Marriott International Reports Record EPS From Continuing Operations of $1.94 for 2003, Up 11% From 2002

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Feb 10, 2004

Marriott International Reports Record EPS From Continuing Operations of $1.94 for 2003, Up 11% From 2002

WASHINGTON, Feb 10, 2004 /PRNewswire-FirstCall via COMTEX/ -- Marriott International, Inc. (NYSE: MAR) today reported record diluted earnings per share from continuing operations of $1.94 in 2003, up 11 percent from 2002. Income from continuing operations, net of taxes, for the year was $476 million, an eight percent increase over 2002 levels. Synthetic fuel operations contributed approximately $96 million ($0.39 per share) in 2003 versus $74 million ($0.29 per share) a year ago.

(Logo: http://www.newscom.com/cgi-bin/prnh/20030605/MARRIOTTLOGO )

J.W. Marriott, Jr., chairman and chief executive officer of Marriott International, said, "We are pleased with our solid performance in 2003, especially in light of the challenges of a war in Iraq and Severe Acute Respiratory Syndrome (SARS). Our leading brands have proven themselves in the challenging operating environment over the past three years. Owners have converted more than 115 hotels with over 20,000 rooms, excluding Ramada International, to our brands since the beginning of 2001 and the trend continues into 2004.

"We expect 2004 to be an even better year at Marriott, in part due to an improved demand outlook and in part due to Marriott's recent product initiatives. We rolled out Marriott's industry leading Look No Further(SM) Best Rate Guarantee, which ensures that customers receive the best available room rate at nearly 2,500 hotels when booking through any Marriott reservation channel. We also recently signed distribution agreements with major third party internet hotel distributors as well as with major travel management companies. These agreements are designed to make Marriott products available to a growing number of travelers with reliable pricing across all distribution channels.

"We are encouraged by the signs of improving trends and look forward to business travel demand building throughout 2004. We expect our 2004 REVPAR (revenue per available room) to increase three to four percent in North America. We also expect to continue our growth in distribution, adding approximately 25,000 to 30,000 hotel rooms and timeshare units to our system in 2004, even as growth in industry supply in the U.S. is expected to continue to decline. As we began 2004, our pipeline of hotel rooms under development increased to more than 50,000 rooms and included a growing proportion of international full service projects. With improved lodging demand, continued strong unit growth and strength in our timeshare business, we continue to expect EPS from continuing operations to be in the range of $2.06 to $2.16 in 2004.

"We have a long term vision for the lodging business to be where our guests are traveling. High-quality, worldwide distribution is important to drive brand value. During the year, we announced a number of exceptional hotels with tremendous market presence, both newly constructed and converted. Properties such as a new Ritz-Carlton in Tokyo and the Grosvenor House in Mayfair, London will extend the excellent distribution our brands enjoy today."

In fiscal 2003 (52 week period from January 4, 2003 to January 2, 2004), REVPAR for comparable systemwide North American properties declined by 1.3 percent, driven largely by lower average room rates. REVPAR at comparable systemwide North American full-service hotels (including Marriott Hotels & Resorts, The Ritz-Carlton, and Renaissance Hotels & Resorts) decreased by 1.6 percent during the year, while North American systemwide REVPAR for select- service and extended-stay brands (including Courtyard, Fairfield Inn, Residence Inn, TownePlace Suites, and SpringHill Suites) posted a REVPAR decline of 0.8 percent. The Ritz-Carlton brand in North America experienced stronger demand, particularly at its resort properties, with comparable REVPAR up 1.0 percent for the year. International REVPAR at comparable systemwide properties increased 3.7 percent (or declined 1.5 percent in constant dollars). International lodging demand was impacted in 2003 by SARS, the Iraqi war and weak economies in Continental Europe.

We added 185 hotels and timeshare resorts (31,261 rooms) to our worldwide lodging portfolio during 2003, while 24 properties (4,126 rooms) exited the system. For the full year 2003, hotels converted from competitor or unbranded hotels accounted for approximately one-third of gross hotel room additions. At year-end, the company's lodging group encompassed 2,718 hotels and timeshare resorts (490,564 rooms).

MARRIOTT REVENUES totaled $9.0 billion in 2003, a 7 percent increase from 2002. Base fees from managed hotels increased 2 percent to $388 million, reflecting 3 percent net growth in managed rooms, somewhat offset by lower REVPAR. Franchise fees increased 6 percent in 2003 to $245 million, reflecting 9 percent net growth in franchised rooms, somewhat offset by lower REVPAR. Incentive management fees declined 33 percent to $109 million, reflecting the REVPAR decline at managed hotels as well as lower property level house profit margins. North American company-operated hotel house profit margins in 2003 declined 2.7 percentage points largely due to lower average room rates, higher wages and insurance costs, lower telephone profits, and higher utility costs, offset somewhat by continued productivity improvements. International house profit margins were down only 1.0 percentage point. In 2003, 29 percent of managed rooms earned incentive management fees.

Marriott's timeshare business reported 16 percent higher contract sales for the full year 2003. Contract sales were particularly strong at timeshare resorts in Aruba and Hawaii.

MARRIOTT OPERATING INCOME increased 17 percent from 2002 levels to $377 million, largely as a result of lower operating losses from the company's synthetic fuel business in 2003 and the $50 million writedown of goodwill associated with ExecuStay that was included in operating income in 2002. Marriott's 2003 operating income included the receipt of a $36 million insurance payment for lost revenue related to the loss of the Marriott World Trade Center Hotel on September 11, 2001. Operating income in 2003 also reflected a $53 million reduction in incentive fees, due to the continued weak operating environment in the lodging industry.

Gains and other income include the gains on the sale of timeshare mortgage notes, hotel assets and other investments, including $64 million from the company's ongoing timeshare mortgage note sale program in 2003 and $21 million in gains on the sale of three international joint venture interests. Prior year gains included $60 million from timeshare mortgage note sales and $44 million from the sale of our equity stake in Interval International.

INTEREST EXPENSE increased to $110 million in 2003 compared to $86 million in 2002 reflecting lower levels of capitalized interest. The net provision for loan losses was $7 million, down from the 2002 level of $12 million.

We sold a 50 percent ownership interest in our synthetic fuel operation to a major U.S. financial institution in mid-2003. We expect to receive substantial additional payments over time, the size of which depends on the amount of synthetic fuel produced. Because the buyer retained a put option, we continued to report synthetic fuel results on a consolidated basis until November 6, 2003, when the put option was terminated. At that point, we began to account for the synthetic fuel business under the equity method. Our income derived from our equity in the synthetic fuel joint venture totaled $10 million during the year. Excluding the impact of our synthetic fuel operations, our tax rate for continuing operations was 34.6 percent in 2003.

Other equity losses increased to $17 million in 2003, primarily as a result of continued weakness in the Courtyard joint venture.

During 2003, we sold 3 hotels, 23 senior living communities and several land parcels totaling $611 million. We owned only six hotels at year-end 2003. Also, during 2003, we received $280 million in cash from the sale and collection of notes receivable (excluding timeshare mortgage notes). Total debt at year end 2003 was $1.5 billion, down from $1.8 billion at the end of 2002. In addition to reducing our debt by more than $300 million, we repurchased 10.5 million shares of common stock during 2003 at a total cost of $380 million. To date in 2004, we have repurchased an additional 2.3 million shares of common stock for a total cost of $104 million. Ten million shares remain authorized for repurchase.

During 2002, we closed the distribution services business and during 2003 we sold our senior living business. Therefore, we show the financial results for those businesses in discontinued operations for 2003 and 2002. Fully diluted earnings per share from discontinued operations were $0.11 in 2003 compared to losses of $0.64 a year ago. In light of our transition to a pure lodging company, we have modified our financial statements to include the consolidation of all of our general and administrative expenses and to provide more detail about our lodging business.

    FOURTH QUARTER RESULTS
    Fourth quarter highlights include:

     * EPS from continuing operations totaled $0.69 in the fourth quarter
       2003, a 47 percent increase over a year ago.

     * North American comparable systemwide REVPAR for the fourth quarter
       (Sept. 13, 2003 - Jan 2, 2004), increased 0.4 percent from the prior
       year.

     * On a fourth quarter 2003 calendar basis, Marriott's full service brands
       reported 1.1 percent comparable company-operated REVPAR growth in North
       America and Hawaii combined.

Fourth quarter diluted earnings per share from continuing operations totaled $0.69 in 2003, a 47 percent increase from the 2002 quarter. Income from continuing operations, net of taxes, for the quarter was $170 million compared to $116 million a year ago. Synthetic fuel operations contributed approximately $30 million ($0.12 per share) in the fourth quarter of 2003 versus $36 million ($0.14 per share) a year ago.

We added 50 hotels and timeshare resorts (7,206 rooms) to our worldwide lodging portfolio during the fourth quarter of 2003, while nine properties (1,599 rooms) exited the system.

Outside North America, comparable systemwide REVPAR for the last four months of 2003 increased 3.4 percent in constant dollars as a result of stronger occupancies in almost all regions and particularly strong demand in Middle Eastern, the United Kingdom and Caribbean destinations. Taking into account the decline in the value of the U.S. dollar, comparable systemwide REVPAR outside North America increased 8.7 percent during the quarter.

MARRIOTT REVENUES totaled $2.9 billion in the 2003 fourth quarter, a six percent increase from 2002. Base fees from managed hotels increased one percent, while franchise fees increased six percent as a result of strong unit growth. Incentive management fees declined 36 percent, reflecting REVPAR declines and lower property level house profit margins. North American comparable company-operated house profit margins during the fourth quarter declined 2.7 percentage points.

Marriott's timeshare business reported 11 percent higher contract sales in the 2003 fourth quarter. Contract sales were particularly strong at timeshare resorts in Hawaii and California.

MARRIOTT'S OPERATING INCOME for the fourth quarter of 2003 was $161 million, up from $37 million a year ago primarily as a result of lower synthetic fuel operating losses in 2003 and the inclusion of a $50 million writedown of goodwill related to our ExecuStay corporate living business in the year ago quarter. Marriott's fourth quarter lodging operating income benefited from a $36 million insurance payment for lost revenue related to the loss of the Marriott World Trade Center Hotel on September 11, 2001, largely offset by $19 million in lower incentive fees and charges totaling $15 million related to three hotels.

INTEREST EXPENSE totaled $33 million during the 2003 fourth quarter compared to $27 million in the fourth quarter of 2002. The increase was largely due to $5 million of lower capitalized interest.

Synthetic fuel operations contributed approximately $0.12 cents per share of after-tax earnings during the quarter. After the sale of a 50 percent interest, we continued to report synthetic fuel results on a consolidated basis because the buyer retained a put option. Effective November 6, 2003, that put option was terminated and we began to account for the synthetic fuel business under the equity method. Our income derived from our equity in the synthetic fuel joint venture totaled $10 million during the quarter. Excluding the impact of our synthetic fuel operations, our tax rate for continuing operations was 34.5 percent in the fourth quarter of 2003.

OUTLOOK

We are pleased with our current booking patterns in 2004 and believe the strengthening economy is beginning to impact favorably individual business travel. Combined with already strong leisure business, we are optimistic about 2004 demand growth. In addition, Lodging Econometrics expects U.S. lodging supply to grow only 1.2 percent in 2004. Based on these dynamics, we continue to estimate North American REVPAR growth for 2004 of 3 to 4 percent.

Assuming nearly flat house profit margins, completion of timeshare mortgage note sale transactions in the second and fourth quarters, approximately 25,000 to 30,000 new room openings, and roughly $0.40 of after-tax earnings per share from our synthetic fuel business, we continue to estimate that 2004 diluted earnings per share from continuing operations will range from $2.06 to $2.16. Under these assumptions, lodging operating income (excluding synthetic fuel's operating loss in 2003) should increase roughly 15 percent for full year 2004.

Assuming North American REVPAR growth of 2 to 4 percent in the first quarter of 2004, we currently estimate first quarter earnings per share from continuing operations of $0.38 to $0.42, including $0.06 of earnings from synthetic fuel.

We expect investment spending in 2004 to include approximately $50 million for maintenance capital spending and approximately $50 million for systems initiatives. We also expect to invest approximately $25 million in new company-developed hotels and $75 million in the timeshare business. We expect to invest approximately $150 million in mezzanine financing and mortgage loans for hotels developed by our owners and franchisees and approximately $150 million in equity investments, including investments in timeshare joint ventures. In 2004, we estimate total investment spending levels to be roughly $500 million, moderately lower than in 2003.

Individual investors and the news media are invited to listen to the review on the Internet at http://www.marriott.com/investor. A replay will be available on the Internet until March 10, 2004 at http://www.marriott.com/investor (click on "recent investor news"). A recording of the call will also be available by telephone from 1 p.m. ET, Tuesday, February 10, 2004 until Tuesday, February 17, 2004 at 8 p.m. ET. To access the recording, call 719-457-0820. The reservation number for the recording is 277182.

Note: This press release contains "forward-looking statements" within the meaning of federal securities laws, including REVPAR, profit margin and earning trends; statements concerning the number of lodging properties we expect to add in future years; our expected investment spending; our anticipated results from synthetic fuel operations; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including the pace and extent of the current recovery in both the economy and the lodging industry; supply and demand changes for hotel rooms, vacation ownership intervals, and corporate housing; competitive conditions in the lodging industry; relationships with clients and property owners; and the availability of capital to finance hotel growth and refurbishment; any of which could cause actual results to differ materially from those expressed in or implied by the statements herein. These statements are made as of the date of this press release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

MARRIOTT INTERNATIONAL, INC. (NYSE: MAR) is a leading worldwide hospitality company with over 2,700 lodging properties in the United States and 67 other countries and territories. Marriott International operates and franchises hotels under the Marriott, JW Marriott, The Ritz-Carlton, Renaissance, Residence Inn, Courtyard, TownePlace Suites, Fairfield Inn, SpringHill Suites and Ramada International brand names; develops and operates vacation ownership resorts under the Marriott Vacation Club International, Horizons, The Ritz-Carlton Club and Marriott Grand Residence Club brands; operates Marriott Executive Apartments; provides furnished corporate housing through its Marriott ExecuStay division; and operates conference centers. Marriott is also in the synthetic fuel business. The company is headquartered in Washington, D.C., and has approximately 128,000 employees. In fiscal year 2003, Marriott International reported sales from continuing operations of $9 billion. For more information or reservations, please visit our web site at www.marriott.com.


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

                              52 Weeks Ended         53 Weeks Ended
                              January 2, 2004       January 3, 2003
                          ---------------------  ----------------------
                                                                       Percent
                                 Synthetic               Synthetic     Better/
                          Lodging  Fuel   Total  Lodging  Fuel   Total (Worse)
                          ------- ------ ------  ------- ------ ------ -------
    REVENUES
    Base management fees    $388   $ --   $388     $379   $ --   $379
    Franchise fees           245     --    245      232     --    232
    Incentive management
     fees                    109     --    109      162     --    162
    Owned, leased, corporate
     housing and other(1)    633     --    633      651     --    651
    Timeshare interval
     sales and services
      (2)                  1,145     --  1,145    1,059     --  1,059
    Cost reimbursements
     (3)                   6,192     --  6,192    5,739     --  5,739
    Synthetic fuel            --    302    302       --    193    193
                          ------- ------ ------  ------- ------ ------
       Total Revenues      8,712    302  9,014    8,222    193  8,415

    OPERATING COSTS AND
     EXPENSES
    Owned, leased and
     corporate housing -
     direct (4)              505     --    505      580     --    580
    Timeshare - direct     1,011         1,011      938     --    938
    Reimbursed costs       6,192     --  6,192    5,739     --  5,739
    General, administrative
     and other (5)           523     --    523      510     --    510
    Synthetic fuel            --    406    406       --    327    327
                          ------- ------ ------  ------- ------ ------
       Total Expenses      8,231    406  8,637    7,767    327  8,094
                          ------- ------ ------  ------- ------ ------

    OPERATING INCOME        $481  $(104)   377     $455  $(134)   321    17
                          ======= ======         ======= ======

    Gains and other income (6)             106                    132
    Interest expense                      (110)                   (86)
    Interest income                        129                    122
    Provision for loan losses               (7)                   (12)
    Equity in earnings
     (losses) - Synthetic
      fuel (7)                              10                     --
            - Other (8)                    (17)                    (6)
                                         ------                 ------
    INCOME FROM CONTINUING
     OPERATIONS BEFORE
     INCOME TAXES AND
     MINORITY INTEREST                     488                    471
    Benefit (Provision) for
     income taxes                           43                    (32)
                                         ------                 ------
    INCOME FROM CONTINUING
     OPERATIONS BEFORE
     MINORITY INTEREST                     531                    439
    Minority Interest                      (55)                    --
                                         ------                 ------
    INCOME FROM CONTINUING
     OPERATIONS                            476                    439     8

    Discontinued operations
      Income (Loss) from Senior
       Living Services, net of
        tax                                 26                   (108)
      Loss from Distribution
       Services, net of tax                 --                    (54)
                                         ------                 ------

    NET INCOME                            $502                   $277    81
                                         ======                 ======

    EARNINGS PER SHARE - Basic
      Earnings from
       continuing operations             $2.05                  $1.83    12
      Earnings (loss) from
       discontinued operations            0.11                  (0.68)    *
                                         ------                 ------
      Earnings per share                 $2.16                  $1.15    88
                                         ======                 ======

    EARNINGS PER SHARE -
     Diluted
      Earnings from
       continuing operations             $1.94                  $1.74    11
      Earnings (loss) from
       discontinued operations            0.11                  (0.64)    *
                                         ------                 ------
      Earnings per share                 $2.05                  $1.10    86
                                         ======                 ======

    Basic Shares                         232.5                  240.3
    Diluted Shares                       245.4                  254.6

    *  Calculated percentage is not meaningful.

    (1) Owned, leased, corporate housing and other revenue includes revenue
        from the properties we own or lease, our ExecuStay business, land rent
        income and other revenue.
    (2) Timeshare interval sales and services includes total timeshare
        revenue except for base fees, reimbursed costs and note sale gains.
    (3) Cost reimbursements include reimbursements from lodging properties
        for Marriott funded operating expenses.  Marriott earns no markup on
        these expenses.
    (4) Owned, leased and corporate housing - direct expenses include
        operating expenses of our ExecuStay business unit, and owned or leased
        hotels including lease payments, pre-opening expenses and
        depreciation.
    (5) General, administrative and other expenses include the overhead
        costs allocated to our lodging business segments (including ExecuStay
        and timeshare) and our unallocated corporate overhead costs.
    (6) Gains and other income includes gains on the sale of real estate,
        timeshare note sale gains, and gains on the sale of our interests in
        joint ventures.
    (7) Equity in earnings/(losses) - Synthetic fuel includes our share of
        the equity in earnings of the Synthetic fuel joint venture and the
        earnout we received from the Synthetic fuel joint venture partner
        beginning November 6, 2003.  The earnout we received prior to November
        6, 2003, along with the revenue generated from the previously
        consolidated Synthetic fuel joint venture, are included in Synthetic
        fuel revenue.
    (8) Equity in earnings/(losses) - Other includes our equity in
        earnings/(losses) of unconsolidated joint ventures.


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

                              16 Weeks Ended        17 Weeks Ended
                             January 2, 2004       January 3, 2003
                          ---------------------  ----------------------
                                                                       Percent
                                 Synthetic               Synthetic     Better/
                          Lodging  Fuel   Total  Lodging  Fuel   Total (Worse)
                          ------- ------ ------  ------- ------ ------ -------

    REVENUES
    Base management fees    $122    $--   $122     $121    $--   $121
    Franchise fees            76     --     76       72     --     72
    Incentive management
     fees                     34     --     34       53     --     53
    Owned, leased, corporate
     housing and other (1)   219     --    219      197     --    197
    Timeshare interval sales
     and services (2)        378     --    378      318     --    318
    Cost reimbursements
     (3)                   1,959     --  1,959    1,852     --  1,852
    Synthetic fuel            --     78     78       --     80     80
                          ------- ------ ------  ------- ------ ------
       Total Revenues      2,788     78  2,866    2,613     80  2,693

    OPERATING COSTS AND
     EXPENSES
    Owned, leased and
     corporate housing
      - direct (4)           158     --    158      214     --    214
    Timeshare - direct       323     --    323      283     --    283
    Reimbursed costs       1,959     --  1,959    1,852     --  1,852
    General, administrative
     and other (5)           187     --    187      174     --    174
    Synthetic fuel            --     78     78       --    133    133
                          ------- ------ ------   ------- ----- ------
       Total Expenses      2,627     78  2,705    2,523    133  2,656
                          ------- ------ ------   ------- ----- ------

    OPERATING INCOME        $161   $ --    161      $90   $(53)    37     *
                          ======= ======          ======= =====

    Gains and other
     income (6)                             52                     69
    Interest expense                       (33)                   (27)
    Interest income                         51                     47
    Provision for loan
     losses                                 --                    (12)
    Equity in earnings
     (losses) - Synthetic
     fuel (7)                               10                     --
             - Other (8)                   (16)                    (6)
                                         ------                  -----

    INCOME FROM CONTINUING
     OPERATIONS BEFORE
     INCOME TAXES AND
     MINORITY INTEREST                     225                    108
    (Provision)/Benefit for
     income taxes                          (29)                     8
                                         ------                  -----
    INCOME FROM CONTINUING
     OPERATIONS BEFORE
     MINORITY INTEREST                     196                    116
    Minority Interest                      (26)                    --
                                         ------                  -----
    INCOME FROM CONTINUING
     OPERATIONS                            170                    116    47

    Discontinued operations
      Loss from Senior Living
       Services, net of tax                 (3)                  (125)
      Income/(loss) from
       Distribution Services,
        net of tax                           2                    (28)
                                         ------                  -----

    NET INCOME/(LOSS)                     $169                   $(37)    *
                                         ======                  =====

    EARNINGS PER SHARE - Basic
      Earnings from continuing
       operations                        $0.74                  $0.49    51
      Loss from discontinued
       operations                        (0.01)                 (0.65)   98
                                         ------                 ------
       Earnings/(loss) per
        share                            $0.73                 $(0.16)
                                         ======                  =====

    EARNINGS PER SHARE -
     Diluted
      Earnings from continuing
       operations                        $0.69                  $0.47    47
      Loss from discontinued
       operations                           --                  (0.62)    *
                                         ------                 ------
      Earnings/(loss) per
       share                             $0.69                 $(0.15)    *
                                         ======                 ======

    Basic Shares                         231.4                  237.0
    Diluted Shares                       245.8                  247.3

    *  Calculated percentage is not meaningful.

    (1) Owned, leased, corporate housing and other revenue includes revenue
        from the properties we own or lease, our ExecuStay business, land rent
        income and other revenue.
    (2) Timeshare interval sales and services includes total timeshare
        revenue except for base fees, reimbursed costs and note sale gains.
    (3) Cost reimbursements include reimbursements from lodging properties
        for Marriott funded operating expenses.  Marriott earns no markup on
        these expenses.
    (4) Owned, leased and corporate housing - direct expenses include
        operating expenses of our ExecuStay business unit, and owned or leased
        hotels including lease payments, pre-opening expenses and
        depreciation.
    (5) General, administrative and other expenses include the overhead
        costs allocated to our lodging business segments (including ExecuStay
        and timeshare) and our unallocated corporate overhead costs.
    (6) Gains and other income includes gains on the sale of real estate,
        timeshare note sale gains, and gains on the sale of our interests in
        joint ventures.
    (7) Equity in earnings/(losses) - Synthetic fuel includes our share of
        the equity in earnings of the Synthetic fuel joint venture and the
        earnout we received from the Synthetic fuel joint venture partner
        beginning November 6, 2003.  The earnout we received prior to November
        6, 2003, along with the revenue generated from the previously
        consolidated Synthetic fuel joint venture, are included in Synthetic
        fuel revenue.
    (8) Equity in earnings/(losses) - Other includes our equity in
        earnings/(losses) of unconsolidated joint ventures.


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

                                                    Year Ended (1)
                                          --------------------------------
                                          January 2, 2004   January 3, 2003
                                          ---------------   ---------------
    REVENUES

    Full-Service                                 $5,876            $5,508
    Select-Service                                1,000               967
    Extended-Stay                                   557               600
    Timeshare                                     1,279             1,147
                                          ---------------   ---------------
      Total Lodging                               8,712             8,222
    Synthetic Fuel                                  302               193
                                          ---------------   ---------------
      Total                                      $9,014            $8,415
                                          ===============   ===============

    INCOME FROM CONTINUING OPERATIONS

    Full-Service                                   $407              $397
    Select-Service                                   99               130
    Extended-Stay                                    47                (3)
    Timeshare                                       149               183
                                          ---------------   ---------------
      Total Lodging Financial
       Results (pretax)                             702               707
    Synthetic Fuel (after tax)                       96                74
    Unallocated corporate expense                  (132)             (126)
    Interest income, provision for
     loan losses and interest expense                12                24
    Income taxes (excluding Synthetic Fuel)        (202)             (240)
                                          ---------------   ---------------
      Total                                        $476              $439
                                          ===============   ===============

    (1) There were 52 weeks in the year ended January 2, 2004 and 53 weeks in
        the year ended January 3, 2003.


                         MARRIOTT INTERNATIONAL, INC.
                              Business Segments
                               ($ in millions)
                                                      Quarter Ended(1)
                                          ---------------------------------
                                          January 2, 2004   January 3, 2003
                                          ----------------  ---------------
    REVENUES

    Full-Service                                 $1,899            $1,791
    Select-Service                                  301               291
    Extended-Stay                                   165               184
    Timeshare                                       423               347
                                          ---------------  ----------------
      Total Lodging                               2,788             2,613
    Synthetic Fuel                                   78                80
                                          ---------------  ----------------
      Total                                      $2,866            $2,693
                                          ===============  ================

    INCOME FROM CONTINUING OPERATIONS

    Full-Service                                   $148              $132
    Select-Service                                   18                35
    Extended-Stay                                    10               (38)
    Timeshare                                        64                73
                                          ---------------  ----------------
      Total Lodging Financial Results
       (pretax)                                     240               202
    Synthetic Fuel (after tax)                       30                36
    Unallocated corporate expense                   (43)              (49)
    Interest income, provision for
     loan losses and interest expense                18                 8
    Income taxes (excluding Synthetic Fuel)         (75)              (81)
                                          ---------------  ----------------
      Total                                        $170              $116
                                          ===============  ================
    (1) There were 16 weeks in the fourth quarter ended January 2, 2004 and 17
        weeks in the fourth quarter ended January 3, 2003.


                         MARRIOTT INTERNATIONAL, INC.
                          CONSOLIDATED BALANCE SHEET
                     January 2, 2004 and January 3, 2003
                               ($ in millions)

                                      January 2,2004           January 3,2003
                                     ----------------        -----------------
             ASSETS

    Current Assets
       Cash and equivalents                $229                      $198
       Accounts and notes receivable        699                       522
       Prepaid taxes                        223                       300
       Other                                 84                        89
       Assets held for sale                  --                       664
                                     ----------------        -----------------
                                          1,235                     1,773

    Property and equipment                2,513                     2,560
    Goodwill                                923                       923
    Other intangible assets                 526                       495
    Investments in affiliates - equity      468                       475
    Investments in affiliates - notes
     receivable                             558                       522

    Notes and other receivables, net
       Loans to timeshare owners            167                       153
       Other notes receivable               389                       366
       Other long-term receivables          548                       473
                                     ----------------        -----------------
                                          1,104                       992

    Other                                   850                       556
                                     ----------------        -----------------
                                         $8,177                    $8,296
                                     ================        =================

        LIABILITIES AND SHAREHOLDERS'
                EQUITY

    Current liabilities
       Accounts payable                    $584                      $505
       Accrued payroll and benefits         412                       373
       Casualty self insurance               43                        32
       Other payables and accruals          667                       662
       Current portion of long-term debt     64                       221
       Liabilities of businesses held
        for sale                             --                       390
                                     ---------------         -----------------
                                          1,770                     2,183

    Long-term debt                        1,391                     1,553
    Casualty self insurance reserves        169                       106
    Other long-term liabilities           1,009                       881

    Shareholders' equity
       Class A common stock                   3                         3
       Additional paid-in capital         3,317                     3,224
       Retained earnings                  1,505                     1,126
       Deferred compensation                (81)                      (43)
       Treasury stock, at cost             (865)                     (667)
       Accumulated other comprehensive
        loss                                (41)                      (70)
                                     ---------------         ----------------
                                          3,838                     3,573
                                     ---------------         ----------------
                                         $8,177                    $8,296
                                     ===============         ================


                            MARRIOTT INTERNATIONAL, INC.
                              KEY LODGING STATISTICS

             North American Comparable Company-Operated Properties (1)
    --------------------------------------------------------------------------
                                        16 Weeks Ended Jan. 2, 2004 vs.
                                         17 Weeks Ended Jan. 3, 2003
                              ------------------------------------------------
                                                                 Average Daily
                               REVPAR            Occupancy           Rate
                               ------            ---------       -------------
    Brand                   2003   vs. 2002  2003   vs. 2002    2003  vs. 2002
    --------------------------------------------------------------------------
    Marriott Hotels
     & Resorts             $91.21     -1.2%  66.6%   0.1% pts. $136.93   -1.4%
    The Ritz-Carlton (2)  $144.34      4.8%  63.5%   3.2% pts. $227.17   -0.5%
    Renaissance Hotels &
     Resorts               $83.38      0.1%  63.0%   1.5% pts. $132.35   -2.3%
    Composite -
     Full-Service          $95.84      0.1%  65.8%   0.6% pts. $145.72   -0.8%
    Residence Inn          $68.63     -1.7%  72.9%  -0.6% pts.  $94.15   -0.8%
    Courtyard              $59.92     -0.7%  64.9%  -0.3% pts.  $92.38   -0.3%
    TownePlace Suites      $42.56      2.1%  68.4%   2.0% pts.  $62.19   -0.9%
    Composite - Select-
     Service &
      Extended-Stay        $60.38     -0.4%  67.0%   0.0% pts.  $90.18   -0.4%
    Composite - All        $82.94      0.0%  66.2%   0.4% pts. $125.29   -0.5%



                North American Comparable Systemwide Properties (1)
    --------------------------------------------------------------------------
                                             16 Weeks Ended Jan. 2, 2004 vs.
                                              17 Weeks Ended Jan. 3, 2003
                         -----------------------------------------------------
                                                                 Average Daily
                               REVPAR            Occupancy           Rate
                               ------            ---------       -------------
    Brand                   2003   vs. 2002  2003   vs. 2002    2003  vs. 2002
    --------------------------------------------------------------------------
    Marriott Hotels
     & Resorts            $84.02      -0.9%  64.9%  -0.1% pts. $129.42   -0.8%
    The Ritz-Carlton (2) $144.34       4.8%  63.5%   3.2% pts. $227.17   -0.5%
    Renaissance Hotels &
     Resorts              $78.51       1.5%  63.5%   2.3% pts. $123.73   -2.1%
    Composite -
     Full-Service         $87.80       0.4%  64.6%   0.5% pts. $135.89   -0.4%
    Residence Inn         $66.68      -0.7%  72.0%  -0.1% pts.  $92.55   -0.6%
    Courtyard             $60.23       0.3%  65.2%  -0.2% pts.  $92.34    0.6%
    Fairfield Inn         $37.56       0.3%  60.0%   0.0% pts.  $62.61    0.2%
    TownePlace Suites     $42.64       2.3%  68.5%   2.4% pts.  $62.22   -1.3%
    SpringHill Suites     $51.41       4.1%  65.5%   2.2% pts.  $78.44    0.6%
    Composite - Select-
     Service &
      Extended-Stay       $54.22       0.3%  65.6%   0.2% pts.  $82.63    0.0%
    Composite - All       $69.05       0.4%  65.2%   0.3% pts. $105.95   -0.1%



             North American Comparable Company-Operated Properties (1)
    --------------------------------------------------------------------------
                                           52 Weeks Ended Jan. 2, 2004 vs.
                                             53 Weeks Ended Jan. 3, 2003
                         -----------------------------------------------------
                                                                 Average Daily
                               REVPAR            Occupancy           Rate
                               ------            ---------       -------------
    Brand                   2003   vs. 2002  2003   vs. 2002    2003  vs. 2002
    --------------------------------------------------------------------------
    Marriott Hotels
     & Resorts            $93.81      -2.8%  69.3%  -0.5% pts. $135.42   -2.1%
    The Ritz-Carlton (3) $151.85       1.0%  65.7%   1.1% pts. $231.12   -0.8%
    Renaissance Hotels &
     Resorts              $86.99      -0.4%  65.8%   0.9% pts. $132.12   -1.8%
    Composite -
     Full-Service         $98.65      -1.8%  68.4%  -0.1% pts. $144.17   -1.6%
    Residence Inn         $73.09      -2.3%  77.0%  -0.3% pts.  $94.94   -1.9%
    Courtyard             $63.01      -2.7%  67.6%  -1.0% pts.  $93.16   -1.2%
    TownePlace Suites     $44.48      -1.0%  70.3%  -2.0% pts.  $63.24    1.8%
    Composite - Select-
     Service &
      Extended-Stay       $63.64      -2.2%  70.0%  -0.8% pts.  $90.98   -1.1%
    Composite - All       $85.85      -1.9%  69.0%  -0.4% pts. $124.45   -1.4%



                North American Comparable Systemwide Properties (1)
    --------------------------------------------------------------------------
                                               52 Weeks Ended Jan. 2, 2004
                                             vs. 53 Weeks Ended Jan. 3, 2003
                         -----------------------------------------------------
                                                                 Average Daily
                               REVPAR            Occupancy           Rate
                               ------            ---------       -------------
    Brand                   2003   vs. 2002  2003   vs. 2002    2003  vs. 2002
    --------------------------------------------------------------------------
    Marriott Hotels
     & Resorts            $86.87      -2.4%  67.6%  -0.4% pts. $128.53   -1.8%
    The Ritz-Carlton (3) $151.85       1.0%  65.7%   1.1% pts. $231.12   -0.8%
    Renaissance Hotels &
     Resorts              $80.92       0.1%  65.3%   1.5% pts. $123.97   -2.2%
    Composite -
     Full-Service         $90.57      -1.6%  67.1%   0.0% pts. $134.92   -1.6%
    Residence Inn         $71.47      -1.1%  76.2%   0.2% pts.  $93.85   -1.4%
    Courtyard             $63.65      -1.4%  68.5%  -0.6% pts.  $92.90   -0.6%
    Fairfield Inn         $41.22      -0.4%  64.1%  -0.3% pts.  $64.28    0.2%
    TownePlace Suites     $44.89      -0.1%  70.9%   0.0% pts.  $63.34   -0.2%
    SpringHill Suites     $54.94       3.2%  68.4%   1.3% pts.  $80.38    1.3%
    Composite - Select-
     Service &
      Extended-Stay       $57.95      -0.8%  69.2%  -0.2% pts.  $83.70   -0.6%
    Composite - All       $72.31      -1.3%  68.3%  -0.1% pts. $105.86   -1.1%

    (1) Composite - All statistics include properties for the Marriott Hotels
        & Resorts, Renaissance Hotels & Resorts, The Ritz-Carlton, Courtyard,
        Residence Inn, TownePlace Suites, Fairfield Inn, and SpringHill Suites
        brands.  Select-Service and Extended-Stay composite statistics include
        properties for the Courtyard, Residence Inn, TownePlace Suites,
        Fairfield Inn and SpringHill Suites brands.
    (2) Statistics for The Ritz-Carlton are for the four months ended
        December 31, 2003.
    (3) Statistics for The Ritz-Carlton are for the twelve months ended
        December 31, 2003.


                         MARRIOTT INTERNATIONAL, INC.
                            KEY LODGING STATISTICS

             International Comparable Company-Operated Properties (1,2)
    --------------------------------------------------------------------------
                                       Four Months Ended December 31, 2003
                                              and December 31, 2002
                             -------------------------------------------------
                                                                 Average Daily
                               REVPAR            Occupancy           Rate
                               ------            ---------       -------------
    Brand                   2003   vs. 2002  2003   vs. 2002    2003  vs. 2002
    --------------------------------------------------------------------------
    Caribbean & Latin
     America              $78.06       8.2%  63.8%   4.0% pts. $122.41    1.5%
    Continental Europe    $87.09      -0.6%  71.5%   3.0% pts. $121.77   -4.7%
    United Kingdom       $128.11       5.1%  82.9%   4.5% pts. $154.46   -0.6%
    Middle East & Africa  $53.82      34.5%  72.5%   5.8% pts.  $74.25   23.8%
    Asia Pacific(4)       $69.92       1.2%  75.5%  -0.4% pts.  $92.59    1.7%

    Total International
     (5)                  $80.81       4.0%  72.1%   2.3% pts. $112.09    0.7%


                International Comparable Systemwide Properties (1,2)
    --------------------------------------------------------------------------
                                      Four Months Ended December 31, 2003
                                              and December 31, 2002
                              ------------------------------------------------
                                                               Average Daily
                               REVPAR            Occupancy           Rate
                               ------            ---------       -------------
    Brand                   2003   vs. 2002  2003   vs. 2002    2003  vs. 2002
    --------------------------------------------------------------------------
    Caribbean & Latin
     America              $73.04       8.2%  62.8%   4.4% pts. $116.29    0.6%
    Continental Europe    $85.56       1.3%  69.8%   3.6% pts. $122.60   -3.8%
    United Kingdom       $101.01      -1.6%  78.1%   1.1% pts. $129.28   -2.9%
    Middle East & Africa  $50.38      26.5%  67.6%   2.3% pts.  $74.56   22.2%
    Asia Pacific(4)       $77.66       3.8%  76.8%   0.6% pts. $101.16    3.0%

    Total International
     (5)                  $83.15       3.4%  72.2%   2.2% pts. $115.09    0.3%



             International Comparable Company-Operated Properties (1,3)
    --------------------------------------------------------------------------
                                     Twelve Months Ended December 31, 2003
                                              and December 31, 2002
                            --------------------------------------------------
                                                                Average Daily
                               REVPAR            Occupancy           Rate
                               ------            ---------       -------------
    Brand                   2003   vs. 2002  2003   vs. 2002    2003  vs. 2002
    --------------------------------------------------------------------------
    Caribbean & Latin
     America              $85.32       9.5%  67.5%   4.2% pts. $126.45    2.7%
    Continental Europe    $79.92      -4.9%  67.9%   0.3% pts. $117.79   -5.4%
    United Kingdom       $113.48      -2.4%  76.6%  -0.7% pts. $148.14   -1.5%
    Middle East & Africa  $47.49      15.7%  66.5%   0.4% pts.  $71.39   14.9%
    Asia Pacific(4)       $55.86     -10.5%  65.5%  -6.7% pts.  $85.25   -1.4%

    Total International
     (5)                  $74.14      -1.8%  67.6%  -1.3% pts. $109.62    0.1%



                International Comparable Systemwide Properties (1,3)
    --------------------------------------------------------------------------
                                       Twelve Months Ended December 31, 2003
                                                 and December 31, 2002
                              ------------------------------------------------
                                                                 Average Daily
                               REVPAR            Occupancy           Rate
                               ------            ---------       -------------
    Brand                   2003   vs. 2002  2003   vs. 2002    2003  vs. 2002
    --------------------------------------------------------------------------
    Caribbean & Latin
     America              $79.49       8.5%  65.3%   3.8% pts. $121.64    2.2%
    Continental Europe    $77.50      -3.5%  64.9%   0.3% pts. $119.40   -4.0%
    United Kingdom        $90.71      -4.2%  72.3%  -0.8% pts. $125.44   -3.2%
    Middle East & Africa  $46.00      15.8%  64.3%   0.6% pts.  $71.58   14.6%
    Asia Pacific(4)       $63.10      -6.8%  67.8%  -5.3% pts.  $93.13    0.5%

    Total International
     (5)                  $75.69      -1.5%  67.5%  -1.0% pts. $112.14    0.0%

    (1) International financial results are reported on a period end basis,
        while International statistics are reported on a month end basis.
    (2) Statistics are in constant dollars and include results for September
        through December.  Excludes North America.
    (3) Statistics are in constant dollars and include results for January
        through December.  Excludes North America.
    (4) Excludes Hawaii.
    (5) Includes Hawaii.


                          MARRIOTT INTERNATIONAL, INC.

                            Total Lodging Products (1)
    --------------------------------------------------------------------------
                                            Number of          Number of
                                           Properties         Rooms/Suites
                                      Jan. 2, vs. Jan. 3,  Jan. 2, vs. Jan. 3,
    Brand                               2004        2003     2004        2003
    --------------------------------  ----------------------------------------
    Full-Service Lodging
    --------------------
        Marriott Hotels & Resorts        472        +22   173,974      +8,774
        The Ritz-Carlton                  56         +5    18,347      +1,781
        Renaissance Hotels & Resorts     126         --    45,614        -185
        Ramada International             192        +46    26,150      +4,920
    Select-Service Lodging
    ----------------------
        Courtyard                        616        +29    88,214      +3,858
        Fairfield Inn                    524        +21    50,206      +1,992
        SpringHill Suites                110        +12    12,682      +1,473
    Extended-Stay Lodging
    ---------------------
        Residence Inn                    449        +21    53,314      +2,741
        TownePlace Suites                111         +7    11,381        +677
        Marriott Executive Apartments     13         +2     2,322        +315
    Timeshare
    ---------
        Marriott Vacation Club
         International                    41         -4     7,622        +649
        Horizons by Marriott Vacation
         Club International                2         --       256        +110
        The Ritz-Carlton Club              4         --       234         +30
        Marriott Grand Residence Club      2         --       248          --
                                       ----------------- ---------------------
    Total                              2,718       +161   490,564     +27,135
                                       ================= =====================

    (1) Total Lodging Products excludes the 2,978 corporate housing rental
        units.


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

We consider income from continuing operations and the effective tax rate excluding the impact of the Synthetic Fuel joint venture, to be meaningful performance indicators because they reflect that portion of our income from continuing operations and the effective tax rate that relates to our lodging business and enables investors to compare the results of our operations and effective tax rate to that of other lodging companies.

The reconciliation of the effective income tax rate from continuing operations to the effective income tax rate from continuing operations, excluding the impact of our Synthetic Fuel business is as follows:


                           Fourth Quarter YTD 2003

                                             Continuing Operations
                                   -------------------------------------------
                                   Income from
                                    Continuing   Synthetic Fuel   Excluding
                                    Operations        Impact    Synthetic Fuel
                                   ------------  -------------- --------------
    Pre tax income (loss)              $488           $(94)          $582

      Tax Benefit/(Provision)          (168)            34           (202)
      Tax Credits                       211            211             --
                                   ------------  -------------- --------------
     Total Tax Benefit/(Provision)       43            245           (202)
                                   ------------  -------------- --------------
    Income from Continuing
     Operations before Minority
      Interest                          531            151            380

    Minority Interest                  (55)            (55)            --

    Income from Continuing
     Operations                       $476            $ 96           $380
                                   ============  ============== ==============
    Diluted Shares                   245.4           245.4          245.4

    Earnings per Share - Diluted     $1.94           $0.39          $1.55

    Tax Rate                          -8.8%                          34.6%


                           Fourth Quarter YTD 2002

                                             Continuing Operations
                                   -------------------------------------------
                                   Income from
                                    Continuing   Synthetic Fuel   Excluding
                                    Operations        Impact    Synthetic Fuel
                                   ------------  -------------- --------------
    Pre tax income (loss)              $471          $(134)          $605

      Tax Benefit/(Provision)         (191)             49           (240)
      Tax Credits                      159             159             --
                                   ------------  -------------- --------------
    Total Tax Benefit/(Provision)      (32)            208           (240)
                                   ------------  -------------- --------------
    Income from Continuing
     Operations before Minority
      Interest                         439              74            365

    Minority Interest                   --              --             --
                                   ------------  -------------- --------------
    Income from Continuing
     Operations                       $439            $ 74           $365
                                   ============  ============== ==============
    Diluted Shares                   254.6           254.6          254.6

    Earnings per Share - Diluted     $1.74           $0.29          $1.45

    Tax Rate                           6.8%                          39.6%


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

We consider income from continuing operations and the effective tax rate excluding the impact of the Synthetic Fuel joint venture, to be meaningful performance indicators because they reflect that portion of our income from continuing operations and the effective tax rate that relates to our lodging business and enables investors to compare the results of our operations and effective tax rate to that of other lodging companies.

The reconciliation of the effective income tax rate from continuing operations to the effective income tax rate from continuing operations, excluding the impact of our Synthetic Fuel business is as follows:


                             Fourth Quarter 2003

                                                 Continuing Operations
                                   -------------------------------------------
                                   Income from
                                    Continuing   Synthetic Fuel   Excluding
                                    Operations        Impact    Synthetic Fuel
                                   ------------  -------------- --------------

    Pre tax income (loss)              $225            $ 10          $215

      Tax Benefit/(Provision)           (78)             (3)          (75)
      Tax Credits                        49              49            --
                                   ------------  -------------- --------------
    Total Tax Benefit/(Provision)       (29)             46           (75)
                                   ------------  -------------- --------------
    Income from Continuing
     Operations before Minority
      Interest                          196              56           140

    Minority Interest                   (26)            (26)           --
                                   ------------  -------------- --------------
    Income from Continuing
     Operations                        $170            $ 30          $140
                                   ============  ============== ==============
    Diluted Shares                    245.8           245.8         245.8

    Earnings per Share - Diluted      $0.69           $0.12         $0.57

    Tax Rate                          12.9%                          34.5%


                             Fourth Quarter 2002

                                                 Continuing Operations
                                   -------------------------------------------
                                   Income from
                                    Continuing   Synthetic Fuel   Excluding
                                    Operations        Impact    Synthetic Fuel
                                   ------------  -------------- --------------

    Pre tax income (loss)              $108           $(53)          $161

      Tax Benefit/(Provision)           (60)            21            (81)
      Tax Credits                        68             68             --
                                   ------------  -------------- --------------
    Total Tax Benefit/(Provision)         8             89            (81)
                                   ------------  -------------- --------------
    Income from Continuing
     Operations before Minority
      Interest                          116             36             80

    Minority Interest                    --             --             --
                                   ------------  -------------- --------------
    Income from Continuing
     Operations                        $116           $ 36           $ 80
                                   ============  ============== ==============
    Diluted Shares                    247.3          247.3          247.3

    Earnings per Share - Diluted      $0.47          $0.14          $0.33

    Tax Rate                           -7.4%                         49.7%


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

We consider lodging operating income to be a meaningful indicator of our performance because it measures our growth in profitability as a lodging company and enables investors to compare the operating income related to our lodging segments to the operating income of other lodging companies.

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

                                                            Fiscal Year
                                                       ---------------------
                                                        2003           2002
                                                       ----------   --------
    Operating Income                                    $377           $321

      Less: Synthetic Fuel Operating Loss                104            134
                                                       ----------   --------
    Lodging Operating Income                            $481           $455
                                                       ==========   ========

                                                           Fourth Quarter
                                                       ---------------------
                                                        2003           2002
                                                       ----------   --------
    Operating Income                                    $161            $37

      Less: Synthetic Fuel Operating Loss                 --             53
                                                       ----------   --------
    Lodging Operating Income                            $161            $90
                                                       ==========   ========

                                    IRPR#1

SOURCE Marriott International, Inc.

Tom Marder of Marriott International, Inc., +1-301-380-2553,
thomas.marder@marriott.com
/Company News On-Call:  http://www.prnewswire.com/comp/532963.html
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