairment of one investment.
NET LOSSES ATTRIBUTABLE TO NONCONTROLLING INTERESTS, NET OF TAX totaled $3 million in the quarter compared to $10 million in the year-ago quarter.

BALANCE SHEET
At the end of third quarter 2009, total debt was $2,660 million and cash balances totaled $130 million, compared to $3,095 million of debt and $134 million of cash at year-end 2008.

COMMON STOCK
Adjusted weighted average fully diluted shares outstanding totaled 366.3 million in the 2009 third quarter compared to 368.0 million in the year-ago quarter. The remaining share repurchase authorization, as of September 11, 2009, totaled 21.3 million shares. No share repurchases are planned in 2009.

On August 6, 2009, the Board of Directors declared the issuance of a stock dividend payable on September 3, 2009, to shareholders of record on August 20, 2009. For periods prior to the stock dividend, all share and per share data in our condensed consolidated financial statements and related notes have been retroactively adjusted to reflect the stock dividend.

FOURTH QUARTER 2009 OUTLOOK
While Marriott typically provides a range of guidance for future performance, the current global economic and financial climate continues to make predictions very difficult. Therefore, the company is unable to give its typical guidance. Instead, the company is providing the following assumptions which it is using for internal planning purposes. For the fourth quarter, the company assumes North American comparable systemwide hotel REVPAR declines of 13 to 16 percent. For comparable systemwide hotels outside North America, the company assumes REVPAR declines of 16 to 18 percent on a constant dollar basis. Total fee revenue could be $310 million to $320 million. Owned, leased, corporate housing and other revenue, net of direct expenses, could total $15 to $20 million.

In the fourth quarter, the company assumes Timeshare sales and services revenue, net of direct expenses, will total approximately $15 million, including a note sale gain of approximately $10 million to $15 million. Fourth quarter Timeshare contract sales could total $185 million to $195 million.

The company anticipates that general, administrative and other expenses will total about $185 million to $190 million in the fourth quarter of 2009, a roughly 20 percent decline from the adjusted 2008 fourth quarter amount.

Based upon the above assumptions and a 38 percent tax rate, adjusted diluted EPS from continuing operations attributable to Marriott shareholders for the 2009 fourth quarter could total $0.20 to $0.23.

The company expects investment spending in 2009 will decline by more than 50 percent from 2008 levels to approximately $325 million to $375 million. This investment spending estimate includes $145 million to $155 million for capital expenditures and maintenance capital spending, $20 million to $30 million for net timeshare development, $90 million to $100 million in new mezzanine financing and mortgage loans, $35 million to $45 million for contract acquisition costs and $35 million to $45 million in equity and other investments (including timeshare equity investments).

2010 OUTLOOK

As in 2009, the company is unable to provide its typical guidance for 2010. Instead, Marriott is providing the following assumptions, which it is using for internal planning purposes. For the full year 2010, the company expects the business climate, particularly the pricing environment, to remain difficult. For worldwide comparable systemwide hotels, the company assumes full year 2010 REVPAR will be flat to down 5 percent (on a constant dollar basis) with performance strengthening over the year. The company expects REVPAR in international markets to show greater relative year over year strength than North American markets.

The company expects to open 25,000 to 30,000 rooms in 2010 as most hotels expected to open are already under construction or undergoing conversion from other brands. Given these assumptions, full year 2010 fee revenue could total $1,050 million to $1,110 million. The company estimates that, on a full-year basis, one point of worldwide systemwide REVPAR impacts total fees by approximately $10 million to $15 million pretax.

For its timeshare business, the company assumes 2010 timeshare contract sales could be in line with 2009 levels.

The company expects to adopt FAS 166 and 167 at the beginning of 2010, which will impact its accounting for securitized timeshare loans. Assuming the consolidation of the existing portfolio of securitized loans, the company expects assets to increase by $950 million to $1,025 million, liabilities to increase by $1,020 million to $1,120 million, and shareholders' equity to decline by $70 million to $95 million. Pretax earnings in 2010 would increase by $30 million to $50 million as a result of the accounting change, but no change in cash flow is anticipated.

The company expects its 2010 general and administrative costs to be modestly higher than in 2009. As part of its ongoing budget process, the company continues to evaluate its timeshare earnings outlook and investment spending estimates for 2010. Based on its preliminary outlook for 2010, excluding the impact of FAS 166 and 167, the company anticipates continued meaningful reductions in debt levels in 2010.

Marriott International, Inc. (NYSE: MAR) will conduct its quarterly earnings review for the investment community and news media on Thursday, October 8, 2009 at 10 a.m. Eastern Time (ET). The conference call will be webcast simultaneously via Marriott's investor relations website at http://www.marriott.com/investor, click the "Recent and Upcoming Events" tab and click on the quarterly conference call link. A replay will be available at that same website until October 8, 2010. The webcast will also be available as a podcast from the same site.

The telephone dial-in number for the conference call is 719-325-4808. A telephone replay of the conference call will be available from 1 p.m. ET, Thursday, October 8, 2009 until 8 p.m. ET, Thursday, October 15, 2009. To access the replay, call 719-457-0820. The reservation number for the recording is 5860348.

Note: This press release and accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including REVPAR, profit margin and earnings trends, estimates and assumptions; statements concerning the number of lodging properties we expect to add in the future; our expected cost savings, investment spending and share repurchases; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including the depth and duration of the current recession; 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 quarterly report on Form 10-Q; any of which could cause actual results to differ materially from those expressed in or implied by the statements herein. These statements are made as of the date of this press release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

MARRIOTT INTERNATIONAL, INC. (NYSE:MAR) is a leading lodging company with more than 3,300 lodging properties in 68 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, The Ritz-Carlton Destination Club, The Ritz-Carlton Residences 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, Maryland, USA and had approximately 146,000 employees at 2008 year-end. It is recognized by BusinessWeek as one of the 100 best global brands, by FORTUNE® as one of the best companies to work for, and by the U.S. Environmental Protection Agency (EPA) as Partner of the Year since 2004. In fiscal year 2008, Marriott International reported sales from continuing operations of nearly $13 billion. For more information or reservations, please visit our web site at www.marriott.com. For an interactive online version of Marriott's 2008 Annual Report, which includes a short video message from Chairman and CEO J.W. Marriott, Jr., visit www.marriott.com/investor.
 

IRPR#1

MARRIOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)



                                             Adjustments
                                             -----------
                         As
                      Reported  Restruc-                          As Adjusted
                      12 Weeks  turing    Timeshare                12 Weeks
                       Ended    Costs     Strategy -                 Ended
                     September & Other    Impairment    Certain    September
                     11, 2009 Charges(6) Charges(5,10) Tax Items  11, 2009**

    REVENUES
    Base management
     fees                  $116     $-         $-         $-        $116
    Franchise fees          100      -          -          -         100
    Incentive
     management fees         17      -          -          -          17
    Owned, leased,
     corporate housing
     and other revenue
      (1)                   226      -          -          -         226
    Timeshare
     sales and
     services (2)           254     (3)         -          -         251
    Cost
     reimbursements
      (3)                 1,758      -          -          -       1,758
                          -----      -          -          -       -----
       Total Revenues     2,471     (3)         -          -       2,468

    OPERATING COSTS
     AND EXPENSES
    Owned, leased
     and corporate
     housing - direct
      (4)                   214      -          -          -         214
    Timeshare - direct      238      -          -          -         238
    Timeshare
     strategy -
     impairment
     charges (5)            614      -       (614)         -           -
    Reimbursed costs      1,758      -          -          -       1,758
    Restructuring
     costs                    9     (9)         -          -           -
    General,
     administrative
     and other (7)          144     (1)         -          -         143
                            ---     --          -          -         ---
       Total Expenses     2,977    (10)      (614)         -       2,353
                          -----   ----       ----          -       -----

    OPERATING (LOSS) /
     INCOME                (506)     7        614          -         115

    (Losses) /
     gains and other
     income (8)              (1)     -          -          -          (1)
    Interest expense        (27)     -          -          -         (27)
    Interest income           5      -          -          -           5
    (Provision for)
     reversal of loan
     losses                   -      -          -          -           -
    Equity in
     (losses) earnings
      (9)                   (12)     1          -          -         (11)
    Timeshare
     strategy -
     impairment
     charges
     (non-operating)
      (10)                 (138)     -        138          -           -
                          -----      -        ---          -           -

    (LOSS) / INCOME
     FROM CONTINUING
     OPERATIONS BEFORE
     INCOME TAXES          (679)     8        752          -          81

    Benefit /
     (Provision) for
     income taxes           210     (4)      (250)        13         (31)
                            ---     --       ----         --         ---

    (LOSS) / INCOME
     FROM CONTINUING
     OPERATIONS            (469)     4        502         13          50

    Discontinued
     operations -
     Synthetic Fuel,
     net of tax (11)          -      -          -          -           -
                              -      -          -          -           -

    NET (LOSS) /
     INCOME                (469)     4        502         13          50

    Add: Net losses
     attributable to
     noncontrolling
     interests, net of
     tax                      3      -          -          -           3
                              -      -          -          -           -

    NET (LOSS) /
     INCOME
     ATTRIBUTABLE TO
     MARRIOTT             $(466)    $4       $502        $13         $53
                          =====     ==       ====        ===         ===

    (LOSSES) /
     EARNINGS PER
     SHARE - Basic
       (Losses) /
       earnings from
     continuing
     operations
     attributable to
     Marriott
     shareholders (12)   $(1.31) $0.01      $1.41      $0.03       $0.15
       Earnings
       from discontinued
     operations (11)          -      -          -          -           -
                              -      -          -          -           -
       (Losses) /
       earnings per
     share
     attributable to
     Marriott
     shareholders (12)   $(1.31) $0.01      $1.41      $0.03       $0.15
                         ======  =====      =====      =====       =====

    (LOSSES) /
     EARNINGS PER
     SHARE - Diluted
       (Losses) /
       earnings from
     continuing
     operations
     attributable to
     Marriott
     shareholders (12)   $(1.31) $0.01      $1.41     $0.03       $0.15
       Earnings
       from discontinued
     operations (11)          -      -          -         -           -
                              -      -          -         -           -
       (Losses) /
       earnings per
     share
     attributable to
     Marriott
     shareholders (12)   $(1.31) $0.01      $1.41     $0.03       $0.15
                         ======  =====      =====     =====       =====
 

    Basic Shares
      (13)                355.5  355.5      355.5     355.5       355.5
    Diluted Shares
      (13,14)             355.5  355.5      355.5     355.5       366.3
 
 
 
 
 
 

                                           Adjustments

                                As Reported         As Adjusted    Percent
                                 12 Weeks            12 Weeks   Better/(Worse)
                                   Ended                Ended    Adjusted 2009
                                 September   Certain  September  vs. Adjusted
                                   5, 2008  Tax Items  5, 2008**    2008

    REVENUES
    Base management fees               $143     $-     $143         (19)
    Franchise fees                      108      -      108          (7)
    Incentive management fees            52      -       52         (67)
    Owned, leased, corporate
     housing and other revenue (1)      260      -      260         (13)
    Timeshare sales and
     services (2)                       384      -      384         (35)
    Cost reimbursements (3)           2,016      -    2,016         (13)

       Total Revenues                 2,963      -    2,963         (17)

    OPERATING COSTS AND EXPENSES
    Owned, leased and corporate
     housing - direct (4)               240      -      240          11
    Timeshare - direct                  337      -      337          29
    Timeshare strategy -
     impairment charges (5)               -      -        -           -
    Reimbursed costs                  2,016      -    2,016          13
    Restructuring costs                   -      -        -           -
    General, administrative and
     other (7)                          167      -      167          14

       Total Expenses                 2,760      -    2,760          15
 

    OPERATING (LOSS) / INCOME           203      -      203         (43)

    (Losses) / gains and other
     income (8)                           7      -        7        (114)
    Interest expense                    (33)     -      (33)         18
    Interest income                       8      -        8         (38)
    (Provision for) reversal of
     loan losses                          -      -        -           -
    Equity in (losses) earnings (9)       2      -        2        (650)
    Timeshare strategy -
     impairment charges
     (non-operating) (10)                 -      -        -           -
 

    (LOSS) / INCOME FROM CONTINUING
     OPERATIONS BEFORE INCOME TAXES     187      -      187         (57)

    Benefit / (Provision) for
     income taxes                      (103)    29      (74)         58
 

    (LOSS) / INCOME FROM CONTINUING
     OPERATIONS                          84     29      113         (56)

    Discontinued operations -
     Synthetic Fuel, net of tax
      (11)                                -      -        -           -
 

    NET (LOSS) / INCOME                  84     29      113         (56)

    Add: Net losses attributable to
     noncontrolling interests, net
     of tax                              10      -       10         (70)
 

    NET (LOSS) / INCOME
     ATTRIBUTABLE TO MARRIOTT           $94    $29     $123         (57)
 

    (LOSSES) / EARNINGS PER SHARE -
     Basic
       (Losses) / earnings from
       continuing operations
       attributable to Marriott
       shareholders (12)              $0.27  $0.08    $0.35         (57)
       Earnings from
       discontinued operations (11)       -      -        -           -

       (Losses) / earnings per
       share attributable to Marriott
     shareholders (12)                $0.27  $0.08    $0.35         (57)
 

    (LOSSES) / EARNINGS PER SHARE -
     Diluted
       (Losses) / earnings from
        continuing operations
        attributable to Marriott
        shareholders (12)             $0.25  $0.08    $0.33         (55)
       Earnings from
        discontinued operations (11)      -      -        -           -
       (Losses) / earnings per
        share attributable to Marriott
        shareholders (12)             $0.25  $0.08    $0.33         (55)
 
 

    Basic Shares (13)                 353.8  353.8    353.8
    Diluted Shares (13,14)            368.0  368.0    368.0

    See page A-3 for footnote
     references.
 
 
 
 
 
 
 

                         MARRIOTT INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF INCOME
                   (in millions, except per share amounts)

                                               Adjustments
                                                                   As Adjusted
                             As Reported Restruct-  Time-            36 Weeks
                               36 Weeks   uring     share               Ended
                                Ended    Costs    Strategy - Certain September
                               September & Other  Impairment     Tax     11,
                               11, 2009 Charges(6) Charges(5,10) Items  2009**

    REVENUES
    Base management fees            $367     $-       $-          $-    $367
    Franchise fees                   281      -        -           -     281
    Incentive management fees         95      -        -           -      95
    Owned, leased, corporate
     housing and other
     revenue (1)                     684      -        -           -     684
    Timeshare sales and
     services (2)                    746     26        -           -     772
    Cost reimbursements (3)        5,355      -        -           -   5,355

       Total Revenues              7,528     26        -           -   7,554

    OPERATING COSTS AND EXPENSES
    Owned, leased and corporate
     housing - direct( 4)            638      -        -           -     638
    Timeshare - direct               737      1        -           -     738
    Timeshare strategy -
     impairment charges (5)          614      -     (614)          -       -
    Reimbursed costs               5,355      -        -           -   5,355
    Restructuring costs               44    (44)       -           -       -
    General, administrative and
     other (7)                       464    (49)       -           -     415

       Total Expenses              7,852    (92)    (614)          -   7,146
 

    OPERATING (LOSS) / INCOME       (324)   118      614           -     408

    Gains and other income (8)        27      -        -           -      27
    Interest expense                 (84)     -        -           -     (84)
    Interest income                   20      -        -           -      20
    (Provision for) reversal of loan
     losses                          (43)    43        -           -       -
    Equity in (losses)
     earnings (9)                    (50)    33        -           -     (17)
    Timeshare strategy - impairment
     charges (non-operating) (10)   (138)     -      138           -       -
 

    (LOSS) / INCOME FROM CONTINUING
     OPERATIONS BEFORE INCOME
     TAXES                          (592)   194      752           -     354

    Benefit / (Provision) for income
     taxes                           133    (76)    (250)         56    (137)
 

    (LOSS) / INCOME FROM CONTINUING
     OPERATIONS                     (459)   118      502          56     217

    Discontinued operations -
     Synthetic Fuel, net of tax (11)   -      -        -           -       -
 

    NET (LOSS) / INCOME             (459)   118      502          56     217

    Add: Net losses attributable to
     noncontrolling interests, net of
     tax                               7      -        -           -       7
 

    NET (LOSS) / INCOME ATTRIBUTABLE TO
     MARRIOTT                      $(452)  $118     $502         $56    $224
 

    (LOSSES) / EARNINGS PER SHARE -
     Basic
       (Losses) / earnings from
        continuing operations
        attributable to Marriott
        shareholders (12)         $(1.27) $0.33    $1.42       $0.16   $0.63
       Earnings from discontinued
        operations (11)                -      -        -           -       -
       (Losses) / earnings per
        share attributable to
        Marriott
        shareholders (12)         $(1.27) $0.33    $1.42       $0.16   $0.63
 

    (LOSSES) / EARNINGS PER SHARE -
     Diluted
       (Losses) / earnings from
        continuing operations
        attributable to Marriott
        shareholders (12)         $(1.27) $0.33    $1.42       $0.16   $0.62
       Earnings from
        discontinued
        operations (11)                -      -        -          -       -
       (Losses) / earnings per
        share attributable to
        Marriott
        shareholders (12)         $(1.27) $0.33    $1.42      $0.16   $0.62
 
 

    Basic Shares (13)              354.5  354.5    354.5      354.5   354.5
    Diluted Shares (13,14)         354.5  354.5    354.5      354.5   364.2
 
 
 
 
 
 
 
 

                                              Adjustments

                                As Reported         As Adjusted    Percent
                                 36 Weeks            36 Weeks   Better/(Worse)
                                   Ended                Ended    Adjusted 2009
                                 September   Certain  September  vs. Adjusted
                                   5, 2008  Tax Items  5, 2008**    2008
 

    REVENUES
    Base management fees               $452     $-      $452       (19)
    Franchise fees                      314      -       314       (11)
    Incentive management fees           229      -       229       (59)
    Owned, leased, corporate
     housing and other revenue (1)      849      -       849       (19)
    Timeshare sales and services (2)  1,098      -     1,098       (30)
    Cost reimbursements (3)           6,153      -     6,153       (13)
                                      -----      -     -----
       Total Revenues                 9,095      -     9,095       (17)

    OPERATING COSTS AND EXPENSES
    Owned, leased and corporate
     housing - direct( 4)               757      -       757        16
    Timeshare - direct                  961      -       961        23
    Timeshare strategy -
     impairment charges (5)               -      -         -         -
    Reimbursed costs                  6,153      -     6,153        13
    Restructuring costs                   -      -         -         -
    General, administrative and
     other (7)                          513      -       513        19
                                        ---      -       ---
       Total Expenses                 8,384      -     8,384        15
                                      -----      -     -----

    OPERATING (LOSS) / INCOME           711      -       711       (43)

    Gains and other income (8)           19      -        19        42
    Interest expense                   (113)     -      (113)       26
    Interest income                      28      -        28       (29)
    (Provision for) reversal of loan
     losses                               2      -         2      (100)
    Equity in (losses) earnings (9)      26      -        26      (165)
    Timeshare strategy -
     impairment charges
     (non-operating) (10)                 -      -         -         -
                                          -      -         -

    (LOSS) / INCOME FROM CONTINUING
     OPERATIONS BEFORE INCOME TAXES     673      -       673       (47)

    Benefit / (Provision) for income
     taxes                             (317)    65      (252)       46
                                       ----     --      ----

    (LOSS) / INCOME FROM CONTINUING
     OPERATIONS                         356     65       421       (48)

    Discontinued operations -
     Synthetic Fuel, net of tax (11)      3      -         3      (100)
                                          -      -         -

    NET (LOSS) / INCOME                 359     65       424       (49)

    Add: Net losses attributable to
     noncontrolling interests, net of
     tax                                 13      -        13       (46)
                                         --      -        --

    NET (LOSS) / INCOME ATTRIBUTABLE
     TO MARRIOTT                       $372    $65      $437       (49)
                                       ====    ===      ====

    (LOSSES) / EARNINGS PER SHARE -
     Basic
       (Losses) / earnings from
        continuing operations
        attributable to Marriott
        shareholders (12)             $1.04  $0.18     $1.22       (48)
       Earnings from discontinued
        operations (11)                0.01      -      0.01      (100)
                                       ----      -      ----
       (Losses) / earnings per
        share attributable to Marriott
        shareholders (12)             $1.05  $0.18     $1.23       (49)
                                      =====  =====     =====

    (LOSSES) / EARNINGS PER SHARE -
     Diluted
       (Losses) / earnings from
        continuing operations
        attributable to Marriott
        shareholders (12)             $0.99  $0.17     $1.16       (47)
       Earnings from discontinued
        operations (11)                0.01      -      0.01      (100)
                                       ----      -      ----
       (Losses) / earnings per
        share attributable to Marriott
        shareholders (12)             $1.00  $0.17     $1.17       (47)
                                      =====  =====     =====
 

    Basic Shares (13)                 355.6  355.6     355.6
    Diluted Shares (13,14)            372.0  372.0     372.0

    See page A-3 for footnote
     references.
 
 
 

                                   MARRIOTT INTERNATIONAL, INC.
                                CONSOLIDATED STATEMENTS OF INCOME
                             (in millions, except per share amounts)

    Reconciliations of Consolidated (Loss) / Income from Continuing Operations
     to (Loss) / Income from Continuing Operations Attributable to Marriott

                                           Adjustments
                                           -----------
                       As Reported                              As Adjusted
                        12 Weeks    Restruc-                      12 Weeks
                          Ended     turing  Timeshare              Ended
                       September    Costs   Strategy -    Certain September
                            11,    & Other  Impairment      Tax     11,
                           2009   Charges(6) Charges(5)(10) Items  2009**
    CONSOLIDATED (LOSS) /
     INCOME FROM CONTINUING
     OPERATIONS              $(469)    $4     $502         $13     $50
    Add: Losses attributable
     to noncontrolling
     interests, net of tax       3      -        -           -       3
                                 -      -        -           -       -
    (LOSS) / INCOME FROM
     CONTINUING OPERATIONS
     ATTRIBUTABLE TO
      MARRIOTT               $(466)    $4     $502         $13     $53
                             =====     ==     ====         ===     ===
 
 

                                         Adjustments
                                         -----------
                          As Reported Restruc-                  As Adjusted
                             36 Weeks turing   Timeshare          36 Weeks
                               Ended    Costs   Strategy -          Ended
                             September & Other Impairment Certain September
                                11,   Charges   Charges     Tax       11,
                               2009      (6)    (5),(10)    Items    2009**

    CONSOLIDATED (LOSS) /
     INCOME FROM CONTINUING
     OPERATIONS              $(459)     $118     $502       $56       $217
    Add: Losses attributable to
     noncontrolling interests,
     net of tax                 7          -        -        -           7
                                -          -        -        -           -
    (LOSS) / INCOME FROM
     CONTINUING OPERATIONS
     ATTRIBUTABLE TO
     MARRIOTT               $(452)      $118     $502       $56       $224
                             =====      ====     ====       ===       ====
 
 
 
 
 
 

                                               Adjustments
                                               -----------
                                                                     Percent
                                                                     Better/
                       As Reported                                  (Worse)
                        12 Weeks                  As Adjusted       Adjusted
                          Ended                     12 Weeks         2009 vs.
                        September   Certain          Ended           Adjusted
                         5, 2008    Tax Items   September 5, 2008**    2008
                        -----------  ---------  -------------------  ---------
 

    CONSOLIDATED (LOSS) /
     INCOME FROM CONTINUING
     OPERATIONS                $84       $29       $113              (56)
    Add: Losses attributable to
     noncontrolling interests,
     net of tax                 10         -         10              (70)
                                --         -         --
    (LOSS) / INCOME FROM
     CONTINUING OPERATIONS
     ATTRIBUTABLE TO MARRIOTT  $94       $29       $123              (57)
                               ===       ===       ====
 

                                               Adjustments
                                               -----------
                                                                     Percent
                                                                     Better/
                       As Reported                                  (Worse)
                        36 Weeks                 As Adjusted        Adjusted
                          Ended                     36 Weeks         2009 vs.
                        September   Certain          Ended           Adjusted
                         5, 2008    Tax Items   September 5, 2008**    2008
                        -----------  ---------  -------------------  ---------
 

    CONSOLIDATED (LOSS) /
     INCOME FROM CONTINUING
     OPERATIONS                $356     $65         $421              (48)
    Add: Losses attributable to
     noncontrolling interests,
     net of tax                  13       -           13              (46)
                                 --       -           --
    (LOSS) / INCOME FROM
     CONTINUING OPERATIONS
     ATTRIBUTABLE TO MARRIOTT  $369     $65         $434              (48)
                               ====     ===         ====
 
 
 

    ** Denotes non-GAAP financial measures.  Please see pages A-20 and A-21
    for additional information about our reasons for providing these
    alternative financial measures and the limitations on their use.

    1    - Owned, leased, corporate housing and other revenue includes
    revenue from the properties we own or lease, revenue from our corporate
    housing business, termination fees and other revenue.

    2    - Timeshare sales and services includes total timeshare revenue
    except for base management fees, cost reimbursements, real estate gains
    and joint venture earnings.  Timeshare sales and services also includes
    gains / (losses) 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    - Reflects the following impairments; inventory $529 million,
    property and equipment $64 million; and other impairments $21 million, all
    of which are allocated to the Timeshare segment.  See page A-14 for
    information regarding Timeshare Strategy - Impairment Charges.

    6    - See page A-13 for information regarding Restructuring Costs and
    Other Charges.

    7    - General, administrative and other expenses include the overhead
    costs allocated to our segments, and our corporate overhead costs and
    general expenses.

    8    - Gains and other income includes gains and losses on: the sale of
    real estate, note sales or repayments (except timeshare note
    securitizations), the sale of joint ventures and investments; and debt
    extinguishments, as well as income from cost method joint ventures.

    9    - Equity in (losses) earnings includes our equity in (losses) /
    earnings of unconsolidated equity method joint ventures.

    10  - Reflects a $71 million joint venture impairment charge which is
    allocated to the Timeshare segment and $67 million loan impairment and
    funding liability charge which is unallocated.  See page A-14 for
    information regarding Timeshare Strategy - Impairment Charges.

    11  - Discontinued operations relates to our Synthetic Fuel business which
    was shut down and substantially all the assets liquidated at December 28,
    2007.

    12  - (Losses) / earnings per share attributable to Marriott
    shareholders plus adjustment items may not equal earnings per share
    attributable to Marriott shareholders as adjusted due to rounding.

    13  - All share numbers and per share amounts have been retroactively
    adjusted to reflect the stock dividends with distribution dates of July
    30, 2009 and September 3, 2009.

    14  - Basic and fully diluted weighted average common shares outstanding
    used to calculate earnings per share from continuing operations for the
    periods in which we had a loss are the same because inclusion of
    additional equivalents would be anti-dilutive.
 
 

                             MARRIOTT INTERNATIONAL, INC.
                                 BUSINESS SEGMENTS
                                 ($ in millions)

                                           Twelve Weeks Ended    Percent
                                           ------------------
                                                                 Better/
                                         September   September
                                          11, 2009     5, 2008   (Worse)
                                         ---------   ---------   ---------

    REVENUES

    North American Full-Service             $1,074      $1,239        (13)
    North American Limited-Service             489         544        (10)
    International                              259         342        (24)
    Luxury                                     296         357        (17)
    Timeshare                                  330         463        (29)
                                            ------      ------
      Total segment revenues(1)              2,448       2,945        (17)
    Other unallocated corporate                 23          18         28
                                            ------      ------
      Total                                 $2,471      $2,963        (17)
                                            ======      ======
 

    INCOME / (LOSS) FROM CONTINUING OPERATIONS

    North American Full-Service                $51         $66        (23)
    North American Limited-Service              77         103        (25)
    International                               25          50        (50)
    Luxury                                       7          17        (59)
    Timeshare (2),(3)                         (681)         49     (1,490)
                                              ----        ----
      Total segment financial results (1)     (521)        285       (283)
    Other unallocated corporate                (65)        (58)       (12)
    Interest income, provision for loan losses
      and interest expense (4)                 (89)        (25)      (256)
    Income taxes (2)                           209        (108)       294
                                              ----        ----
      Total                                  $(466)        $94       (596)
                                             =====        ====
 
 
 

    (1)  We consider segment revenues and segment financial results to be
         meaningful indicators of our performance because they measure
         changes in our 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 noncontrolling interests of our consolidated subsidiaries
         to our segments.  Accordingly, we allocated $3 million
         of noncontrolling interests of our consolidated subsidiaries for
         the 2009 third quarter as reflected in our income statement
         as follows: $4 million to our Timeshare segment and $(1) million to
         provision for income taxes.  For the 2008 third quarter,
         we allocated $10 million of noncontrolling interests as follows: $15
         million to our Timeshare segment
         and $(5) million to provision for income taxes.

    (3)  Reflects $685 million of impairment charges recorded in the 2009
         third quarter.  See page A-14 for more information.

    (4)  Reflects a $67 million loan impairment and funding liability charge
         in the 2009 third quarter which is unallocated.  See page A-14 for
         more information.
 
 

                             MARRIOTT INTERNATIONAL, INC.
                                 BUSINESS SEGMENTS
                                 ($ in millions)

                                     Thirty-Six Weeks Ended  Percent
                                     ----------------------
                                                             Better/
                                     September   September
                                      11, 2009     5, 2008   (Worse)
                                     ---------   ---------   -------

    REVENUES

    North American Full-Service         $3,382      $3,917        (14)
    North American Limited-Service       1,401       1,570        (11)
    International                          756       1,093        (31)
    Luxury                                 971       1,147        (15)
    Timeshare                              962       1,326        (27)
                                         -----       -----
      Total segment revenues (1)         7,472       9,053        (17)
    Other unallocated corporate             56          42         33
                                         -----      ------
      Total                             $7,528      $9,095        (17)
                                        ======      ======
 

    INCOME / (LOSS) FROM CONTINUING OPERATIONS

    North American Full-Service           $191        $290        (34)
    North American Limited-Service         182         301        (40)
    International (2)                       89         179        (50)
    Luxury                                   -          66       (100)
    Timeshare (2),(3)                     (733)        123       (696)
                                         -----        ----
      Total segment financial
       results (1)                        (271)        959       (128)
    Other unallocated corporate           (136)       (183)        26
    Interest income, provision for loan losses
      and interest expense (4)            (174)        (83)      (110)
    Income taxes (2)                       129        (324)       140
                                           ---        ----
      Total                              $(452)       $369       (222)
                                         =====        ====
 

    (1)  We consider segment revenues and segment financial results to be
         meaningful indicators of our performance because they measure
         changes in our 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 noncontrolling interests of our consolidated
         subsidiaries to our segments.  Accordingly, we allocated $7
         million of noncontrolling interests of our consolidated
         subsidiaries for the 2009 third quarter  year-to-date as reflected
         in our income statement as follows: $11 million to our Timeshare
         segment and $(4) million to provision for income taxes.  For the
         2008 third quarter year-to-date, we allocated $13 million of
         noncontrolling interests as follows: $21 million to our Timeshare
         segment, $(1) million to our International segment, and $(7)
         million to provision for income taxes.

    (3)  Reflects $685 million of impairment charges recorded in the 2009
         third quarter.  See page A-14 for more information.

    (4)  Reflects a $67 million loan impairment and funding liability
         charge in the 2009 third quarter which is unallocated.  See page
         A-14 for more information.
 
 

                                        MARRIOTT INTERNATIONAL, INC.
                                          TOTAL LODGING PRODUCTS (1)

                                 Number of Properties  Number of Rooms/Suites
                           --------------------------------------------------
                                      September                September
                                --------------------     --------------------
    Brand                        11,     5,      5,       11,      5,      5,

                                2009    2008    2008     2009     2008   2008
    Domestic Full-Service
    ---------------------
      Marriott Hotels & Resorts  350     345       5  139,280  137,498  1,782
      Renaissance Hotels &
       Resorts                    78      75       3   28,508   27,546    962

    Domestic Limited-Service
    ------------------------
      Courtyard                  761     715      46  106,835   99,676  7,159
      Fairfield Inn              609     547      62   54,537   48,542  5,995
      SpringHill Suites          241     198      43   27,818   23,057  4,761
      Residence Inn              583     541      42   69,865   64,552  5,313
      TownePlace Suites          179     154      25   17,917   15,403  2,514

    International
    -------------
      Marriott Hotels & Resorts  188     179       9   57,010   53,805  3,205
      Renaissance Hotels &
       Resorts                    65      65       -   22,291   21,684    607
      Courtyard                   88      78      10   17,254   14,708  2,546
      Fairfield Inn                9       9       -    1,109    1,109      -
      SpringHill Suites            1       1       -      124      124      -
      Residence Inn               18      18       -    2,604    2,665    (61)
      Marriott Executive
       Apartments                 22      19       3    3,580    3,029    551

    Luxury
    ------
      The Ritz-Carlton
       - Domestic                 37      37       -   11,549   11,603    (54)
      The Ritz-Carlton -
       International              33      33       -   10,117   10,171    (54)
      Bulgari Hotels & Resorts     2       2       -      117      117      -
      The Ritz-Carlton
       Residential                25      21       4    2,638    2,122    516
      The Ritz-Carlton Serviced
       Apartments                  3       2       1      474      387     87

    Timeshare (2)
    -----------
      Marriott Vacation
       Club(3)                    52      51       1   11,854   11,772     82
      The Ritz-Carlton
       Destination Club           10       9       1      461      425     36
      The Ritz-Carlton
       Residences                  4       3       1      234      145     89
      Grand Residences by
       Marriott - Fractional       2       2       -      248      248      -
      Grand Residences by
       Marriott - Residential      2       1       1       91       65     26
                                 ---     ---     ---      ---      ---    ---
    Sub Total Timeshare           70      66       4   12,888   12,655    233
                                 ---     ---     ---      ---      ---    ---
    Total                      3,362   3,105     257  586,515  550,453 36,062
                               =====   =====     ===  =======  ======= ======
 

         Number of Timeshare Interval, Fractional and
                      Residential Resorts
         --------------------------------------------

                                              Total    Properties in
                                          Properties(2) Active Sales(4)
                                           ----------   --------------
    100% Company-Developed
    ----------------------
        Marriott Vacation Club(3)               52             29
        The Ritz-Carlton Destination Club and
         Residences                             10              8
        Grand Residences by Marriott and
         Residences                              4              4

    Joint Ventures
    --------------
        The Ritz-Carlton Destination Club and
         Residences                              4              4
                                                 -              -
    Total                                       70             45
                                                ==             ==

    (1)  Total Lodging Products excludes the 2,153 and 2,314 corporate housing
         rental units as of September 11, 2009 and September 5, 2008,
         respectively.
    (2)  Includes products that are in active sales as well as those that are
         sold out.  Residential products are included once they possess a
         certificate of occupancy.
    (3)  Marriott Vacation Club includes Horizons by Marriott Vacation Club
         products that were previously reported separately.
    (4)  Products in active sales may not be ready for occupancy.
 
 

                               MARRIOTT INTERNATIONAL, INC.
                                  KEY LODGING STATISTICS
                                        Constant $

                   Comparable Company-Operated International Properties(1)
                   -----------------------------------------------------

                                 Three Months Ended August 31, 2009
                                        and August 31, 2008
                                 ------------------------------------------
                                                                  Average
                                 REVPAR          Occupancy       Daily Rate
                             -------------    --------------   --------------
    Region                   2009 vs. 2008     2009  vs. 2008   2009 vs. 2008
    ------                   -------------   ----------------  --------------
    Caribbean & Latin
     America                $105.28  -23.9%  66.3%  -9.1% pts. $158.84 -13.5%
    Continental Europe      $109.13  -18.4%  71.0%  -2.1% pts. $153.72 -16.0%
    United Kingdom          $111.78  -12.3%  77.3%  -2.7% pts. $144.66  -9.1%
    Middle East & Africa     $74.52  -27.8%  61.6% -13.8% pts. $121.06 -11.7%
    Asia Pacific(2)          $74.55  -29.6%  62.6%  -6.1% pts. $119.16 -22.7%

    Regional Composite(3)    $97.11  -21.4%  68.3%  -5.4% pts. $142.25 -15.2%

    International Luxury(4) $155.56  -26.7%  55.0%  -9.7% pts. $282.69 -13.7%

    Total International(5)  $103.26  -22.3%  66.9%  -5.8% pts. $154.40 -15.5%

    Worldwide(6)             $94.06  -21.1%  68.1% -5.4% pts.  $138.03 -14.9%
 

                      Comparable Systemwide International Properties(1)
                      -------------------------------------------------
                   -----------------------------------------------------

                                 Three Months Ended August 31, 2009
                                        and August 31, 2008
                                 ------------------------------------------
                                                                  Average
                                 REVPAR          Occupancy       Daily Rate
                             -------------    --------------   --------------
    Region                   2009 vs. 2008     2009  vs. 2008   2009 vs. 2008
    ------                   -------------   ----------------  --------------
    Caribbean & Latin
     America                 $90.76  -24.5%  62.4%  -9.5% pts. $145.41 -13.1%
    Continental Europe      $108.55  -20.3%  69.4%  -3.4% pts. $156.47 -16.3%
    United Kingdom          $109.26  -12.5%  76.2%  -2.8% pts. $143.41 -9.3%
    Middle East & Africa     $74.52  -27.8%  61.6% -13.8% pts. $121.06 -11.7%
    Asia Pacific(2)          $82.39  -25.0%  63.1%  -6.7% pts. $130.53 -17.0%

    Regional Composite(3)    $96.60  -21.4%  67.0%  -6.0% pts. $144.17 -14.4%

    International Luxury(4) $155.56  -26.7%  55.0%  -9.7% pts. $282.69 -13.7%

    Total International(5)  $101.66  -22.1%  66.0%  -6.3% pts. $154.10 -14.7%

    Worldwide(6)             $83.79  -19.9%  68.0%  -5.7% pts. $123.15 -13.2%

    (1)  We report International results on a period basis, and international
         statistics on a monthly basis.  Statistics are in constant dollars
         for June through August.  International includes properties located
         outside the Continental United States and Canada, except for
         Worldwide which also includes North America.
    (2)  Does not include Hawaii.
    (3)  Regional information includes the Marriott Hotels & Resorts,
         Renaissance Hotels & Resorts and Courtyard brands.
         Includes Hawaii.
    (4)  International Luxury includes The Ritz-Carlton properties outside
         of North America and Bulgari Hotels & Resorts.
    (5)  Includes Regional Composite and International Luxury.
    (6)  Includes international statistics for the three calendar months
         ended August 31, 2009 and August 31, 2008, and North
         American statistics for the twelve weeks ended September 11, 2009
         and September 5, 2008.  Includes the Marriott Hotels & Resorts,
         Renaissance Hotels & Resorts, The Ritz-Carlton, Bulgari Hotels &
         Resorts, Residence Inn, Courtyard, Fairfield Inn, TownePlace Suites
         and SpringHill Suites brands.
 

                               MARRIOTT INTERNATIONAL, INC.
                                  KEY LODGING STATISTICS
                                        Constant $

                   Comparable Company-Operated International Properties(1)
                   -----------------------------------------------------

                                 Eight Months Ended August 31, 2009
                                        and August 31, 2008
                                 ------------------------------------------
                                                                  Average
                                 REVPAR          Occupancy       Daily Rate
                             -------------    --------------   --------------
    Region                   2009 vs. 2008     2009  vs. 2008   2009 vs. 2008
    ------                   -------------   ----------------  --------------
    Caribbean & Latin
     America                $121.87  -21.3%  67.6%  -9.8% pts. $180.31  -9.9%
    Continental Europe      $101.15  -18.7%  65.0%  -5.2% pts. $155.57 -12.2%
    United Kingdom           $96.91  -14.0%  71.6%  -4.4% pts. $135.44  -8.6%
    Middle East & Africa     $92.22  -21.3%  67.0%  -12.5% pts.$137.69  -6.7%
    Asia Pacific(2)          $74.93  -27.2%  60.5%  -9.2% pts. $123.94 -16.1%

    Regional Composite(3)    $96.58  -20.3%  65.7%  -7.3% pts. $146.92 -11.5%

    International Luxury(4) $177.03  -24.1%  56.2%  -10.3% pts.$314.73 -10.2%

    Total International(5)  $105.04  -21.0%  64.7%  -7.6% pts. $162.25 -11.7%

    Worldwide(6)             $96.54 -20.9%   65.3%  -7.0% pts. $147.82 -12.4%
 

                     Comparable Systemwide International Properties(1)
                   -----------------------------------------------------

                                 Eight Months Ended August 31, 2009
                                        and August 31, 2008
                                 ------------------------------------------
                                                                  Average
                                 REVPAR          Occupancy       Daily Rate
                             -------------    --------------   --------------
    Region                   2009 vs. 2008     2009  vs. 2008   2009 vs. 2008
    ------                   -------------   ----------------  --------------
    Caribbean & Latin
     America                $104.49  -21.4%  63.4%  -9.1% pts. $164.74 -10.1%
    Continental Europe       $99.59  -19.6%  63.2%  -6.1% pts. $157.58 -11.9%
    United Kingdom           $94.59  -14.3%  70.3%  -4.7% pts. $134.55  -8.6%
    Middle East & Africa     $92.22  -21.3%  67.0% -12.5% pts. $137.69  -6.7%
    Asia Pacific(2)          $81.23  -24.0%  61.5%  -9.0% pts. $132.08 -13.0%

    Regional Composite(3)    $95.08  -20.2%  64.4%  -7.5% pts. $147.73 -11.0%

    International Luxury(4) $177.03  -24.1%  56.2% -10.3% pts. $314.73 -10.2%

    Total International(5)  $102.13  -20.8%  63.7%  -7.7% pts. $160.41 -11.2%

    Worldwide(6)             $83.54  -19.3%  64.9%  -6.5% pts. $128.81 -11.3%
 

    (1)  We report International results on a period basis, and international
         statistics on a monthly basis.  Statistics are in constant dollars
         for January through August.  International includes properties
         located outside the Continental United States and Canada, except
         for Worldwide which also includes North America.
    (2)  Does not include Hawaii.
    (3)  Regional information includes the Marriott Hotels & Resorts,
         Renaissance Hotels & Resorts and Courtyard brands.
         Includes Hawaii.
    (4)  International Luxury includes The Ritz-Carlton properties outside of
         North America and Bulgari Hotels & Resorts.
    (5)  Includes Regional Composite and International Luxury.
    (6)  Includes international statistics for the eight calendar months ended
         August 31, 2009 and August 31, 2008, and North
         American statistics for the thirty-six weeks ended September 11, 2009
         and September 5, 2008.  Includes the Marriott Hotels
         & Resorts, Renaissance Hotels & Resorts, The Ritz-Carlton, Bulgari
         Hotels & Resorts, Residence Inn, Courtyard, Fairfield Inn,
         TownePlace Suites and SpringHill Suites brands.
 
 

                                 MARRIOTT INTERNATIONAL, INC.
                                   KEY LODGING STATISTICS

                     Comparable Company-Operated North American Properties(1)
                     --------------------------------------------------------

                                  Twelve Weeks Ended September 11, 2009
                                         and September 5, 2008
                               ---------------------------------------------

                                                                  Average
                                   REVPAR        Occupancy       Daily Rate
                               -------------  --------------   --------------
    Brand                      2009 vs. 2008  2009  vs. 2008    2009 vs. 2008
    -----                      -------------  ---------------  --------------
    Marriott Hotels
     & Resorts                $100.78 -19.8%  70.0% -4.9% pts. $143.98 -14.2%
    Renaissance Hotels
     & Resorts                 $93.90 -18.2%  68.0% -4.3% pts. $138.14 -13.1%
    Composite North American
     Full-Service(2)           $99.58 -19.6%  69.6% -4.8% pts. $142.99 -14.0%
    The Ritz-Carlton(3)       $155.09 -23.5%  64.9% -5.0% pts. $238.99 -17.5%
    Composite North American
     Full-Service & Luxury(4) $105.21 -20.2%  69.2% -4.8% pts. $152.12 -14.6%
    Residence Inn              $83.11 -17.2%  75.2% -4.9% pts. $110.56 -11.8%
    Courtyard                  $67.42 -23.7%  65.0% -6.1% pts. $103.75 -16.4%
    TownePlace Suites          $51.94 -19.0%  68.8% -4.6% pts.  $75.46 -13.6%
    SpringHill Suites          $59.51 -22.6%  64.6% -7.8% pts.  $92.11 -13.2%
    Composite North American
     Limited-Service(5)        $70.26 -21.4%  68.0% -5.8% pts. $103.34 -14.7%
    Composite - All(6)         $90.28 -20.6%  68.7% -5.3% pts. $131.48 -14.5%
 

                 Comparable Systemwide North American Properties(1)
                 --------------------------------------------------
                                  Twelve Weeks Ended September 11, 2009
                                         and September 5, 2008
                               ---------------------------------------------

                                                                  Average
                                   REVPAR        Occupancy       Daily Rate
                               -------------  --------------   --------------
    Brand                      2009 vs. 2008  2009  vs. 2008    2009 vs. 2008
    -----                      -------------  ---------------  --------------
    Marriott Hotels
     & Resorts                 $90.69 -19.9%  66.9% -5.3% pts. $135.47 -13.6%
    Renaissance Hotels
     & Resorts                 $85.97 -19.6%  66.6% -5.0% pts. $129.04 -13.5%
    Composite North American
     Full-Service(2)           $89.90 -19.8%  66.9% -5.2% pts. $134.40 -13.6%
    The Ritz-Carlton(3)       $155.09 -23.5%  64.9% -5.0% pts. $238.99 -17.5%
    Composite North American
     Full- Service & Luxury(4) $93.82 -20.2%  66.8% -5.2% pts. $140.50 -14.0%
    Residence Inn              $85.72 -16.4%  76.3% -5.0% pts. $112.41 -11.0%
    Courtyard                  $72.51 -20.2%  67.2% -5.8% pts. $107.88 -13.3%
    Fairfield Inn              $56.69 -17.7%  66.5% -6.7% pts. $85.21   -9.5%
    TownePlace Suites          $55.69 -17.6%  69.4% -5.3% pts. $80.22  -11.3%
    SpringHill Suites          $65.52 -18.4%  66.9% -6.4% pts. $97.97  -10.7%
    Composite North American
     Limited-Service(5)        $71.41 -18.4%  69.5% -5.8% pts. $102.68 -11.7%
    Composite - All(6)         $80.16 -19.3%  68.5% -5.6% pts. $117.09 -12.7%
 

    (1)  North America includes properties located in the Continental United
         States and Canada.
    (2)  Includes the Marriott Hotels & Resorts, and Renaissance Hotels &
         Resorts brands.
    (3)  Statistics for The Ritz-Carlton are for June through August.
    (4)  Includes the Marriott Hotels & Resorts, Renaissance Hotels & Resorts
         and The Ritz-Carlton brands.
    (5)  Includes the Residence Inn, Courtyard, Fairfield Inn, TownePlace
         Suites and SpringHill Suites brands.
    (6)  Includes the Marriott Hotels & Resorts, Renaissance Hotels &
         Resorts, The Ritz-Carlton, Residence Inn, Courtyard, Fairfield
         Inn, TownePlace Suites, and SpringHill Suites brands.
 

                             MARRIOTT INTERNATIONAL, INC.
                               KEY LODGING STATISTICS
 
 

                     Comparable Company-Operated North American Properties(1)
                     --------------------------------------------------------

                                Thirty-six Weeks Ended September 11, 2009
                                       and September 5, 2008
                               ---------------------------------------------
                                                                  Average
                                   REVPAR        Occupancy       Daily Rate
                               -------------  --------------   --------------
    Brand                      2009 vs. 2008  2009  vs. 2008    2009 vs. 2008
    -----                      -------------  ---------------  --------------
    Marriott Hotels
     & Resorts                $104.85 -19.4%  66.9% -6.1% pts. $156.81 -12.1%
    Renaissance Hotels &
     Resorts                  $102.27 -17.3%  66.2% -5.8% pts. $154.51 -10.0%
    Composite North American
     Full-Service(2)          $104.40 -19.1%  66.7% -6.0% pts. $156.42 -11.8%
    The Ritz-Carlton(3)       $174.21 -27.6%  61.8% -10.3% pts.$281.86 -15.6%
    Composite North American
     Full-Service & Luxury(4) $110.70 -20.4%  66.3% -6.4% pts. $166.98 -12.7%
    Residence Inn              $81.49 -17.6%  70.5% -6.7% pts. $115.58 -9.7%
    Courtyard                  $68.60 -23.7%  62.0% -7.5% pts. $110.72 -14.5%
    TownePlace Suites          $50.04 -18.9%  63.2% -6.9% pts.  $79.23 -10.1%
    SpringHill Suites          $61.58 -22.0%  62.2% -9.1% pts.  $99.05 -10.5%
    Composite North American
     Limited-Service(5)        $70.58 -21.6%  64.5% -7.3% pts. $109.47 -12.7%
    Composite - All(6)         $93.44 -20.8%  65.5% -6.8% pts. $142.62 -12.6%
 

                 Comparable Systemwide North American Properties(1)
                 --------------------------------------------------
                                Thirty-six Weeks Ended September 11, 2009
                                       and September 5, 2008
                               ---------------------------------------------
                                                                  Average
                                   REVPAR        Occupancy       Daily Rate
                               -------------  --------------   --------------
    Brand                      2009 vs. 2008  2009  vs. 2008    2009 vs. 2008
    -----                      -------------  ---------------  --------------
    Marriott Hotels
     & Resorts                 $93.03 -19.6%  64.1% -6.2% pts. $145.13 -11.9%
    Renaissance Hotels &
     Resorts                   $91.36 -18.0%  64.4% -6.0% pts. $141.97 -10.4%
    Composite North American
     Full-Service(2)           $92.75 -19.4%  64.1% -6.1% pts. $144.60 -11.7%
    The Ritz-Carlton(3)       $174.21 -27.6%  61.8%-10.3% pts  $281.86 -15.6%
    Composite North American
     Full-Service & Luxury(4)  $97.10 -20.2%  64.0% -6.3% pts. $151.67 -12.3%
    Residence Inn              $82.60 -15.8%  71.8% -5.7% pts. $115.12  -9.2%
    Courtyard                  $71.76 -19.9%  64.0% -6.3% pts. $112.08 -12.0%
    Fairfield Inn              $53.54 -16.6%  62.3% -6.4% pts.  $85.87  -8.0%
    TownePlace Suites          $53.48 -16.8%  64.4% -6.7% pts.  $83.08  -8.2%
    SpringHill Suites          $64.52 -17.1%  63.9% -6.5% pts. $101.01  -8.6%
    Composite North American
     Limited-Service(5)        $69.49 -17.8%  65.7% -6.2% pts. $105.71 -10.1%
    Composite - All(6)         $80.21 -19.0%  65.1% -6.3% pts. $123.26 -11.2%
 

    (1)  North America includes properties located in the Continental United
         States and Canada.
    (2)  Includes the Marriott Hotels & Resorts, and Renaissance Hotels &
         Resorts brands.
    (3)  Statistics for The Ritz-Carlton are for January through August.
    (4)  Includes the Marriott Hotels & Resorts, Renaissance Hotels & Resorts
         and The Ritz-Carlton brands.
    (5)  Includes the Residence Inn, Courtyard, Fairfield Inn, TownePlace
         Suites and SpringHill Suites brands.
    (6)  Includes the Marriott Hotels & Resorts, Renaissance Hotels &
         Resorts, The Ritz-Carlton, Residence Inn, Courtyard,
         Fairfield Inn, TownePlace Suites, and SpringHill Suites brands.
 
 

                          MARRIOTT INTERNATIONAL, INC.
                                TIMESHARE SEGMENT
                                 ($ in millions)
 

                                                          Adjustments
                                                          -----------

                                           As
                                        Reported    Restruc-
                                        12 Weeks     turing     Timeshare
                                         Ended      Costs &     Strategy -
                                       September     Other      Impairment
                                        11, 2009     Charges      Charges
       ----------------                ----------   --------    -----------
      Segment Revenues
      ----------------
      Segment revenues                       $330         $(3)           $-
                                             ====         ===            ==
 

       ---------------
      Segment Results
      ---------------
      Base fees revenue                       $11          $-            $-
      Timeshare sales and services,
       net                                     16          (3)            -
      Timeshare strategy - impairment
           charges                           (614)          -           614
      Restructuring costs                      (7)          7             -
      General, administrative and other
           expense                            (17)          -             -
      Gains and other income                    1           -             -
      Joint venture equity earnings            (4)          1             -
      Timeshare strategy - impairment
          charges (non-operating)             (71)          -            71
      Noncontrolling interest                   4           -             -
                                                -           -             -
          Segment results                   $(681)         $5          $685
                                            =====          ==          ====
 
 

       --------------------------
      Sales and Services Revenue
      --------------------------
      Development                            $138          $-            $-
      Services                                 82           -             -
      Financing                                27          (3)            -
      Other revenue                             7           -             -
                                                -           -             -
          Sales and services revenue         $254         $(3)           $-
                                             ====         ===            ==
 
 

       --------------
      Contract Sales
      --------------
      Company:
          Timeshare                          $164          $-            $-
          Fractional                            7           -             -
          Residential                           2           -             -
                                                -           -             -
              Total company                   173           -             -
      Joint ventures:
          Timeshare                             -           -             -
          Fractional                           (4)          7             -
          Residential                         (17)         17             -
                                              ---          --             -
              Total joint ventures            (21)         24             -
                                              ---          --             -
              Total contract sales,
               including joint
               ventures                      $152         $24            $-
                                             ====         ===            ==
 
 

       ---------------------------
      (Loss) / Gain on Notes Sold
      ---------------------------
      (Loss) / gain on notes sold              $-          $-            $-
                                               ==          ==            ==
 
 

                                                                  Percent
                                           As          As        Better /
                                        Adjusted    Reported     (Worse)
                                        12 Weeks    12 Weeks   As Adjusted
                                         Ended       Ended       2009 vs.
                                       September   September       2008
                                       11, 2009**    5, 2008    As Reported
      ----------------                 ----------  ----------  ------------
      Segment Revenues
      ----------------
      Segment revenues                       $327        $463           (29)
                                             ====        ====
 

       ---------------
      Segment Results
      ---------------
      Base fees revenue                       $11         $12            (8)
      Timeshare sales and services,
       net                                     13          47           (72)
      Timeshare strategy - impairment
           charges                              -           -             -
      Restructuring costs                       -           -             -
      General, administrative and other
           expense                            (17)        (27)           37
      Gains and other income                    1           -             *
      Joint venture equity earnings            (3)          2          (250)
      Timeshare strategy - impairment
          charges (non-operating)               -           -             -
      Noncontrolling interest                   4          15           (73)
                                                -          --
          Segment results                      $9         $49           (82)
                                               ==         ===
 
 

       --------------------------
      Sales and Services Revenue
      --------------------------
      Development                            $138        $265           (48)
      Services                                 82          81             1
      Financing                                24          31           (23)
      Other revenue                             7           7             *
                                                -           -
          Sales and services revenue         $251        $384           (35)
                                             ====        ====
 
 

       --------------
      Contract Sales
      --------------
      Company:
          Timeshare                          $164        $283           (42)
          Fractional                            7          18           (61)
          Residential                           2          (6)          133
                                                -          --
              Total company                   173         295           (41)
      Joint ventures:
          Timeshare                             -           -             -
          Fractional                            3           6           (50)
          Residential                           -           5          (100)
                                                -           -
              Total joint ventures              3          11           (73)
                                                -          --
              Total contract sales,
               including joint
               ventures                      $176        $306           (42)
                                             ====        ====
 
 

       ---------------------------
      (Loss) / Gain on Notes Sold
      ---------------------------
      (Loss) / gain on notes sold              $-         $(1)          100
                                               ==         ===

       *Percent cannot be calculated.
      **Denotes non-GAAP financial measures.  Please see pages A-20 and A-21
    for additional information about our reasons for providing these
    alternative financial measures and the limitations on their use.
 
 

                          MARRIOTT INTERNATIONAL, INC.
                                TIMESHARE SEGMENT
                                 ($ in millions)
 

                                                          Adjustments
                                                          -----------

                                           As
                                        Reported     Restruc-
                                        36 Weeks      turing     Timeshare
                                          Ended      Costs &    Strategy -
                                       September      Other     Impairment
                                        11, 2009      Charges     Charges
       ----------------                -----------   --------   -----------
      Segment Revenues
      ----------------
      Segment revenues                        $962         $26           $-
                                              ====         ===           ==
 

       ---------------
      Segment Results
      ---------------
      Base fees revenue                        $32          $-           $-
      Timeshare sales and services,
       net                                       9          25            -
      Timeshare strategy - impairment
           charges                            (614)          -          614
      Restructuring costs                      (38)         38            -
      General, administrative and other
           expense                             (57)          7            -
      Gains and other income                     1           -            -
      Joint venture equity earnings             (6)          3            -
      Timeshare strategy - impairment
          charges (non-operating)              (71)          -           71
      Noncontrolling interest                   11           -            -
                                                --           -            -
          Segment results                    $(733)        $73         $685
                                             =====         ===         ====
 
 

       --------------------------
      Sales and Services Revenue
      --------------------------
      Development                             $441          $4           $-
      Services                                 232           -            -
      Financing                                 54          22            -
      Other revenue                             19           -            -
                                                --           -            -
          Sales and services revenue          $746         $26           $-
                                              ====         ===           ==
 
 

       --------------
      Contract Sales
      --------------
      Company:
          Timeshare                           $502          $-           $-
          Fractional                            25           1            -
          Residential                           (1)          4            -
                                                --           -            -
              Total company                    526           5            -
      Joint ventures:
          Timeshare                              -           -            -
          Fractional                            (9)         23            -
          Residential                          (27)         27            -
                                               ---          --            -
              Total joint ventures             (36)         50            -
                                               ---          --            -
              Total contract sales,
               including joint
               ventures                       $490         $55           $-
                                              ====         ===           ==
 
 

       ---------------------------
      (Loss) / Gain on Notes Sold
      ---------------------------
        (Loss) / gain on notes sold            $(1)         $-           $-
                                               ===          ==           ==
 
 

                                                                  Percent
                                                                 Better /
                                           As           As        (Worse)
                                        Adjusted     Reported       As
                                        36 Weeks     36 Weeks    Adjusted
                                          Ended       Ended      2009 vs.
                                        September   September     2008 As
                                        11, 2009**    5, 2008     Reported
      ----------------                  ----------  ----------   ---------
      Segment Revenues
      ----------------
      Segment revenues                        $988      $1,326          (25)
                                              ====      ======
 

       ---------------
      Segment Results
      ---------------
      Base fees revenue                        $32         $35           (9)
      Timeshare sales and services,
       net                                      34         137          (75)
      Timeshare strategy - impairment
           charges                               -           -            -
      Restructuring costs                        -           -            -
      General, administrative and other
           expense                             (50)        (79)          37
      Gains and other income                     1           -            *
      Joint venture equity earnings             (3)          9         (133)
      Timeshare strategy - impairment
          charges (non-operating)                -           -            -
      Noncontrolling interest                   11          21          (48)
                                                --          --
          Segment results                      $25        $123          (80)
                                               ===        ====
 
 

       --------------------------
      Sales and Services Revenue
      --------------------------
      Development                             $445        $722          (38)
      Services                                 232         244           (5)
      Financing                                 76         107          (29)
      Other revenue                             19          25          (24)
                                                --          --
          Sales and services revenue          $772      $1,098          (30)
                                              ====      ======
 
 

       --------------
      Contract Sales
      --------------
      Company:
          Timeshare                           $502        $859          (42)
          Fractional                            26          34          (24)
          Residential                            3          33          (91)
                                                 -          --
              Total company                    531         926          (43)
      Joint ventures:
          Timeshare                              -           -            -
          Fractional                            14          17          (18)
          Residential                            -          30         (100)
                                                 -          --
              Total joint ventures              14          47          (70)
                                                --          --
              Total contract sales,
               including joint
               ventures                       $545        $973          (44)
                                              ====        ====
 
 

       ---------------------------
      (Loss) / Gain on Notes Sold
      ---------------------------
        (Loss) / gain on notes sold            $(1)        $28         (104)
                                               ===         ===

     *Percent cannot be calculated.
    **Denotes non-GAAP financial measures.  Please see pages A-20 and A-21 for
    additional information about our reasons for providing these alternative
    financial measures and the limitations on their use.
 
 

                          MARRIOTT INTERNATIONAL, INC.
                Summary of Restructuring Costs and Other Charges
                                ($ in millions)

                                                    2009
                                                    ----
                                                               Third
      External                                              Quarter Year
       Line                Description      Third Quarter      to Date
      --------             -----------      -------------  -------------

      Timeshare
       sales and           Mark-to-market
       services             of residual
       revenue              interests                 $(3)           $22
                           Contract sale
                            cancellation
                            allowances                   -              4

                                                       --             --
                                  Timeshare
                                  sales and
                                   services
                                    revenue            (3)            26

      Timeshare -          Contract sale
       direct               cancellation
       expenses             allowances                  -             (1)

                                                        -             --
                                Timeshare -
                                     direct
                                   expenses             -             (1)

      Restructuring
       costs               Severance                    4             16
                           Facilities
                            exit costs                  5             27
                           Development
                            cancellations               -              1
                                                        -              -
                              Restructuring
                                      costs             9             44

      General,             System
       administrative       development
       and other            write-down                  -              7
                           Accounts
                            receivable and
                            guarantee
                            charges                     1              4
                           Reserves for
                            security
                            deposits, net
                            of prior year
                            reserves                    -             38

                                                        -             --
                                   General,
                             administrative
                                  and other             1             49

      Provision
       for loan            Loan
       losses               impairments                 -             43

                                                        -             --
                              Provision for
                                loan losses             -             43

      Equity in            Contract sale
       (earnings)           cancellation
       losses               allowances                  1              3
                           Investment
                            impairment                  -             30

                                                        -             --
                                  Equity in
                                 (earnings)
                                     losses             1             33
                                                        -             --

                              Restructuring
                              Costs & Other
                              Charges Total             8            194

                                Tax Impact             (4)           (76)
                                                       --            ---

                              Restructuring
                              Costs & Other
                             Charges Net of
                                        Tax            $4           $118
                                                       ==           ====
 
 
 
 
 

                          MARRIOTT INTERNATIONAL, INC.
                              Timeshare Strategy -
                           Impairment Charges Summary
                               Third Quarter 2009
                                ($ in millions)
 

                                               Impairment
                                                  Charge
                                                  ------
    Third Quarter 2009 Operating Income Impact
      Inventory impairment                         $529
      Property and equipment impairment              64
      Other impairments                              21
                                                    ---
        Total operating income impact               614
                                                    ---

    Third Quarter 2009 Non-Operating Income Impact
      Joint venture impairment                       71
      Loan impairment                                40
      Funding liability                              27
                                                    ---
        Total non-operating income impact           138
                                                    ---

          Total impact                             $752
                                                  ====
 

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

                                                 Fiscal Year 2009
                                                 ----------------
                                                                        Total
                                    First        Second       Third      Year
                                   Quarter      Quarter      Quarter   to Date
                                  --------     --------     --------   -------
    Net (Loss) / Income
     attributable to Marriott         $(23)         $37        $(466)   $(452)
    Interest expense                    29           28           27       84
    Tax provision, continuing
     operations                         33           44         (210)    (133)
    Tax provision, noncontrolling
     interest                            1            2            1        4
    Depreciation and amortization       39           42           43      124
    Less: Depreciation reimbursed by
     third-party owners                 (2)          (2)          (2)      (6)
    Interest expense from
     unconsolidated joint venture        3            6            4       13
    Depreciation and amortization
     from unconsolidated joint
     ventures                            6            6            6       18
                                         -            -            -       --
    EBITDA **                           86          163         (597)    (348)

    Restructuring costs
     and other charges
           Severance                     2           10            4       16
           Facilities exit
            costs                        -           22            5       27
           Development
            cancellations                -            1            -        1
                                         -            -            -        -
              Total
               restructuring
               costs                     2           33            9       44
                                         -           --            -       --
           Impairment of
            investments
            and other, net
            of prior year
            reserves                    68            3            1       72
           Reserves for
            loan losses                 42            1            -       43
           Contract
            cancellation
            allowances                   4            1            1        6
           Residual
            interests
            valuation                   13           12           (3)      22
           System
            development
            write-off                    -            7            -        7
                                         -            -            -        -
              Total other
               charges                 127           24           (1)     150
                                       ---           --           --      ---
    Total restructuring
     costs and other
     charges                           129           57            8      194
                                       ---           --            -      ---

    Timeshare strategy -
     impairment charges
           Operating
            impairments                  -            -          614      614
           Non-operating
            impairments                  -            -          138      138
                                         -            -          ---      ---
    Total timeshare
     strategy -
     impairment charges                  -            -          752      752
                                         -            -          ---      ---

    Adjusted EBITDA **                $215         $220         $163     $598
                                      ====         ====         ====     ====

    Decrease over 2008
     Adjusted EBITDA                   -25%         -43%         -43%     -38%
 
 

                                         Fiscal Year 2008
                                         ----------------
                          First      Second       Third        Fourth
                        Quarter     Quarter      Quarter      Quarter    Total
                        -------    --------     --------     --------    -----
    Net Income/ (Loss)
     attributable to
     Marriott             $121         $157          $94         $(10)   $362
    Interest expense        42           38           33           50     163
    Tax provision,
     continuing
     operations             75          139          103           33     350
    Tax provision,
     minority interest       1            1            5            2       9
    Tax benefit,
     synthetic fuel          -           (6)          (1)           -      (7)
    Depreciation and
     amortization           41           47           42           60     190
    Less: Depreciation
     reimbursed by third-
     party owners           (3)          (3)          (2)          (2)    (10)
    Interest expense from
     unconsolidated joint
     ventures                4            4            5            5      18
    Depreciation and
     amortization from
     unconsolidated joint
     ventures                5            6            6           10      27
                             -            -            -           --      --
    EBITDA **              286          383          285          148   1,102

    Discontinued
     operations
     adjustment
     (synthetic fuel)        1            2            1            -       4
    Restructuring
     costs and other
     charges
           Severance         -            -            -           19      19
           Facilities
            exit costs       -            -            -            5       5
           Development
            cancellations    -            -            -           31      31
                             -            -            -           --      --
              Total
               restructuring
               costs         -            -            -           55      55
                             -            -            -           --      --
           Reserves for
            expected
            fundings         -            -            -           16      16
           Inventory
            write-downs      -            -            -            9       9
           Contract
            cancellation
            allowances       -            -            -           12      12
           Accounts
            receivable-bad
            debts            -            -            -            4       4
           Residual
            interests
            valuation        -            -            -           32      32
           Hedge
            ineffectiveness  -           -            -           12      12
           Impairment of
            investments
            and other        -            -            -           30      30
           Reserves for
            loan losses      -            -            -           22      22
                             -            -            -           --      --
              Total other
               charges       -            -            -          137     137
                             -            -            -          ---     ---
    Total restructuring
     costs and other
     charges                 -            -            -          192     192
                             -            -            -          ---     ---

    Adjusted EBITDA **    $287         $385         $286         $340  $1,298
                          ====         ====         ====         ====  ======

    The following items
     make up the
     discontinued
     operations
     adjustment
     (synthetic fuel)
    Pre-tax Synthetic
     Fuel losses            $1           $2           $1           $-      $4
                            --           --           --           --      --
    EBITDA adjustment
     for discontinued
     operations
     (synthetic fuel)       $1           $2           $1           $-      $4
                            ==           ==           ==           ==      ==

    ** Denotes non-GAAP financial measures.  Please see pages A-20 and A-21
       for additional information about our reasons for providing these
       alternative financial measures and the limitations on their use.
 
 
 
 
 
 
 
 

                MARRIOTT INTERNATIONAL, INC.
                 Non-GAAP Financial Measure
                   Total Debt Net of Cash
                       ($ in millions)
 
 

                      Balance at   Balance at   Better/
                     End of 2009     Year-End   (Worse)
                    Third Quarter      2008      Change
                    -------------  -----------  -------
    Total debt             $2,660       $3,095     $435
    Cash and cash
     equivalents             (130)        (134)      (4)
                             ----         ----      ---
    Total debt net
     of cash**             $2,530       $2,961     $431
                           ======       ======     ====
 
 

                               Range                        Range
                               -----                        -----
                                                  As Compared to Balance
                                                     at Year-End 2008
                   Estimated        Estimated     ----------------------
                    Balance          Balance         Better/     Better/
                    Year-End          Year-End       (Worse)     (Worse)
                     2009 (a)         2009 (b)     Change (a)  Change (b)
                    ---------        ---------     ----------  ----------
    Total debt            $2,476           $2,426        $619        $669
    Cash and
     cash
     equivalents            (115)            (115)        (19)        (19)
                            ----             ----         ---         ---
    Total debt
     net of
     cash**               $2,361           $2,311        $600        $650
                          ======           ======        ====        ====
 

    (a)   Assumes $619 debt repayment in 2009 and $19 reduction in cash
    (b)   Assumes $669 debt repayment in 2009 and $19 reduction in cash
 
 
 
 

    **  Denotes non-GAAP financial measures.  Please see pages A-20 and A-21
    for additional information about our reasons for providing these
    alternative financial measures and the limitations on their use.
 
 
 
 

                  MARRIOTT INTERNATIONAL, INC.
           Non-GAAP Financial Measure Reconciliation
         Adjusted Third Quarter 2008 and 2009 General,
                       Administrative and
     Other Expenses Excluding Restructuring Costs and Other
                            Charges,
     Deferred Compensation Charges and Certain Litigation Expenses
                        ($ in millions)
 
 

                                      Third       Third
                                     Quarter      Quarter
                                       2008        2009
                                    --------     --------
      General, administrative
       and other expenses                 $167        $144
      Less: Restructuring costs
       and other charges                     -          (1)
      Deferred Compensation
       charges                               7          (8)
      Certain Litigation Expenses            -          (5)
                                             -          --

      Adjusted General,
       administrative and other
       expenses**                         $174        $130
                                          ====        ====
 

    ** Denotes non-GAAP financial measures.  Please see pages A-20 and A-21
       for additional information about our reasons for providing these
       alternative financial measures and the limitations on their use.
 
 

                        MARRIOTT INTERNATIONAL, INC.
                  Non-GAAP Financial Measure Reconciliation
       Adjusted Fourth Quarter 2008 General, Administrative and Other
                                   Expenses
               Excluding Restructuring Costs and Other Charges
                               ($ in millions)
 
 

                                                    Fourth Quarter 2008
                                                    -------------------
    General, administrative and other expenses                     $270
    Less: Restructuring costs and other charges                     (32)
                                                                    ---
    General, administrative and other expenses  Excluding
      restructuring costs and other charges**                      $238
                                                                   ====
 
 

    ** Denotes non-GAAP financial measures.  Please see pages A-20
       and A-21 for additional information about our
       reasons for providing these alternative financial measures and
       the limitations on their use.
 
 
 
 

                           MARRIOTT INTERNATIONAL, INC.
                     Non-GAAP Financial Measure Reconciliation
              Internal Planning Assumptions and Related Estimates of
          Earnings per Share Attributable to Marriott Shareholders that
             Exclude Restructuring Costs and Other Charges, Timeshare
            Strategy - Impairment Charges and Certain Tax Items in 2009
 
 
 

                                                          Range
                                                          -----
                                                                  Assumed/
                                           Assumed/Estimated      Estimated
                                             Fourth Quarter     Fourth Quarter
                                                  2009               2009
                                           -----------------   ---------------
      Earnings per share attributable to
       Marriott shareholders                            $0.19            $0.22
      Add back: Restructuring costs and
       other charges, timeshare
        strategy - impairment charges and
       certain tax items                                 0.01             0.01
                                                         ----             ----
      Earnings per share attributable to
       Marriott shareholders
         excluding restructuring costs and
       other charges, timeshare
         strategy - impairment charges and
       certain tax items**                              $0.20            $0.23
                                                        =====            =====
 

    ** Denotes non-GAAP financial measures.  Please see pages A-20 and A-21
       for additional information about our reasons for providing these
       alternative financial measures and the limitations on their use.      
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measures
In our press release and schedules, and on the related conference call, we report certain financial measures that are not prescribed or authorized by United States generally accepted accounting principles ("GAAP"). We discuss management's reasons for reporting these non-GAAP measures below, and the press release schedules reconcile the most directly comparable GAAP measure to each non-GAAP measure that we refer to (identified by a double asterisk on the preceding pages). Although management evaluates and presents these non-GAAP measures for the reasons described below, please be aware that these non-GAAP measures are not alternatives to revenue, operating income, income from continuing operations, net income, earnings per share or any other comparable operating measure prescribed by GAAP. In addition, these non-GAAP financial measures may be calculated and/or presented differently than measures with the same or similar names that are reported by other companies, and as a result, the non-GAAP measures we report may not be comparable to those reported by others.
Measures That Exclude Timeshare Strategy - Impairment Charges, Restructuring Costs and Other Charges, Deferred Compensation Charges (Credits), Litigation Expenses, and Certain Tax Expenses. Management evaluates non-GAAP measures that exclude the impact of Timeshare strategy - impairment charges incurred in the 2009 third quarter, restructuring costs and other charges and certain tax expenses incurred in the 2009 first quarter, 2009 and 2008 second and third quarters, as well as estimated restructuring costs and other charges expected to be incurred in the fourth quarter of 2009 and estimated full year 2009 restructuring costs and other charges, deferred compensation charges (credits) incurred in the 2009 and 2008 third quarters of $8 million and ($7) million, respectively, associated with our deferred compensation plan, and litigation expenses of $5 million because those non-GAAP measures allow for period-over-period comparisons of our on-going core operations before material charges. These non-GAAP measures also facilitate management's comparison of results from our on-going operations before material charges with results from other lodging companies.
In response to the difficult business conditions that the Timeshare segment's timeshare, luxury residential, and luxury fractional real estate development businesses continue to experience, we evaluated the entire Timeshare portfolio in the 2009 third quarter. In order to adjust the business strategy to reflect current market conditions, on September 22, 2009, we approved plans for our Timeshare segment to take the following actions: (1) for our luxury residential projects, reduce prices, convert certain proposed projects to other uses, sell some undeveloped land, and not pursue further Marriott-funded residential development projects; (2) reduce prices for existing luxury fractional units; (3) continue short-term promotions for our U.S. timeshare business and defer the introduction of new projects and development phases; and (4) for our European timeshare and fractional resorts, continue promotional pricing and marketing incentives and not pursue further development. As a result of these decisions, we recorded third quarter 2009 pretax charges totaling $752 million in our Consolidated Statements of Income ($502 million after-tax), including $614 million of pretax charges impacting operating income under the "Timeshare strategy-impairment charges" caption, and $138 million of pretax charges impacting non-operating income under the "Timeshare strategy-impairment charges (non-operating)" caption.
During the latter part of 2008 and particularly the fourth quarter, we experienced a significant decline in demand for hotel rooms both domestically and internationally due, in part, to the failures and near failures of several large financial service companies and the dramatic downturn in the economy. Our capital intensive Timeshare business was also hurt by the downturn in market conditions and particularly, the significant deterioration in the credit markets, which resulted in our decision not to complete a note sale in the fourth quarter of 2008 (although we did complete a note sale in the first quarter of 2009). These declines resulted in reduced management and franchise fees, cancellation of development projects, reduced timeshare contract sales, contract cancellation allowances, and charges and reserves associated with expected fundings, loans, Timeshare inventory, accounts receivable, contract cancellation allowances, valuation of Timeshare residual interests, hedge ineffectiveness, and asset impairments. We responded by implementing various cost saving measures, beginning in the fourth quarter of 2008 and which continued in the first quarter through third quarters of 2009, and resulted in first quarter 2009 restructuring costs of $2 million, second quarter 2009 restructuring costs of $33 million, and third quarter 2009 restructuring costs of $9 million that were directly related to the downturn. We also incurred other first quarter 2009 and second quarter 2009 charges totaling $127 million and $24 million, respectively, as well as $1 million in net other credits in the 2009 third quarter, that were directly related to the downturn, including asset impairment charges, accounts receivable and guarantee charges, reserves associated with loans, reversal of the liability related to expected fundings, Timeshare contract cancellation allowances, and charges related to the valuation of Timeshare residual interests. Currently, we expect to incur $5 million to $6 million in restructuring costs and other charges in the 2009 fourth quarter. For full year 2009, we expect restructuring costs and other charges to total $199 million to $200 million as a result of our restructuring efforts and the economic downturn, which includes $194 million of restructuring costs and other charges already incurred in the first three quarters of 2009. These estimates are subject to change.
Certain tax expenses included $26 million in the 2009 first quarter, $17 million in the 2009 second quarter, $13 million in the 2009 third quarter and $24 million in the 2008 second quarter of non-cash charges primarily related to the treatment of funds received from certain foreign subsidiaries, an issue we are contesting with the Internal Revenue Service ("IRS"). Additionally, certain tax expenses in the 2008 second quarter also reflected $12 million of tax expense due primarily to prior years' tax adjustments, including a settlement with the IRS that resulted in a lower than expected refund of taxes associated with a 1995 leasing transaction. Certain tax items in the 2008 third quarter reflected $29 million of tax expense primarily related to an unfavorable court decision involving a tax planning transaction associated with a 1994 sale transaction.
Earnings Before Interest, Taxes, Depreciation and Amortization. Earnings before interest, taxes, depreciation and amortization ("EBITDA") reflects earnings excluding the impact of interest expense, tax expense, depreciation and amortization. Management considers EBITDA to be an indicator of operating performance because it can be used to measure our ability to service debt, fund capital expenditures, and expand our business. EBITDA is used by analysts, lenders, investors and others, as well as by us, to evaluate companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company's capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and tax expense can vary considerably among companies. EBITDA also excludes depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.
Adjusted EBITDA. Management also evaluates adjusted EBITDA which excludes: (1) Timeshare strategy - impairment charges of $752 million incurred in the 2009 third quarter (2) the 2009 third quarter restructuring costs and other charges totaling $8 million; (3) the 2009 second quarter restructuring costs and other charges totaling $57 million; (4) the 2009 first quarter restructuring costs and other charges totaling $129 million; (5) the 2008 fourth quarter restructuring costs and other charges totaling $192 million; and (6) the first through third quarters of 2008 impact of the synthetic fuel business. Management excludes the restructuring costs and other charges incurred in the 2009 first through third quarters and in the 2008 fourth quarter and the timeshare strategy-impairment charges recorded in the 2009 third quarter for the reasons noted above under "Measures That Exclude Timeshare - Strategy Impairment Charges, Restructuring Costs and Other Charges, Deferred Compensation Charges (Credits), Litigation Expenses, and Certain Tax Expenses." Fourth quarter 2008 restructuring costs and other charges included $55 million of restructuring costs and $137 million of other charges, including charges and reserves associated with expected fundings, loans, Timeshare inventory, accounts receivable, contract cancellation allowances, valuation of Timeshare residual interests, hedge ineffectiveness, and asset impairments. Management also excludes the first through third quarters of 2008 impact of the synthetic fuel business, which was discontinued in 2007 and which did not relate to our core lodging business, to allow for period-over-period comparisons of our on-going core lodging operations and facilitate management's comparison of our results with those of other lodging companies.
Total Debt, Net of Cash (or, "Net Debt"). Total debt net of cash reflects total debt less cash and cash equivalents. Management considers total debt net of cash to be a more accurate indicator of the net debt that must be repaid or refinanced at maturity (as it gives consideration to cash resources available to retire a portion of the debt when due). Additionally, management believes that this financial measure provides a clearer picture of the future demands on cash to repay debt. Management uses this financial measure in making decisions regarding its borrowing capacity and future refinancing needs.
SOURCE Marriott International, Inc.
.
Contact:

Marriott International, Inc.
 

 
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Also See: Marriott Reports 2nd Qtr Profit of $37 million, Down 76% from a Year Earlier; Revpar Falls 23.6% in 2nd Qtr / Hotel Operating Statistics / July 2009
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