Marriott International Reports Second Quarter 2010 Results
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Marriott International Reports Second Quarter 2010 Results
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Category: Worldwide - Industry economy -
Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2010-07-15
Marriott International, Inc. (NYSE: MAR) today reported second quarter 2010 results, exceeding the company's diluted EPS expectations and prior year results.
SECOND QUARTER HIGHLIGHTS
Second quarter diluted earnings per share (EPS) totaled $0.31, ahead of expectations and prior year results;
Total fee revenue increased 13 percent to $287 million as a result of strong revenue per available room (REVPAR) and unit growth. Incentive fees climbed 31 percent;
Worldwide company-operated comparable REVPAR rose 9.9 percent (an 8.2 percent increase using constant dollars). Average daily rate rose 1.6 percent (a 0.1 percent increase using constant dollars);
North American company-operated comparable REVPAR increased 7.9 percent (a 7.5 percent increase using constant dollars) with a 1.2 increase in average daily rate (a 0.8 percent increase 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 36,000 rooms outside North America;
Over 6,500 rooms opened during the second quarter, including over 1,800 rooms in international markets and nearly 1,300 rooms converting from competitor brands. At the end of the second quarter, Marriott's newest brand, The Autograph Collection, included 10 hotels with over 1,500 rooms.
SECOND QUARTER 2010 RESULTS
Second quarter 2010 net income totaled $119 million, a 42 percent increase compared to second quarter 2009 adjusted net income. Diluted EPS totaled $0.31, a 35 percent increase from adjusted diluted EPS in the year-ago quarter. On April 22, 2010, the company forecasted second quarter diluted EPS of $0.25 to $0.29.
Adjusted results for the 2009 second quarter excluded $57 million pretax ($30 million after-tax and $0.08 per diluted share) of restructuring costs and other charges and $17 million of non-cash charges ($0.05 per diluted share) in the provision for income taxes.
Reported net income totaled $119 million in the second quarter of 2010 compared to reported net income of $37 million in the year-ago quarter. Reported diluted EPS was $0.31 in the second quarter of 2010 compared to reported EPS of $0.10 in the second quarter of 2009.
J.W. Marriott, Jr., chairman and chief executive officer of Marriott International, said, "This is an exciting time for Marriott. Business and leisure stays at our hotels are trending up. Revenue per available room increased more than expected in the second quarter and room rates at company-operated hotels in North America rose for the first time in nearly two years.
"Totaling approximately 95,000 rooms, our development pipeline reflects expanding global opportunities. We opened over 6,500 rooms during the quarter. With strong interest by owners and franchisees in our brands, we expect to open over 30,000 rooms in 2010, including conversions to our new brand, the Autograph Collection.
"We are seeing major international growth. At the end of the quarter, a record 39 percent of our development pipeline was outside North America as were two-thirds of our worldwide rooms under construction. During the quarter, we opened superb new international hotels in Phuket, Shanghai, St. Petersburg and Budapest.
"We anticipate even more favorable pricing in the second half of 2010 and into 2011. Combined with productivity improvements achieved over the last year, strong unit growth and increasing demand, we look forward to growing cash flow and strong earnings in 2010 and beyond."
For the 2010 second quarter, REVPAR for worldwide comparable company-operated properties increased 9.9 percent (an 8.2 percent increase using constant dollars) and REVPAR for worldwide comparable systemwide properties increased 8.5 percent (a 7.0 percent increase using constant dollars).
International comparable company-operated REVPAR rose 14.1 percent (a 9.8 percent increase using constant dollars), including a 2.0 percent increase in average daily rate (a 1.8 percent decline using constant dollars) in the second quarter of 2010.
In North America, comparable company-operated REVPAR increased 7.9 percent (a 7.5 percent increase using constant dollars) in the second quarter of 2010. On a constant dollar basis, REVPAR for comparable company-operated North American full-service and luxury hotels (including Marriott Hotels & Resorts, The Ritz-Carlton and Renaissance Hotels) increased 9.0 percent with a 1.7 percent increase in average daily rate.
Marriott added 46 new properties (6,568 rooms) to its worldwide lodging portfolio in the 2010 second quarter and 14 properties (2,311 rooms) exited the system during the quarter. At quarter-end, the company's lodging group encompassed 3,489 properties and timeshare resorts for a total of over 607,000 rooms.
The company's worldwide pipeline of hotels under construction, awaiting conversion or approved for development totaled nearly 600 properties with approximately 95,000 rooms at quarter-end.
Early in the 2010 third quarter, the company launched Marriott Vacation Club Destinations (MVCD), a points-based program that offers increased usage and purchase flexibility to its owners. While Marriott Vacation Clubs in North America will offer this improved product to new customers going forward, existing owners will retain full rights and privileges of interval ownership as well as the opportunity to participate in MVCD.
MARRIOTT REVENUES totaled nearly $2.8 billion in the 2010 second quarter compared to approximately $2.6 billion for the second quarter of 2009. Base management and franchise fees rose 10 percent to $241 million reflecting higher REVPAR and fees from new hotels. Second quarter incentive management fees increased 31 percent to $46 million. In the second quarter, 25 percent of company-managed hotels earned incentive management fees compared to 23 percent in the year-ago quarter. Approximately 62 percent of incentive management fees came from hotels outside North America in the 2010 quarter compared to 61 percent in the 2009 quarter.
Worldwide comparable company-operated house profit margins increased 90 basis points in the second quarter reflecting higher occupancy, slight rate increases and strong productivity.
Owned, leased, corporate housing and other revenue, net of direct expenses, increased $10 million in the 2010 second quarter, to $31 million, including a $6 million favorable impact of hotel termination fees net of property closing costs. Operating results at owned and leased hotels improved year-over-year with stronger occupancy and margins.
Second quarter adjusted Timeshare segment contract sales decreased 21 percent to $167 million (excluding a $6 million allowance for fractional and residential contract cancellations recorded in the quarter) largely due to tough comparisons as a result of the 25th anniversary promotion in the year-ago quarter. In the prior year's quarter, adjusted Timeshare segment contract sales totaled $212 million (excluding a $3 million allowance for fractional and residential contract cancellations).
In the second quarter, timeshare sales and services revenue totaled $289 million and, net of expenses, totaled $50 million for the quarter. Adjusting for restructuring and other charges, as well as the impact of consolidating securitized loans had that occurred at the beginning of 2009 rather than 2010, second quarter 2009 timeshare sales and services revenue would have totaled $331 million and, net of direct expenses, would have totaled $48 million. These adjustments for the 2009 quarter are shown on page A-11.
Despite lower contract sales, development revenue, net of expense, benefited from lower marketing and sales costs, as well as price increases year-over-year. Timeshare segment results include Timeshare sales and services revenue, net of direct expenses, as well as base management fees, equity earnings (losses), noncontrolling interest, interest expense and general, administrative and other expenses associated with the timeshare business. Timeshare segment results for the 2010 second quarter, shown on page A-9, totaled $30 million, including $14 million of interest expense related to the consolidation of securitized Timeshare notes. Adjusting for restructuring and other charges, as well as the impact of consolidating securitized loans had that occurred at the beginning of 2009 rather than 2010, second quarter 2009 timeshare segment results would have totaled $29 million, including $18 million of interest expense related to the consolidation of securitized Timeshare notes. These adjustments for the 2009 quarter are shown on page A-11.
GENERAL, ADMINISTRATIVE and OTHER expenses for the 2010 second quarter increased 4 percent to $142 million, compared to adjusted expenses of $136 million in the year-ago quarter, and included higher incentive compensation costs partially offset by lower legal and deferred compensation expenses.
GAINS AND OTHER INCOME totaled $3 million primarily reflecting $2 million of gains on the sale of real estate and $1 million of returns from joint venture investments. The prior year's second quarter gains and other income totaled $3 million largely related to gains on the sale of real estate.
INTEREST EXPENSE increased $16 million to $44 million in the second quarter primarily due to $14 million of interest expense related to the consolidation of debt associated with securitized Timeshare notes, lower capitalized interest and interest expense associated with the company's deferred compensation plan partially offset by the impact of lower debt balances and interest rates. Adjusting for the impact of consolidating securitized loans had that occurred at the beginning of 2009 rather than 2010, second quarter 2009 interest expense would have been $18 million higher.
Earnings before Interest Expense, Taxes, Depreciation and Amortization (EBITDA)
EBITDA totaled $278 million in the 2010 second quarter. In the 2009 second quarter, adjusted EBITDA totaled $220 million. If the consolidation of securitized timeshare notes had occurred at the beginning of 2009, adjusted EBITDA in the 2009 second quarter would have totaled $252 million.
BALANCE SHEET
At the end of the second quarter 2010, total debt was $2,911 million and cash balances totaled $100 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, has declined by over $350 million since year-end 2009.
At the end of the 2010 second quarter, Marriott had borrowings of approximately $100 million outstanding under its $2.4 billion bank revolver, about $900 million lower than the end of the 2009 first quarter.
COMMON STOCK
Weighted average fully diluted shares outstanding used to calculate diluted EPS totaled 377.4 million in the 2010 second quarter compared to weighted average fully diluted shares outstanding of 366.0 million used to calculate adjusted diluted EPS in the year-ago quarter.
The remaining share repurchase authorization, as of June 18, 2010, totaled 21.3 million shares. No share repurchases are planned for 2010.
THIRD QUARTER 2010 OUTLOOK
For the third quarter, the company assumes comparable systemwide REVPAR on a constant dollar basis will increase 5 to 7 percent in North America, 7 to 9 percent outside North America and 6 to 8 percent worldwide.
The company assumes third quarter 2010 Timeshare contract sales will total $165 million to $175 million and Timeshare sales and services revenue, net of direct expenses, will total approximately $50 million to $55 million. With these assumptions, Timeshare segment results for the third quarter, including interest expense associated with securitized notes, are expected to total $30 million to $35 million.
FULL YEAR 2010 OUTLOOK
For the full year 2010, the company assumes comparable systemwide REVPAR on a constant dollar basis will increase 4 to 6 percent in North America, 6 to 8 percent outside North America and 4 to 6 percent worldwide.
The company expects to open over 30,000 rooms in 2010 as most hotels expected to open are already under construction or undergoing conversion from other brands.
The company continues to estimate that, on a full-year basis, one point of worldwide systemwide REVPAR impacts total fees by approximately $10 million to $15 million pretax and impacts owned, leased, corporate housing and other revenue, net of direct expense, by approximately $3 million to $5 million pretax.
For its timeshare business, the company assumes 2010 timeshare contract sales will be in line with 2009 levels. For 2010, Timeshare sales and services revenue, net of direct expenses, is expected to total $205 million to $215 million. Timeshare segment results for 2010, including interest expense associated with previously securitized notes, is expected to total $115 million to $125 million.
The company expects that its 2010 general, administrative and other expenses will total $650 million to $660 million reflecting higher incentive compensation.
Third Quarter 2010 Full Year 2010
------------------ --------------
Total fee revenue $245 million to $1,160 million to
$255 million $1,180 million
Owned, leased,
corporate housing and
other revenue, net of
direct expenses Approx $10 million Approx $95 million
Timeshare sales and
services revenue, net
of direct expenses $50 million to $205 million to
$55 million $215 million
General, administrative
and other expenses Approx $155 million $650 million to
$660 million
Operating income $150 million to $800 million to
$165 million $840 million
Gains and other income Approx $5 million Approx $20 million
Net interest expense(1) Approx $40 million $165 million to
$170 million
Equity in earnings
(losses) ($5) million to $0 Approx ($30) million
Earnings per share $0.18 to $0.22 $1.05 to $1.13
Tax rate 36 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. The investment in net timeshare development is not included above as the company expects cost of goods sold in the timeshare business will exceed timeshare inventory spending in 2010.
Based upon the assumptions above, full year 2010 EBITDA is expected to total $1,045 million to $1,085 million, a 7 to 11 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 is shown on page A-15.
Marriott International, Inc. (NYSE: MAR) will conduct its quarterly earnings review for the investment community and news media on Thursday, July 15, 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 July 15, 2011.
The telephone dial-in number for the conference call is 706-679-3455 and the pass code is 75250137. A telephone replay of the conference call will be available from 1 p.m. ET, Thursday, July 15, 2010 until 8 p.m. ET, Thursday, July 22, 2010. To access the replay, call 706-645-9291. The reservation number for the recording is 75250137.
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 July 14, 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 3,400 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 and Bulgari 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(R) 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, visit www.marriottnewscenter.com.
IRPR#1
Tables follow
MARRIOTT INTERNATIONAL, INC.
PRESS RELEASE SCHEDULES
QUARTER 2, 2010
TABLE OF CONTENTS
Consolidated Statements of Income A-1
Total Lodging Products A-4
Key Lodging Statistics A-5
Timeshare Segment A-9
Second 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
Second 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
Non-GAAP Financial Measures A-17
MARRIOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
Adjustments
-----------
Restructuring
As Reported As Reported Costs Certain
& Other
12 Weeks 12 Weeks Charges Tax Items
Ended Ended -------- ---------
June 18, June 19,
2010 2009
--------- --------
REVENUES
Base management
fees $136 $126 $- $-
Franchise fees 105 93 - -
Incentive
management
fees 46 35 - -
Owned, leased,
corporate
housing and
other revenue
1 255 238 - -
Timeshare sales
and services 2 289 283 12 -
Cost
reimbursements
3 1,940 1,787 - -
--- ---
Total Revenues 2,771 2,562 12 -
OPERATING COSTS
AND EXPENSES
Owned, leased
and corporate
housing -
direct 4 224 217 - -
Timeshare -
direct 239 279 - -
Reimbursed
costs 1,940 1,787 - -
Restructuring
costs - 33 (33) -
General,
administrative
and other 5 142 147 (11) -
--- ---
Total Expenses 2,545 2,463 (44) -
----- --- ---
OPERATING
INCOME 226 99 56 -
Gains and other
income 6 3 3 - -
Interest
expense (44) (28) - -
Interest income 3 9 - -
Equity in
(losses)
earnings 7 (4) (4) 1 -
--- --- --- ---
INCOME BEFORE
INCOME TAXES 184 79 57 -
Provision for
income taxes (65) (44) (27) 17
--- --- --- ---
NET INCOME 119 35 30 17
Add: Net losses
attributable
to
noncontrolling
interests, net
of tax - 2 - -
--- --- --- ---
NET INCOME
ATTRIBUTABLE
TO MARRIOTT $119 $37 $30 $17
==== === === ===
EARNINGS PER
SHARE -Basic
8
Earnings per
share
attributable
to Marriott
shareholders 9 $0.33 $0.10 $0.08 $0.05
===== ===== ===== =====
EARNINGS PER
SHARE -
Diluted 8
Earnings per
share
attributable
to Marriott
shareholders 9 $0.31 $0.10 $0.08 $0.05
===== ===== ===== =====
Basic Shares 8 362.1 356.2 356.2 356.2
Diluted Shares
8 377.4 366.0 366.0 366.0
As Adjusted Percent
Better/
(Worse)
12 Weeks 2010 vs.
Adjusted
Ended 2009
June 19,
2009** ---------
---------
REVENUES
Base management fees $126 8
Franchise fees 93 13
Incentive management fees 35 31
Owned, leased, corporate housing and
other revenue 1 238 7
Timeshare sales and services 2 295 (2)
Cost reimbursements 3 1,787 9
Total Revenues 2,574 8
OPERATING COSTS AND EXPENSES
Owned, leased and corporate housing -
direct 4 217 (3)
Timeshare - direct 279 14
Reimbursed costs 1,787 (9)
Restructuring costs - *
General, administrative and other 5 136 (4)
Total Expenses 2,419 (5)
-----
OPERATING INCOME 155 46
Gains and other income 6 3 -
Interest expense (28) (57)
Interest income 9 (67)
Equity in (losses) earnings 7 (3) (33)
---
INCOME BEFORE INCOME TAXES 136 35
Provision for income taxes (54) (20)
---
NET INCOME 82 45
Add: Net losses attributable to
noncontrolling interests, net of tax 2 (100)
---
NET INCOME ATTRIBUTABLE TO MARRIOTT $84 42
===
EARNINGS PER SHARE - Basic 8
Earnings per share attributable to
Marriott shareholders 9 $0.24 38
=====
EARNINGS PER SHARE - Diluted 8
Earnings per share attributable to
Marriott shareholders 9 $0.23 35
=====
Basic Shares 8 356.2
Diluted Shares 8 366.0
* Percent cannot be calculated.
** Denotes non-GAAP financial measures. Please see pages A-17 and
A-18 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 As Restructuring
Reported Reported Costs Certain
& Other Tax
24 Weeks 24 Weeks Charges Items
Ended Ended -------- ------
June 18, June 19,
2010 2009
--------- ---------
REVENUES
Base management fees $261 $251 $- $-
Franchise fees 196 181 - -
Incentive management
fees 86 78 - -
Owned, leased, corporate
housing and other
revenue 1 484 458 - -
Timeshare sales and
services (including net
note sale losses of $1
for 574 492 29 -
twenty-four weeks ended
June 19, 2009) 2
Cost reimbursements 3 3,800 3,597 - -
Total Revenues 5,401 5,057 29 -
OPERATING COSTS AND
EXPENSES
Owned, leased and
corporate housing -
direct 4 441 424 - -
Timeshare - direct 474 499 1 -
Reimbursed costs 3,800 3,597 - -
Restructuring costs - 35 (35) -
General, administrative
and other 5 280 363 (91) -
Total Expenses 4,995 4,918 (125) -
----- ---
OPERATING INCOME 406 139 154 -
Gains and other income
(including gain on debt
extinguishment of $21 4 28 - -
for the twenty-four
weeks ended June 19,
2009) 6
Interest expense (89) (57) - -
Interest income 7 15 - -
Equity in (losses)
earnings 7 (15) (38) 32 -
--- --- --- ---
INCOME BEFORE INCOME
TAXES 313 87 186 -
Provision for income
taxes (111) (77) (72) 43
---- --- --- ---
NET INCOME 202 10 114 43
Add: Net losses
attributable to
noncontrolling
interests, net of tax - 4 - -
--- --- --- ---
NET INCOME ATTRIBUTABLE
TO MARRIOTT $202 $14 $114 $43
==== === ==== ===
EARNINGS PER SHARE -
Basic 8
Earnings per share
attributable to
Marriott shareholders 9 $0.56 $0.04 $0.32 $0.12
===== ===== ===== =====
EARNINGS PER SHARE -
Diluted 8
Earnings per share
attributable to
Marriott shareholders 9 $0.54 $0.04 $0.31 $0.12
===== ===== ===== =====
Basic Shares 8 360.7 355.3 355.3 355.3
Diluted Shares 8 375.5 364.2 364.2 364.2
As
Adjusted Percent
Better/
(Worse)
24 Weeks 2010 vs.
Adjusted
Ended 2009
June 19,
2009** ---------
---------
REVENUES
Base management fees $251 4
Franchise fees 181 8
Incentive management fees 78 10
Owned, leased, corporate housing and other
revenue 1 458 6
Timeshare sales and services (including
net note sale losses of $1 for 521 10
twenty-four weeks ended June 19, 2009) 2
Cost reimbursements 3 3,597 6
Total Revenues 5,086 6
OPERATING COSTS AND EXPENSES
Owned, leased and corporate housing -
direct 4 424 (4)
Timeshare - direct 500 5
Reimbursed costs 3,597 (6)
Restructuring costs - *
General, administrative and other 5 272 (3)
Total Expenses 4,793 (4)
OPERATING INCOME 293 39
Gains and other income (including gain on
debt extinguishment of $21 28 (86)
for the twenty-four weeks ended June 19,
2009) 6
Interest expense (57) (56)
Interest income 15 (53)
Equity in (losses) earnings 7 (6) (150)
---
INCOME BEFORE INCOME TAXES 273 15
Provision for income taxes (106) (5)
----
NET INCOME 167 21
Add: Net losses attributable to
noncontrolling interests, net of tax 4 (100)
---
NET INCOME ATTRIBUTABLE TO MARRIOTT $171 18
====
EARNINGS PER SHARE - Basic 8
Earnings per share attributable to
Marriott shareholders 9 $0.48 17
=====
EARNINGS PER SHARE - Diluted 8
Earnings per share attributable to
Marriott shareholders 9 $0.47 15
=====
Basic Shares 8 355.3
Diluted Shares 8 364.2
* Percent cannot be calculated.
** Denotes non-GAAP financial measures. Please see pages A-17 and
A-18 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) earnings includes our equity in (losses) /
earnings 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.
A-3
MARRIOTT INTERNATIONAL, INC.
TOTAL LODGING PRODUCTS 1
Number of Properties
--------------------
June 18, June 19, vs. June 19,
Brand 2010 2009 2009
----- --------- --------- -------------
Domestic Full-Service
---------------------
Marriott Hotels & Resorts 354 349 5
Renaissance Hotels 80 77 3
Autograph Collection 10 - 10
Domestic Limited-Service
------------------------
Courtyard 780 747 33
Fairfield Inn & Suites 641 589 52
SpringHill Suites 267 226 41
Residence Inn 589 567 22
TownePlace Suites 190 173 17
International
-------------
Marriott Hotels & Resorts 194 187 7
Renaissance Hotels 66 67 (1)
Courtyard 96 87 9
Fairfield Inn & Suites 9 9 -
SpringHill Suites 1 1 -
Residence Inn 17 18 (1)
Marriott Executive
Apartments 22 21 1
Luxury
------
The Ritz-Carlton -
Domestic 39 37 2
The Ritz-Carlton -
International 34 33 1
Bulgari Hotels & Resorts 2 2 -
The Ritz-Carlton
Residential 25 24 1
The Ritz-Carlton Serviced
Apartments 3 3 -
Timeshare 2
-----------
Marriott Vacation Club 3 53 52 1
The Ritz-Carlton
Destination Club 9 10 (1)
The Ritz-Carlton
Residences 4 3 1
Grand Residences by
Marriott -Fractional 2 2 -
Grand Residences by
Marriott -Residential 2 2 -
Sub Total Timeshare 70 69 1
--- --- ---
Total 3,489 3,286 203
===== ===== ===
Number of Rooms/Suites
----------------------
June 18, June 19, vs. June 19,
Brand 2010 2009 2009
----- --------- --------- -------------
Domestic Full-Service
---------------------
Marriott Hotels & Resorts 141,819 138,945 2,874
Renaissance Hotels 29,069 28,197 872
Autograph Collection 1,529 - 1,529
Domestic Limited-Service
------------------------
Courtyard 109,649 104,657 4,992
Fairfield Inn & Suites 57,780 52,450 5,330
SpringHill Suites 31,295 26,044 5,251
Residence Inn 70,998 67,814 3,184
TownePlace Suites 19,063 17,359 1,704
International
-------------
Marriott Hotels & Resorts 59,616 56,514 3,102
Renaissance Hotels 22,255 22,698 (443)
Courtyard 18,931 17,110 1,821
Fairfield Inn & Suites 1,153 1,109 44
SpringHill Suites 124 124 -
Residence Inn 2,418 2,604 (186)
Marriott Executive
Apartments 3,679 3,412 267
Luxury
------
The Ritz-Carlton -
Domestic 11,587 11,549 38
The Ritz-Carlton -
International 10,171 10,117 54
Bulgari Hotels & Resorts 117 117 -
The Ritz-Carlton
Residential 2,644 2,539 105
The Ritz-Carlton Serviced
Apartments 458 474 (16)
Timeshare 2
-----------
Marriott Vacation Club 3 11,874 11,858 16
The Ritz-Carlton
Destination Club 469 461 8
The Ritz-Carlton Residences 238 150 88
Grand Residences by Marriott
-Fractional 248 241 7
Grand Residences by Marriott
-Residential 68 91 (23)
Sub Total Timeshare 12,897 12,801 96
------ ------ ---
Total 607,252 576,634 30,618
======= ======= ======
Number of Timeshare Interval, Fractional and Residential Resorts
----------------------------------------------------------------
Properties
Total in
Active
Properties 2 Sales 4
------------ -------
100% Company-Developed
----------------------
Marriott Vacation Club 3 53 27
The Ritz-Carlton Destination Club
and Residences 9 7
Grand Residences by Marriott and
Residences 4 3
Joint Ventures
--------------
The Ritz-Carlton Destination Club
and Residences 4 4
Total 70 41
=== ===
1 Total Lodging Products excludes the 1,869 and 2,142 corporate
housing rental units as of June 18, 2010 and June 19, 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 May 31, 2010 and May 31, 2009
------------------------------------------------
REVPAR Occupancy
------ ---------
vs.
Region 2010 2009 2010 vs. 2009
------ ---- ---- ---- --------
Caribbean & Latin America $138.23 9.5% 72.7% 5.5% pts.
Continental Europe $115.68 5.6% 70.6% 3.8% pts.
United Kingdom $115.15 5.8% 76.3% 4.0% pts.
Middle East & Africa $104.18 -2.0% 76.7% 3.8% pts.
Asia Pacific 2 $83.87 27.7% 68.2% 16.2% pts.
Regional Composite 3 $108.81 8.8% 72.1% 7.3% pts.
International Luxury 4 $213.49 14.0% 67.3% 10.1% pts.
Total International 5 $120.13 9.8% 71.6% 7.6% pts.
Worldwide 6 $110.74 8.2% 71.7% 5.4% pts.
Three Months Ended May 31, 2010 and May 31, 2009
------------------------------------------------
Average Daily Rate
------------------
Region 2010 vs. 2009
------ ---- --------
Caribbean &
Latin
America $190.08 1.3%
Continental
Europe $163.77 0.0%
United
Kingdom $150.98 0.3%
Middle East &
Africa $135.92 -6.8%
Asia Pacific
2 $122.94 -2.5%
Regional
Composite 3 $150.82 -2.2%
International
Luxury 4 $317.09 -3.1%
Total
International
5 $167.72 -1.8%
Worldwide 6 $154.52 0.1%
Comparable Systemwide International Properties 1
Three Months Ended May 31, 2010 and May 31, 2009
------------------------------------------------
REVPAR Occupancy
------ ---------
vs. vs.
Region 2010 2009 2010 2009
------ ---- ---- ---- ----
Caribbean & Latin
America $122.40 15.5% 71.2% 8.8% pts.
Continental Europe $111.92 5.1% 68.9% 4.6% pts.
United Kingdom $113.43 5.8% 75.6% 3.9% pts.
Middle East & Africa $104.18 -2.0% 76.7% 3.8% pts.
Asia Pacific 2 $87.89 21.0% 69.0% 13.9% pts.
Regional Composite 3 $106.96 9.0% 71.2% 7.5% pts.
International Luxury 4 $213.49 14.0% 67.3% 10.1% pts.
Total International 5 $116.55 9.8% 70.9% 7.7% pts.
Worldwide 6 $92.96 7.0% 70.7% 5.0% pts.
Three Months Ended May 31, 2010 and May 31, 2009
------------------------------------------------
Average Daily
Rate
--------------
vs.
Region 2010 2009
------ ---- ----
Caribbean &
Latin America $171.83 1.3%
Continental
Europe $162.53 -1.9%
United Kingdom $150.08 0.3%
Middle East &
Africa $135.92 -6.8%
Asia Pacific 2 $127.43 -3.4%
Regional
Composite 3 $150.16 -2.4%
International
Luxury 4 $317.09 -3.1%
Total
International 5 $164.43 -2.1%
Worldwide 6 $131.39 -0.6%
1 We report International results on a period basis, and
international statistics on a monthly basis. Statistics are in
constant dollars for March through May. 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 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 May 31, 2010 and May 31, 2009, and North American statistics
for the twelve weeks ended June 18, 2010 and June 19, 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
Five Months Ended May 31, 2010 and May 31, 2009
-----------------------------------------------
REVPAR Occupancy
------ ---------
vs.
Region 2010 2009 2010 vs. 2009
------ ---- ---- ---- --------
Caribbean & Latin America $140.94 4.1% 73.0% 4.9% pts.
Continental Europe $106.18 4.2% 65.6% 4.2% pts.
United Kingdom $110.77 5.9% 72.6% 4.2% pts.
Middle East & Africa $100.94 -5.3% 73.1% 2.8% pts.
Asia Pacific 2 $79.53 23.3% 64.9% 14.8% pts.
Regional Composite 3 $104.41 6.2% 68.9% 6.9% pts.
International Luxury 4 $204.73 8.4% 63.9% 7.7% pts.
Total International 5 $115.26 6.6% 68.3% 7.0% pts.
Worldwide 6 $103.13 4.0% 68.2% 5.0% pts.
Five Months Ended May 31, 2010 and May 31, 2009
-----------------------------------------------
Average Daily
Rate
--------------
vs.
Region 2010 2009
------ ---- ----
Caribbean &
Latin America $193.07 -2.9%
Continental
Europe $161.90 -2.5%
United Kingdom $152.56 -0.1%
Middle East &
Africa $138.08 -8.9%
Asia Pacific 2 $122.62 -4.8%
Regional
Composite 3 $151.59 -4.4%
International
Luxury 4 $320.28 -4.6%
Total
International 5 $168.66 -4.3%
Worldwide 6 $151.27 -3.7%
Comparable Systemwide International Properties 1
Five Months Ended May 31, 2010 and May 31, 2009
-----------------------------------------------
REVPAR Occupancy
------ ---------
vs.
Region 2010 2009 2010 vs. 2009
------ ---- ---- ---- --------
Caribbean & Latin
America $121.45 9.7% 69.7% 7.8% pts.
Continental Europe $102.50 3.4% 63.9% 4.7% pts.
United Kingdom $109.01 5.7% 71.9% 4.1% pts.
Middle East & Africa $100.94 -5.3% 73.1% 2.8% pts.
Asia Pacific 2 $83.65 16.0% 65.6% 12.6% pts.
Regional Composite 3 $102.06 6.1% 67.7% 7.0% pts.
International Luxury 4 $204.73 8.4% 63.9% 7.7% pts.
Total International 5 $111.24 6.5% 67.4% 7.0% pts.
Worldwide 6 $86.27 3.1% 67.0% 4.3% pts.
Five Months Ended May 31, 2010 and May 31, 2009
-----------------------------------------------
Average Daily
Rate
--------------
vs.
Region 2010 2009
------ ---- ----
Caribbean & Latin
America $174.24 -2.6%
Continental
Europe $160.29 -4.1%
United Kingdom $151.68 -0.2%
Middle East &
Africa $138.08 -8.9%
Asia Pacific 2 $127.61 -6.2%
Regional
Composite 3 $150.65 -4.7%
International
Luxury 4 $320.28 -4.6%
Total
International 5 $165.05 -4.6%
Worldwide 6 $128.77 -3.6%
1 We report International results on a period basis, and
international statistics on a monthly basis. Statistics are in
constant dollars for January through May. International includes<
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