Marriott International Reports Second Quarter Results

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Jul 16, 2009

Marriott International Reports Second Quarter Results

BETHESDA, Md., July 16, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Marriott International, Inc. ("Marriott") (NYSE: MAR) today reported second quarter 2009 adjusted income from continuing operations attributable to Marriott of $84 million, a 56 percent decline over the year-ago quarter, and adjusted diluted earnings per share ("EPS") from continuing operations attributable to Marriott shareholders of $0.23, down 55 percent. The company's EPS guidance for the 2009 second quarter, disclosed on April 23, 2009, totaled $0.20 to $0.23.

(Logo: http://www.newscom.com/cgi-bin/prnh/20090217/MARRIOTTINTLLOGO )

The reported income from continuing operations attributable to Marriott was $37 million in the second quarter of 2009 compared to reported income from continuing operations attributable to Marriott of $153 million in the year-ago quarter. Reported diluted EPS from continuing operations attributable to Marriott shareholders was $0.10 in the second quarter of 2009 compared to diluted EPS from continuing operations attributable to Marriott shareholders of $0.41 in the second quarter of 2008.

Adjusted results for the 2009 second quarter exclude $57 million pretax ($30 million after-tax and $0.08 per diluted share) of restructuring costs and other charges resulting from the continued soft lodging and timeshare demand environment. Restructuring costs totaled $33 million pretax and primarily included severance costs and timeshare facilities exit costs. Other charges totaled $24 million pretax primarily reflecting revaluation of residual interests from prior timeshare note sales, reserves for loan losses and guarantees and other charges. Of the total restructuring costs and other charges, cash payments are expected to be $31 million. See the table on page A-13 of the accompanying schedules for the detail of these restructuring costs and other charges and their placement on the Consolidated Statements of Income.

Adjusted results for the 2009 second quarter also exclude $17 million of non-cash charges ($0.05 per diluted share) in the provision for income taxes primarily related to the treatment of funds received from certain foreign subsidiaries that is in ongoing discussions with the Internal Revenue Service ("IRS").

Adjusted results for the 2008 second quarter exclude the $36 million ($0.10 per diluted share) impact of non-cash items included in the tax provision. These prior year items included a $24 million tax reserve related to the treatment of funds received from certain foreign subsidiaries with the remaining $12 million expense due primarily to prior years' tax adjustments, including a settlement with the IRS associated with a 1995 leasing transaction.

J.W. Marriott, Jr., chairman and chief executive officer of Marriott International, said, "In the midst of a continued difficult environment for the travel and tourism industry, our company retains its focus on driving revenue, reducing costs and strengthening the balance sheet.

"In the second quarter, we delivered impressive house profit margins as a result of ongoing cost controls and operational improvements, despite a significant decline in revenue per available room. Our efficient delivery of high quality products and services continues to get solid reviews from owners and franchisees as we manage through the difficult economy. Our 110,000-room global hotel development pipeline demonstrates owners' and franchisees' ongoing confidence in our brands and management expertise.

"Across the enterprise our lodging brands continue to show significant REVPAR premiums as our teams launch quick-to-market and focused revenue generation initiatives. Our timeshare business rolled out a successful 25(th) Anniversary stimulus promotion in the second quarter, which significantly improved timeshare contract sales compared to first quarter levels, while significant cost reductions helped the bottom line. We expect timeshare to deliver positive cash flow in 2009.

"Most importantly, both customer and associate satisfaction levels remain high in both our lodging and timeshare businesses. As a result, we remain confident in the long term prospects for our company."

In the 2009 second quarter (12-week period from March 28, 2009 to June 19, 2009), REVPAR for the company's worldwide comparable company-operated properties declined 26.1 percent (23.0 percent using constant dollars) and REVPAR for the company's worldwide comparable systemwide properties declined 23.6 percent (21.4 percent using constant dollars).

Markets outside North America were impacted by the difficult economic climate as well as concerns about the H1N1 flu. International comparable company-operated REVPAR declined 31.5 percent (22.1 percent using constant dollars), including a 22.3 percent decline in average daily rate (11.6 percent using constant dollars) in the second quarter of 2009.

In North America comparable company-operated REVPAR declined 23.4 percent and comparable systemwide REVPAR declined 21.2 percent. REVPAR at the company's comparable company-operated North American full-service and luxury hotels (including Marriott Hotels & Resorts, The Ritz-Carlton and Renaissance Hotels & Resorts) was down 23.5 percent driven by a 14.7 percent decline in average daily rate.

Marriott added 62 new properties (8,462 rooms) to its worldwide lodging portfolio in the 2009 second quarter, including the 118-room Renaissance Paris Arc de Triomphe. Three properties (861 rooms) exited the system during the quarter. At quarter-end, the company's lodging group encompassed 3,286 properties and timeshare resorts for a total of nearly 577,000 rooms. As of the end of the second quarter, the company's worldwide pipeline of hotels under construction, awaiting conversion or approved for development totaled over 110,000 rooms.

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

MARRIOTT REVENUES totaled approximately $2.6 billion in the 2009 second quarter compared to $3.2 billion for the second quarter of 2008. Base management and franchise fees declined 19 percent to $219 million reflecting worldwide declines in REVPAR in all brands offset in part by fees from new hotels. With continued soft lodging demand trends worldwide, second quarter incentive management fees declined 66 percent. The percentage of company-operated hotels earning incentive management fees declined to 23 percent in the 2009 second quarter compared to 58 percent in the year-ago quarter. Sixty-one percent of incentive management fees came from hotels outside of North America in the 2009 quarter compared to 37 percent in the 2008 quarter.

Worldwide comparable company-operated house profit margins declined 450 basis points in the second quarter reflecting weak REVPAR offset by continued efficiency improvements at the property level. House profit margins for comparable company-operated properties outside North America declined 310 basis points. North American comparable company-operated house profit margins declined 530 basis points from the year-ago quarter.

Owned, leased, corporate housing and other revenue, net of direct expenses, declined 54 percent in the 2009 second quarter, to $21 million, primarily reflecting weaker operating results at owned and leased properties, lower termination fees, and the impact of four hotels converting to management agreements during the second quarter of 2008, partially offset by higher branding fees.

Second quarter adjusted Timeshare segment contract sales declined 37 percent to $212 million excluding the $3 million allowance for fractional and residential contract cancellations recorded in the quarter. While demand remains soft, particularly in fractional and residential products, Marriott Vacation Club's 25(th) Anniversary marketing program was successful. Second quarter 2009 adjusted contract sales were $55 million higher than adjusted first quarter 2009 levels.

In the second quarter of 2009, adjusted Timeshare sales and services revenue declined 24 percent to $295 million and, net of expenses, declined to $16 million from $77 million in the 2008 second quarter. Adjusted results reflected lower development profit due to continued soft demand for timeshare, fractional, and residential products and an $8 million charge related to an issue with a state tax authority. Financing profit declined largely as a result of the absence of a note sale in the second quarter of 2009, compared to a $29 million note sale gain recognized in the second quarter of 2008.

Adjusted Timeshare segment results, which includes Timeshare sales and services revenue, net of direct expenses, as well as base management fees, equity earnings, noncontrolling interest and general, administrative and other expenses associated with the timeshare business, totaled $15 million in the 2009 second quarter compared to $70 million in the prior year quarter.

ADJUSTED GENERAL, ADMINISTRATIVE AND OTHER expenses for the 2009 second quarter totaled $136 million, a 26 percent decline from the year-ago quarter reflecting cost reductions throughout the organization as well as an $8 million reversal of incentive compensation accruals.

GAINS AND OTHER INCOME totaled $3 million largely related to gains on the sale of real estate. The prior year's second quarter gains totaled $9 million and included $5 million of gains on the sale of real estate, a $1 million gain from the sale of the company's interest in a joint venture and $3 million of returns from joint venture investments.

INTEREST EXPENSE decreased $10 million in the second quarter primarily due to lower interest rates on short-term borrowings and lower debt balances.

BALANCE SHEET

At the end of second quarter 2009, total debt was $2,849 million and cash balances totaled $125 million, compared to $3,095 million in debt and $134 million of cash at year-end 2008. As of the end of the second quarter 2009, Marriott had unused capacity of approximately $1.4 billion under its $2.4 billion bank revolver.

COMMON STOCK

Weighted average fully diluted shares outstanding totaled 363.5 million in the 2009 second quarter compared to 371.3 million in the year-ago quarter. The remaining share repurchase authorization, as of June 19, 2009, totaled 21.3 million shares. No share repurchases are planned in 2009.

On May 1, 2009, the Board of Directors declared the issuance of a stock dividend payable on July 30, 2009, to shareholders of record on June 25, 2009. For periods prior to the stock dividend, all share and per share data in our condensed consolidated financial statements and related notes have been retroactively adjusted to reflect the stock dividend.

OUTLOOK

While Marriott typically provides a range of guidance for future performance, the current global economic and financial climate continues to make predictions very difficult. Therefore, the company is unable to give its typical guidance. Instead, the company is providing the following assumptions which it is using for internal planning purposes. For the third quarter, the company assumes North American comparable systemwide hotel REVPAR declines of 20 to 23 percent. For comparable systemwide hotels outside North America, the company assumes REVPAR declines of 22 to 24 percent on a constant dollar basis. Total fee revenue could total $210 million to $220 million, including incentive fees of only $0 to $10 million. Owned, leased, corporate housing and other revenue, net of direct expenses, could total $0 to $5 million.

In the third quarter, the company assumes Timeshare sales and services revenue, net of direct expenses, totals about $15 million. Third quarter Timeshare contract sales could total $165 million to $175 million.

The company anticipates that general, administrative and other expenses will total about $135 million to $145 million in the third quarter of 2009, a roughly 15 percent decline from the 2008 third quarter.

Based upon the above assumptions and a 39 percent tax rate, adjusted diluted EPS from continuing operations attributable to Marriott shareholders for the 2009 third quarter could total $0.09 to $0.14.

For the full year 2009, the company expects the business climate, particularly the pricing environment, to remain very unpredictable. In addition, booking windows remain very short. For comparable systemwide hotels in North America, the company continues to assume a 17 to 20 percent decline in REVPAR for full year 2009. With continued concerns regarding the H1N1 virus and weakening economies in most international markets, the company assumes full year 2009 REVPAR declines of 17 to 20 percent for comparable systemwide hotels outside North America on a constant dollar basis.

The company expects to open over 30,000 rooms in 2009 as most hotels expected to open are already under construction or undergoing conversion from other brands. All in all, fee revenue under these assumptions could total roughly $1,030 million to $1,060 million in 2009. The company estimates that incentive management fees in 2009 would derive largely from international markets. Owned, leased, corporate housing and other revenue, net of direct expenses, could total $55 million to $60 million in 2009. The company estimates that, on a full-year basis, one point of worldwide systemwide REVPAR impacts total fees by approximately $15 million to $20 million and one point of REVPAR impacts owned, leased, corporate housing and other revenue, net of direct expenses, by roughly $4 million.

Similar to lodging, timeshare demand is difficult to predict and the business is more complex to forecast and model, particularly in this weak economic environment. In 2009, if adjusted Timeshare segment contract sales total roughly $800 million, then adjusted Timeshare sales and services revenue, net of direct expenses, could total approximately $45 million. Base management fees associated with the timeshare business are likely to increase and timeshare site, regional and corporate overhead is likely to decline in 2009. In contrast, rental rates remain weak and maintenance fees on unsold units are likely to increase. While the company expects to complete an additional timeshare note sale in 2009, pricing is likely to remain unfavorable, so no note sale gain is assumed. Under this scenario, adjusted Timeshare segment results for 2009 could total approximately $25 million. The company estimates that a $50 million change in Timeshare segment contract sales could impact Timeshare segment pretax earnings by $5 million to $10 million.

The company anticipates that adjusted general, administrative and other expenses will decline from $751 million in 2008 to about $585 million to $605 million in 2009. Further, the company anticipates a 39 percent tax rate for the second half of the year.

While the company cannot forecast results with any certainty, based upon the above assumptions, adjusted diluted EPS from continuing operations attributable to Marriott shareholders for 2009 could total $0.76 to $0.86. Assuming the investment spending levels shown below, debt levels, net of cash, are expected to decline $600 million to $650 million during 2009.

The company expects investment spending in 2009 will decline by more than 50 percent from 2008 levels to approximately $325 million to $375 million. This investment spending estimate includes $145 million to $155 million for capital expenditures and maintenance capital spending, $25 million to $35 million for net timeshare development, $80 million to $90 million in new mezzanine financing and mortgage loans, $35 million to $45 million for contract acquisition costs and $40 million to $50 million in equity and other investments (including timeshare equity investments).

Marriott International, Inc. (NYSE: MAR) will conduct its quarterly earnings review for the investment community and news media on Thursday, July 16, 2009 at 10 a.m. Eastern Time (ET). The conference call will be webcast simultaneously via Marriott's investor relations website at http://www.marriott.com/investor, click the "Recent and Upcoming Events" tab and click on the quarterly conference call link. A replay will be available at that same website until July 16, 2010. The webcast will also be available as a podcast from the same site.

The telephone dial-in number for the conference call is 719-325-4805. A telephone replay of the conference call will be available from 1 p.m. ET, Thursday, July 16, 2009 until 8 p.m. ET, Thursday, July 23, 2009. To access the replay, call 719-457-0820. The reservation number for the recording is 8493117.

Note: This press release and accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including REVPAR, profit margin and earnings trends, estimates and assumptions; statements concerning the number of lodging properties we expect to add in the future; our expected cost savings, investment spending and share repurchases; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including the depth and duration of the current recession; supply and demand changes for hotel rooms, vacation ownership, condominiums, and corporate housing; competitive conditions in the lodging industry; relationships with clients and property owners; the availability of capital to finance hotel growth and refurbishment; and other risk factors identified in our most recent quarterly report on Form 10-Q; any of which could cause actual results to differ materially from those expressed in or implied by the statements herein. These statements are made as of the date of this press release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

MARRIOTT INTERNATIONAL, INC. (NYSE: MAR) is a leading lodging company with more than 3,200 lodging properties in 66 countries and territories. Marriott International operates and franchises hotels under the Marriott, JW Marriott, The Ritz-Carlton, Renaissance, Residence Inn, Courtyard, TownePlace Suites, Fairfield Inn, SpringHill Suites and Bulgari brand names; develops and operates vacation ownership resorts under the Marriott Vacation Club, The Ritz-Carlton Destination Club and Grand Residences by Marriott brands; operates Marriott Executive Apartments; provides furnished corporate housing through its Marriott ExecuStay division; and operates conference centers. The company is headquartered in Bethesda, Maryland, USA and had approximately 146,000 employees at 2008 year-end. It is recognized by BusinessWeek as one of the 100 best global brands, by FORTUNE(R) as one of the best companies to work for, and by the U.S. Environmental Protection Agency (EPA) as Partner of the Year since 2004. In fiscal year 2008, Marriott International reported sales from continuing operations of nearly $13 billion. For more information or reservations, please visit our web site at www.marriott.com. For an interactive online version of Marriott's 2008 Annual Report, which includes a short video message from Chairman and CEO J.W. Marriott, Jr., visit www.marriott.com/investor.

IRPR#1

Tables follow

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

                                           Adjustments
                           ------------------------------------------------
                                                                     As
                                                                  Adjusted
                            As Reported   Restructuring            12 Weeks
                              12 Weeks         Costs      Certain   Ended
                               Ended         & Other        Tax   June 19,
                           June 19, 2009     Charges(5)    Items    2009**
                           -------------  --------------  ------- ---------


    REVENUES
    Base management
     fees                        $126              $-       $-      $126
    Franchise fees                 93               -        -        93
    Incentive
     management fees               35               -        -        35
    Owned, leased,
     corporate
     housing and
     other revenue (1)            238               -        -       238
    Timeshare sales
     and services (2)             283              12        -       295
    Cost
     reimbursements (3)         1,787               -        -     1,787
                                -----             ---      ---     -----
       Total Revenues           2,562              12        -     2,574

    OPERATING COSTS
     AND EXPENSES
    Owned, leased
     and corporate
     housing - direct (4)         217               -        -       217
    Timeshare - direct            279               -        -       279
    Reimbursed costs            1,787               -        -     1,787
    Restructuring costs            33             (33)       -         -
    General,
     administrative and
     other (6)                    146             (10)       -       136
                                  ---             ---      ---       ---
       Total Expenses           2,462             (43)       -     2,419
                                -----             ---      ---     -----

    OPERATING INCOME              100              55        -       155

    Gains and
     other income (7)               3               -        -         3
    Interest expense              (28)              -        -       (28)
    Interest income                 9               -        -         9
    (Provision for)
     reversal of loan
     losses                        (1)              1        -         -
    Equity in (losses)
     earnings (8)                  (4)              1        -        (3)
                                   --             ---      ---        --

    INCOME FROM CONTINUING
     OPERATIONS BEFORE
     INCOME TAXES                  79              57        -       136

    Provision for
     income taxes                 (44)            (27)      17       (54)
                                  ---             ---       --       ---

    INCOME FROM
     CONTINUING OPERATIONS         35              30       17        82

    Discontinued operations -
     Synthetic Fuel, net of
     tax (9)                        -               -        -         -
                                  ---             ---      ---       ---

    NET INCOME                     35              30       17        82

    Add: Net losses
     attributable to
     noncontrolling
     interests, net of tax          2               -        -         2
                                  ---             ---      ---       ---

    NET INCOME
     ATTRIBUTABLE TO
     MARRIOTT                     $37             $30      $17       $84
                                  ===             ===      ===       ===

    EARNINGS PER
     SHARE - Basic
       Earnings from
        continuing
        operations
        attributable to
        Marriott
        shareholders (10)       $0.10           $0.08    $0.05     $0.24
       Earnings from
        discontinued
        operations (9)              -               -        -         -
                                  ---             ---      ---       ---
       Earnings per
        share
        attributable to
        Marriott
        shareholders (10)       $0.10           $0.08    $0.05     $0.24
                                =====           =====    =====     =====

    EARNINGS PER
     SHARE - Diluted
       Earnings from
        continuing
        operations
        attributable to
        Marriott
        shareholders (10)       $0.10           $0.08    $0.05     $0.23
       Earnings from
        discontinued
        operations (9)              -               -        -         -
                                  ---             ---      ---       ---
       Earnings per
        share
        attributable to
        Marriott
        shareholders (10)       $0.10           $0.08    $0.05     $0.23
                                =====           =====    =====     =====


    Basic Shares (11)           353.7           353.7    353.7     353.7
    Diluted Shares (11)         363.5           363.5    363.5     363.5

    Reconciliation of
     Income from
     Continuing
     Operations
     Attributable to
     Marriott:
    -----------------

    CONSOLIDATED
     INCOME FROM
     CONTINUING
     OPERATIONS                   $35             $30      $17       $82
    Add: Losses
     attributable to
     noncontrolling
     interests, net of tax          2               -        -         2
                                  ---             ---      ---       ---
    INCOME FROM
     CONTINUING
     OPERATIONS
     ATTRIBUTABLE
     TO MARRIOTT                  $37             $30      $17       $84
                                  ===             ===      ===       ===



                                              Adjustments
                                 ------------------------------------------
                                                                  Percent
                                   As                             Better/
                                 Reported             As          (Worse)
                                   12               Adjusted      Adjusted
                                  Weeks             12 Weeks        2009
                                  Ended     Certain   Ended          vs.
                                 June 13,     Tax   June 13,       Adjusted
                                   2008      Items    2008**         2008
                                 ---------  ------- ---------     ---------


    REVENUES
    Base management fees            $161       $-      $161          (22)
    Franchise fees                   110        -       110          (15)
    Incentive management
     fees                            103        -       103          (66)
    Owned, leased,
     corporate
     housing and
     other revenue (1)               319        -       319          (25)
    Timeshare
     sales and
     services (2)                    388        -       388          (24)
    Cost
     reimbursements (3)            2,104        -     2,104          (15)
                                   -----      ---     -----
       Total
        Revenues                   3,185        -     3,185          (19)

    OPERATING COSTS AND
     EXPENSES
    Owned, leased
     and corporate
     housing - direct (4)            273        -       273           21
    Timeshare - direct               311        -       311           10
    Reimbursed costs               2,104        -     2,104           15
    Restructuring costs                -        -         -            *
    General, administrative
     and other (6)                   184        -       184           26
                                     ---      ---       ---
       Total Expenses              2,872        -     2,872           16
                                   -----      ---     -----

    OPERATING INCOME                 313        -       313          (50)

    Gains and
     other income (7)                  9        -         9          (67)
    Interest expense                 (38)       -       (38)          26
    Interest income                    9        -         9            -
    (Provision
     for) reversal
     of loan losses                    -        -         -            *
    Equity in
     (losses)
     earnings (8)                     (3)       -        (3)           -
                                     ---      ---       ---

    INCOME FROM CONTINUING
     OPERATIONS BEFORE INCOME
     TAXES                           290        -       290          (53)

    Provision for income taxes      (139)      36      (103)          48
                                    ----      ---      ----

    INCOME FROM
     CONTINUING OPERATIONS           151       36       187          (56)

    Discontinued
     operations -
     Synthetic
     Fuel, net of
     tax (9)                           4        -         4         (100)
                                     ---      ---       ---

    NET INCOME                       155       36       191          (57)

    Add: Net losses
     attributable to
     noncontrolling
     interests, net
     of tax                            2        -         2            -
                                     ---      ---       ---

    NET INCOME
     ATTRIBUTABLE
     TO MARRIOTT                    $157      $36      $193          (56)
                                    ====      ===      ====

    EARNINGS PER
     SHARE -
     Basic
       Earnings from
        continuing
        operations
        attributable
        to Marriott
        shareholders
        (10)                       $0.43    $0.10     $0.53          (55)
       Earnings from
        discontinued
        operations (9)              0.01        -      0.01         (100)
                                    ----      ---      ----
       Earnings per
        share
        attributable
        to Marriott
        shareholders
        (10)                       $0.44    $0.10     $0.54          (56)
                                   =====    =====     =====

    EARNINGS PER
     SHARE - Diluted
       Earnings from
        continuing
        operations
        attributable
        to Marriott
        shareholders
        (10)                       $0.41    $0.10     $0.51          (55)
       Earnings from
        discontinued
        operations (9)              0.01        -      0.01         (100)
                                    ----      ---      ----
       Earnings per
        share
        attributable
        to Marriott
        shareholders
        (10)                       $0.42    $0.10     $0.52          (56)
                                   =====    =====     =====


    Basic Shares (11)              354.8    354.8     354.8
    Diluted Shares (11)            371.3    371.3     371.3

    Reconciliation of
     Income from
     Continuing
     Operations
     Attributable to
     Marriott:
    -----------------

    CONSOLIDATED
     INCOME FROM
     CONTINUING
     OPERATIONS                     $151      $36      $187          (56)
    Add: Losses
     attributable to
     noncontrolling
     interests, net of
     tax                               2        -         2            -
                                     ---      ---       ---
    INCOME FROM
     CONTINUING
     OPERATIONS
     ATTRIBUTABLE
     TO MARRIOTT                    $153      $36      $189          (56)
                                    ====      ===      ====

    *   Percent can not be calculated.
    **  Denotes non-GAAP financial measures.  Please see page A-17 for
        additional information about our reasons for providing these
        alternative financial measures and the limitations on their use.

    (1)  - Owned, leased, corporate housing and other revenue includes
           revenue from the properties we own or lease, revenue from our
           corporate housing business, termination fees and other revenue.
    (2)  - Timeshare sales and services includes total timeshare revenue
           except for base management fees, cost reimbursements, real estate
           gains and joint venture earnings.  Timeshare sales and services
           also includes gains / (losses) on the sale of timeshare note
           receivable securitizations.
    (3)  - Cost reimbursements include reimbursements from lodging
           properties for Marriott-funded operating expenses.
    (4)  - Owned, leased and corporate housing - direct expenses include
           operating expenses related to our owned or leased hotels,
           including lease payments, pre-opening expenses and depreciation,
           plus expenses related to our corporate housing business.
    (5)  - See page A-13 for information regarding Restructuring Costs
           and Other Charges.
    (6)  - General, administrative and other expenses include the
           overhead costs allocated to our segments, and our corporate
           overhead costs and general expenses.
    (7)  - Gains and other income includes gains and losses on the sale
           of real estate, gains on note sales or repayments (except
           timeshare note securitizations gains), sale of joint ventures,
           gains on debt extinguishment and income from cost method joint
           ventures.
    (8)  - Equity in (losses) earnings includes our equity in (losses) /
           earnings of unconsolidated equity method joint ventures.
    (9)  - Discontinued operations relates to our Synthetic Fuel business
           which was shut down and substantially all the assets liquidated at
           December 28, 2007.
    (10) - 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.
    (11) - All share numbers and per share amounts have been
           retroactively adjusted to reflect the stock dividend that will be
           distributed on July 30, 2009.

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

                                                 Adjustments
                                ---------------------------------------------
                                   As                                  As
                                 Reported                           Adjusted
                                24 Weeks   Restructuring            24 Weeks
                                  Ended         Costs      Certain   Ended
                                June 19,      & Other        Tax     June 19,
                                   2009       Charges (5)   Items     2009**
                                ---------  --------------  -------  ---------


    REVENUES
    Base management fees             $251              $-       $-      $251
    Franchise fees                    181               -        -       181
    Incentive management fees          78               -        -        78
    Owned, leased, corporate
     housing and other revenue (1)    458               -        -       458
    Timeshare sales and
     services (2)                     492              29        -       521
    Cost reimbursements (3)         3,597               -        -     3,597
                                    -----             ---      ---     -----
       Total Revenues               5,057              29        -     5,086

    OPERATING COSTS AND
     EXPENSES
    Owned, leased and
     corporate housing -
     direct (4)                       424               -        -       424
    Timeshare - direct                499               1        -       500
    Reimbursed costs                3,597               -        -     3,597
    Restructuring costs                35             (35)       -         -
    General, administrative and
     other (6)                        320             (48)       -       272
                                      ---             ---      ---       ---
       Total Expenses               4,875             (82)       -     4,793
                                    -----             ---      ---     -----

    OPERATING INCOME                  182             111        -       293

    Gains and other income (7)         28               -        -        28
    Interest expense                  (57)              -        -       (57)
    Interest income                    15               -        -        15
    (Provision for) reversal of
     loan losses                      (43)             43        -         -
    Equity in (losses)
     earnings  (8)                    (38)             32        -        (6)
                                      ---             ---      ---       ---

    INCOME FROM CONTINUING
     OPERATIONS BEFORE INCOME
     TAXES                             87             186        -       273

    Provision for income taxes        (77)            (72)      43      (106)
                                      ---             ---       --      ----

    INCOME FROM CONTINUING
     OPERATIONS                        10             114       43       167

    Discontinued operations -
     Synthetic Fuel, net of tax
     (9)                                -               -        -         -
                                      ---             ---      ---       ---

    NET INCOME                         10             114       43       167

    Add: Net losses
     attributable to
     noncontrolling interests,
     net of tax                         4               -        -         4
                                      ---             ---      ---       ---

    NET INCOME ATTRIBUTABLE TO
     MARRIOTT                         $14            $114      $43      $171
                                      ===            ====      ===      ====

    EARNINGS PER SHARE - Basic
       Earnings from
        continuing operations
        attributable to
        Marriott shareholders
        (10)                        $0.04           $0.32    $0.12     $0.48
       Earnings from
        discontinued
        operations (9)                  -               -        -         -
                                      ---             ---      ---       ---
       Earnings per share
        attributable to
        Marriott
        shareholders (10)           $0.04           $0.32    $0.12     $0.48
                                    =====           =====    =====     =====

    EARNINGS PER SHARE -
     Diluted
       Earnings from
        continuing operations
        attributable to
        Marriott shareholders (10)  $0.04           $0.31    $0.12     $0.47
       Earnings from
        discontinued
        operations (9)                  -               -        -         -
                                      ---             ---      ---       ---
       Earnings per share
        attributable to
        Marriott
        shareholders (10)           $0.04           $0.31    $0.12     $0.47
                                    =====           =====    =====     =====


    Basic Shares (11)               352.7           352.7    352.7     352.7
    Diluted Shares (11)             361.6           361.6    361.6     361.6

    Reconciliation of Income
     from Continuing
     Operations Attributable
     to Marriott:
    ------------------------

    CONSOLIDATED INCOME
     FROM CONTINUING
     OPERATIONS                       $10            $114      $43      $167
    Add: Losses attributable
     to noncontrolling
     interests, net of tax              4               -        -         4
                                      ---             ---      ---       ---
    INCOME FROM CONTINUING
     OPERATIONS ATTRIBUTABLE TO
     MARRIOTT                         $14            $114      $43      $171
                                      ===            ====      ===      ====



                                                  Adjustments
                                    -----------------------------------------
                                                                    Percent
                                       As                 As        Better/
                                    Reported           Adjusted     (Worse)
                                    24 Weeks           24 Weeks     Adjusted
                                      Ended    Certain   Ended      2009 vs.
                                     June 13,     Tax   June 13,    Adjusted
                                       2008     Items    2008**       2008
                                    ---------  ------- ---------    ---------


    REVENUES
    Base management fees               $309       $-      $309          (19)
    Franchise fees                      206        -       206          (12)
    Incentive management fees           177        -       177          (56)
    Owned, leased,
     corporate housing and
     other revenue (1)                  589        -       589          (22)
    Timeshare sales and
     services (2)                       714        -       714          (27)
    Cost reimbursements (3)           4,137        -     4,137          (13)
                                      -----      ---     -----
       Total Revenues                 6,132        -     6,132          (17)

    OPERATING COSTS AND EXPENSES
    Owned, leased and
     corporate housing -
     direct (4)                         517        -       517           18
    Timeshare - direct                  624        -       624           20
    Reimbursed costs                  4,137        -     4,137           13
    Restructuring costs                   -        -         -            *
    General, administrative and
     other (6)                          346        -       346           21
                                        ---      ---       ---
       Total Expenses                 5,624        -     5,624           15
                                      -----      ---     -----

    OPERATING INCOME                    508        -       508          (42)

    Gains and other income (7)           12        -        12          133
    Interest expense                    (80)       -       (80)          29
    Interest income                      20        -        20          (25)
    (Provision for)
     reversal of loan
     losses                               2        -         2         (100)
    Equity in (losses)
     earnings (8)                        24        -        24         (125)
                                        ---      ---       ---

    INCOME FROM CONTINUING
     OPERATIONS BEFORE
     INCOME TAXES                       486        -       486          (44)

    Provision for income taxes         (214)      36      (178)          40
                                       ----       --      ----

    INCOME FROM CONTINUING
     OPERATIONS                         272       36       308          (46)

    Discontinued operations -
      Synthetic Fuel, net of
       tax (9)                            3        -         3         (100)
                                        ---      ---       ---

    NET INCOME                          275       36       311          (46)

    Add: Net losses
     attributable to
     noncontrolling interests,
     net of tax                           3        -         3           33
                                        ---      ---       ---

    NET INCOME ATTRIBUTABLE TO
     MARRIOTT                          $278      $36      $314          (46)
                                       ====      ===      ====

    EARNINGS PER SHARE - Basic
       Earnings from
        continuing operations
        attributable to
        Marriott shareholders
        (10)                          $0.77    $0.10     $0.87          (45)
       Earnings from
        discontinued
        operations (9)                 0.01        -      0.01         (100)
                                       ----      ---      ----
       Earnings per share
        attributable to Marriott
        shareholders (10)             $0.78    $0.10     $0.88          (45)
                                      =====    =====     =====

    EARNINGS PER SHARE - Diluted
       Earnings from
        continuing operations
        attributable to
        Marriott shareholders (10)    $0.74    $0.10     $0.83          (43)
       Earnings from
        discontinued
        operations (9)                 0.01        -      0.01         (100)
                                       ----      ---      ----
       Earnings per share
        attributable to Marriott
        shareholders (10)             $0.75    $0.10     $0.84          (44)
                                      =====    =====     =====


    Basic Shares (11)                 355.2    355.2     355.2
    Diluted Shares (11)               372.5    372.5     372.5

    Reconciliation of Income from
     Continuing Operations
     Attributable to Marriott:
    -----------------------------

    CONSOLIDATED INCOME
     FROM CONTINUING
     OPERATIONS                        $272      $36      $308          (46)
    Add: Losses attributable to
     noncontrolling interests,
     net of tax                           3        -         3           33
                                        ---      ---       ---
    INCOME FROM CONTINUING
     OPERATIONS ATTRIBUTABLE
     TO MARRIOTT                       $275      $36      $311          (45)
                                       ====      ===      ====

    *   Percent can not be calculated.
    **  Denotes non-GAAP financial measures.  Please see page A-17 for
        additional information about our reasons for providing these
        alternative financial measures and the limitations on their use.

    (1)  - Owned, leased, corporate housing and other revenue includes revenue
           from the properties we own or lease, revenue from our corporate
           housing business, termination fees and other revenue.
    (2)  - Timeshare sales and services includes total timeshare revenue
           except for base management fees, cost reimbursements, real estate
           gains and joint venture earnings.  Timeshare sales and services
           also includes gains / (losses) on the sale of timeshare note
           receivable securitizations.
    (3)  - Cost reimbursements include reimbursements from lodging properties
           for Marriott-funded operating expenses.
    (4)  - Owned, leased and corporate housing - direct expenses include
           operating expenses related to our owned or leased hotels,
           including lease payments, pre-opening expenses and depreciation,
           plus expenses related to our corporate housing business.
    (5)  - See page A-13 for information regarding Restructuring Costs and
           Other Charges.
    (6)  - General, administrative and other expenses include the overhead
           costs allocated to our segments, and our corporate overhead costs
           and general expenses.
    (7)  - Gains and other income includes gains and losses on the sale of
           real estate, gains on note sales or repayments (except timeshare
           note securitizations gains), sale of joint ventures, gains on debt
           extinguishment and income from cost method joint ventures.
    (8)  - Equity in (losses) earnings includes our equity in (losses) /
           earnings of unconsolidated equity method joint ventures.
    (9)  - Discontinued operations relates to our Synthetic Fuel business
           which was shut down and substantially all the assets liquidated at
           December 28, 2007.
    (10) - 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.
    (11) - All share numbers and per share amounts have been retroactively
           adjusted to reflect the stock dividend that will be distributed on
           July 30, 2009.

                           MARRIOTT INTERNATIONAL, INC.
                                 BUSINESS SEGMENTS
                                  ($ IN MILLIONS)


                                                Twelve Weeks
                                                    Ended
                                              -----------------   Percent
                                              June 19, June 13,   Better/
                                                2009    2008      (Worse)
                                              -------- --------   -------

    REVENUES

    North American Full-Service               $1,142  $1,371        (17)
    North American Limited-Service               471     538        (12)
    International                                250     399        (37)
    Luxury                                       324     403        (20)
    Timeshare                                    355     461        (23)
                                                 ---     ---
      Total segment revenues (1)               2,542   3,172        (20)
    Other unallocated corporate                   20      13         54
                                                 ---     ---
      Total                                   $2,562  $3,185        (20)
                                              ======  ======


    INCOME / (LOSS) FROM CONTINUING OPERATIONS

    North American Full-Service                  $71    $129        (45)
    North American Limited-Service                72     112        (36)
    International (2)                             27      65        (58)
    Luxury                                        15      23        (35)
    Timeshare (2)                                (35)     70       (150)
                                                 ---     ---
      Total segment financial results 1          150     399        (62)
    Other unallocated corporate                  (47)    (77)        39
    Interest income, provision for loan losses
      and interest expense                       (20)    (29)        31
    Income taxes (2)                             (46)   (140)        67
                                                 ---    ----
      Total                                      $37    $153        (76)
                                                 ===    ====

    (1)  We consider segment revenues and segment financial results to be
         meaningful indicators of our performance because they
         measure changes in our profitability as a lodging company and enable
         investors to compare the revenues and results of our
         lodging operations to those of other lodging companies.

    (2)  We allocate noncontrolling interests of our consolidated
         subsidiaries to our segments.  Accordingly, we allocated $2 million
         of noncontrolling interests of our consolidated subsidiaries for the
         2009 second quarter as reflected in our income statement
         as follows: $4 million to our Timeshare segment and $(2) million to
         provision for income taxes.  For the 2008 second quarter,
         we allocated $2 million of noncontrolling interests as follows: $4
         million to our Timeshare segment, $(1) million to our International
         segment, and $(1) million to provision for income taxes.



                            MARRIOTT INTERNATIONAL, INC.
                                 BUSINESS SEGMENTS
                                  ($ IN MILLIONS)


                                                Twenty-Four
                                                 Weeks Ended
                                             -----------------   Percent
                                             June 19, June 13,   Better/
                                               2009    2008      (Worse)
                                             -------- --------   -------

    REVENUES

    North American Full-Service               $2,308  $2,678        (14)
    North American Limited-Service               912   1,026        (11)
    International                                497     751        (34)
    Luxury                                       675     790        (15)
    Timeshare                                    632     863        (27)
                                                 ---     ---
      Total segment revenues (1)               5,024   6,108        (18)
    Other unallocated corporate                   33      24         38
                                                 ---     ---
      Total                                   $5,057  $6,132        (18)
                                              ======  ======


    INCOME / (LOSS) FROM CONTINUING OPERATIONS

    North American Full-Service                 $140    $224        (38)
    North American Limited-Service               105     198        (47)
    International (2)                             64     129        (50)
    Luxury                                        (7)     49       (114)
    Timeshare (2)                                (52)     74       (170)
                                                 ---     ---
      Total segment financial results (1)        250     674        (63)
    Other unallocated corporate                  (71)   (125)        43
    Interest income, provision for loan losses
      and interest expense                       (85)    (58)       (47)
    Income taxes (2)                             (80)   (216)        63
                                                 ---    ----
      Total                                      $14    $275        (95)
                                                 ===    ====

    (1)  We consider segment revenues and segment financial results to be
         meaningful indicators of our performance because they measure
         changes in our profitability as a lodging company and enable
         investors to compare the revenues and results of our lodging
         operations to those of other lodging companies.

    (2)  We allocate noncontrolling interests of our consolidated
         subsidiaries to our segments.  Accordingly, we allocated $4 million
         of noncontrolling interests of our consolidated subsidiaries for the
         2009 second quarter year-to-date as reflected in our income
         statement as follows: $7 million to our Timeshare segment and $(3)
         million to provision for income taxes. For the 2008 second quarter
         year-to-date, we allocated noncontrolling interests of $3 million as
         follows: $6 million to our Timeshare segment, $(1) million to our
         International segment, and $(2) million to provision for income
         taxes.



                         MARRIOTT INTERNATIONAL, INC.
                          TOTAL LODGING PRODUCTS (1)



                                               Number of Properties
                                        ------------------------------------
                                         June 19,  June 13,    vs. June 13,
    Brand                                 2009      2008           2008
    -----                               --------- ---------    -------------

    Domestic Full-Service
    ---------------------
        Marriott Hotels & Resorts           349       344             5
        Renaissance Hotels & Resorts         77        76             1
    Domestic Limited-Service
    ------------------------
        Courtyard                           747       708            39
        Fairfield Inn                       589       536            53
        SpringHill Suites                   226       195            31
        Residence Inn                       567       534            33
        TownePlace Suites                   173       152            21
    International
    -------------
        Marriott Hotels & Resorts           187       179             8
        Renaissance Hotels & Resorts         67        64             3
        Courtyard                            87        77            10
        Fairfield Inn                         9         9             -
        SpringHill Suites                     1         1             -
        Residence Inn                        18        18             -
        Marriott Executive Apartments        21        19             2
    Luxury
    ------
        The Ritz-Carlton - Domestic          37        36             1
        The Ritz-Carlton - International     33        33             -
        Bulgari Hotels & Resorts              2         2             -
        The Ritz-Carlton Residential         24        21             3
        The Ritz-Carlton
         Serviced Apartments                  3         2             1
    Timeshare (2)
    -------------
        Marriott Vacation Club (3)           52        50             2
        The Ritz-Carlton
         Club -Fractional                    10         7             3
        The Ritz-Carlton
         Club -Residential                    3         3             -
        Grand Residences
         by Marriott -
         Fractional                           2         2             -
        Grand Residences
         by Marriott - Residential            2         1             1
                                            ---       ---           ---
    Sub Total Timeshare                      69        63             6
                                            ---       ---           ---

    Total                                 3,286     3,069           217
                                          =====     =====           ===



                                                Number of Rooms/Suites
                                                ----------------------
                                         June 19,      June 13,   vs. June 13
    Brand                                  2009          2008        2008
    -----                               ----------    ----------   ---------

    Domestic Full-Service
    ---------------------
        Marriott Hotels & Resorts         138,945       137,130       1,815
        Renaissance Hotels & Resorts       28,197        27,721         476
    Domestic Limited-Service
    ------------------------
        Courtyard                         104,657        98,901       5,756
        Fairfield Inn                      52,450        47,572       4,878
        SpringHill Suites                  26,044        22,718       3,326
        Residence Inn                      67,814        63,843       3,971
        TownePlace Suites                  17,359        15,195       2,164
    International
    -------------
        Marriott Hotels & Resorts          56,514        52,457       4,057
        Renaissance Hotels & Resorts       22,698        21,118       1,580
        Courtyard                          17,110        14,576       2,534
        Fairfield Inn                       1,109         1,111          (2)
        SpringHill Suites                     124           124           -
        Residence Inn                       2,604         2,611          (7)
        Marriott Executive Apartments       3,412         3,029         383
    Luxury
    ------
        The Ritz-Carlton - Domestic        11,549        11,437         112
        The Ritz-Carlton - International   10,117        10,171         (54)
        Bulgari Hotels & Resorts              117           117           -
        The Ritz-Carlton
         Residential                        2,539         2,122         417
        The Ritz-Carlton
         Serviced Apartments                  474           387          87
    Timeshare (2)
    -------------
        Marriott Vacation Club (3)         11,858        11,625         233
        The Ritz-Carlton
         Club -Fractional                     461           388          73
        The Ritz-Carlton
         Club -Residential                    150           145           5
        Grand Residences by
         Marriott -Fractional                 241           248          (7)
        Grand Residences
         by Marriott - Residential             91            65          26
                                              ---           ---         ---
    Sub Total Timeshare                    12,801        12,471         330
                                           ------        ------         ---

    Total                                 576,634       544,811      31,823
                                          =======       =======      ======



        Number of Timeshare Interval, Fractional and Residential
                                 Resorts
        --------------------------------------------------------
                                                Total       Properties in
                                             Properties (2) Active Sales (4)
                                             -------------  ---------------
    100% Company-Developed
    ----------------------
        Marriott Vacation Club (3)                 52             29
        The Ritz-Carlton Club and
         Residences                                10              8
        Grand Residences by Marriott and
         Residences                                 4              4

    Joint Ventures
    --------------
        The Ritz-Carlton Club and Residences        3              3
                                                  ---            ---

    Total                                          69             44
                                                  ===            ===


    (1)  Total Lodging Products excludes the 2,142 and 2,225 corporate
         housing rental units as of June 19, 2009 and June 13, 2008,
         respectively.
    (2)  Includes products that are in active sales as well as those that are
         sold out.  We include residential products once they possess a
         certificate of occupancy.
    (3)  Marriott Vacation Club includes Horizons by Marriott Vacation Club
         products that were previously reported separately.
    (4)  Products in active sales may not be ready for occupancy.

                              MARRIOTT INTERNATIONAL, INC.
                                 KEY LODGING STATISTICS
                                       Constant $


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

                            Three Months Ended May 31, 2009 and May 31, 2008
                              --------------------------------------------
                                    REVPAR                Occupancy
                              ------------------    ----------------------
    Region                     2009   vs. 2008       2009     vs. 2008
    ------                    ------------------    ----------------------
    Caribbean & Latin America $124.51    -23.5%      67.9%    -11.2% pts.
    Continental Europe        $102.98    -18.6%      66.6%     -5.9% pts.
    United Kingdom             $92.61    -15.2%      72.1%     -5.3% pts.
    Middle East & Africa      $100.59    -22.2%      72.8%    -12.7% pts.
    Asia Pacific (2)           $73.57    -28.9%      59.6%    -12.0% pts.

    Regional Composite (3)     $97.23    -21.2%      66.8%     -8.5% pts.

    International Luxury (4)  $188.29    -26.1%      57.5%    -11.8% pts.

    Total International (5)   $106.80    -22.1%      65.8%     -8.9% pts.

    Worldwide (6)             $100.67    -23.0%      66.9%     -8.2% pts.



                                      Three Months
                            Ended May 31, 2009 and May 31, 2008
                                    -----------------
                                    Average Daily Rate
                                    -----------------
    Region                           2009   vs. 2008
    ------                          -----------------
    Caribbean & Latin America       $183.40    -10.8%
    Continental Europe              $154.59    -11.4%
    United Kingdom                  $128.51     -9.0%
    Middle East & Africa            $138.09     -8.7%
    Asia Pacific (2)                $123.43    -14.5%

    Regional Composite (3)          $145.61    -11.1%

    International Luxury (4)        $327.22    -10.9%

    Total International (5)         $162.31    -11.6%

    Worldwide (6)                   $150.59    -13.6%



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

                             Three Months Ended May 31, 2009 and May 31, 2008
                               ------------------------------------------
                                    REVPAR               Occupancy
                               ----------------      --------------------
    Region                     2009   vs. 2008        2009     vs. 2008
    ------                     ----------------      --------------------
    Caribbean & Latin America $108.33    -23.4%      64.3%    -10.2% pts.
    Continental Europe        $100.57    -19.6%      64.3%     -7.0% pts.
    United Kingdom             $90.20    -15.6%      70.7%     -5.6% pts.
    Middle East & Africa      $100.59    -22.2%      72.8%    -12.7% pts.
    Asia Pacific (2)           $78.31    -26.7%      61.5%    -11.0% pts.

    Regional Composite (3)     $95.22    -21.4%      65.4%     -8.6% pts.

    International Luxury (4)  $188.29    -26.1%      57.5%    -11.8% pts.

    Total International (5)   $103.26    -22.2%      64.7%     -8.9% pts.

    Worldwide (6)              $86.09    -21.4%      66.1%     -7.5% pts.



                                 Three Months
                                 Ended May 31,
                               2009 and May 31,
                                     2008
                              ------------------
                                Average Daily
                                     Rate
                              ------------------
    Region                      2009   vs. 2008
    ------                    ------------------
    Caribbean & Latin America $168.35    -11.3%
    Continental Europe        $156.52    -10.9%
    United Kingdom            $127.66     -9.0%
    Middle East & Africa      $138.09     -8.7%
    Asia Pacific (2)          $127.39    -13.6%

    Regional Composite(3)     $145.56    -11.1%

    International Luxury (4)  $327.22    -10.9%

    Total International (5)   $159.51    -11.5%

    Worldwide (6)             $130.17    -12.4%


    (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 & Resorts and Courtyard brands. Includes Hawaii.
    (4)  International Luxury includes The Ritz-Carlton properties outside of
         North America and Bulgari Hotels & Resorts.
    (5)  Includes Regional Composite and International Luxury.
    (6)  Includes international statistics for the three calendar months ended
         May 31, 2009 and May 31, 2008, and North American statistics for the
         twelve weeks ended June 19, 2009 and June 13, 2008.  Includes the
         Marriott Hotels & Resorts, Renaissance Hotels & Resorts, The Ritz-
         Carlton, Bulgari Hotels & Resorts, Residence Inn, Courtyard,
         Fairfield Inn, TownePlace Suites and SpringHill Suites brands.



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

                            Five Months Ended May 31, 2009 and May 31, 2008
                              -------------------------------------------
                                   REVPAR                Occupancy
                              -----------------     ---------------------
    Region                      2009  vs. 2008       2009     vs. 2008
    ------                    -----------------     ---------------------
    Caribbean & Latin America $131.99    -19.9%      68.4%    -10.2% pts.
    Continental Europe         $96.30    -18.9%      61.4%     -7.1% pts.
    United Kingdom             $88.25    -15.0%      68.5%     -5.4% pts.
    Middle East & Africa      $101.69    -17.9%      70.4%    -11.5% pts.
    Asia Pacific (2)           $75.17    -26.2%      59.2%    -11.1% pts.

    Regional Composite (3)     $96.22    -19.7%      64.3%     -8.4% pts.

    International Luxury (4)  $189.56    -22.8%      57.0%    -10.7% pts.

    Total International (5)   $106.04    -20.2%      63.5%     -8.7% pts.

    Worldwide (6)              $97.82    -20.7%      63.8%     -7.9% pts.



                                 Five Months
                                 Ended May 31,
                               2009 and May 31,
                                     2008
                              -----------------
                                Average Daily
                                     Rate
                              -----------------
    Region                      2009  vs. 2008
    ------                    -----------------
    Caribbean & Latin America $192.99     -7.9%
    Continental Europe        $156.88     -9.6%
    United Kingdom            $128.88     -8.3%
    Middle East & Africa      $144.49     -4.5%
    Asia Pacific (2)          $127.02    -12.4%

    Regional Composite (3)    $149.68     -9.1%

    International Luxury (4)  $332.67     -8.2%

    Total International (5)   $166.94     -9.3%

    Worldwide (6)             $153.32    -11.0%



                              MARRIOTT INTERNATIONAL, INC.
                                 KEY LODGING STATISTICS
                                       Constant $


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

                            Five Months Ended May 31, 2009 and May 31, 2008
                              -------------------------------------------
                                    REVPAR                Occupancy
                              -----------------     ---------------------
    Region                      2009  vs. 2008       2009     vs. 2008
    ------                    -----------------     ---------------------
    Caribbean & Latin America $112.86    -19.8%      64.0%     -8.9% pts.
    Continental Europe         $94.11    -19.2%      59.4%     -7.7% pts.
    United Kingdom             $86.00    -15.4%      67.1%     -5.7% pts.
    Middle East & Africa      $101.69    -17.9%      70.4%    -11.5% pts.
    Asia Pacific (2)           $80.52    -23.8%      60.5%    -10.3% pts.

    Regional Composite (3)     $94.13    -19.6%      62.8%     -8.4% pts.

    International Luxury (4)  $189.56    -22.8%      57.0%    -10.7% pts.

    Total International (5)   $102.33    -20.1%      62.3%     -8.6% pts.

    Worldwide (6)              $83.43    -19.1%      63.2%     -6.9% pts.


                                 Five Months
                                 Ended May 31,
                               2009 and May 31,
                                     2008
                              -----------------
                                Average Daily
                                     Rate
                              -----------------
    Region                      2009  vs. 2008
    ------                    -----------------
    Caribbean & Latin America $176.23     -8.6%
    Continental Europe        $158.38     -8.8%
    United Kingdom            $128.19     -8.2%
    Middle East & Africa      $144.49     -4.5%
    Asia Pacific (2)          $133.06    -10.8%

    Regional Composite (3)    $149.82     -8.8%

    International Luxury (4)  $332.67     -8.2%

    Total International (5)   $164.19     -9.0%

    Worldwide (6)             $132.00    -10.2%


    (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 properties located
         outside the Continental United States and Canada, except for
         Worldwide which also includes North America.
    (2)  Does not include Hawaii.
    (3)  Regional information includes the Marriott Hotels & Resorts,
         Renaissance Hotels & Resorts and Courtyard brands. Includes Hawaii.
    (4)  International Luxury includes The Ritz-Carlton properties outside of
         North America and Bulgari Hotels & Resorts.
    (5)  Includes Regional Composite and International Luxury.
    (6)  Includes international statistics for the five calendar months ended
         May 31, 2009 and May 31, 2008, and North American statistics for the
         twenty-four weeks ended June 19, 2009 and June 13, 2008.  Includes
         the Marriott Hotels & Resorts, Renaissance Hotels & Resorts, The
         Ritz-Carlton, Bulgari Hotels & Resorts, Residence Inn, Courtyard,
         Fairfield Inn, TownePlace Suites and SpringHill Suites brands.

                              MARRIOTT INTERNATIONAL, INC.
                                 KEY LODGING STATISTICS


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

                               Twelve Weeks Ended June 19, 2009 and
                                           June 13, 2008
                              --------------------------------------
                                    REVPAR           Occupancy
                              ----------------   -------------------
    Brand                      2009  vs. 2008     2009   vs. 2008
    -----                     ----------------   -------------------
    Marriott Hotels & Resorts $109.81  -22.0%     68.6%   -7.2% pts.
    Renaissance Hotels &
     Resorts                  $107.73  -20.8%     68.1%   -7.1% pts.
    Composite North American
     Full-Service (2)         $109.45  -21.8%     68.5%   -7.1% pts.
    The Ritz-Carlton (3)      $185.34  -31.4%     61.9%  -13.9% pts.
    Composite North American
     Full-Service &
     Luxury (4)               $117.05  -23.5%     67.9%   -7.8% pts.
    Residence Inn              $82.78  -18.9%     71.8%   -7.6% pts.
    Courtyard                  $70.91  -25.8%     64.2%   -8.5% pts.
    TownePlace Suites          $49.42  -20.8%     63.6%   -8.0% pts.
    SpringHill Suites          $65.26  -21.9%     65.9%   -9.3% pts.
    Composite North American
     Limited-Service (5)       $72.58  -23.3%     66.5%   -8.2% pts.
    Composite - All (6)        $98.17  -23.4%     67.3%   -8.0% pts.


                                                       Twelve Weeks
                                                      Ended June 19,
                                                       2009 and June
                                                         13, 2008
                                                    -----------------
                                                      Average Daily
                                                           Rate
                                                    -----------------
    Brand                                            2009   vs. 2008
    -----                                           -----------------
    Marriott Hotels & Resorts                       $159.98    -13.8%
    Renaissance Hotels & Resorts                    $158.24    -12.6%
    Composite North American Full-Service (2)       $159.69    -13.6%
    The Ritz-Carlton (3)                            $299.28    -16.1%
    Composite North American Full-Service &
     Luxury (4)                                     $172.45    -14.7%
    Residence Inn                                   $115.31    -10.4%
    Courtyard                                       $110.53    -16.0%
    TownePlace Suites                                $77.69    -10.8%
    SpringHill Suites                                $99.00    -10.9%
    Composite North American Limited-Service (5)    $109.19    -13.9%
    Composite - All (6)                             $145.91    -14.4%



                 Comparable Systemwide North American Properties (1)
                 --------------------------------------------------

                                    Twelve Weeks Ended June 19, 2009 and June
                                                     13, 2008
                                   -------------------------------------------
                                         REVPAR              Occupancy
                                   -----------------     ---------------------
    Brand                            2009  vs. 2008       2009      vs. 2008
    -----                          -----------------     ---------------------
    Marriott Hotels & Resorts       $96.16    -22.1%      65.5%     -7.3% pts.
    Renaissance Hotels & Resorts    $95.05    -20.6%      66.0%     -6.8% pts.
    Composite North American
     Full-Service (2)               $95.97    -21.8%      65.6%     -7.2% pts.
    The Ritz-Carlton (3)           $185.34    -31.4%      61.9%    -13.9% pts.
    Composite North American Full-
     Service & Luxury (4)          $101.30    -23.0%      65.4%     -7.6% pts.
    Residence Inn                   $82.71    -17.4%      72.3%     -6.6% pts.
    Courtyard                       $73.68    -22.0%      65.8%     -7.3% pts.
    Fairfield Inn                   $54.60    -17.1%      63.9%     -6.8% pts.
    TownePlace Suites               $53.43    -18.0%      65.1%     -7.5% pts.
    SpringHill Suites               $65.71    -18.2%      65.5%     -7.2% pts.
    Composite North American
     Limited-Service (5)            $70.60    -19.5%      67.1%     -7.1% pts.
    Composite - All (6)             $82.63    -21.2%      66.4%     -7.3% pts.


                                                       Twelve Weeks
                                                      Ended June 19,
                                                       2009 and June
                                                         13, 2008
                                                     ---------------
                                                      Average Daily
                                                           Rate
                                                    -----------------
    Brand                                              2009 vs. 2008
    -----                                           -----------------
    Marriott Hotels & Resorts                       $146.79    -13.4%
    Renaissance Hotels & Resorts                    $143.92    -12.3%
    Composite North American Full-Service (2)       $146.31    -13.3%
    The Ritz-Carlton (3)                            $299.28    -16.1%
    Composite North American Full-Service &
     Luxury (4)                                     $154.95    -14.1%
    Residence Inn                                   $114.39     -9.9%
    Courtyard                                       $111.93    -13.3%
    Fairfield Inn                                    $85.46     -8.2%
    TownePlace Suites                                $82.05     -8.6%
    SpringHill Suites                               $100.29     -9.2%
    Composite North American Limited-Service (5)    $105.23    -11.0%
    Composite - All (6)                             $124.41    -12.6%


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



                              MARRIOTT INTERNATIONAL, INC.
                                 KEY LODGING STATISTICS


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

                                    Twenty-four Weeks Ended June 19, 2009 and
                                                   June 13, 2008
                                   -------------------------------------------
                                        REVPAR                Occupancy
                                   -----------------     ---------------------
    Brand                            2009  vs. 2008       2009   vs.   2008
    -----                          -----------------     ---------------------
    Marriott Hotels & Resorts      $106.72    -19.2%      65.2%     -6.6% pts.
    Renaissance Hotels & Resorts   $106.46    -16.9%      65.3%     -6.6% pts.
    Composite North American
     Full-Service (2)              $106.68    -18.8%      65.2%     -6.6% pts.
    The Ritz-Carlton (3)           $185.85    -29.6%      59.9%    -13.5% pts.
    Composite North American Full-
     Service & Luxury (4)          $113.31    -20.5%      64.8%     -7.2% pts.
    Residence Inn                   $80.68    -17.8%      68.2%     -7.6% pts.
    Courtyard                       $69.19    -23.8%      60.4%     -8.2% pts.
    TownePlace Suites               $49.09    -18.8%      60.3%     -8.0% pts.
    SpringHill Suites               $62.61    -21.7%      60.9%     -9.8% pts.
    Composite North American
     Limited-Service (5)            $70.74    -21.7%      62.7%     -8.1% pts.
    Composite - All (6)             $95.05    -20.9%      63.9%     -7.6% pts.



                                                       Twenty-four
                                                     Weeks Ended June
                                                       19, 2009 and
                                                       June 13, 2008
                                                    -----------------
                                                      Average Daily
                                                           Rate
                                                    -----------------
    Brand                                              2009 vs. 2008
    -----                                           -----------------
    Marriott Hotels & Resorts                       $163.64    -11.0%
    Renaissance Hotels & Resorts                    $163.04     -8.5%
    Composite North American Full-Service (2)       $163.53    -10.6%
    The Ritz-Carlton (3)                            $310.14    -13.7%
    Composite North American Full-Service &
     Luxury (4)                                     $174.89    -11.7%
    Residence Inn                                   $118.35     -8.6%
    Courtyard                                       $114.46    -13.4%
    TownePlace Suites                                $81.38     -8.1%
    SpringHill Suites                               $102.73     -9.1%
    Composite North American Limited-Service (5)    $112.80    -11.6%
    Composite - All (6)                             $148.74    -11.5%



            Comparable Systemwide North American Properties (1)
            --------------------------------------------------

                          Twenty-four Weeks Ended June 19, 2009 and
                                         June 13, 2008
                         -------------------------------------------
                               REVPAR              Occupancy
                         -----------------    ----------------------
    Brand                  2009  vs. 2008       2009    vs. 2008
    -----                -----------------    ----------------------
    Marriott Hotels &
     Resorts              $94.22    -19.4%      62.6%     -6.6% pts.
    Renaissance Hotels &
     Resorts              $94.07    -17.3%      63.2%     -6.5% pts.
    Composite North
     American Full-
     Service (2)          $94.19    -19.1%      62.7%     -6.6% pts.
    The Ritz-Carlton (3) $185.85    -29.6%      59.9%    -13.5% pts.
    Composite North
     American Full-
     Service & Luxury (4) $98.74    -20.2%      62.6%     -6.9% pts.
    Residence Inn         $81.04    -15.5%      69.5%     -6.0% pts.
    Courtyard             $71.43    -19.7%      62.4%     -6.6% pts.
    Fairfield Inn         $51.97    -16.0%      60.3%     -6.3% pts.
    TownePlace Suites     $52.38    -16.4%      61.9%     -7.3% pts.
    SpringHill Suites     $64.02    -16.3%      62.4%     -6.6% pts.
    Composite North
     American Limited-
     Service (5)          $68.54    -17.5%      63.8%     -6.4% pts.
    Composite - All (6)   $80.28    -18.8%      63.4%     -6.6% pts.



                                                       Twenty-four
                                                     Weeks Ended June
                                                       19, 2009 and
                                                       June 13, 2008
                                                    -----------------
                                                      Average Daily
                                                           Rate
                                                    -----------------
    Brand                                            2009   vs. 2008
    -----                                           -----------------
    Marriott Hotels & Resorts                       $150.39    -11.0%
    Renaissance Hotels & Resorts                    $148.80     -8.8%
    Composite North American Full-Service (2)       $150.12    -10.6%
    The Ritz-Carlton (3)                            $310.14    -13.7%
    Composite North American Full-Service &
     Luxury (4)                                     $157.73    -11.4%
    Residence Inn                                   $116.61     -8.2%
    Courtyard                                       $114.40    -11.2%
    Fairfield Inn                                    $86.24     -7.2%
    TownePlace Suites                                $84.68     -6.5%
    SpringHill Suites                               $102.64     -7.5%
    Composite North American Limited-Service (5)    $107.38     -9.2%
    Composite - All (6)                             $126.71    -10.3%


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



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




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

                                 As Reported   Restructuring    As Adjusted
                               12 Weeks Ended  Costs & Other   12 Weeks Ended
                                June 19, 2009     Charges     June 19, 2009**
    ----------------            -------------   -----------    --------------
    Segment Revenues
    ----------------
      Segment revenues                $355              $12           $367
                                      ====              ===           ====


    ---------------
    Segment Results
    ---------------
      Base fees revenue                 $11              $-            $11
      Timeshare sales and
       services, net                      4              12             16
      Restructuring costs               (30)             30              -
      Joint venture equity
       earnings                          (1)              1              -
      Noncontrolling interest             4               -              4
      General, administrative
       and other expense                 (23)             7            (16)
                                         ---            ---            ---
      Segment results                   $(35)           $50            $15
                                        ====            ===            ===



    --------------------------
    Sales and Services Revenue
    --------------------------
      Development                       $182             $-           $182
      Services                            80              -             80
      Financing                           14             12             26
      Other revenue                        7              -              7
                                         ---            ---            ---
      Sales and services
       revenue                          $283            $12           $295
                                        ====            ===           ====



    --------------
    Contract Sales
    --------------
      Company:
        Timeshare                       $200             $-           $200
        Fractional                         8              1              9
        Residential                        2              -              2
                                         ---            ---            ---
            Total company                210              1            211
      Joint ventures:
        Timeshare                          -              -              -
        Fractional                       (18)            19              1
        Residential                       17            (17)             -
                                          --            ---            ---
            Total joint ventures          (1)             2              1
                                          --            ---            ---
        Total contract sales,
         including joint ventures       $209             $3           $212
                                        ====            ===           ====



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


                                                            Percent Better /
                                            As Reported    (Worse) as Adjusted
                                          12 Weeks Ended      2009 vs. 2008
                                           June 13, 2008       As Reported
    ----------------                        -------------       -----------
    Segment Revenues
    ----------------
      Segment revenues                          $461                (20)
                                                ====


    ---------------
    Segment Results
    ---------------
      Base fees revenue                          $12                 (8)
      Timeshare sales and
       services, net                              77                (79)
      Restructuring costs                          -                  *
      Joint venture equity earnings                2               (100)
      Noncontrolling interest                      4                  -
      General, administrative and
       other expense                             (25)                36
                                                 ---
      Segment results                            $70                (79)
                                                 ===



    --------------------------
    Sales and Services Revenue
    --------------------------
      Development                               $252                (28)
      Services                                    79                  1
      Financing                                   49                (47)
      Other revenue                                8                (13)
                                                   -
      Sales and services revenue                $388                (24)
                                                ====

    --------------
    Contract Sales
    --------------
      Company:
        Timeshare                               $291                (31)
        Fractional                                 8                 13
        Residential                               27                (93)
                                                 ---
            Total company                        326                (35)
      Joint ventures:
        Timeshare                                  -                  *
        Fractional                                 6                (83)
        Residential                                2               (100)
                                                 ---
            Total joint ventures                   8                (88)
                                                 ---
        Total contract sales, including
         joint ventures                         $334                (37)
                                                ====



    ---------------------------
    (Loss) / Gain on Notes Sold
    ---------------------------
      (Loss) / gain on notes sold                $29               (100)
                                                 ===
    *   Percent can not be calculated.
    **  Denotes non-GAAP financial measures.  Please see page A-17 for
        additional information about our reasons for providing these
        alternative financial measures and the limitations on their use.

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


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

                                  As Reported   Restructuring   As Adjusted
                                24 Weeks Ended  Costs & Other  24 Weeks Ended
                                June 19, 2009     Charges    June 19, 2009 **
      ----------------          --------------   ----------- ----------------
      Segment Revenues
      ----------------
        Segment revenues               $632          $29             $661
                                       ====          ===             ====


      ---------------
      Segment Results
      ---------------
        Base fees revenue               $21           $-              $21
        Timeshare sales and
         services, net                   (7)          28               21
        Restructuring costs             (31)          31                -
        Joint venture
         equity earnings                 (2)           2                -
        Noncontrolling
         interest                         7            -                7
        General,
         administrative and
         other expense                  (40)           7              (33)
                                        ---            -              ---
        Segment results                $(52)         $68              $16
                                       ====          ===              ===



      ------------------
      Sales and Services
       Revenue
      ------------------
        Development                    $303           $4             $307
        Services                        150            -              150
        Financing                        27           25               52
        Other revenue                    12            -               12
                                        ---          ---              ---
        Sales and services revenue     $492          $29             $521
                                       ====          ===             ====



      --------------
      Contract Sales
      --------------
        Company:
          Timeshare                    $338           $-             $338
          Fractional                     18            1               19
          Residential                    (3)           4                1
                                        ---          ---              ---
              Total company             353            5              358
        Joint ventures:
          Timeshare                       -            -                -
          Fractional                     (5)          16               11
          Residential                   (10)          10                -
                                        ---           --               --
              Total joint
               ventures                 (15)          26               11
                                        ---           --               --
          Total contract
           sales, including
           joint ventures              $338          $31             $369
                                       ====          ===             ====



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



                                                           Percent Better /
                                           As Reported    (Worse) As Adjusted
                                         24 Weeks Ended      2009 vs. 2008
                                          June 13, 2008       As Reported
      ----------------                    -------------       -----------
      Segment Revenues
      ----------------
        Segment revenues                         $863             (23)
                                                 ====

      ---------------
      Segment Results
      ---------------
        Base fees revenue                         $23              (9)
        Timeshare sales and
         services, net                             90             (77)
        Restructuring costs                         -               *
        Joint venture equity earnings               7            (100)
        Noncontrolling
         interest                                   6              17
        General, administrative
         and other expense                        (52)             37
                                                  ---
        Segment results                           $74             (78)
                                                  ===

      --------------------------
      Sales and Services Revenue
      --------------------------
        Development                              $457             (33)
        Services                                  163              (8)
        Financing                                  76             (32)
        Other revenue                              18             (33)
                                                   --
        Sales and services revenue               $714             (27)
                                                 ====

      --------------
      Contract Sales
      --------------
        Company:
          Timeshare                              $576             (41)
          Fractional                               16              19
          Residential                              39             (97)
                                                   --
              Total company                       631             (43)
        Joint ventures:
          Timeshare                                 -               *
          Fractional                               11               -
          Residential                              25            (100)
                                                   --
              Total joint ventures                 36             (69)
                                                   --
          Total contract sales,
           including joint ventures              $667             (45)
                                                 ====

      ---------------------------
      (Loss) / Gain on Notes Sold
      ---------------------------
        (Loss) / gain on notes sold               $29            (103)
                                                  ===

    *   Percent can not be calculated.
    **  Denotes non-GAAP financial measures.  Please see page A-17 for
        additional information about our reasons for providing these
        alternative financial measures and the limitations on their use.



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


                                                     Fiscal Year 2009
                                            ----------------------------------
                                             First       Second     Total Year
                                            Quarter      Quarter      to Date
                                            --------     --------    ---------
    Net (Loss) / Income
     attributable to Marriott                 $(23)         $37          $14
    Interest expense                            29           28           57
    Tax provision, continuing
     operations                                 33           44           77
    Tax provision, noncontrolling
     interest                                    1            2            3
    Depreciation and amortization               39           42           81
    Less: Depreciation
     reimbursed by third-party
     owners                                     (2)          (2)          (4)
    Interest expense from
     unconsolidated joint ventures               3            6            9
    Depreciation and amortization
     from unconsolidated joint
     ventures                                    6            6           12
                                                --           --           --
    EBITDA **                                  $86         $163         $249

    Restructuring costs and other
     charges
           Severance                             2           10           12
           Facilities exit costs                 -           22           22
           Development
            cancellations                        -            1            1
                                                --           --           --
              Total restructuring costs          2           33           35
                                                --           --           --
           Impairment of investments
            and other, net of prior
            year reserves                       68            3           71
           Reserves for loan
            losses                              42            1           43
           Contract cancellation
            allowances                           4            1            5
           Residual interests
            valuation                           13           12           25
           System development write-off          -            7            7
                                                --           --           --
              Total other charges              127           24          151
                                               ---           --          ---
    Total restructuring costs and
     other charges                             129           57          186
                                               ---           --          ---

    Adjusted EBITDA **                        $215         $220         $435
                                              ====         ====         ====

    Decrease over 2008 Adjusted EBITDA        -25%         -43%         -35%



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

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

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

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

    ** Denotes non-GAAP financial measures.  Please see page A-17 for
       additional information about our reasons for providing these
       alternative financial measures and the limitations on their use.



                            Marriott International, Inc.
                  Summary of Restructuring Costs and Other Charges
                 Second Quarter and Second Quarter Year-to-Date 2009
                                   ($ in millions)


                                                                Q2     Q2 YTD
      External Line            Description                    Amount   Amount
      -------------            -----------                    ------   ------

      Timeshare sales and      Mark-to-market of residual
       services revenue         interests                        $12      $25
                               Contract sale cancellation
                                allowances                         -        4

                                                                 ---       --
                                        Timeshare sales and
                                         services revenue         12       29

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

      Restructuring costs      Severance                          10       12
                               Facilities exit costs              22       22
                               Development cancellations           1        1
                                                                   -        -
                                        Restructuring costs       33       35

      General, administrative
       and other               System development write-down       7        7
                               Accounts receivable and
                                guarantee charges                  3        3
                               Reserves for security
                                deposits, net of prior year
                                reserves                           -       38

                                                                  --       --
                                        General, administrative
                                         and other                10       48

      Provision for loan
       losses                  Loan impairments                    1       43

                                                                  --       --
                                        Provision for loan
                                         losses                    1       43

      Equity in (earnings)     Contract sale cancellation
       losses                   allowances                         1        2
                               Investment impairment               -       30
                                                                  --       --
                                  Equity in (earnings) losses      1       32
                                                                  --       --

                                        Restructuring Costs &
                                         Other Charges Total     $57     $186

                                                   Tax Impact    (27)     (72)
                                                                 ---      ---

                                  Restructuring Costs & Other
                                   Charges Net of Tax            $30     $114
                                                                 ===     ====



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


                         Balance at     Balance at    Better/
                         End of 2009     Year-End     (Worse)
                        Second Quarter    2008        Change
                        --------------  -----------   -------
    Total debt              $2,849       $3,095        $246
    Cash and cash
     equivalents              (125)        (134)        $(9)
                              ----         ----         ---
    Total debt net
     of cash**              $2,724       $2,961        $237
                            ======       ======        ====



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

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


    **  Denotes non-GAAP financial measures.  Please see page A-17 for
        additional information about our reasons for providing these
        alternative financial measures and the limitations on their use.

                         MARRIOTT INTERNATIONAL, INC.
                   Non-GAAP Financial Measure Reconciliation
      Measures that Exclude Restructuring Costs and Other Charges in 2008
                                ($ in millions)



                                                            Full Year 2008
                                                            --------------
      General, administrative and other expenses                      $783
      Less: Restructuring costs and other charges                      (32)
                                                                       ---
      General, administrative and other expenses
       excluding restructuring costs and other charges**              $751
                                                                      ====

       ** Denotes non-GAAP financial measures.  Please see page A-17 for
          additional information about our reasons for providing these
          alternative financial measures and the limitations on their use.



                           MARRIOTT INTERNATIONAL, INC.
                    Non-GAAP Financial Measure Reconciliation
              Internal Planning Assumptions and Related Estimates that
      Exclude Restructuring Costs and Other Charges and Certain Tax Items in
                                       2009
                    ($ in millions, except per share amounts)

                                                            Assumed/Estimated
                                                              Full Year 2009
                                                            -----------------
      Timeshare sales and services revenue net
       of Timeshare direct expenses                                       $14
      Add back: Restructuring costs and other charges                      31
                                                                           --
      Timeshare sales and services (net)
       excluding restructuring costs and other charges**                  $45
                                                                          ===



                                                       Range
                                           -----------------------------
                                              Assumed/       Assumed/
                                              Estimated      Estimated
                                           Full Year 2009 Full Year 2009
                                           -------------- --------------
      General, administrative and other
       expenses                                      $633           $653
      Less: Restructuring costs and other
       charges                                        (48)           (48)
                                                       --             --
      General, administrative and other
       expenses excluding restructuring
       costs and other charges**                     $585           $605
                                                     ====           ====



                                     Range                      Range
                        -----------------------------------------------------
                            Assumed/        Assumed/     Assumed/   Assumed/
                           Estimated       Estimated     Estimated  Estimated
                         Third Quarter   Third Quarter  Full Year  Full Year
                              2009            2009         2009       2009
                        --------------- --------------- ---------- ----------
      Earnings per
       share
       attributable
       to Marriott
       shareholders               $0.07           $0.12      $0.31      $0.41
      Add back:
       Restructuring
       costs and other
       charges and
       certain tax
       items                       0.02            0.02       0.45       0.45
                                   ----            ----       ----       ----
      Earnings per
       share
       attributable to
       Marriott
       shareholders
       excluding
       restructuring
       costs and other
       charges and
       certain tax
       items**                    $0.09           $0.14      $0.76      $0.86
                                  =====           =====      =====      =====



                                                    Assumed/Estimated
                                                      Full Year 2009
                                                     -----------------
      Timeshare segment results                                  $(53)
      Add back: Restructuring costs and other charges              78
                                                                   --
      Timeshare segment results excluding
       restructuring costs and other charges**                    $25
                                                                  ===

      ** Denotes non-GAAP financial measures.  Please see page A-17 for
         additional information about our reasons for providing these
         alternative financial measures and the limitations on their use.


                            MARRIOTT INTERNATIONAL, INC.
                             Non-GAAP Financial Measure

    In our press release and schedules, and on the related conference call, we
    report certain financial measures that are not prescribed or authorized by
    United States generally accepted accounting principles ("GAAP"). We
    discuss management's reasons for reporting these non-GAAP measures below,
    and the press release schedules reconcile the most directly comparable
    GAAP measure to each non-GAAP measure that we refer to (identified by a
    double asterisk on the preceding pages).  Although management evaluates
    and presents these non-GAAP measures for the reasons described below,
    please be aware that these non-GAAP measures are not alternatives to
    revenue, operating income, income from continuing operations, net income,
    earnings per share or any other comparable operating measure prescribed by
    GAAP.  In addition, these non-GAAP financial measures may be calculated
    and/or presented differently than measures with the same or similar names
    that are reported by other companies, and as a result, the non-GAAP
    measures we report may not be comparable to those reported by others.

    Measures That Exclude Restructuring Costs and Other Charges and Certain
    Tax Expenses.  Management evaluates non-GAAP measures that exclude the
    impact of restructuring costs and other charges and certain tax expenses
    incurred in the 2009 first quarter and 2009 and 2008 second quarters as
    well as estimated restructuring costs and other charges expected to be
    incurred in the third quarter of 2009 and full year 2009 because those
    non-GAAP measures allow for period-over-period comparisons of our on-going
    core operations before material charges.  These non-GAAP measures also
    facilitate management's comparison of results from our on-going operations
    before material charges with results from other lodging companies.

    During the latter part of 2008 and particularly the fourth quarter, we
    experienced a significant decline in demand for hotel rooms both
    domestically and internationally due, in part, to the failures and near
    failures of several large financial service companies and the dramatic
    downturn in the economy.  Our capital intensive Timeshare business was
    also hurt by the downturn in market conditions and particularly, the
    significant deterioration in the credit markets, which resulted in our
    decision not to complete a note sale in the fourth quarter of 2008
    (although we did complete a note sale in the first quarter of 2009).
    These declines resulted in reduced management and franchise fees,
    cancellation of development projects, reduced timeshare contract sales,
    contract cancellation allowances, and charges and reserves associated with
    expected fundings, loans, Timeshare inventory, accounts receivable,
    contract cancellation allowances, valuation of Timeshare residual
    interests, hedge ineffectiveness, and asset impairments.  We responded by
    implementing various cost saving measures, beginning in the fourth quarter
    of 2008 and which continued in the first quarter of 2009 and second
    quarter of 2009, and resulted in first quarter 2009 restructuring costs of
    $2 million and second quarter 2009 restructuring costs of $33 million that
    were directly related to the downturn.  We also incurred other first
    quarter 2009 and second quarter 2009 charges totaling $127 million and $24
    million, respectively, that were directly related to the downturn,
    including asset impairment charges, accounts receivable and guarantee
    charges, reserves associated with loans, reversal of the liability related
    to expected fundings, Timeshare contract cancellation allowances, and
    charges related to the valuation of Timeshare residual interests.
    Currently, we expect to incur $9 to $11 million (our calculation assumes
    $10 million) in restructuring costs and other charges in the 2009 third
    quarter.  For full year 2009, we expect restructuring costs and other
    charges to total $197 million to $202 million (our calculation assumes
    $201 million) as a result of our restructuring efforts and the economic
    downturn, which includes $186 million of restructuring costs and other
    charges already incurred in the first half of 2009.  These estimates are
    subject to change.

    Certain tax expenses included $26 million in the 2009 first quarter, $17
    million in the 2009 second quarter and $24 million in the 2008 second
    quarter of non-cash charges primarily related to the treatment of funds
    received from certain foreign subsidiaries that is in ongoing discussion
    with the Internal Revenue Service ("IRS"). Additionally, certain tax
    expenses in the 2008 second quarter also reflected $12 million of tax
    expense due primarily to prior years' tax adjustments, including a
    settlement with the IRS that resulted in a lower than expected refund of
    taxes associated with a 1995 leasing transaction.

    Earnings Before Interest, Taxes, Depreciation and Amortization. Earnings
    before interest, taxes, depreciation and amortization ("EBITDA") reflects
    earnings excluding the impact of interest expense, tax expense,
    depreciation and amortization. Management considers EBITDA to be an
    indicator of operating performance because it can be used to measure our
    ability to service debt, fund capital expenditures, and expand our
    business. EBITDA is used by analysts, lenders, investors and others, as
    well as by us, to evaluate companies because it excludes certain items
    that can vary widely across different industries or among companies within
    the same industry. For example, interest expense can be dependent on a
    company's capital structure, debt levels and credit ratings. Accordingly,
    the impact of interest expense on earnings can vary significantly among
    companies. The tax positions of companies can also vary because of their
    differing abilities to take advantage of tax benefits and because of the
    tax policies of the jurisdictions in which they operate. As a result,
    effective tax rates and tax expense can vary considerably among companies.
    EBITDA also excludes depreciation and amortization because companies
    utilize productive assets of different ages and use different methods of
    both acquiring and depreciating productive assets. These differences can
    result in considerable variability in the relative costs of productive
    assets and the depreciation and amortization expense among companies.

    Adjusted EBITDA.  Management also evaluates adjusted EBITDA which
    excludes: (1) the 2009 second quarter restructuring costs and other
    charges totaling $57 million; (2) the 2009 first quarter restructuring
    costs and other charges totaling $129 million; (3) the 2008 fourth quarter
    restructuring costs and other charges totaling $192 million; and (4) the
    first and second quarter 2008 impact of the synthetic fuel business.
    Management excludes the restructuring costs and other charges incurred in
    the 2009 first and second quarters and in the 2008 fourth quarter for the
    reasons noted above under "Measures That Exclude Restructuring Costs and
    Other Charges and Certain Tax Expenses." Fourth quarter 2008 restructuring
    costs and other charges included $55 million of restructuring costs and
    $137 million of other charges, including charges and reserves associated
    with expected fundings, loans, Timeshare inventory, accounts receivable,
    contract cancellation allowances, valuation of Timeshare residual
    interests, hedge ineffectiveness, and asset impairments. Management also
    excludes the first and second quarter 2008 impact of the synthetic fuel
    business, which was discontinued in 2007 and which did not relate to our
    core lodging business, to allow for period-over-period comparisons of our
    on-going core lodging operations and facilitate management's comparison of
    our results with those of other lodging companies.

    Total Debt, Net of Cash (or, "Net Debt"). Total debt net of cash
    reflects total debt less cash and cash equivalents.  Management considers
    total debt net of cash to be a more accurate indicator of the net debt
    that must be repaid or refinanced at maturity (as it gives consideration
    to cash resources available to retire a portion of the debt when due).
    Additionally, management believes that this financial measure provides a
    clearer picture of the future demands on cash to repay debt.  Management
    uses this financial measure in making decisions regarding its borrowing
    capacity and future refinancing needs.

SOURCE Marriott International, Inc.

http://www.marriott.com

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