BETHESDA, Md., October.
6, 2010
THIRD
QUARTER HIGHLIGHTS
- Third
quarter diluted earnings per share (EPS) totaled $0.22, a 47
percent increase over prior year adjusted results,
- Total
fee revenue increased 9 percent to $253
million as a
result of strong revenue per available room (REVPAR) and unit growth.
Incentive fees climbed 24 percent,
- Worldwide
systemwide comparable REVPAR rose 8.2 percent using constant dollars.
Average daily rate rose 1.8 percent using constant dollars,
- The
company's worldwide pipeline of hotels under construction, awaiting
conversion or approved for development totaled nearly 95,000 rooms,
including over 33,000 rooms outside North
America,
- Over
5,000 rooms opened during the third quarter, including nearly 2,000
rooms in international markets.
Marriott
International, Inc. (NYSE: MAR)
today reported third quarter 2010 results, exceeding prior year results
and at the high end of the company's expectations.
THIRD
QUARTER 2010 RESULTS
Third
quarter 2010 net income totaled $83
million, a 57 percent increase compared to third quarter 2009
adjusted net income. Diluted EPS totaled $0.22, a 47
percent increase from adjusted diluted EPS in the year-ago quarter.
On July
14, 2010, the company forecasted third quarter diluted EPS of $0.18 to $0.22.
Adjusted
results for the 2009 third quarter exclude $8 million pretax ($4
million after-tax
and $0.01 per diluted share) of
restructuring costs and other charges, as well as $752 million pretax ($502
million after-tax
and $1.41 per diluted share) of
impairment charges related to the Timeshare segment. Adjusted
results for 2009 third quarter also exclude the $13 million($0.03 per diluted share) impact
of non-cash charges in the provision for income taxes.
Reported
net income totaled $83
million in the
third quarter of 2010 compared to the reported loss of $466 million in the year-ago quarter.
Reported diluted EPS was $0.22 in the third quarter of
2010 compared to reported diluted losses per share of$1.31 in the third quarter of
2009.
J.W.
Marriott, Jr., chairman and chief executive officer of Marriott
International, said, "We are having an outstanding year.
Corporate and leisure demand continues to strengthen, and we are
leading the U.S. industry in pushing retail price increases. For
the Marriott Hotels and Resorts brand in North America,
nearly 90 percent of hotels raised corporate retail rates in the
quarter and, overall, such retail rates rose 9 percent.
"In
the third quarter, revenue per available room at North American
systemwide hotels rose 7.2 percent year-over-year and average daily
rates rose nearly 2 percent. International systemwide hotels
showed tremendous strength, with REVPAR up 12 percent in the quarter on
a constant dollar basis. Our Asia Pacific region is leading the
way with REVPAR up over 20 percent. China was especially strong
with our hotels benefiting from favorable demand, strong brands and
outstanding locations.
"While
U.S. supply growth continues to moderate, we are adding hotels to our
portfolio. During the third quarter, we opened over 5,000 new
rooms, and we have nearly 95,000 rooms in our worldwide development
pipeline at quarter-end, including the stunning 3,000 room Cosmopolitan
Hotel in Las
Vegas - our
first hotel on the Strip - which will open in December as part of The
Autograph Collection. Our pipeline also includes almost 7,000
rooms to be converted to our brands.
"With
substantial unit growth, improving REVPAR and continued focus on the
bottom line, our strong cash flow has enabled us to reduce our debt
ahead of schedule. Our adjusted net debt has declined by almost $1.5 billion since the end of 2008.
We are pleased that Standard & Poor's upgraded our bond
rating to BBB last week.
"We
expect 2011 to be even better than 2010 as demand and pricing continue
to strengthen. We are currently forecasting 2011 systemwide
worldwide REVPAR to increase 6 to 8 percent. We also expect to
open 25,000 to 30,000 rooms worldwide in 2011."
For
the 2010 third quarter, REVPAR for worldwide comparable systemwide
properties increased 8.2 percent (a 7.5 percent increase using actual
dollars).
International
comparable systemwide REVPAR rose 12.0 percent (an 8.5 percent increase
using actual dollars), including a 1.6 percent increase in
average daily rate (a 1.6 percent decrease using actual dollars) in the
third quarter of 2010.
In North America,
comparable systemwide REVPAR increased 7.2 percent in the third quarter
of 2010, including a 1.7 percent increase in average daily rate.
REVPAR for comparable systemwide North American full-service and
luxury hotels (includingMarriott Hotels & Resorts, The Ritz-Carlton and Renaissance Hotels)
increased 7.3 percent with a 2.6 percent increase in average daily
rate. The company estimates that excluding the impact of the
calendar shift of Rosh
Hashanah from
the 2009 fiscal fourth quarter to the 2010 fiscal third quarter, REVPAR
for comparable systemwide North American full-service and luxury hotels
would have increased nearly 8 percent.
Marriott
added 32 new properties (5,056 rooms) to its worldwide lodging
portfolio in the 2010 third quarter, including the Renaissance Tianjin
Lakeview, the Ritz-Carlton Shanghai Pudong and the 457-room Courtyard
Shanghai Puxi. Three properties (667 rooms) exited the system
during the quarter. At quarter-end, the company's lodging group
encompassed 3,518 properties and timeshare resorts for a total of over
611,000 rooms.
The
company's worldwide pipeline of hotels under construction, awaiting
conversion or approved for development totaled almost 575 properties
with nearly 95,000 rooms at quarter-end.
MARRIOTT
REVENUES totaled over $2.6
billion in the
2010 third quarter compared to approximately $2.5 billion for the third quarter of
2009. Total fee revenue rose 9 percent to $253 million reflecting higher REVPAR
and fees from new hotels. Third quarter incentive management fees
alone increased 24 percent to $21
million. In the third quarter, 23 percent of
company-managed hotels earned incentive management fees compared to 20
percent in the year-ago quarter. Incentive management fees
largely came from hotels outside of North
America in both
the 2010 and 2009 quarters.
Worldwide
comparable company-operated house profit margins increased 90 basis
points in the third quarter reflecting higher occupancy, rate increases
and strong productivity. House profit margins for comparable
company-operated properties outsideNorth America increased 170 basis points
and North American comparable company-operated house profit margins
increased 30 basis points from the year-ago quarter. Excluding
the impact of cancellation and attrition fees in the 2009 quarter,
North American comparable company-operated house profit margins
increased 60 basis points year-over-year.
Owned,
leased, corporate housing and other revenue, net of direct expenses,
declined $5
million in the
2010 third quarter, to$7 million,
largely due to the impact of a $6
million cancellation
fee recorded in the 2009 third quarter.
The
company launched Marriott Vacation Club Destinations, a new North
American timeshare points program, in June and focused its efforts on
educating existing customers about the benefits of the new product.
The program allows customers to purchase timeshare in smaller
increments than the traditional one-week product and allows greater
flexibility of use. Feedback from owners has been favorable.
In the third quarter alone, 22,000 existing owners joined the
points program, exceeding the company's expectations, and many of those
owners purchased additional product. In fact, contract sales to
existing owners increased 27 percent in the third quarter. With
fewer sales to new customers year-over-year, third quarter adjusted
Timeshare segment contract sales decreased 6 percent to $165 million (excluding a $1 million allowance for fractional
contract cancellations recorded in the quarter). In the prior
year's quarter, Timeshare segment adjusted contract sales totaled $176 million (excluding a $24 million allowance for fractional
and residential contract cancellations).
In
the third quarter, Timeshare sales and services revenue totaled $275 million and, net of expenses,
totaled $56
million for the
quarter. Adjusting for the Timeshare impairment and restructuring
costs and other charges, as well as the impact of consolidating
securitized loans had that occurred at the beginning of 2009 rather
than 2010, third quarter 2009 timeshare sales and services revenue
would have totaled $290
million and, net
of direct expenses, would have totaled $45 million.
These adjustments for the 2009 quarter are shown on page A-11.
Third
quarter 2010 Timeshare sales and services revenue, net of expense,
benefited from lower marketing and sales costs, price increases
year-over-year, and a $15
million favorable
adjustment to the Marriott Rewards liability resulting from the lower
than projected cost of Marriott Rewards redemptions. Results were
reduced by $6
million of
incremental program costs and$11 million of deferred profit
associated with lower reportability of contract sales, both related to
the new points-based program.
Timeshare
segment results include Timeshare sales and services revenue, net of
direct expenses, as well as base management fees, equity in earnings
(losses), gains and other income, noncontrolling interest, interest
expense and general, administrative and other expenses associated with
the timeshare business. Timeshare segment results for the 2010
third quarter totaled $37
million as shown
on page A-9. In the prior year quarter, adjusted Timeshare
segment results would have totaled $24
million, adjusting for the Timeshare impairment and
restructuring costs and other charges, as well as the impact of
consolidating securitized loans had that occurred at the beginning of
2009 rather than 2010, as shown on page A-11. Timeshare segment
results for the 2010 third quarter included $12 million of interest expense related
to the consolidation of securitized Timeshare notes. Adjusted
Timeshare segment results for the year-ago quarter included $17 million of interest expense related
to the consolidation of securitized Timeshare notes.
GENERAL,
ADMINISTRATIVE and OTHER expenses for the 2010 third quarter increased
4 percent to $149
million, compared to adjusted expenses of $143 million in the year-ago quarter,
and included higher incentive compensation and legal costs, partially
offset by lower deferred compensation expenses and the favorable
reversal of an accrual related to a tax settlement on a European asset.
GAINS
(LOSSES) AND OTHER INCOME totaled $3
million, primarily reflecting gains on the sale of real estate.
The prior year's third quarter losses totaled $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 $1
million of
income from cost method investments.
INTEREST
EXPENSE increased to $41
million in the
third quarter primarily due to $12
million of
interest expense related to the consolidation of debt associated with
securitized Timeshare notes, lower capitalized interest and higher
interest expense associated with the company's deferred compensation
plan, partially offset by the impact of lower debt balances and lower
interest rates. Adjusting for the impact of consolidating
securitized loans had that occurred at the beginning of 2009 rather
than 2010, third quarter 2009 interest expense would have been $44 million.
EQUITY
IN (LOSSES) totaled a $5
million loss in
the quarter compared to an $11
million adjusted
loss in the year-ago quarter. The $6 million improvement in results
primarily reflected lower losses in two joint ventures, as well as the
favorable impact of the impairment of one investment in the year ago
quarter.
Earnings
before Interest Expense, Taxes, Depreciation and Amortization (EBITDA)
EBITDA
totaled $220
million in the
2010 third quarter. In the 2009 third quarter, adjusted EBITDA
totaled $163
million. If the consolidation of securitized Timeshare
notes had occurred at the beginning of 2009, adjusted EBITDA in the
2009 third quarter would have totaled $195
million.
BALANCE
SHEET
At
the end of the third quarter 2010, total debt was $2,726 million and cash balances totaled $223 million,
compared to $2,298
million in debt
and $115
million of cash
at year-end 2009. Adjusting for the debt associated with
securitized Timeshare mortgage notes now required to be consolidated
under new accounting rules, adjusted total debt, net of cash, totaled $1,591 million,
a decline of nearly $600
million since
year-end 2009.
At
the end of the 2010 third quarter, Marriott did not have any borrowings
outstanding under its $2.4
billion revolving
bank credit facility.
COMMON
STOCK
Weighted
average fully diluted shares outstanding used to calculate diluted EPS
totaled 378.1 million in the 2010 third quarter compared to weighted
average fully diluted shares outstanding of 367.5 million used to
calculate adjusted diluted EPS in the year-ago quarter.
The
remaining share repurchase authorization, as of September 10, 2010,
totaled 21.3 million shares.
FOURTH
QUARTER 2010 OUTLOOK
For
the fourth quarter, the company assumes comparable systemwide REVPAR on
a constant dollar basis will increase 6 to 8 percent in North America,
7 to 9 percent outside North
America and 6 to
8 percent worldwide.
The
company assumes fourth quarter 2010 Timeshare contract sales will total $190 million to $200
million and
Timeshare sales and services revenue, net of direct expenses, will
total approximately $45
million to $50 million. With these assumptions, Timeshare
segment results for the fourth quarter, including interest expense
associated with securitized notes, are expected to total $40 million to $45
million, including an approximately $20 million gain on the sale of real
estate.
The
company expects to open about 30,000 rooms in 2010.
The
company estimates that, on a full-year basis, one point of worldwide
systemwide REVPAR impacts total fees by approximately $15 million pretax and owned, leased,
corporate housing and other revenue, net of direct expense, by
approximately $5
million pretax.
|
|
|
Fourth
Quarter
2010
|
Full Year
2010
|
|
Total fee
revenue
|
$370
million to $380
million
|
$1,166
million to $1,176
million
|
|
Owned,
leased, corporate housing and other revenue, net of direct expenses
|
Approx $40
million
|
Approx $90
million
|
|
Timeshare
sales and services revenue, net of direct expenses
|
$45 million
to $50
million
|
$201 million
to $206
million
|
|
General,
administrative and other expenses
|
$220 million
to $225
million
|
$649 million
to $654
million
|
|
Operating
income
|
$230
million to $250
million
|
$803 million
to $823
million
|
|
Gains and
other income
|
Approx $25
million
|
Approx $32
million
|
|
Net interest
expense1
|
Approx $50
million
|
Approx $169
million
|
|
Equity in
(losses)
|
Approx ($10)
million
|
Approx ($30)
million
|
|
Earnings per
share
|
$0.33 to
$0.36
|
$1.09 to
$1.12
|
|
Tax rate
|
|
35.5 percent
|
|
1 Net of
interest income
|
|
|
|
|
The
company expects investment spending in 2010 will total approximately $500 million,
including $50
million for
maintenance capital spending and $200
million of other
capital expenditures (including property acquisitions).
Investment spending will also include new mezzanine financing and
mortgage loans, contract acquisition costs, and equity and other
investments.
Based
upon the assumptions above, full year 2010 EBITDA is expected to total $1,050 million to
$1,065 million, an 8 to 9 percent increase over the prior year's
adjusted EBITDA including the impact of consolidating securitized loans
had that occurred at the beginning of 2009 rather than 2010.
Adjusted EBITDA for full year 2009 totaled $974 million and is shown on page A-15.
2011
OUTLOOK
For
the full year 2011, the company expects the business climate,
particularly the pricing environment, to continue to improve. The
company assumes full year 2011 systemwide REVPAR on a constant dollar
basis will increase 6 to 8 percent in North
America, outside North
America and on a
worldwide basis.
The
company expects to open 25,000 to 30,000 rooms in 2011 as most hotels
expected to open are already under construction or undergoing
conversion from other brands. Given these assumptions, full year
2011 fee revenue could total $1,290
million to $1,330 million and
owned, leased, corporate housing and other revenue, net of direct
expense, could increase 5 to 15 percent year-over-year.
The
company expects 2011 Timeshare contract sales to be in line with 2010
levels.
The
company expects its 2011 general and administrative costs to increase 3
to 5 percent reflecting increased spending for brand initiatives and
higher compensation.
Marriott
International, Inc. (NYSE: MAR)
will conduct its quarterly earnings review for the investment community
and news media on Thursday,
October 7, 2010 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
7, 2011.
The
telephone dial-in number for the conference call is 706-679-3455 and
the conference ID is 93873764. A telephone replay of the
conference call will be available from 1 p.m. ET, Thursday, October 7,
2010 until 8 p.m. ET, Thursday, October 14,
2010. To access the replay, call 706-645-9291. The
reservation number for the recording is 93873764.
Definitions
All
references to net income or net loss reflect net income or net loss
attributable to Marriott. All references to EPS or diluted losses
per share, unless otherwise noted, reflect EPS or diluted losses per
share attributable to Marriott shareholders.
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
expectations about 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 continuation
and pace of the economic recovery; supply and demand changes for hotel
rooms, corporate housing and our Timeshare segment products;
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 that we identify
in our most recent quarterly report on Form 10-Q; any of which could
cause actual results to differ materially from the expectations we
express or imply here. These statements are made as of October 6, 2010,
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 3,500 lodging properties in
70 countries and territories. Marriott International operates and
franchises hotels under the Marriott, JW Marriott, The Ritz-Carlton,The
Autograph Collection, Renaissance, Residence Inn, Courtyard, TownePlace Suites, Fairfield Inn, SpringHill Suites andBulgari brand names; develops and
operates vacation ownership resorts under the Marriott Vacation Club, The Ritz-Carlton
Destination Club, and Grand
Residences by Marriott brands;
licenses and manages whole-ownership residential brands, including The Ritz-Carlton
Residences, JW
Marriott Residences and Marriott
Residences; operates Marriott
Executive Apartments; provides furnished corporate housing through
its Marriott
ExecuStay division;
and operates conference centers. The company is headquartered in Bethesda, Maryland,
USA, and had approximately 137,000 employees at 2009 year-end. It is
recognized by FORTUNE® as one of the best companies to work for,
and by Newsweek as one of the greenest big
companies in America. In fiscal year 2009, Marriott International
reported sales from continuing operations of nearly $11 billion.
For more information or reservations, please visit our web site at www.marriott.com,
and for the latest company news, visitwww.marriottnewscenter.com.
IRPR#1
Tables
follow
MARRIOTT
INTERNATIONAL, INC.
PRESS
RELEASE SCHEDULES
QUARTER 3,
2010
TABLE OF
CONTENTS
|
|
|
|
|
Consolidated
Statements of Income
|
A-1
|
|
|
|
|
Total
Lodging Products
|
A-4
|
|
|
|
|
Key Lodging
Statistics
|
A-5
|
|
|
|
|
Timeshare
Segment
|
A-9
|
|
|
|
|
Third
Quarter 2009 Timeshare Segment As Adjusted Had ASU Nos. 2009-16 and
2009-17 Been Adopted on January 3, 2009
|
A-11
|
|
|
|
|
Timeshare
Inventory As Adjusted Had ASU Nos. 2009-16 and 2009-17 Been Adopted on
January 3, 2009
|
A-12
|
|
|
|
|
EBITDA and
Adjusted EBITDA
|
A-13
|
|
|
|
|
Third
Quarter 2009 EBITDA As Adjusted Had ASU Nos. 2009-16 and 2009-17 Been
Adopted on January 3, 2009
|
A-14
|
|
|
|
|
2009 EBITDA
As Adjusted Had ASU Nos. 2009-16 and 2009-17 Been Adopted on January 3,
2009 and Forecasted 2010
|
A-15
|
|
|
|
|
Adjusted
Total Debt Net of Cash
|
A-16
|
|
|
|
|
Third
Quarter 2009 Interest Expense As Adjusted Had ASU Nos. 2009-16 and
2009-17 Been Adopted on January 3, 2009
|
A-17
|
|
|
|
|
Non-GAAP
Financial Measures
|
A-18
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
(in
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
As Reported
12 Weeks Ended September 10, 2010
|
|
As Reported
12 Weeks Ended September 11, 2009
|
Restructuring
Costs & Other Charges
|
Timeshare
Strategy - Impairment Charges
|
Certain Tax
Items
|
As Adjusted
12 Weeks Ended September 11, 2009**
|
|
Percent
Better/ (Worse) 2010 vs. Adjusted 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
Base
management fees
|
$
123
|
|
$
116
|
$
-
|
$
-
|
$
-
|
$
116
|
|
6
|
|
Franchise
fees
|
109
|
|
100
|
-
|
-
|
-
|
100
|
|
9
|
|
Incentive
management fees
|
21
|
|
17
|
-
|
-
|
-
|
17
|
|
24
|
|
Owned,
leased, corporate housing and other revenue (1)
|
220
|
|
226
|
-
|
-
|
-
|
226
|
|
(3)
|
|
Timeshare
sales and services (2)
|
275
|
|
254
|
(3)
|
-
|
-
|
251
|
|
10
|
|
Cost
reimbursements (3)
|
1,900
|
|
1,758
|
-
|
-
|
-
|
1,758
|
|
8
|
|
Total
Revenues
|
2,648
|
|
2,471
|
(3)
|
-
|
-
|
2,468
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
COSTS AND EXPENSES
|
|
|
|
|
|
|
|
|
|
|
Owned,
leased and corporate housing - direct (4)
|
213
|
|
214
|
-
|
-
|
-
|
214
|
|
-
|
|
Timeshare -
direct
|
219
|
|
238
|
-
|
-
|
-
|
238
|
|
8
|
|
Timeshare
strategy - impairment charges
|
-
|
|
614
|
-
|
(614)
|
-
|
-
|
|
-
|
|
Reimbursed
costs
|
1,900
|
|
1,758
|
-
|
-
|
-
|
1,758
|
|
(8)
|
|
Restructuring
costs
|
-
|
|
9
|
(9)
|
-
|
-
|
-
|
|
-
|
|
General,
administrative and other (5)
|
149
|
|
144
|
(1)
|
-
|
-
|
143
|
|
(4)
|
|
Total
Expenses
|
2,481
|
|
2,977
|
(10)
|
(614)
|
-
|
2,353
|
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME (LOSS)
|
167
|
|
(506)
|
7
|
614
|
-
|
115
|
|
45
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains and
other income (6)
|
3
|
|
(1)
|
-
|
-
|
-
|
(1)
|
|
400
|
|
Interest
expense
|
(41)
|
|
(27)
|
-
|
-
|
-
|
(27)
|
|
(52)
|
|
Interest
income
|
4
|
|
5
|
-
|
-
|
-
|
5
|
|
(20)
|
|
Equity in
losses (7)
|
(5)
|
|
(12)
|
1
|
-
|
-
|
(11)
|
|
55
|
|
Timeshare
strategy - impairment charges (non-operating)
|
-
|
|
(138)
|
-
|
138
|
-
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
(LOSS) BEFORE INCOME TAXES
|
128
|
|
(679)
|
8
|
752
|
-
|
81
|
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|
(Provision)
benefit for income taxes
|
(45)
|
|
210
|
(4)
|
(250)
|
13
|
(31)
|
|
(45)
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS)
|
83
|
|
(469)
|
4
|
502
|
13
|
50
|
|
66
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Net
losses attributable to noncontrolling interests, net of tax
|
-
|
|
3
|
-
|
-
|
-
|
3
|
|
(100)
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS) ATTRIBUTABLE TO MARRIOTT
|
$
83
|
|
$
(466)
|
$
4
|
$
502
|
$
13
|
$
53
|
|
57
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS
(LOSSES) PER SHARE - Basic (8)
|
|
|
|
|
|
|
|
|
|
|
Earnings (losses) per share attributable to Marriott shareholders 9
|
$
0.23
|
|
$
(1.31)
|
$
0.01
|
$
1.41
|
$
0.03
|
$
0.15
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS
(LOSSES) PER SHARE - Diluted (8,10)
|
|
|
|
|
|
|
|
|
|
|
Earnings (losses) per share attributable to Marriott shareholders 9
|
$
0.22
|
|
$
(1.31)
|
$
0.01
|
$
1.41
|
$
0.03
|
$
0.15
|
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Shares
(8)
|
363.1
|
|
356.7
|
356.7
|
356.7
|
356.7
|
356.7
|
|
|
|
Diluted
Shares (8,10)
|
378.1
|
|
356.7
|
356.7
|
356.7
|
356.7
|
367.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-18 and A-19 for
additional information about our reasons for providing these
alternative financial measures and limitations on their use.
|
|
See page A-3
for footnote references.
|
|
A-1
|
|
|
|
|
|
|
|
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
(in
millions, except per share amounts)
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
As Reported
36 Weeks Ended September 10, 2010
|
As Reported
36 Weeks Ended September 11, 2009
|
Restructuring
Costs & Other Charges
|
Timeshare
Strategy - Impairment Charges
|
Certain Tax
Items
|
As Adjusted
36 Weeks Ended September 11, 2009**
|
|
Percent
Better/ (Worse) 2010 vs. Adjusted 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
Base
management fees
|
$
384
|
$
367
|
$
-
|
$
-
|
$
-
|
$
367
|
|
5
|
|
Franchise
fees
|
305
|
281
|
-
|
-
|
-
|
281
|
|
9
|
|
Incentive
management fees
|
107
|
95
|
-
|
-
|
-
|
95
|
|
13
|
|
Owned,
leased, corporate housing and other revenue (1)
|
704
|
684
|
-
|
-
|
-
|
684
|
|
3
|
|
Timeshare
sales and services (including net note sale losses of $1 for
thirty-six
weeks ended September 11, 2009) (2)
|
849
|
746
|
26
|
-
|
-
|
772
|
|
10
|
|
Cost
reimbursements (3)
|
5,700
|
5,355
|
-
|
-
|
-
|
5,355
|
|
6
|
|
Total
Revenues
|
8,049
|
7,528
|
26
|
-
|
-
|
7,554
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
COSTS AND EXPENSES
|
|
|
|
|
|
|
|
|
|
Owned,
leased and corporate housing - direct (4)
|
654
|
638
|
-
|
-
|
-
|
638
|
|
(3)
|
|
Timeshare -
direct
|
693
|
737
|
1
|
-
|
-
|
738
|
|
6
|
|
Timeshare
strategy - impairment charges
|
-
|
614
|
-
|
(614)
|
-
|
-
|
|
-
|
|
Reimbursed
costs
|
5,700
|
5,355
|
-
|
-
|
-
|
5,355
|
|
(6)
|
|
Restructuring
costs
|
-
|
44
|
(44)
|
-
|
-
|
-
|
|
-
|
|
General,
administrative and other (5)
|
429
|
507
|
(92)
|
-
|
-
|
415
|
|
(3)
|
|
Total
Expenses
|
7,476
|
7,895
|
(135)
|
(614)
|
-
|
7,146
|
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME (LOSS)
|
573
|
(367)
|
161
|
614
|
-
|
408
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
Gains and
other income (including gain on debt extinguishment of $21
for
the thirty-six weeks ended September 11, 2009) (6)
|
7
|
27
|
-
|
-
|
-
|
27
|
|
(74)
|
|
Interest
expense
|
(130)
|
(84)
|
-
|
-
|
-
|
(84)
|
|
(55)
|
|
Interest
income
|
11
|
20
|
-
|
-
|
-
|
20
|
|
(45)
|
|
Equity in
losses (7)
|
(20)
|
(50)
|
33
|
-
|
-
|
(17)
|
|
(18)
|
|
Timeshare
strategy - impairment charges (non-operating)
|
-
|
(138)
|
-
|
138
|
-
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
(LOSS) BEFORE INCOME TAXES
|
441
|
(592)
|
194
|
752
|
-
|
354
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
(Provision)
benefit for income taxes
|
(156)
|
133
|
(76)
|
(250)
|
56
|
(137)
|
|
(14)
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS)
|
285
|
(459)
|
118
|
502
|
56
|
217
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
Add: Net
losses attributable to noncontrolling interests, net of tax
|
-
|
7
|
-
|
-
|
-
|
7
|
|
(100)
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS) ATTRIBUTABLE TO MARRIOTT
|
$
285
|
$
(452)
|
$
118
|
$
502
|
$
56
|
$
224
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS
(LOSSES) PER SHARE - Basic (8)
|
|
|
|
|
|
|
|
|
|
Earnings (losses) per share attributable to Marriott shareholders (9)
|
$
0.79
|
$
(1.27)
|
$
0.33
|
$
1.41
|
$
0.16
|
$
0.63
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS
(LOSSES) PER SHARE - Diluted (8,10)
|
|
|
|
|
|
|
|
|
|
Earnings (losses) per share attributable to Marriott shareholders (9)
|
$
0.76
|
$
(1.27)
|
$
0.33
|
$
1.41
|
$
0.16
|
$
0.61
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Shares
(8)
|
361.5
|
355.7
|
355.7
|
355.7
|
355.7
|
355.7
|
|
|
|
Diluted
Shares (8,10)
|
376.4
|
355.7
|
355.7
|
355.7
|
355.7
|
365.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-18 and A-19 for
additional information about our reasons for providing these
alternative financial measures and limitations on their use.
|
|
See page A-3
for footnote references.
|
|
A-2
|
|
|
|
|
|
|
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
FOOTNOTES TO
CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
1 -- Owned,
leased, corporate housing and other revenue includes revenue from the
properties we own or lease, revenue from our corporate housing
business, termination fees, branding fees and other revenue.
|
|
2 -- Timeshare
sales and services includes total timeshare
revenue except for base management fees and cost reimbursements.
|
|
3 -- Cost
reimbursements include reimbursements from
properties for Marriott-funded operating expenses.
|
|
4 -- Owned,
leased and corporate housing - direct expenses include operating
expenses related to our owned or leased hotels, including lease
payments, pre-opening expenses and depreciation, plus expenses related
to our corporate housing business.
|
|
5 -- General,
administrative and other expenses
include the overhead costs allocated to our segments, and our corporate
overhead costs and general expenses.
|
|
6 -- Gains and
other income includes gains and losses
on: the sale of real estate, note sales or repayments (except timeshare
note securitizations), the sale of joint ventures and investments; and
debt extinguishments, as well as income from cost method joint ventures.
|
|
7 -- Equity in
losses includes our
equity in losses of unconsolidated equity method joint ventures.
|
|
8 -- 2009
share numbers and per share amounts have been retroactively adjusted to
reflect the stock dividends with distribution dates of July 30, 2009,
September 3, 2009 and December 3, 2009.
|
|
9 --
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.
|
|
10 -- Basic
and fully diluted weighted average common shares outstanding used to
calculate earnings per share for the periods in which we had a loss are
the same because inclusion of additional equivalents would be
anti-dilutive.
|
|
A-3
|
|
|
MARRIOTT INTERNATIONAL, INC.
|
|
TOTAL
LODGING PRODUCTS (1)
|
|
|
|
|
Number of
Properties
|
Number of
Rooms/Suites
|
|
Brand
|
September
10, 2010
|
September
11, 2009
|
vs.
September 11, 2009
|
September
10, 2010
|
September
11, 2009
|
vs.
September 11, 2009
|
|
|
|
|
|
|
|
|
|
Domestic
Full-Service
|
|
|
|
|
|
|
|
Marriott Hotels & Resorts
|
355
|
350
|
5
|
142,277
|
139,280
|
2,997
|
|
Renaissance Hotels
|
79
|
78
|
1
|
28,790
|
28,508
|
282
|
|
Autograph Collection
|
11
|
-
|
11
|
1,646
|
-
|
1,646
|
|
Domestic
Limited-Service
|
|
|
|
|
|
|
|
Courtyard
|
785
|
761
|
24
|
110,325
|
106,835
|
3,490
|
|
Fairfield Inn & Suites
|
647
|
609
|
38
|
58,398
|
54,537
|
3,861
|
|
SpringHill Suites
|
271
|
241
|
30
|
31,772
|
27,818
|
3,954
|
|
Residence Inn
|
592
|
583
|
9
|
71,280
|
69,865
|
1,415
|
|
TownePlace Suites
|
192
|
179
|
13
|
19,320
|
17,917
|
1,403
|
|
International
|
|
|
|
|
|
|
|
Marriott Hotels & Resorts
|
195
|
188
|
7
|
59,936
|
57,010
|
2,926
|
|
Renaissance Hotels
|
67
|
65
|
2
|
22,622
|
22,291
|
331
|
|
Courtyard
|
97
|
88
|
9
|
19,307
|
17,254
|
2,053
|
|
Fairfield Inn & Suites
|
10
|
9
|
1
|
1,235
|
1,109
|
126
|
|
SpringHill Suites
|
1
|
1
|
-
|
124
|
124
|
-
|
|
Residence Inn
|
18
|
18
|
-
|
2,559
|
2,604
|
(45)
|
|
Marriott Executive Apartments
|
23
|
22
|
1
|
3,775
|
3,580
|
195
|
|
Luxury
|
|
|
|
|
|
|
|
The Ritz-Carlton - Domestic
|
39
|
37
|
2
|
11,587
|
11,549
|
38
|
|
The Ritz-Carlton - International
|
35
|
33
|
2
|
10,457
|
10,117
|
340
|
|
Bulgari Hotels & Resorts
|
2
|
2
|
-
|
117
|
117
|
-
|
|
The Ritz-Carlton Residential
|
26
|
25
|
1
|
2,715
|
2,638
|
77
|
|
The Ritz-Carlton Serviced Apartments
|
3
|
3
|
-
|
458
|
474
|
(16)
|
|
Timeshare (2)
|
|
|
|
|
|
|
|
Marriott Vacation Club (3)
|
53
|
52
|
1
|
11,866
|
11,854
|
12
|
|
The Ritz-Carlton Destination Club
|
9
|
10
|
(1)
|
446
|
461
|
(15)
|
|
The Ritz-Carlton Residences
|
4
|
4
|
-
|
238
|
234
|
4
|
|
Grand Residences by Marriott - Fractional
|
2
|
2
|
-
|
248
|
248
|
-
|
|
Grand Residences by Marriott - Residential
|
2
|
2
|
-
|
68
|
91
|
(23)
|
|
Sub Total
Timeshare
|
70
|
70
|
-
|
12,866
|
12,888
|
(22)
|
|
|
|
|
|
|
|
|
|
Total
|
3,518
|
3,362
|
156
|
611,566
|
586,515
|
25,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Timeshare Interval, Fractional and Residential Resorts
|
|
|
Total
|
Properties in
|
|
|
|
|
|
|
Properties
(2)
|
Active Sales
(4)
|
|
|
|
|
|
100%
Company-Developed
|
|
|
|
|
|
|
|
Marriott Vacation Club (3)
|
53
|
27
|
|
|
|
|
|
The Ritz-Carlton Destination Club and Residences
|
11
|
9
|
|
|
|
|
|
Grand Residences by Marriott and Residences
|
4
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint
Ventures
|
|
|
|
|
|
|
|
The Ritz-Carlton Destination Club and Residences
|
2
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
70
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Total
Lodging Products excludes the 1,993 and 2,153 corporate housing rental
units as of September 10, 2010 and September 11, 2009, 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.
|
|
A-4
|
|
|
|
|
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
KEY LODGING
STATISTICS
CONSTANT $
|
|
Comparable
Company-Operated International Properties(1)
|
|
|
|
|
Three Months
Ended August 31, 2010 and August 31, 2009
|
|
|
REVPAR
|
Occupancy
|
Average
Daily
Rate
|
|
Region
|
2010
|
vs. 2009
|
2010
|
|
vs. 2009
|
2010
|
vs. 2009
|
|
Caribbean
& Latin America
|
$113.33
|
7.6%
|
71.5%
|
5.8%
|
pts.
|
$158.53
|
-1.1%
|
|
Continental
Europe
|
$112.54
|
8.6%
|
75.5%
|
3.8%
|
pts.
|
$149.09
|
3.2%
|
|
United
Kingdom
|
$129.35
|
9.7%
|
81.6%
|
3.3%
|
pts.
|
$158.45
|
5.3%
|
|
Middle East
& Africa
|
$74.25
|
-2.2%
|
62.4%
|
1.5%
|
pts.
|
$119.06
|
-4.5%
|
|
Asia
Pacific(2)
|
$80.76
|
29.9%
|
68.1%
|
13.1%
|
pts.
|
$118.54
|
4.9%
|
|
|
|
|
|
|
|
|
|
|
Regional
Composite(3)
|
$103.89
|
12.1%
|
73.0%
|
6.5%
|
pts.
|
$142.33
|
2.2%
|
|
|
|
|
|
|
|
|
|
|
International
Luxury(4)
|
$182.05
|
12.4%
|
62.8%
|
5.3%
|
pts.
|
$289.92
|
2.8%
|
|
|
|
|
|
|
|
|
|
|
Total
International(5)
|
$112.42
|
12.2%
|
71.9%
|
6.3%
|
pts.
|
$156.39
|
2.3%
|
|
|
|
|
|
|
|
|
|
|
Worldwide(6)
|
$101.43
|
8.4%
|
71.2%
|
3.7%
|
pts.
|
$142.46
|
2.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
Systemwide International Properties(1)
|
|
|
|
|
Three Months
Ended August 31, 2010 and August 31, 2009
|
|
|
REVPAR
|
Occupancy
|
Average
Daily
Rate
|
|
Region
|
2010
|
vs. 2009
|
2010
|
|
vs. 2009
|
2010
|
vs. 2009
|
|
Caribbean
& Latin America
|
$100.82
|
14.2%
|
68.6%
|
8.1%
|
pts.
|
$146.92
|
0.7%
|
|
Continental
Europe
|
$111.17
|
9.0%
|
74.7%
|
4.8%
|
pts.
|
$148.78
|
2.0%
|
|
United
Kingdom
|
$127.58
|
9.6%
|
81.3%
|
3.4%
|
pts.
|
$157.02
|
5.0%
|
|
Middle East
& Africa
|
$73.85
|
-1.9%
|
62.7%
|
1.6%
|
pts.
|
$117.81
|
-4.4%
|
|
Asia
Pacific(2)
|
$88.25
|
21.0%
|
68.2%
|
11.3%
|
pts.
|
$129.35
|
0.9%
|
|
|
|
|
|
|
|
|
|
|
Regional
Composite(3)
|
$103.38
|
11.9%
|
72.2%
|
6.7%
|
pts.
|
$143.23
|
1.5%
|
|
|
|
|
|
|
|
|
|
|
International
Luxury(4)
|
$182.05
|
12.4%
|
62.8%
|
5.3%
|
pts.
|
$289.92
|
2.8%
|
|
|
|
|
|
|
|
|
|
|
Total
International(5)
|
$110.47
|
12.0%
|
71.3%
|
6.6%
|
pts.
|
$154.85
|
1.6%
|
|
|
|
|
|
|
|
|
|
|
Worldwide(6)
|
$89.79
|
8.2%
|
71.7%
|
4.2%
|
pts.
|
$125.18
|
1.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 We
report financial results on a period basis and international statistics
on a monthly basis. Statistics are in constant dollars for June
through August. International includes properties located outside
the Continental United States and Canada, except for Worldwide which
includes the Continental United States.
|
|
2 Does
not include Hawaii.
|
|
3
Regional information includes the Marriott Hotels & Resorts,
Renaissance Hotels and Courtyard brands. Includes Hawaii.
|
|
4
International Luxury includes The Ritz-Carlton properties outside
of the Continental United States and Canada and Bulgari Hotels &
Resorts.
|
|
5
Includes Regional Composite and International Luxury.
|
|
6
Includes international statistics for the three calendar months
ended August 31, 2010 and August 31, 2009, and the Continental United
States statistics for the twelve weeks ended September 10, 2010 and
September 11, 2009. Includes the Marriott Hotels & Resorts,
Renaissance Hotels, The Ritz-Carlton, Bulgari Hotels & Resorts,
Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites
and SpringHill Suites brands.
|
|
A-5
|
|
|
|
|
|
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
KEY LODGING
STATISTICS
CONSTANT $
|
|
Comparable
Company-Operated International Properties(1)
|
|
|
|
|
Eight Months
Ended August 31, 2010 and August 31, 2009
|
|
|
REVPAR
|
Occupancy
|
Average
Daily
Rate
|
|
Region
|
2010
|
vs. 2009
|
2010
|
|
vs. 2009
|
2010
|
vs. 2009
|
|
Caribbean
& Latin America
|
$130.49
|
5.2%
|
72.4%
|
5.2%
|
pts.
|
$180.16
|
-2.4%
|
|
Continental
Europe
|
$108.94
|
5.8%
|
69.4%
|
4.0%
|
pts.
|
$156.87
|
-0.3%
|
|
United
Kingdom
|
$117.80
|
7.5%
|
76.0%
|
3.9%
|
pts.
|
$154.96
|
2.0%
|
|
Middle East
& Africa
|
$90.84
|
-4.4%
|
69.0%
|
2.3%
|
pts.
|
$131.57
|
-7.5%
|
|
Asia
Pacific(2)
|
$80.00
|
25.7%
|
66.1%
|
14.1%
|
pts.
|
$121.02
|
-1.1%
|
|
|
|
|
|
|
|
|
|
|
Regional
Composite(3)
|
$104.12
|
8.5%
|
70.5%
|
6.8%
|
pts.
|
$147.78
|
-1.9%
|
|
|
|
|
|
|
|
|
|
|
International
Luxury(4)
|
$196.14
|
9.8%
|
63.5%
|
6.8%
|
pts.
|
$308.92
|
-1.9%
|
|
|
|
|
|
|
|
|
|
|
Total
International(5)
|
$114.16
|
8.7%
|
69.7%
|
6.8%
|
pts.
|
$163.79
|
-1.8%
|
|
|
|
|
|
|
|
|
|
|
Worldwide(6)
|
$102.45
|
5.5%
|
69.2%
|
4.6%
|
pts.
|
$148.01
|
-1.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
Systemwide International Properties(1)
|
|
|
|
|
Eight Months
Ended August 31, 2010 and August 31, 2009
|
|
|
REVPAR
|
Occupancy
|
Average
Daily
Rate
|
|
Region
|
2010
|
vs. 2009
|
2010
|
|
vs. 2009
|
2010
|
vs. 2009
|
|
Caribbean
& Latin America
|
$113.59
|
11.1%
|
69.3%
|
7.9%
|
pts.
|
$163.94
|
-1.6%
|
|
Continental
Europe
|
$106.02
|
5.5%
|
68.1%
|
4.7%
|
pts.
|
$155.68
|
-1.8%
|
|
United
Kingdom
|
$116.04
|
7.3%
|
75.4%
|
3.8%
|
pts.
|
$153.86
|
1.9%
|
|
Middle East
& Africa
|
$89.87
|
-3.9%
|
69.1%
|
2.7%
|
pts.
|
$130.09
|
-7.6%
|
|
Asia
Pacific(2)
|
$85.54
|
17.9%
|
66.5%
|
12.1%
|
pts.
|
$128.55
|
-3.5%
|
|
|
|
|
|
|
|
|
|
|
Regional
Composite(3)
|
$102.48
|
8.4%
|
69.4%
|
6.9%
|
pts.
|
$147.58
|
-2.4%
|
|
|
|
|
|
|
|
|
|
|
International
Luxury(4)
|
$196.14
|
9.8%
|
63.5%
|
6.8%
|
pts.
|
$308.92
|
-1.9%
|
|
|
|
|
|
|
|
|
|
|
Total
International(5)
|
$110.92
|
8.6%
|
68.9%
|
6.9%
|
pts.
|
$160.97
|
-2.3%
|
|
|
|
|
|
|
|
|
|
|
Worldwide(6)
|
$87.38
|
4.8%
|
68.6%
|
4.3%
|
pts.
|
$127.41
|
-1.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 We
report financial results on a period basis and international statistics
on a monthly basis. Statistics are in constant dollars for
January through August. International includes properties located
outside the Continental United States and Canada, except for Worldwide
which includes the Continental United States.
|
|
2 Does
not include Hawaii.
|
|
3
Regional information includes the Marriott Hotels & Resorts,
Renaissance Hotels and Courtyard brands. Includes Hawaii.
|
|
4
International Luxury includes The Ritz-Carlton properties outside
of the Continental United States and Canada and Bulgari Hotels &
Resorts.
|
|
5
Includes Regional Composite and International Luxury.
|
|
6
Includes international statistics for the eight calendar months
ended August 31, 2010 and August 31, 2009, and the Continental United
States statistics for the thirty-six weeks ended September 10, 2010 and
September 11, 2009. Includes the Marriott Hotels & Resorts,
Renaissance Hotels, The Ritz-Carlton, Bulgari Hotels & Resorts,
Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites
and SpringHill Suites brands.
|
|
A-6
|
|
|
|
|
|
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
KEY LODGING
STATISTICS
|
|
Comparable
Company-Operated North American Properties(1)
|
|
|
|
|
Twelve Weeks
Ended September 10, 2010 and September 11, 2009
|
|
|
REVPAR
|
Occupancy
|
Average
Daily Rate
|
|
Brand
|
2010
|
vs. 2009
|
2010
|
|
vs. 2009
|
2010
|
vs. 2009
|
|
Marriott
Hotels & Resorts
|
$105.35
|
7.0%
|
71.7%
|
2.2%
|
pts.
|
$147.02
|
3.7%
|
|
Renaissance
Hotels
|
$98.20
|
3.8%
|
69.1%
|
0.7%
|
pts.
|
$142.02
|
2.7%
|
|
Composite
North American Full-Service(2)
|
$104.01
|
6.4%
|
71.2%
|
1.9%
|
pts.
|
$146.11
|
3.5%
|
|
The
Ritz-Carlton(3)
|
$169.51
|
7.9%
|
68.6%
|
2.9%
|
pts.
|
$247.12
|
3.3%
|
|
Composite
North American Full-Service & Luxury(4)
|
$112.10
|
6.7%
|
70.9%
|
2.0%
|
pts.
|
$158.18
|
3.6%
|
|
Residence Inn
|
$89.50
|
6.2%
|
78.9%
|
3.8%
|
pts.
|
$113.40
|
1.1%
|
|
Courtyard
|
$71.37
|
5.8%
|
67.5%
|
2.5%
|
pts.
|
$105.77
|
1.9%
|
|
TownePlace
Suites
|
$54.67
|
5.2%
|
72.8%
|
4.0%
|
pts.
|
$75.06
|
-0.5%
|
|
SpringHill
Suites
|
$64.65
|
8.0%
|
68.5%
|
3.6%
|
pts.
|
$94.32
|
2.3%
|
|
Composite
North American Limited-Service(5)
|
$74.74
|
6.0%
|
70.9%
|
3.0%
|
pts.
|
$105.39
|
1.5%
|
|
Composite -
All(6)
|
$96.40
|
6.5%
|
70.9%
|
2.4%
|
pts.
|
$135.99
|
2.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
Systemwide North American Properties(1)
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Weeks
Ended September 10, 2010 and September 11, 2009
|
|
|
REVPAR
|
Occupancy
|
Average
Daily Rate
|
|
Brand
|
2010
|
vs. 2009
|
2010
|
|
vs. 2009
|
2010
|
vs. 2009
|
|
Marriott
Hotels & Resorts
|
$95.20
|
7.4%
|
69.4%
|
3.1%
|
pts.
|
$137.17
|
2.6%
|
|
Renaissance
Hotels
|
$92.22
|
6.2%
|
69.6%
|
2.7%
|
pts.
|
$132.59
|
2.1%
|
|
Composite
North American Full-Service(2)
|
$94.67
|
7.2%
|
69.4%
|
3.1%
|
pts.
|
$136.35
|
2.5%
|
|
The
Ritz-Carlton(3)
|
$169.51
|
7.9%
|
68.6%
|
2.9%
|
pts.
|
$247.12
|
3.3%
|
|
Composite
North American Full-Service & Luxury(4)
|
$100.21
|
7.3%
|
69.4%
|
3.0%
|
pts.
|
$144.46
|
2.6%
|
|
Residence Inn
|
$91.37
|
6.6%
|
80.6%
|
4.4%
|
pts.
|
$113.32
|
0.9%
|
|
Courtyard
|
$76.92
|
6.8%
|
70.2%
|
3.3%
|
pts.
|
$109.63
|
1.8%
|
|
Fairfield
Inn & Suites
|
$61.20
|
8.4%
|
70.5%
|
4.4%
|
pts.
|
$86.76
|
1.7%
|
|
TownePlace
Suites
|
$61.74
|
8.6%
|
76.4%
|
7.1%
|
pts.
|
$80.79
|
-1.4%
|
|
SpringHill
Suites
|
$69.63
|
6.9%
|
70.6%
|
4.5%
|
pts.
|
$98.56
|
0.1%
|
|
Composite
North American Limited-Service(5)
|
$75.92
|
7.1%
|
73.3%
|
4.1%
|
pts.
|
$103.52
|
1.1%
|
|
Composite -
All(6)
|
$85.24
|
7.2%
|
71.8%
|
3.7%
|
pts.
|
$118.69
|
1.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Statistics include only properties located in the Continental
United States.
|
|
2
Includes the Marriott Hotels & Resorts and Renaissance Hotels
brands.
|
|
3
Statistics for The Ritz-Carlton are for June through August.
|
|
4
Includes the Marriott Hotels & Resorts, Renaissance Hotels
and The Ritz-Carlton brands.
|
|
5
Includes the Residence Inn, Courtyard, Fairfield Inn &
Suites, TownePlace Suites and SpringHill Suites brands.
|
|
6
Includes the Marriott Hotels & Resorts, Renaissance Hotels,
The Ritz-Carlton, Residence Inn, Courtyard, Fairfield Inn & Suites,
TownePlace Suites, and SpringHill Suites brands.
|
|
A-7
|
|
|
|
|
|
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
KEY LODGING
STATISTICS
|
|
Comparable
Company-Operated North American Properties(1)
|
|
|
|
|
Thirty-six
Weeks Ended September 10, 2010 and September 11, 2009
|
|
|
REVPAR
|
Occupancy
|
Average
Daily Rate
|
|
Brand
|
2010
|
vs. 2009
|
2010
|
|
vs. 2009
|
2010
|
vs. 2009
|
|
Marriott
Hotels & Resorts
|
$107.94
|
4.3%
|
70.4%
|
3.7%
|
pts.
|
$153.40
|
-1.2%
|
|
Renaissance
Hotels
|
$102.32
|
1.1%
|
68.1%
|
2.2%
|
pts.
|
$150.30
|
-2.3%
|
|
Composite
North American Full-Service(2)
|
$106.88
|
3.7%
|
69.9%
|
3.4%
|
pts.
|
$152.83
|
-1.4%
|
|
The
Ritz-Carlton(3)
|
$191.72
|
9.7%
|
68.7%
|
6.5%
|
pts.
|
$279.22
|
-0.7%
|
|
Composite
North American Full-Service & Luxury(4)
|
$116.24
|
4.7%
|
69.8%
|
3.7%
|
pts.
|
$166.55
|
-0.9%
|
|
Residence Inn
|
$85.65
|
3.5%
|
75.0%
|
4.7%
|
pts.
|
$114.20
|
-3.0%
|
|
Courtyard
|
$69.98
|
1.9%
|
65.2%
|
3.2%
|
pts.
|
$107.35
|
-3.1%
|
|
TownePlace
Suites
|
$49.48
|
-1.1%
|
66.6%
|
3.4%
|
pts.
|
$74.34
|
-6.2%
|
|
SpringHill
Suites
|
$63.36
|
3.0%
|
65.9%
|
3.7%
|
pts.
|
$96.09
|
-2.9%
|
|
Composite
North American Limited-Service(5)
|
$72.48
|
2.3%
|
68.0%
|
3.6%
|
pts.
|
$106.63
|
-3.1%
|
|
Composite -
All(6)
|
$97.69
|
4.0%
|
69.0%
|
3.7%
|
pts.
|
$141.53
|
-1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
Systemwide North
American Properties(1)
|
|
|
|
|
|
|
|
|
|
|
|
Thirty-six
Weeks Ended September 10, 2010 and September 11, 2009
|
|
|
REVPAR
|
Occupancy
|
Average
Daily Rate
|
|
Brand
|
2010
|
vs. 2009
|
2010
|
|
vs. 2009
|
2010
|
vs. 2009
|
|
Marriott
Hotels & Resorts
|
$95.79
|
4.4%
|
67.6%
|
4.0%
|
pts.
|
$141.62
|
-1.7%
|
|
Renaissance
Hotels
|
$94.03
|
3.1%
|
68.0%
|
3.9%
|
pts.
|
$138.29
|
-2.8%
|
|
Composite
North American Full-Service(2)
|
$95.48
|
4.2%
|
67.7%
|
4.0%
|
pts.
|
$141.02
|
-1.9%
|
|
The
Ritz-Carlton(3)
|
$191.72
|
9.7%
|
68.7%
|
6.5%
|
pts.
|
$279.22
|
-0.7%
|
|
Composite
North American Full-Service & Luxury(4)
|
$101.80
|
4.8%
|
67.8%
|
4.1%
|
pts.
|
$150.23
|
-1.5%
|
|
Residence Inn
|
$85.83
|
3.8%
|
76.4%
|
4.7%
|
pts.
|
$112.34
|
-2.6%
|
|
Courtyard
|
$73.42
|
2.7%
|
66.8%
|
3.1%
|
pts.
|
$109.90
|
-2.0%
|
|
Fairfield
Inn & Suites
|
$54.54
|
2.7%
|
64.5%
|
2.8%
|
pts.
|
$84.62
|
-1.7%
|
|
TownePlace
Suites
|
$55.95
|
3.1%
|
69.6%
|
5.5%
|
pts.
|
$80.33
|
-5.1%
|
|
SpringHill
Suites
|
$65.41
|
2.0%
|
66.9%
|
3.8%
|
pts.
|
$97.73
|
-3.7%
|
|
Composite
North American Limited-Service(5)
|
$71.08
|
3.0%
|
69.0%
|
3.7%
|
pts.
|
$103.04
|
-2.5%
|
|
Composite -
All(6)
|
$82.80
|
3.9%
|
68.5%
|
3.8%
|
pts.
|
$120.84
|
-1.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Statistics include only properties located in the Continental
United States.
|
|
2
Includes the Marriott Hotels & Resorts and Renaissance Hotels
brands.
|
|
3
Statistics for The Ritz-Carlton are for January through August.
|
|
4
Includes the Marriott Hotels & Resorts, Renaissance Hotels
and The Ritz-Carlton brands.
|
|
5
Includes the Residence Inn, Courtyard, Fairfield Inn &
Suites, TownePlace Suites and SpringHill Suites brands.
|
|
6
Includes the Marriott Hotels & Resorts, Renaissance Hotels,
The Ritz-Carlton, Residence Inn, Courtyard, Fairfield Inn & Suites,
TownePlace Suites, and SpringHill Suites brands.
|
|
A-8
|
|
|
|
|
|
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
TIMESHARE
SEGMENT
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported
12 Weeks
Ended
September 10,
2010
|
|
As Reported
12 Weeks
Ended
September 11,
2009
|
|
Restructuring
Costs &
Other
Charges
|
|
Timeshare
Strategy -
Impairment
Charges
|
|
As Adjusted
12 Weeks
Ended
September 11,
2009**
|
|
Percent
Better/
(Worse)
2010 vs.
Adjusted 2009
|
|
Segment
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
management fees
|
$
11
|
|
$
11
|
|
$
-
|
|
$
-
|
|
$
11
|
|
-
|
|
Sales and
services revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
|
135
|
|
138
|
|
-
|
|
-
|
|
138
|
|
(2)
|
|
Services
|
86
|
|
82
|
|
-
|
|
-
|
|
82
|
|
5
|
|
Financing
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income - non-securitized notes
|
11
|
|
11
|
|
-
|
|
-
|
|
11
|
|
-
|
|
Interest
income - securitized notes
|
30
|
|
-
|
|
-
|
|
-
|
|
-
|
|
*
|
|
Other
financing revenue
|
2
|
|
12
|
|
(3)
|
|
-
|
|
9
|
|
(78)
|
|
Total
financing revenue
|
43
|
|
23
|
|
(3)
|
|
-
|
|
20
|
|
115
|
|
Other revenue
|
11
|
|
11
|
|
-
|
|
-
|
|
11
|
|
-
|
|
Total sales
and services revenue
|
275
|
|
254
|
|
(3)
|
|
-
|
|
251
|
|
10
|
|
Cost
reimbursements
|
65
|
|
65
|
|
-
|
|
-
|
|
65
|
|
-
|
|
Segment
revenues
|
$
351
|
|
$
330
|
|
$
(3)
|
|
$
-
|
|
$
327
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
management fees
|
$
11
|
|
$
11
|
|
$
-
|
|
$
-
|
|
$
11
|
|
-
|
|
Timeshare
sales and services, net
|
56
|
|
16
|
|
(3)
|
|
-
|
|
13
|
|
331
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
charges
|
-
|
|
(614)
|
|
-
|
|
614
|
|
-
|
|
-
|
|
Restructuring
costs
|
-
|
|
(7)
|
|
7
|
|
-
|
|
-
|
|
-
|
|
General,
administrative and other
|
|
|
|
|
|
|
|
|
|
|
|
|
expense
|
(16)
|
|
(17)
|
|
-
|
|
-
|
|
(17)
|
|
6
|
|
Gains and
other income
|
-
|
|
1
|
|
-
|
|
-
|
|
1
|
|
(100)
|
|
Equity in
losses
|
(2)
|
|
(4)
|
|
1
|
|
-
|
|
(3)
|
|
(33)
|
|
Interest
expense
|
(12)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
*
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
charges (non-operating)
|
-
|
|
(71)
|
|
-
|
|
71
|
|
-
|
|
-
|
|
Noncontrolling
interest
|
-
|
|
4
|
|
-
|
|
-
|
|
4
|
|
(100)
|
|
Segment
results
|
$
37
|
|
$
(681)
|
|
$
5
|
|
$
685
|
|
$
9
|
|
311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
$
157
|
|
$
164
|
|
$
-
|
|
$
-
|
|
$
164
|
|
(4)
|
|
Fractional
|
5
|
|
7
|
|
-
|
|
-
|
|
7
|
|
(29)
|
|
Residential
|
-
|
|
2
|
|
-
|
|
-
|
|
2
|
|
(100)
|
|
Total company
|
162
|
|
173
|
|
-
|
|
-
|
|
173
|
|
(6)
|
|
Joint
ventures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Fractional
|
2
|
|
(4)
|
|
7
|
|
-
|
|
3
|
|
(33)
|
|
Residential
|
-
|
|
(17)
|
|
17
|
|
-
|
|
-
|
|
-
|
|
Total joint ventures
|
2
|
|
(21)
|
|
24
|
|
-
|
|
3
|
|
(33)
|
|
Total
contract sales (1)
|
$
164
|
|
$
152
|
|
$
24
|
|
$
-
|
|
$
176
|
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Percent cannot be calculated.
|
|
** Denotes
non-GAAP financial measures. Please see pages A-18 and A-19 for
additional information about our reasons for providing these
alternative financial measures and limitations on their use.
|
|
|
|
1 As
Reported 12 Weeks Ended September 10, 2010 includes fractional contract
cancellation allowances of ($1) million. Gross contract sales for
the 2010 third quarter were $165 million before the contract
cancellation allowance.
|
|
A-9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
TIMESHARE
SEGMENT
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported
36 Weeks
Ended
September 10,
2010
|
|
As Reported
36 Weeks
Ended
September 11,
2009
|
|
Restructuring
Costs &
Other
Charges
|
|
Timeshare
Strategy -
Impairment
Charges
|
|
As Adjusted
36 Weeks
Ended
September 11,
2009**
|
|
Percent
Better/
(Worse)
2010 vs.
Adjusted 2009
|
|
Segment
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
management fees
|
$
34
|
|
$
32
|
|
$
-
|
|
$
-
|
|
$
32
|
|
6
|
|
Sales and
services revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
|
430
|
|
441
|
|
4
|
|
-
|
|
445
|
|
(3)
|
|
Services
|
253
|
|
232
|
|
-
|
|
-
|
|
232
|
|
9
|
|
Financing
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income - non-securitized notes
|
30
|
|
34
|
|
-
|
|
-
|
|
34
|
|
(12)
|
|
Interest
income - securitized notes
|
99
|
|
-
|
|
-
|
|
-
|
|
-
|
|
*
|
|
Other
financing revenue (1)
|
5
|
|
8
|
|
22
|
|
-
|
|
30
|
|
(83)
|
|
Total
financing revenue
|
134
|
|
42
|
|
22
|
|
-
|
|
64
|
|
109
|
|
Other revenue
|
32
|
|
31
|
|
-
|
|
-
|
|
31
|
|
3
|
|
Total sales
and services revenue
|
849
|
|
746
|
|
26
|
|
-
|
|
772
|
|
10
|
|
Cost
reimbursements
|
189
|
|
184
|
|
-
|
|
-
|
|
184
|
|
3
|
|
Segment
revenues
|
$
1,072
|
|
$
962
|
|
$
26
|
|
$
-
|
|
$
988
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
management fees
|
$
34
|
|
$
32
|
|
$
-
|
|
$
-
|
|
$
32
|
|
6
|
|
Timeshare
sales and services, net
|
156
|
|
9
|
|
25
|
|
-
|
|
34
|
|
359
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
charges
|
-
|
|
(614)
|
|
-
|
|
614
|
|
-
|
|
-
|
|
Restructuring
costs
|
-
|
|
(38)
|
|
38
|
|
-
|
|
-
|
|
-
|
|
General,
administrative and other
|
|
|
|
|
|
|
|
|
|
|
|
|
expense
|
(48)
|
|
(57)
|
|
7
|
|
-
|
|
(50)
|
|
4
|
|
Gains and
other income
|
-
|
|
1
|
|
-
|
|
-
|
|
1
|
|
100
|
|
Equity in
losses
|
(10)
|
|
(6)
|
|
3
|
|
-
|
|
(3)
|
|
233
|
|
Interest
expense
|
(40)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
*
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
charges (non-operating)
|
-
|
|
(71)
|
|
-
|
|
71
|
|
-
|
|
-
|
|
Noncontrolling
interest
|
-
|
|
11
|
|
-
|
|
-
|
|
11
|
|
(100)
|
|
Segment
results
|
$
92
|
|
$
(733)
|
|
$
73
|
|
$
685
|
|
$
25
|
|
268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
$
463
|
|
$
502
|
|
$
-
|
|
$
-
|
|
$
502
|
|
(8)
|
|
Fractional
|
21
|
|
25
|
|
1
|
|
-
|
|
26
|
|
(19)
|
|
Residential
|
6
|
|
(1)
|
|
4
|
|
-
|
|
3
|
|
100
|
|
Total company
|
490
|
|
526
|
|
5
|
|
-
|
|
531
|
|
(8)
|
|
Joint
ventures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Fractional
|
2
|
|
(9)
|
|
23
|
|
-
|
|
14
|
|
(86)
|
|
Residential
|
(3)
|
|
(27)
|
|
27
|
|
-
|
|
-
|
|
*
|
|
Total joint ventures
|
(1)
|
|
(36)
|
|
50
|
|
-
|
|
14
|
|
(107)
|
|
Total
contract sales (2)
|
$
489
|
|
$
490
|
|
$
55
|
|
$
-
|
|
$
545
|
|
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Percent cannot be calculated.
|
|
** Denotes
non-GAAP financial measures. Please see pages A-18 and A-19 for
additional information about our reasons for providing these
alternative financial measures and limitations on their use.
|
|
1 As
Reported 36 Weeks Ended September 11, 2009 and As Adjusted 36 Weeks
Ended September 11, 2009 include losses on notes sold of $1 million and
$1 million, respectively.
|
|
2 As
Reported 36 Weeks Ended September 10, 2010 includes fractional and
residential contract cancellation allowances of ($8) million and ($7)
million, respectively. Gross contract sales for 2010 year-to-date
were $504 million before the contract cancellation allowance.
|
|
A-10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
TIMESHARE
SEGMENT
|
|
AS ADJUSTED
HAD ASU NOS. 2009-16 AND 2009-17 BEEN ADOPTED ON JANUARY 3, 2009
|
|
THIRD
QUARTER 2009
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
12 Weeks
Ended
September
11,
2009
|
|
Restructuring
Costs &
Other
Charges
|
|
Timeshare
Strategy -
Impairment
Charges
|
|
As
Adjusted
12 Weeks
Ended
September
11,
2009**
|
|
ASU Nos.
2009-16
And 2009-17
Adjustments
|
|
As
Adjusted
For
ASU Nos.
2009-16
And 2009-17
12 Weeks
Ended
September
11, 2009**
|
|
Segment
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
management fees
|
$
11
|
|
$
-
|
|
$
-
|
|
$
11
|
|
$
-
|
|
$
11
|
|
Sales and
services revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Development
|
138
|
|
-
|
|
-
|
|
138
|
|
11
|
|
149
|
|
Services
|
82
|
|
-
|
|
-
|
|
82
|
|
-
|
|
82
|
|
Financing
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income - non-securitized notes
|
11
|
|
-
|
|
-
|
|
11
|
|
-
|
|
11
|
|
Interest
income - securitized notes
|
-
|
|
-
|
|
-
|
|
-
|
|
36
|
|
36
|
|
Other
financing revenue
|
12
|
|
(3)
|
|
-
|
|
9
|
|
(8)
|
|
1
|
|
Total
financing revenue
|
23
|
|
(3)
|
|
-
|
|
20
|
|
28
|
|
48
|
|
Other revenue
|
11
|
|
-
|
|
-
|
|
11
|
|
-
|
|
11
|
|
Total sales
and services revenue
|
254
|
|
(3)
|
|
-
|
|
251
|
|
39
|
|
290
|
|
Cost
reimbursements
|
65
|
|
-
|
|
-
|
|
65
|
|
-
|
|
65
|
|
Segment
revenues
|
$
330
|
|
$
(3)
|
|
$
-
|
|
$
327
|
|
$
39
|
|
$
366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
management fees
|
$
11
|
|
$
-
|
|
$
-
|
|
$
11
|
|
$
-
|
|
$
11
|
|
Timeshare
sales and services, net
|
16
|
|
(3)
|
|
-
|
|
13
|
|
32
|
|
45
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
charges
|
(614)
|
|
-
|
|
614
|
|
-
|
|
-
|
|
-
|
|
Restructuring
costs
|
(7)
|
|
7
|
|
-
|
|
-
|
|
-
|
|
-
|
|
General,
administrative and other
|
|
|
|
|
|
|
|
|
|
|
|
|
expense
|
(17)
|
|
-
|
|
-
|
|
(17)
|
|
-
|
|
(17)
|
|
Gains and
other income
|
1
|
|
-
|
|
-
|
|
1
|
|
-
|
|
1
|
|
Equity in
losses
|
(4)
|
|
1
|
|
-
|
|
(3)
|
|
-
|
|
(3)
|
|
Interest
expense
|
-
|
|
-
|
|
-
|
|
-
|
|
(17)
|
|
(17)
|
|
Timeshare
strategy - impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
charges (non-operating)
|
(71)
|
|
-
|
|
71
|
|
-
|
|
-
|
|
-
|
|
Noncontrolling
interest
|
4
|
|
-
|
|
-
|
|
4
|
|
-
|
|
4
|
|
Segment
results
|
$
(681)
|
|
$
5
|
|
$
685
|
|
$
9
|
|
$
15
|
|
$
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
$
164
|
|
$
-
|
|
$
-
|
|
$
164
|
|
$
-
|
|
$
164
|
|
Fractional
|
7
|
|
-
|
|
-
|
|
7
|
|
-
|
|
7
|
|
Residential
|
2
|
|
-
|
|
-
|
|
2
|
|
-
|
|
2
|
|
Total company
|
173
|
|
-
|
|
-
|
|
173
|
|
-
|
|
173
|
|
Joint
ventures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Fractional
|
(4)
|
|
7
|
|
-
|
|
3
|
|
-
|
|
3
|
|
Residential
|
(17)
|
|
17
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total joint ventures
|
(21)
|
|
24
|
|
-
|
|
3
|
|
-
|
|
3
|
|
Total
contract sales, including joint ventures
|
$
152
|
|
$
24
|
|
$
-
|
|
$
176
|
|
$
-
|
|
$
176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-18 and A-19 for
additional information about our reasons for providing these
alternative financial measures and limitations on their use.
|
|
A-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
TIMESHARE
INVENTORY
|
|
AS ADJUSTED
HAD ASU NOS. 2009-16 AND 2009-17 BEEN ADOPTED ON JANUARY 3, 2009
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
Balance at
End of 2010
Third Quarter
|
|
As Reported
Balance at
Year-End 2009
|
|
ASU Nos.
2009-16
And 2009-17
Adjustments
|
|
As Adjusted
For
ASU Nos.
2009-16
And 2009-17
Balance at
Year-End
2009**(1)
|
|
|
|
|
|
|
|
|
|
|
Finished
goods (2)
|
$
738
|
|
$
721
|
|
$
100
|
|
$
821
|
|
Work-in-process
|
147
|
|
198
|
|
-
|
|
198
|
|
Land and
infrastructure
|
552
|
|
507
|
|
-
|
|
507
|
|
Total
inventory
|
$
1,437
|
|
$
1,426
|
|
$
100
|
|
$
1,526
|
|
|
|
|
|
|
|
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-18 and A-19 for
additional information about our reasons for providing these
alternative financial measures and limitations on their use.
|
|
1 As
Adjusted had ASU Nos. 2009-16 and 2009-17 (formerly referred to as FAS
166 & 167) been adopted on January 3, 2009.
|
|
2
Includes completed inventory as well as an estimate of inventory
we expect to acquire when we foreclose on defaulted notes. The
estimate of inventory we expect to acquire when we foreclose on
defaulted notes for As Adjusted 2009 and As Reported 2010 include
securitized and non-securitized notes, and As Reported 2009 includes
non-securitized notes.
|
|
A-12
|
|
|
|
|
|
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
EBITDA AND
ADJUSTED EBITDA
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
2010
|
|
|
First Quarter
|
|
Second
Quarter
|
|
Third Quarter
|
|
Total Year
to Date
|
|
Net Income
attributable to Marriott
|
$
83
|
|
$
119
|
|
$
83
|
|
$
285
|
|
Interest
expense
|
45
|
|
44
|
|
41
|
|
130
|
|
Tax provision
|
46
|
|
65
|
|
45
|
|
156
|
|
Depreciation
and amortization
|
39
|
|
42
|
|
40
|
|
121
|
|
Less:
Depreciation reimbursed by third-party owners
|
(3)
|
|
(3)
|
|
(2)
|
|
(8)
|
|
Interest
expense from unconsolidated joint ventures
|
5
|
|
5
|
|
6
|
|
16
|
|
Depreciation
and amortization from unconsolidated joint ventures
|
6
|
|
6
|
|
7
|
|
19
|
|
EBITDA **
|
$
221
|
|
$
278
|
|
$
220
|
|
$
719
|
|
|
|
|
|
|
|
|
|
|
Increase
over 2009 Adjusted EBITDA
|
3%
|
|
26%
|
|
35%
|
|
20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
2009
|
|
|
First Quarter
|
|
Second
Quarter
|
|
Third Quarter
|
|
Fourth
Quarter
|
|
Total
|
|
Net Income
(Loss) attributable to Marriott
|
$
(23)
|
|
$
37
|
|
$
(466)
|
|
$
106
|
|
$ (346)
|
|
Interest
expense
|
29
|
|
28
|
|
27
|
|
34
|
|
118
|
|
Tax
provision (benefit)
|
33
|
|
44
|
|
(210)
|
|
68
|
|
(65)
|
|
Tax
provision, noncontrolling interest
|
1
|
|
2
|
|
1
|
|
-
|
|
4
|
|
Depreciation
and amortization
|
39
|
|
42
|
|
43
|
|
61
|
|
185
|
|
Less:
Depreciation reimbursed by
third-party
owners
|
(2)
|
|
(2)
|
|
(2)
|
|
(3)
|
|
(9)
|
|
Interest
expense from unconsolidated joint ventures
|
3
|
|
6
|
|
4
|
|
6
|
|
19
|
|
Depreciation
and amortization from unconsolidated joint ventures
|
6
|
|
6
|
|
6
|
|
9
|
|
27
|
|
EBITDA **
|
86
|
|
163
|
|
(597)
|
|
281
|
|
(67)
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs and other charges
|
|
|
|
|
|
|
|
|
|
|
Severance
|
2
|
|
10
|
|
4
|
|
5
|
|
21
|
|
Facilities exit costs
|
-
|
|
22
|
|
5
|
|
2
|
|
29
|
|
Development cancellations
|
-
|
|
1
|
|
-
|
|
-
|
|
1
|
|
Total restructuring costs
|
2
|
|
33
|
|
9
|
|
7
|
|
51
|
|
Impairment of investments and other, net of prior year
reserves
|
68
|
|
3
|
|
1
|
|
11
|
|
83
|
|
Reserves for loan losses
|
42
|
|
1
|
|
-
|
|
-
|
|
43
|
|
Contract cancellation allowances
|
4
|
|
1
|
|
1
|
|
3
|
|
9
|
|
Residual interests valuation
|
13
|
|
12
|
|
(3)
|
|
(2)
|
|
20
|
|
System development write-off
|
-
|
|
7
|
|
-
|
|
-
|
|
7
|
|
Total other charges
|
127
|
|
24
|
|
(1)
|
|
12
|
|
162
|
|
Total
restructuring costs and other charges
|
129
|
|
57
|
|
8
|
|
19
|
|
213
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
$
300
|
|
$ 898
|
|
|
|
|
|
|
|
|
|
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-18 and A-19 for
additional information about our reasons for providing these
alternative financial measures and limitations on their use.
|
|
A-13
|
|
|
|
|
|
|
|
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
EBITDA AND
ADJUSTED EBITDA
|
|
AS ADJUSTED
HAD ASU NOS. 2009-16 AND 2009-17 BEEN ADOPTED ON JANUARY 3, 2009
|
|
THIRD
QUARTER 2009
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
Third
Quarter
2009
|
|
ASU Nos.
2009-16 and
2009-17
Adjustments
|
|
As Adjusted
For
ASU Nos.
2009-16 and
2009-17
Third Quarter
2009**
|
|
Net (Loss)
Income attributable to Marriott
|
$
(466)
|
|
$
9
|
|
$
(457)
|
|
Interest
expense
|
27
|
|
17
|
|
44
|
|
Tax benefit
|
(210)
|
|
6
|
|
(204)
|
|
Tax
provision, noncontrolling interest
|
1
|
|
-
|
|
1
|
|
Depreciation
and amortization
|
43
|
|
-
|
|
43
|
|
Less:
Depreciation reimbursed by third-party owners
|
(2)
|
|
-
|
|
(2)
|
|
Interest
expense from unconsolidated joint ventures
|
4
|
|
-
|
|
4
|
|
Depreciation
and amortization from unconsolidated joint ventures
|
6
|
|
-
|
|
6
|
|
EBITDA **
|
(597)
|
|
32
|
|
(565)
|
|
|
|
|
|
|
|
|
Restructuring
costs and other charges
|
|
|
|
|
|
|
Severance
|
4
|
|
-
|
|
4
|
|
Facilities exit costs
|
5
|
|
-
|
|
5
|
|
Development cancellations
|
-
|
|
-
|
|
-
|
|
Total restructuring costs
|
9
|
|
-
|
|
9
|
|
Impairment of investments and other, net of prior year
reserves
|
1
|
|
-
|
|
1
|
|
Reserves for loan losses
|
-
|
|
-
|
|
-
|
|
Contract cancellation allowances
|
1
|
|
-
|
|
1
|
|
Residual interests valuation
|
(3)
|
|
-
|
|
(3)
|
|
System development write-off
|
-
|
|
-
|
|
-
|
|
Total other charges
|
(1)
|
|
-
|
|
(1)
|
|
Total
restructuring costs and other charges
|
8
|
|
-
|
|
8
|
|
|
|
|
|
|
|
|
Timeshare
strategy - impairment charges
|
|
|
|
|
|
|
Operating impairments
|
614
|
|
-
|
|
614
|
|
Non-operating impairments
|
138
|
|
-
|
|
138
|
|
Total
timeshare strategy - impairment charges
|
752
|
|
-
|
|
752
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA **
|
$
163
|
|
$
32
|
|
$
195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-18 and A-19 for
additional information about our reasons for providing these
alternative financial measures and limitations on their use.
|
|
A-14
|
|
|
|
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
EBITDA AND
ADJUSTED EBITDA
|
|
2009 AS
ADJUSTED HAD ASU NOS. 2009-16 AND 2009-17 BEEN ADOPTED ON JANUARY 3,
2009 AND FORECASTED 2010
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Range
|
|
|
2009 Fiscal
Year
|
|
ASU Nos.
2009-16 and
2009-17
Adjustments
|
|
As Adjusted
For
ASU Nos.
2009-16 and
2009-17
Fiscal Year
2009**
|
|
Estimated
EBITDA
Full Year
2010
|
|
Net (Loss)
Income attributable to Marriott
|
$
(346)
|
|
$
(1)
|
|
$
(347)
|
|
$
411
|
|
$
424
|
|
Interest
expense
|
118
|
|
77
|
|
195
|
|
190
|
|
185
|
|
Tax
(benefit) provision
|
(65)
|
|
-
|
|
(65)
|
|
224
|
|
231
|
|
Tax
provision, noncontrolling interest
|
4
|
|
-
|
|
4
|
|
-
|
|
-
|
|
Depreciation
and amortization
|
185
|
|
-
|
|
185
|
|
180
|
|
180
|
|
Less:
Depreciation reimbursed by third-party owners
|
(9)
|
|
-
|
|
(9)
|
|
(10)
|
|
(10)
|
|
Interest
expense from unconsolidated joint ventures
|
19
|
|
-
|
|
19
|
|
25
|
|
25
|
|
Depreciation
and amortization from unconsolidated joint ventures
|
27
|
|
-
|
|
27
|
|
30
|
|
30
|
|
EBITDA **
|
(67)
|
|
76
|
|
9
|
|
1,050
|
|
1,065
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
costs and other charges
|
|
|
|
|
|
|
|
|
|
|
Severance
|
21
|
|
-
|
|
21
|
|
-
|
|
-
|
|
Facilities exit costs
|
29
|
|
-
|
|
29
|
|
-
|
|
-
|
|
Development cancellations
|
1
|
|
-
|
|
1
|
|
-
|
|
-
|
|
Total restructuring costs
|
51
|
|
-
|
|
51
|
|
-
|
|
-
|
|
Impairment of investments and other, net of prior year
reserves
|
83
|
|
-
|
|
83
|
|
-
|
|
-
|
|
Reserves for loan losses
|
43
|
|
-
|
|
43
|
|
-
|
|
-
|
|
Contract cancellation allowances
|
9
|
|
-
|
|
9
|
|
-
|
|
-
|
|
Residual interests valuation
|
20
|
|
-
|
|
20
|
|
-
|
|
-
|
|
System development write-off
|
7
|
|
-
|
|
7
|
|
-
|
|
-
|
|
Total other charges
|
162
|
|
-
|
|
162
|
|
-
|
|
-
|
|
Total
restructuring costs and other charges
|
213
|
|
-
|
|
213
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Timeshare
strategy - impairment charges
|
|
|
|
|
|
|
|
|
|
|
Operating impairments
|
614
|
|
-
|
|
614
|
|
-
|
|
-
|
|
Non-operating impairments
|
138
|
|
-
|
|
138
|
|
-
|
|
-
|
|
Total
timeshare strategy - impairment charges
|
752
|
|
-
|
|
752
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA **
|
$
898
|
|
$
76
|
|
$
974
|
|
$ 1,050
|
|
$ 1,065
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
over 2009 Adjusted EBITDA as Adjusted for ASU Nos. 2009-16 and 2009-17
|
|
|
|
|
|
|
8%
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-18 and A-19 for
additional information about our reasons for providing these
alternative financial measures and limitations on their use.
|
|
A-15
|
|
|
|
|
|
|
|
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
ADJUSTED
TOTAL DEBT NET OF CASH
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Better /
(Worse) Change
|
|
|
|
|
|
|
|
|
|
Balance at
End of
2010 Third
Quarter
as Compared
to
|
|
|
|
Balance at
End of 2010
Third Quarter
|
|
Balance at
Year-End
2009
|
|
Balance at
Year-End
2008
|
|
Balance at
Year-End 2009
|
|
Balance at
Year-End 2008
|
|
Total debt
|
$
2,726
|
|
$
2,298
|
|
$
3,095
|
|
$
(428)
|
|
$
369
|
|
Cash and
cash equivalents
|
(223)
|
|
(115)
|
|
(134)
|
|
108
|
|
89
|
|
Total debt
net of cash**
|
2,503
|
|
2,183
|
|
2,961
|
|
(320)
|
|
458
|
|
Less the
impact of ASU Nos. 2009-16 and 2009-17
|
(912)
|
|
-
|
|
-
|
|
912
|
|
912
|
|
Adjusted
total debt net of cash** (a)
|
$
1,591
|
|
$
2,183
|
|
$
2,961
|
|
$
592
|
|
$
1,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
Excludes the impact of the update to ASU Nos. 2009-16 and 2009-17.
|
|
** Denotes
non-GAAP financial measures. Please see pages A-18 and A-19 for
additional information about our reasons for providing these
alternative financial measures and limitations on their use.
|
|
A-16
|
|
|
|
|
|
|
|
|
|
|
|
|
MARRIOTT
INTERNATIONAL, INC.
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
INTEREST
EXPENSE
|
|
AS ADJUSTED
HAD ASU NOS. 2009-16 AND 2009-17 BEEN ADOPTED ON JANUARY 3, 2009
|
|
THIRD
QUARTER 2009
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
As Reported
12 Weeks Ended September 11, 2009
|
|
ASU Nos.
2009-16 and 2009-17 Adjustments
|
|
As Adjusted
For ASU Nos. 2009-16 And 2009-17 12 Weeks Ended September 11, 2009**
|
|
|
|
|
|
|
|
|
Interest
Expense
|
$
27
|
|
$
17
|
|
$
44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Denotes
non-GAAP financial measures. Please see pages A-18 and A-19 for
additional information about our reasons for providing these
alternative financial measures and limitations on their use.
|
|
A-17
|
|
|
|
|
|
|
|
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 have limitations and
should not be considered in isolation or as a substitute for revenue,
operating income, income from continuing operations, net income,
earnings per share or any other comparable operating measure prescribed
by GAAP. In addition, these non-GAAP financial measures may be
calculated and/or presented differently than measures with the same or
similar names that are reported by other companies, and as a result,
the non-GAAP measures we report may not be comparable to those reported
by others.
Adjusted
Measures That Exclude Certain Charges, Costs, and Other Expenses.
Management evaluates non-GAAP measures that exclude the impact of
Timeshare strategy - impairment charges incurred in the 2009 third
quarter, restructuring costs and other charges incurred in the 2009
first through fourth quarters, and certain tax expenses incurred in the
2009 first through third quarters, 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.
Timeshare
Strategy - Impairment Charges. In response to the difficult
business conditions that the Timeshare segment's timeshare, luxury
residential, and luxury fractional real estate development businesses
experienced, we evaluated our entire Timeshare portfolio in the 2009
third quarter. In order to adjust the business strategy to
reflect current market conditions at that time, 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.
Restructuring
Costs and Other Charges. During the latter part of 2008 we
experienced a significant decline in demand for hotel rooms both
domestically and internationally due, in part, to the financial crisis
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.
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 which
resulted in first, second, third and fourth quarter 2009 restructuring
costs of $2
million,$33 million, $9 million, and $7 million,
respectively, that were directly related to the downturn. We also
incurred other charges in the 2009 first, second, and fourth quarters
totaling $127
million, $24
million, and $12
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.
Certain
Tax Expenses. Certain tax expenses included non-cash charges of $26 million in the 2009 first quarter, $17 million in the 2009 second quarter,
and $13
million in the
2009 third quarter primarily related to the treatment of funds received
from certain foreign subsidiaries, an issue we are contesting with the
Internal Revenue Service.
Earnings
Before Interest, Taxes, Depreciation and Amortization. Earnings before
interest, taxes, depreciation and amortization ("EBITDA") reflects
earnings excluding the impact of interest expense, provision for income
taxes, depreciation and amortization. Management considers EBITDA to be
an indicator of operating performance because we use it to measure our
ability to service debt, fund capital expenditures, and expand our
business. We also use EBITDA, as do analysts, lenders, investors and
others, to evaluate companies because it excludes certain items that
can vary widely across different industries or among companies within
the same industry. For example, interest expense can be dependent on a
company's capital structure, debt levels and credit ratings.
Accordingly, the impact of interest expense on earnings can vary
significantly among companies. The tax positions of companies can also
vary because of their differing abilities to take advantage of tax
benefits and because of the tax policies of the jurisdictions in which
they operate. As a result, effective tax rates and provision for income
taxes can vary considerably among companies. EBITDA also excludes
depreciation and amortization because companies utilize productive
assets of different ages and use different methods of both acquiring
and depreciating productive assets. These differences can result in
considerable variability in the relative costs of productive assets and
the depreciation and amortization expense among companies.
Both
EBITDA and Adjusted EBITDA (described below) exclude certain cash
expenses that we are obligated to make.
Adjusted
EBITDA. Management also evaluates Adjusted EBITDA as an indicator
of operating performance. Adjusted EBITDA excludes: (1) Timeshare
strategy - impairment charges of $752
million incurred
in the 2009 third quarter; and (2) the 2009 restructuring costs and
other charges of $19
million from the
fourth quarter, $8 million from the third quarter, $57 million from the second quarter and $129 million from the first quarter.
Management excludes these Timeshare strategy-impairment charges
and restructuring costs and other charges for the reasons noted above
under "Adjusted Measures That Exclude Certain Charges, Costs, and Other
Expenses."
Adjusted
Measures that Exclude the Impact of New Accounting Standards or Reflect
Their Early Adoption. As of the first day of fiscal year 2010, we
adopted Accounting Standards Update ("ASU") No. 2009-16, "Transfers and
Servicing (Topic 860): Accounting for Transfers of Financial Assets"
(formerly known as FAS No. 166) and ASU No. 2009-17, "Consolidations
(Topic 810): Improvements to Financial Reporting by Enterprises
Involved with Variable Interest Entities" (formerly known as FAS No.
167), which required consolidating previously securitized pools of
Timeshare notes and impacts the ongoing accounting for those notes.
Management evaluates non-GAAP measures that exclude the impact of
these standards in the current year or include the impact of these
standards as if we had adopted them early in order to better perform
year-over-year comparisons on a comparable basis.
Total
Debt Net of Cash (or "Net Debt") and Adjusted Total Debt Net of Cash.
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). In addition,
Management evaluates adjusted total debt net of cash, which excludes
the debt that was consolidated as a result of adopting ASU Nos. 2009-16
and 2009-17, because that debt is non-recourse to the Company and is
not supported by the Company's cash flows. Management believes
that these financial measures provide a clearer picture of the future
demands on cash to repay debt and uses these measures in making
decisions regarding its borrowing capacity and future refinancing
needs. Management also evaluates adjusted total debt net of cash
for the reason stated in the previous paragraph.
|