Feb 9, 2006
/FIRST AND FINAL ADD -- NYTH069 -- Marriott International Earnings/
/FIRST AND FINAL ADD -- NYTH069 -- Marriott International Earnings/
Feb 09, 2006 /PRNewswire via COMTEX News Network/ --
MARRIOTT INTERNATIONAL, INC.
Financial Highlights
(in millions, except per share amounts)
16 Weeks Ended 16 Weeks Ended
December 30, 2005 December 31, 2004
-------------------- -------------------- Percent
Synthetic Synthetic Better/
Lodging Fuel Total Lodging Fuel Total (Worse)
------- ------ ----- ------- ------ ----- -------
REVENUES
Base management fees $155 $- $155 $133 $- $133 17
Franchise fees 103 - 103 89 - 89 16
Incentive management fees 69 - 69 52 - 52 33
Owned, leased, corporate
housing and other(1) 361 - 361 239 - 239 51
Timeshare interval sales
and services(2) 413 - 413 349 - 349 18
Cost reimbursements(3) 2,423 - 2,423 2,156 - 2,156 12
Synthetic fuel - 117 117 - 123 123 (5)
------- ------ ----- ------- ------ -----
Total Revenues 3,524 117 3,641 3,018 123 3,141 16
OPERATING COSTS AND EXPENSES
Owned, leased and corporate
housing - direct(4) 298 - 298 201 - 201 (48)
Timeshare - direct 357 - 357 293 - 293 (22)
Reimbursed costs 2,423 - 2,423 2,156 - 2,156 (12)
General, administrative
and other(5) 196 - 196 222 - 222 12
Synthetic fuel - 146 146 - 160 160 9
------- ------ ----- ------- ------ -----
Total Expenses 3,274 146 3,420 2,872 160 3,032 (13)
------- ------ ----- ------- ------ -----
OPERATING INCOME (LOSS) $250 $(29) 221 $146 $(37) 109 103
======= ====== ======= ======
Gains and other income(6) 84 69 22
Interest expense (37) (30) (23)
Interest income 14 48 (71)
Reversal of provision for
loan losses - 8 (100)
Equity in earnings/
(losses) - Other(7) 18 (5) 460
---- ----
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST 300 199 51
Provision for income taxes (76) (21) (262)
---- ----
INCOME BEFORE MINORITY
INTEREST 224 178 26
Minority interest 13 10 30
---- ----
INCOME FROM CONTINUING
OPERATIONS 237 188 26
DISCONTINUED OPERATIONS - 1 (100)
---- ----
NET INCOME $237 $189 25
==== ====
EARNINGS PER SHARE - Basic
Earnings from continuing
operations $1.14 $0.84 36
Earnings from discontinued
operations - - *
---- ----
EARNINGS PER SHARE - Basic $1.14 $0.84 36
==== ====
EARNINGS PER SHARE - Diluted
Earnings from continuing
operations $1.07 $0.79 35
Earnings from discontinued
operations - - *
---- ----
EARNINGS PER SHARE - Diluted $1.07 $0.79 35
==== ====
Basic Shares 207.3 224.5
Diluted Shares 220.8 239.1
* Percent cannot be calculated.
(1) Owned, leased, corporate housing and other revenue includes revenue
from the properties we own or lease, revenue from our ExecuStay
business, land rent income and other revenue.
(2) Timeshare interval sales and services includes total timeshare
revenue except for base fees, cost reimbursements, gains, and joint
venture earnings (losses).
(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 ExecuStay business.
(5) General, administrative and other expenses include the overhead
costs allocated to our lodging business segments (including ExecuStay
and Timeshare) and our unallocated corporate overhead costs and
general expenses.
(6) Gains and other income includes gains on the sale of real estate,
gains from the sale of joint ventures, income related to our cost
method joint ventures and the earn-out payments we made to the
previous owner of the synthetic fuel operations and earn-out payments
we received from our synthetic fuel joint venture partner.
(7) Equity in earnings/(losses) -- Other includes our equity in earnings
(losses) of unconsolidated joint ventures.
MARRIOTT INTERNATIONAL, INC.
Financial Highlights
(in millions, except per share amounts)
52 Weeks Ended 52 Weeks Ended
December 30, 2005 December 31, 2004
-------------------- -------------------- Percent
Synthetic Synthetic Better/
Lodging Fuel Total Lodging Fuel Total (Worse)
------- ------ ----- ------- ------ ----- -------
REVENUES
Base management fees $497 $- $497 $435 $- $435 14
Franchise fees 329 - 329 296 - 296 11
Incentive management
fees 201 - 201 142 - 142 42
Owned, leased, corporate
housing and other(1) 944 - 944 730 - 730 29
Timeshare interval sales
and services(2) 1,487 - 1,487 1,247 - 1,247 19
Cost reimbursements(3) 7,671 - 7,671 6,928 - 6,928 11
Synthetic fuel - 421 421 - 321 321 31
------- ------ ------ ------ ------ ------
Total Revenues 11,129 421 11,550 9,778 321 10,099 14
OPERATING COSTS AND
EXPENSES
Owned, leased and
corporate housing -
direct(4) 778 - 778 629 - 629 (24)
Timeshare - direct 1,228 - 1,228 1,039 - 1,039 (18)
Reimbursed costs 7,671 - 7,671 6,928 - 6,928 (11)
General, administrative
and other(5) 753 - 753 607 - 607 (24)
Synthetic fuel - 565 565 - 419 419 (35)
------- ------ ------ ------ ------ ------
Total Expenses 10,430 565 10,995 9,203 419 9,622 (14)
------- ------ ------ ------ ------ ------
OPERATING INCOME (LOSS) $699 $(144) 555 $575 $(98) 477 16
======= ====== ====== ======
Gains and other income(6) 181 164 10
Interest expense (106) (99) (7)
Interest income 79 146 (46)
(Provision for)/reversal
of provision for loan
losses (28) 8 (450)
Equity in losses -
Synthetic Fuel(7) - (28) 100
Equity in earnings/
(losses) - Other(8) 36 (14) 357
----- -----
INCOME BEFORE INCOME
TAXES AND MINORITY
INTEREST 717 654 10
Provision for income
taxes (94) (100) 6
----- -----
INCOME BEFORE MINORITY
INTEREST 623 554 12
Minority interest 45 40 13
----- -----
INCOME FROM CONTINUING
OPERATIONS 668 594 12
DISCONTINUED OPERATIONS 1 2 (50)
----- -----
NET INCOME $669 $596 12
===== =====
EARNINGS PER SHARE -
Basic
Earnings from
continuing
operations $3.09 $2.62 18
Earnings from
discontinued
operations - 0.01 (100)
----- -----
EARNINGS PER SHARE -
Basic $3.09 $2.63 17
===== =====
EARNINGS PER SHARE -
Diluted
Earnings from
continuing
operations $2.89 $2.47 17
Earnings from
discontinued
operations - 0.01 (100)
----- -----
EARNINGS PER SHARE -
Diluted $2.89 $2.48 17
===== =====
Basic Shares 216.4 226.6
Diluted Shares 231.2 240.5
(1) Owned, leased, corporate housing and other revenue includes revenue
from the properties we own or lease, revenue from our ExecuStay
business, land rent income and other revenue.
(2) Timeshare interval sales and services includes total timeshare revenue
except for base fees, cost reimbursements, gains, and joint venture
earnings (losses).
(3) Cost reimbursements include reimbursements from lodging properties for
Marriott funded operating expenses.
(4) Owned, leased and corporate housing -- direct expenses include
operating expenses related to our owned or leased hotels, including
lease payments, pre-opening expenses and depreciation, plus expenses
related to our ExecuStay business.
(5) General, administrative and other expenses include the overhead costs
allocated to our lodging business segments (including ExecuStay and
Timeshare) and our unallocated corporate overhead costs and general
expenses.
(6) Gains and other income includes gains on the sale of real estate,
gains from the sale of joint ventures, income related to our cost
method joint ventures and the earn-out payments we made to the
previous owner of the synthetic fuel operations and earn-out payments
we received from our synthetic fuel joint venture partner.
(7) Equity in losses -- Synthetic fuel includes our share of the equity in
earnings of the synthetic fuel joint ventures and the net earn-out
payments made to our synthetic fuel joint venture partner from January
3, 2004 through March 25, 2004. Beginning March 26, 2004, the
synthetic fuel operations were consolidated as a result of adopting
FIN 46(R), "Consolidation of Variable Interest Entities."
(8) Equity in earnings/(losses) -- Other includes our equity in earnings/
(losses) of unconsolidated joint ventures.
Marriott International, Inc.
Business Segments
($ in millions)
Sixteen Weeks Ended Percent
--------------------------------------- Better/
December 30, 2005 December 31, 2004 (Worse)
------------------- ------------------- ---------
REVENUES
Full-Service $2,442 $2,099 16%
Select-Service 397 330 20%
Extended-Stay 197 170 16%
Timeshare 488 419 16%
------------------- -------------------
Total lodging(1) 3,524 3,018 17%
Synthetic fuel 117 123 -5%
------------------- -------------------
Total $3,641 $3,141 16%
=================== ===================
INCOME FROM CONTINUING
OPERATIONS
Full-Service $199 $134 49%
Select-Service 79 36 119%
Extended-Stay 22 18 22%
Timeshare 78 68 15%
------------------- -------------------
Total lodging
financial results(1) 378 256 48%
Synthetic fuel (after-tax) 33 34 -3%
Unallocated corporate
expenses (40) (47) 15%
Interest income, provision
for loan losses and
interest expense (23) 26 -188%
Income taxes (excluding
Synthetic fuel) (111) (81) -37%
------------------- -------------------
Total $237 $188 26%
=================== ===================
(1) We consider lodging revenues and lodging financial results to be
meaningful indicators of our performance because they measure our
growth in profitability as a lodging company and enable investors to
compare the sales and results of our lodging operations to those of
other lodging companies.
Marriott International, Inc.
Business Segments
($ in millions)
Fifty-Two Weeks Ended Percent
--------------------------------------- Better/
December 30, 2005 December 31, 2004 (Worse)
------------------- ------------------- ---------
REVENUES
Full-Service $7,535 $6,611 14%
Select-Service 1,265 1,118 13%
Extended-Stay 608 547 11%
Timeshare 1,721 1,502 15%
------------------- -------------------
Total lodging(1) 11,129 9,778 14%
Synthetic fuel 421 321 31%
------------------- -------------------
Total $11,550 $10,099 14%
=================== ===================
INCOME FROM CONTINUING
OPERATIONS
Full-Service $474 $426 11%
Select-Service 209 140 49%
Extended-Stay 65 66 -2%
Timeshare 271 203 33%
------------------- -------------------
Total lodging
financial results(1) 1,019 835 22%
Synthetic fuel (after-tax) 125 107 17%
Unallocated corporate
expenses (137) (138) 1%
Interest income, provision
for loan losses and
interest expense (55) 55 -200%
Income taxes (excluding
Synthetic fuel) (284) (265) -7%
------------------- -------------------
Total $668 $594 12%
=================== ===================
(1) We consider lodging revenues and lodging financial results to be
meaningful indicators of our performance because they measure our
growth in profitability as a lodging company and enable investors to
compare the sales and results of our lodging operations to those of
other lodging companies.
MARRIOTT INTERNATIONAL, INC.
Total Lodging Products(1)
-------------------------------------------------------------------------
Number of Number of
Properties Rooms/Suites
---------- ------------
Change vs. Change vs.
Dec. 30, Dec. 31, Dec. 30, Dec. 31,
Brand 2005 2004 2005 2004
--------------------------------- ---------------------------------------
Full-Service Lodging
--------------------
Marriott Hotels & Resorts 507 17 183,455 4,296
The Ritz-Carlton 59 2 19,285 674
Renaissance Hotels & Resorts 137 4 48,232 773
Bulgari Hotel & Resort 1 - 58 -
Ramada International 3 (1) 532 (195)
Select-Service Lodging
----------------------
Courtyard 692 36 99,669 5,666
Fairfield Inn 524 1 47,999 (711)
SpringHill Suites 137 12 16,002 1,452
Extended-Stay Lodging
---------------------
Residence Inn 490 27 58,444 3,385
TownePlace Suites 122 7 12,303 593
Marriott Executive Apartments 17 3 2,852 381
Timeshare(2)
-----------
Marriott Vacation Club
International 44 1 9,401 569
The Ritz-Carlton Club 4 - 292 31
Grand Residences by Marriott 2 - 313 65
Horizons by Marriott Vacation
Club 2 - 328 -
------------------ -------------------
Total 2,741 109 499,165 16,979
================== ===================
(1) Total Lodging Products excludes the 1,850 corporate housing rental
units.
(2) Includes products in active sales which are not ready for occupancy.
MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
Comparable Company-Operated North American Properties
--------------------------------------------------------------------------
Sixteen Weeks Ended December 30, 2005
and December 31, 2004
------------------------------------------------
Average
REVPAR Occupancy Daily Rate
------ --------- ----------
Brand 2005 vs. 2004 2005 vs. 2004 2005 vs. 2004
--------------------------------------------------------------------------
Marriott Hotels &
Resorts $114.74 10.9% 71.1% 1.8% pts. $161.39 8.2%
The Ritz-Carlton(2) $199.80 12.9% 68.9% 3.8% pts. $290.17 6.7%
Renaissance Hotels &
Resorts $109.95 15.1% 70.1% 3.9% pts. $156.77 8.8%
Composite - Full-Service $122.82 11.8% 70.7% 2.3% pts. $173.68 8.2%
Residence Inn $85.47 9.7% 78.5% 1.7% pts. $108.87 7.2%
Courtyard $74.16 10.2% 68.2% 0.5% pts. $108.67 9.4%
TownePlace Suites $52.54 11.6% 73.3% 2.6% pts. $71.70 7.5%
SpringHill Suites $68.79 14.0% 72.3% 1.7% pts. $95.13 11.3%
Composite - Select-
Service & Extended-Stay $75.34 10.4% 71.5% 1.1% pts. $105.33 8.7%
Composite - All(1) $103.86 11.4% 71.0% 1.8% pts. $146.19 8.5%
Comparable Systemwide North American Properties
--------------------------------------------------------------------------
Sixteen Weeks Ended December 30, 2005
and December 31, 2004
------------------------------------------------
Average
REVPAR Occupancy Daily Rate
------ --------- ----------
Brand 2005 vs. 2004 2005 vs. 2004 2005 vs. 2004
--------------------------------------------------------------------------
Marriott Hotels &
Resorts $102.57 10.5% 69.0% 1.8% pts. $148.64 7.6%
The Ritz-Carlton(2) $199.80 12.9% 68.9% 3.8% pts. $290.17 6.7%
Renaissance Hotels &
Resorts $102.29 14.5% 69.7% 3.0% pts. $146.67 9.6%
Composite - Full-Service $109.26 11.3% 69.1% 2.1% pts. $158.11 7.9%
Residence Inn $81.62 9.1% 77.7% 1.9% pts. $105.00 6.4%
Courtyard $75.08 10.2% 69.9% 1.2% pts. $107.36 8.3%
Fairfield Inn $50.48 13.5% 67.4% 3.2% pts. $74.94 8.1%
TownePlace Suites $54.09 11.8% 74.1% 2.2% pts. $72.99 8.6%
SpringHill Suites $65.66 13.4% 72.5% 2.7% pts. $90.54 9.2%
Composite - Select-
Service & Extended-Stay $69.61 10.6% 71.8% 2.0% pts. $96.91 7.6%
Composite - All(1) $86.14 11.0% 70.7% 2.0% pts. $121.85 7.8%
(1) Composite - All statistics include properties for the Marriott Hotels
& Resorts, Renaissance Hotels & Resorts, The Ritz-Carlton, Courtyard,
Residence Inn, TownePlace Suites, Fairfield Inn, and SpringHill Suites
brands. Full-Service composite statistics include properties for
Marriott Hotels & Resorts, Renaissance Hotels & Resorts and The Ritz-
Carlton brands. Select-Service and Extended-Stay composite statistics
include properties for the Courtyard, Residence Inn, TownePlace
Suites, Fairfield Inn and SpringHill Suites brands.
(2) Statistics for The Ritz-Carlton are for September through December.
MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
Comparable Company-Operated North American Properties
--------------------------------------------------------------------------
Fifty-Two Weeks Ended December 30, 2005
and December 31, 2004
------------------------------------------------
Average
REVPAR Occupancy Daily Rate
------ --------- ----------
Brand 2005 vs. 2004 2005 vs. 2004 2005 vs. 2004
--------------------------------------------------------------------------
Marriott Hotels &
Resorts $113.31 9.0% 73.2% 1.0% pts. $154.84 7.5%
The Ritz-Carlton(2) $204.45 12.2% 71.0% 1.9% pts. $287.99 9.2%
Renaissance Hotels &
Resorts $108.01 12.5% 72.1% 3.0% pts. $149.90 7.8%
Composite - Full-Service $121.27 10.0% 72.8% 1.4% pts. $166.58 7.8%
Residence Inn $86.46 8.6% 80.0% 1.0% pts. $108.09 7.3%
Courtyard $75.32 9.1% 70.7% -0.2% pts. $106.50 9.4%
TownePlace Suites $53.18 9.1% 75.4% 1.1% pts. $70.52 7.4%
SpringHill Suites $70.36 16.3% 74.9% 3.4% pts. $93.89 11.0%
Composite - Select-
Service & Extended-Stay $76.49 9.4% 73.8% 0.5% pts. $103.70 8.7%
Composite - All(1) $103.29 9.8% 73.2% 1.0% pts. $141.14 8.2%
Comparable Systemwide North American Properties
--------------------------------------------------------------------------
Fifty-Two Weeks Ended December 30, 2005
and December 31, 2004
------------------------------------------------
Average
REVPAR Occupancy Daily Rate
------ --------- ----------
Brand 2005 vs. 2004 2005 vs. 2004 2005 vs. 2004
--------------------------------------------------------------------------
Marriott Hotels &
Resorts $102.21 8.7% 71.0% 1.2% pts. $144.03 6.9%
The Ritz-Carlton(2) $204.45 12.2% 71.0% 1.9% pts. $287.99 9.2%
Renaissance Hotels &
Resorts $100.45 12.4% 71.3% 2.6% pts. $140.89 8.3%
Composite - Full-Service $108.51 9.6% 71.0% 1.4% pts. $152.81 7.3%
Residence Inn $83.47 8.1% 79.5% 1.1% pts. $104.99 6.7%
Courtyard $76.31 8.9% 72.2% 0.6% pts. $105.72 7.9%
Fairfield Inn $51.76 11.7% 69.5% 2.3% pts. $74.47 8.1%
TownePlace Suites $54.62 10.8% 75.8% 1.1% pts. $72.11 9.3%
SpringHill Suites $66.88 13.5% 74.0% 2.9% pts. $90.43 9.1%
Composite - Select-
Service &
Extended-Stay $70.97 9.5% 73.8% 1.3% pts. $96.11 7.6%
Composite - All(1) $86.56 9.5% 72.7% 1.3% pts. $119.12 7.5%
(1) Composite - All statistics include properties for the Marriott Hotels
& Resorts, Renaissance Hotels & Resorts, The Ritz-Carlton, Courtyard,
Residence Inn, TownePlace Suites, Fairfield Inn, and SpringHill Suites
brands. Full-Service composite statistics include properties for
Marriott Hotels & Resorts, Renaissance Hotels & Resorts and The Ritz-
Carlton brands. Select-Service and Extended-Stay composite statistics
include properties for the Courtyard, Residence Inn, TownePlace
Suites, Fairfield Inn and SpringHill Suites brands.
(2) Statistics for The Ritz-Carlton are for January through December.
Comparable Company-Operated International Properties (1, 2)
--------------------------------------------------------------------------
Four Months Ended December 31, 2005 and December 31, 2004
---------------------------------------------------------
Average
REVPAR Occupancy Daily Rate
------ --------- ----------
Region/Brand(3) 2005 vs. 2004 2005 vs. 2004 2005 vs. 2004
--------------------------------------------------------------------------
Caribbean & Latin
America $102.05 10.2% 72.1% 3.9% pts. $141.62 4.3%
Continental Europe $99.87 3.2% 72.9% 0.4% pts. $137.07 2.7%
United Kingdom $141.92 4.5% 77.8% -0.5% pts. $182.44 5.2%
Middle East & Africa $88.93 28.6% 69.6% 0.8% pts. $127.84 27.2%
Asia Pacific(4) $94.14 10.8% 76.7% 0.1% pts. $122.79 10.7%
The Ritz-Carlton
International $150.08 12.0% 72.3% 1.1% pts. $207.67 10.2%
Total International(5) $105.37 9.7% 74.5% 0.9% pts. $141.39 8.5%
Worldwide(6) $104.25 10.9% 72.0% 1.6% pts. $144.89 8.5%
Comparable Systemwide International Properties (1, 2)
--------------------------------------------------------------------------
Four Months Ended December 31, 2005 and December 31, 2004
----------------------------------------------------------
Average
REVPAR Occupancy Daily Rate
------ --------- ----------
Region/Brand(3) 2005 vs. 2004 2005 vs. 2004 2005 vs. 2004
--------------------------------------------------------------------------
Caribbean & Latin America $95.64 10.7% 73.7% 5.8% pts. $129.84 1.9%
Continental Europe $99.99 7.0% 72.6% 1.7% pts. $137.70 4.4%
United Kingdom $124.31 4.5% 77.8% 0.1% pts. $159.74 4.4%
Middle East & Africa $87.53 31.3% 69.8% 3.0% pts. $125.42 25.7%
Asia Pacific(4) $98.04 14.4% 77.7% 0.9% pts. $126.18 13.1%
The Ritz-Carlton
International $150.08 12.0% 72.3% 1.1% pts. $207.67 10.2%
Total International(5) $103.88 11.0% 74.8% 1.3% pts. $138.87 9.1%
Worldwide(6) $89.18 11.0% 71.4% 1.9% pts. $124.91 8.0%
(1) International financial results are reported on a period-end basis,
while International statistics are reported on a month-end basis.
(2) Statistics are in constant dollars and include results for September
through December. Excludes North American (except for Worldwide).
(3) Regional information includes the Marriott Hotels & Resorts,
Renaissance Hotels & Resorts and Courtyard brands. Does not include
The Ritz-Carlton brand.
(4) Excludes Hawaii.
(5) Includes Hawaii.
(6) Includes international statistics for the four calendar months ended
December 31, 2005 and December 31, 2004, and North American statistics
for the sixteen weeks ended December 30, 2005 and December 31, 2004.
Includes the Marriott Hotels & Resorts, Renaissance Hotels & Resorts,
The Ritz-Carlton, Courtyard, Residence Inn, TownePlace Suites,
Fairfield Inn and SpringHill Suites brands.
Comparable Company-Operated International Properties (1, 2)
--------------------------------------------------------------------------
Twelve Months Ended December 31, 2005 and December 31, 2004
------------------------------------------------------------
Average
REVPAR Occupancy Daily Rate
------ --------- ----------
Region/Brand(3) 2005 vs. 2004 2005 vs. 2004 2005 vs. 2004
--------------------------------------------------------------------------
Caribbean & Latin America $107.24 12.1% 73.6% 3.9% pts. $145.78 6.3%
Continental Europe $96.69 3.1% 70.5% 0.5% pts. $137.09 2.4%
United Kingdom $140.49 4.8% 76.9% 0.1% pts. $182.61 4.8%
Middle East & Africa $84.96 29.5% 73.2% 4.0% pts. $116.07 22.5%
Asia Pacific(4) $86.63 13.1% 75.8% 0.8% pts. $114.34 12.0%
The Ritz-Carlton
International $143.30 18.3% 71.6% 3.4% pts. $200.08 12.7%
Total International(5) $101.84 11.0% 74.0% 1.5% pts. $137.62 8.7%
Worldwide(6) $102.94 10.1% 73.4% 1.2% pts. $140.26 8.3%
Comparable Systemwide International Properties (1, 2)
--------------------------------------------------------------------------
Twelve Months Ended December 31, 2005 and December 31, 2004
-------------------------------------------------------------
Average
REVPAR Occupancy Daily Rate
------ --------- ----------
Region/Brand(3) 2005 vs. 2004 2005 vs. 2004 2005 vs. 2004
--------------------------------------------------------------------------
Caribbean & Latin
America $101.02 13.1% 73.0% 4.6% pts. $138.31 5.9%
Continental Europe $95.10 5.9% 68.6% 1.0% pts. $138.63 4.3%
United Kingdom $120.53 3.1% 74.0% -1.1% pts. $162.96 4.6%
Middle East & Africa $82.10 29.3% 71.7% 4.5% pts. $114.45 21.2%
Asia Pacific(4) $90.79 14.7% 76.5% 1.5% pts. $118.63 12.5%
The Ritz-Carlton
International $143.30 18.3% 71.6% 3.4% pts. $200.08 12.7%
Total International(5) $100.02 11.9% 73.2% 1.8% pts. $136.57 9.1%
Worldwide(6) $88.72 9.9% 72.8% 1.4% pts. $121.94 7.8%
(1) International financial results are reported on a period-end basis,
while International statistics are reported on a month-end basis.
(2) Statistics are in constant dollars and include results for January
through December. Excludes North American (except for Worldwide).
(3) Regional information includes the Marriott Hotels & Resorts,
Renaissance Hotels & Resorts and Courtyard brands. Does not include
The Ritz-Carlton brand.
(4) Excludes Hawaii.
(5) Includes Hawaii.
(6) Includes international statistics for the twelve calendar months ended
December 31, 2005 and December 31, 2004, and North American statistics
for the fifty-two weeks ended December 30, 2005 and December 31, 2004.
Includes the Marriott Hotels & Resorts, Renaissance Hotels & Resorts,
The Ritz-Carlton, Courtyard, Residence Inn, TownePlace Suites,
Fairfield Inn and SpringHill Suites brands.
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
($ in millions)
We consider lodging operating income to be a meaningful indicator of our performance because it measures our growth in profitability as a lodging company and enables investors to compare the operating income related to our lodging segments to the operating income of other lodging companies. However, lodging operating income is a non-GAAP financial measure and is not an alternative to operating income or any other operating measure prescribed by United States generally accepted accounting principles.
The reconciliation of operating income to lodging operating income is as
follows:
Fiscal Year 2005
--------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
------- ------- ------- ------- ------
Operating income as reported $ $158 $ $41 $ $135 $221 $555
Add back: Synthetic fuel
operating loss 45 36 34 29 144
------- ------- ------- ------- ------
Lodging operating income $ 203 $ 77 $ 169 $250 $699
======= ======= ======= ======= ======
Fiscal Year 2004
-------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
------- ------- ------- ------- -----
Operating income as reported $151 $118 $99 $109 $477
Add back: Synthetic fuel
operating loss - 30 31 37 98
------- ------- ------- ------- ------
Lodging operating income $151 $148 $130 $146 $575
======= ======= ======= ======= ======
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
(in millions, except per share amounts)
The table below details the impact on our continuing operations of our Synthetic Fuel segment for the 2005 and 2004 fourth quarters. Our management evaluates the figures presented in the "Excluding Synthetic Fuel" columns because management expects the Synthetic Fuel segment will no longer have a material impact on our business after the Internal Revenue Code Section 29 synthetic fuel tax credits expire at the end of 2007 or earlier if the company elects to make permanent its present synthetic fuel production shutdown and because the presentation reflects the results of our core lodging operations. Management also believes that these presentations facilitate the comparison of our results with the results of other lodging companies.
However, the figures presented in the "Excluding Synthetic Fuel" columns are all non-GAAP financial measures, may be calculated and/or presented differently than presentations of other companies and are not alternatives to operating income, income from continuing operations, net income, earnings per share or any other operating measure prescribed by United States generally accepted accounting principles.
Fourth Quarter 2005
Continuing Operations
-----------------------------------------
Income from Synthetic
Continuing Fuel Excluding
Operations Impact Synthetic Fuel
------------- ----------- ---------------
Operating income (loss) $221 $(29) $250
Gains and other income 84 12 72
Interest income, provision
for loan losses and interest
expense (23) - (23)
Equity in earnings/(losses) 18 - 18
------------- ----------- ---------------
Pre-tax income (loss) 300 (17) 317
------------- ----------- ---------------
Tax (Provision)/Benefit (109) 2 (111)
Tax Credits 33 33 -
------------- ----------- ---------------
Total Tax (Provision)/Benefit (76) 35 (111)
------------- ----------- ---------------
Income from Continuing Operations
before Minority Interest 224 18 206
Minority Interest 13 15 (2)
------------- ----------- ---------------
Income from Continuing
Operations $237 $33 $204
============= =========== ===============
Diluted Shares 220.8 220.8 220.8
Earnings per Share from
Continuing Operations -
Diluted $1.07 $0.15 0.92
Tax Rate 25.3% 35.0%
Fourth Quarter 2004
Continuing Operations
-----------------------------------------
Income from Synthetic
Continuing Fuel Excluding
Operations Impact Synthetic Fuel
------------- ----------- ---------------
Operating income (loss) $109 $(37) $146
Gains and other income 69 - 69
Interest income, provision for
loan losses and interest expense 26 - 26
Equity in earnings/(losses) (5) - (5)
------------- ----------- ---------------
Pre-tax income (loss) 199 (37) 236
------------- ----------- ---------------
Tax (Provision)/Benefit (72) 9 (81)
Tax Credits 51 51 -
------------- ----------- ---------------
Total Tax (Provision)/Benefit (21) 60 (81)
------------- ----------- ---------------
Income from Continuing
Operations before Minority
Interest 178 23 155
Minority Interest 10 11 (1)
------------- ----------- ---------------
Income from Continuing
Operations $188 $34 $154
============= =========== ===============
Diluted Shares 239.1 239.1 239.1
Earnings per Share from
Continuing Operations - Diluted $0.79 $0.14 $0.65
Tax Rate 10.4% 34.3%
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
(in millions, except per share amounts)
The table below details the impact on our continuing operations of our Synthetic Fuel segment for the 52 weeks ended December 30, 2005 and December 31, 2004. Our management evaluates the figures presented in the "Excluding Synthetic Fuel" columns because management expects the Synthetic Fuel segment will no longer have a material impact on our business after the Internal Revenue Code Section 29 synthetic fuel tax credits expire at the end of 2007 or earlier if the company elects to make permanent its present synthetic fuel production shutdown and because the presentation reflects the results of our core lodging operations. Management also believes that these presentations facilitate the comparison of our results with the results of other lodging companies.
However, the figures presented in the "Excluding Synthetic Fuel" columns are all non-GAAP financial measures, may be calculated and/or presented differently than presentations of other companies and are not alternatives to operating income, income from continuing operations, net income, earnings per share or any other operating measure prescribed by United States generally accepted accounting principles.
Fiscal Year 2005
Continuing Operations
------------------------------------
Income from Synthetic Excluding
Continuing Fuel Synthetic
Operations Impact Fuel
----------- --------- ---------
Operating income (loss) $555 $(144) $699
Gains and other income 181 32 149
Interest income, provision for loan
losses and interest expense (55) - (55)
Equity in earnings/(losses) 36 - 36
--------- ------- ---------
Pre-tax income (loss) 717 (112) 829
--------- ------- ---------
Tax (Provision)/Benefit (261) 23 (284)
Tax Credits 167 167 -
--------- ------- ---------
Total Tax (Provision)/Benefit (94) 190 (284)
--------- ------- ---------
Income from Continuing Operations
before Minority Interest 623 78 545
Minority Interest 45 47 (2)
--------- ------- ---------
Income from Continuing Operations $668 $125 $543
========= ======= =========
Diluted Shares 231.2 231.2 231.2
Earnings per Share from Continuing
Operations - Diluted $2.89 $0.54 $2.35
Tax Rate 13.1% 34.3%
Fiscal Year 2004
Continuing Operations
------------------------------------
Income from Synthetic Excluding
Continuing Fuel Synthetic
Operations Impact Fuel
----------- --------- ---------
Operating income (loss) $477 $(98) $575
Gains and other income 164 28 136
Interest income, provision for loan
losses and interest expense 55 - 55
Equity in earnings/(losses) (42) (28) (14)
--------- ------- ---------
Pre-tax income (loss) 654 (98) 752
--------- ------- ---------
Tax (Provision)/Benefit (244) 21 (265)
Tax Credits 144 144 -
--------- ------- ---------
Total Tax (Provision)/Benefit (100) 165 (265)
--------- ------- ---------
Income from Continuing Operations
before Minority Interest 554 67 487
Minority Interest 40 40 -
--------- ------- ---------
Income from Continuing Operations $594 $107 $487
========= ======= =========
Diluted Shares 240.5 240.5 240.5
Earnings per Share from Continuing
Operations - Diluted $2.47 $0.44 $2.03
Tax Rate 15.3% 35.2%
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
(in millions, except per share amounts)
The table below details the impact on our continuing operations of the $94 million charge (2005 second quarter) associated with the agreements we entered into with CTF Holdings Ltd. (the "CTF transaction") and the $17 million leveraged lease impairment charge (2005 third quarter). The $94 million charge recorded in connection with the CTF transaction was primarily non-cash and primarily due to the write-off of deferred contract acquisition costs associated with the termination of management agreements. In addition, we incurred a material charge of $17 million associated with the impairment of our one investment in an aircraft leveraged lease. We do not consider the leveraged lease investment to be related to our core business.
Our management evaluates the figures in the "Excluding CTF and Leveraged Lease Charges" column because they allow for year-over-year comparisons relative to our on-going operations before material charges and believes that this presentation facilitates the comparison of our results with the results of other lodging companies. Management evaluates income-related financial measures that exclude the leveraged lease impairment charge in order to better assess the period-over-period performance of our core operating businesses. Management evaluates income-related financial measures that exclude the CTF transaction charge in order to better assess the Company's period-over-period performance of our lodging operations in light of the fact that the CTF transaction charge does not reflect the fact that new management agreements, entered into as part of the CTF transaction, substantially replaced the old management agreements the termination of which make up the bulk of the CTF transaction charge.
However, the figures presented in the "Excluding CTF and Leveraged Lease Charges" column are all non-GAAP financial measures, may be calculated and/or presented differently than presentations of other companies, and are not alternatives to operating income, income from continuing operations, net income, earnings per share or any other operating measure prescribed by United States generally accepted accounting principles.
Fiscal Year 2005
---------------------------------------------------
Excluding
Income CTF Leveraged CTF and
from Transaction Lease Leveraged
Continuing Charge Charge Lease
Operations Charges
---------- ----------- --------- ---------
Operating income
(loss) $ 555 $ (94) $ - $ 649
Gains and other
income 181 - - 181
Interest income,
provision for
loan losses and
interest expense (55) - (17) (38)
Equity in earnings 36 - - 36
---------- ----------- ---------- --------
Pre-tax income
(loss) 717 (94) (17) 828
---------- ----------- ---------- --------
Tax (Provision)/
Benefit (261) 32 6 (299)
Tax Credits 167 - - 167
---------- ----------- ---------- --------
Total Tax (Provision)/
Benefit (94) 32 6 (132)
---------- ----------- ---------- --------
Income (Loss)
from Continuing
Operations before
Minority Interest 623 (62) (11) 696
Minority Interest 45 - - 45
---------- ----------- ---------- --------
Income (Loss)
from Continuing
Operations $ 668 $ (62) $ (11) $ 741
========== =========== ========== ========
Diluted Shares 231.2 231.2 231.2 231.2
Earnings/(Loss) per
Share from
Continuing
Operations - Diluted $2.89 $(0.27) $(0.05) $3.21
Fiscal Year 2004
---------------------------------------------------
Excluding
Income CTF Leveraged CTF and
from Transaction Lease Leveraged
Continuing Charge Charge Lease
Operations Charges
---------- ----------- --------- ---------
Operating income $ 477 $ - $ - $ 477
Gains and other
income 164 - - 164
Interest income,
provision for loan
losses and
interest expense 55 - - 55
Equity in losses (42) - - (42)
---------- ----------- ---------- --------
Pre-tax income 654 - - 654
Tax Provision (244) - - (244)
Tax Credits 144 - - 144
---------- ----------- ---------- --------
Total Tax Provision (100) - - (100)
---------- ----------- ---------- --------
Income from Continuing
Operations before
Minority Interest 554 - - 554
Minority Interest 40 - - 40
---------- ----------- ---------- --------
Income from
Continuing
Operations $ $594 $ - $ - $ 594
========== =========== ========== ========
Diluted Shares 240.5 240.5 240.5 240.5
Earnings per Share
from Continuing
Operations -
Diluted $ $2.47 - $ - $ 2.47
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure Reconciliation
We adopted Statement of Financial Accounting Standard No. 123 (revised 2004), "Share-Based Payment ("FAS No. 123R") at the beginning of our 2006 fiscal year. We estimate the adoption of FAS No. 123R, using the modified prospective method, will result in incremental pre-tax expense in the 2006 first quarter of $9 million and total incremental pre-tax expense for the entire 2006 fiscal year of $44 million.
Our management evaluates diluted earnings per share from continuing operations excluding the impact of the Synthetic Fuel segment and the adoption of FAS 123R because it allows for year-over-year comparisons relative to our on-going lodging operations before material charges and because management expects the Synthetic Fuel segment will no longer have a material impact on our business after the Internal Revenue Code Section 29 synthetic fuel tax credits expire at the end of 2007 or earlier if the company elects to make permanent its present synthetic fuel production shutdown. Management believes that this presentation facilitates the comparison of our results with the results of other lodging companies.
However, diluted earnings per share from continuing operations excluding the impact of the Synthetic Fuel segment and the adoption of FAS 123R is a non-GAAP financial measure, may be calculated and/or presented differently than presentations of other companies and are not alternatives to operating income, income from continuing operations, net income, earnings per share or any other operating measure prescribed by United States generally accepted accounting principles.
Range
--------------------------------------
Estimated Estimated
First Quarter 2006 First Quarter 2006
------------------- ------------------
Diluted earnings per share from
continuing operations
excluding the impact of the
Synthetic Fuel segment $ 0.67 $ 0.73
Add back estimated eps impact
associated with the adoption
of FAS No. 123R 0.03 0.03
------------------- ------------------
Diluted earnings per share from
continuing operations excluding
the impact of the Synthetic
Fuel segment and the adoption
of FAS No. 123R $ 0.70 $ 0.76
=================== ==================
Range
------------------------------------
Estimated Estimated
Full Year 2006 Full Year 2006
------------------- ----------------
Diluted earnings per share from
continuing operations
excluding the impact of the
Synthetic Fuel segment $ 2.95 $ 3.05
Add back estimated eps impact
associated with the adoption
of FAS No. 123R 0.13 0.13
------------------- ----------------
Diluted earnings per share from
continuing operations excluding
the impact of the Synthetic
Fuel segment and the adoption
of FAS No. 123R $ $3.08 $ $3.18
=================== ================
MARRIOTT INTERNATIONAL, INC.
Non-GAAP Financial Measure
EBITDA
($ in millions)
Our management considers earnings before interest, taxes, depreciation and amortization (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.
In the 2005 second quarter we recorded a $94 million charge associated with the agreements we entered into with CTF Holdings Ltd. (the "CTF transaction"). The $94 million charge was primarily non-cash and due to the write-off of deferred contract acquisition costs associated with the termination of management agreements. In addition, we incurred a material charge of $17 million in the 2005 third quarter associated with the impairment of our one investment in an aircraft leveraged lease. We do not consider the leveraged lease investment to be related to our core business. Management expects the Synthetic Fuel segment will no longer have a material impact on our business after the Internal Revenue Code Section 29 synthetic fuel tax credits expire at the end of 2007 or earlier if the company elects to make permanent its present synthetic fuel production shutdown.
Management evaluates Adjusted EBITDA which excludes the aircraft leveraged lease impairment charge, discontinued operations and the impact of our Synthetic Fuel segment in order to better assess the period-over-period performance of our on-going core operating businesses. Management evaluates Adjusted EBITDA which also excludes the CTF transaction charge in order to better assess the Company's period-over-period performance of our lodging operations in light of the fact that the CTF transaction charge does not reflect the fact that new management agreements, entered into as part of the CTF transaction, substantially replaced the old management agreements the termination of which makes up the bulk of the CTF transaction charge. Management also believes that these presentations facilitate the comparison of our results with the results of other lodging companies.
However, EBITDA and Adjusted EBITDA are non-GAAP financial measures, may
be calculated and/or presented differently than presentations of other
companies, and are not alternatives to operating income, income from
continuing operations, net income, cash flow from operations, or any other
operating measure prescribed by United States generally accepted accounting
principles.
Fiscal Year 2005
--------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
------- ------- ------- ------- ------
Net income $ 145 $ 138 $ 149 $ 237 $ 669
Interest expense 24 21 24 37 106
Tax provision/(benefit) from
continuing operations 5 (20) 33 76 94
Tax provision from discontinued
operations - - 1 - 1
Depreciation(1) 30 29 34 46 139
Amortization 7 7 7 7 28
Interest expense from unconsolidated
joint ventures 11 6 4 8 29
Depreciation and amortization from
unconsolidated joint ventures 12 9 7 11 39
------- ------- ------- ------- ------
EBITDA $ 234 $ 190 $ 259 $ 422 $1,105
Synthetic fuel adjustment 42 22 (7) (1) 56
Pre-tax gain discontinued
operations - - (2) - (2)
Non-recurring charges -
CTF acquisition charge - 94 - - 94
Leveraged lease charge - - 17 - 17
------- ------- ------- ------- ------
Adjusted EBITDA $ 276 $ 306 $ 267 $ 421 $1,270
======= ======= ======= ======= ======
Increase over 2004 Adjusted
EBITDA 14% 10% 12% 23% 15%
The following items make up the
synthetic fuel adjustment:
Pre-tax synthetic fuel losses $ 54 $ 28 $ 13 $ 17 $ 112
Pre-tax minority interest -
synthetic fuel (10) (4) (18) (15) (47)
Synthetic fuel depreciation (2) (2) (2) (3) (9)
------- ------- ------- ------- ------
EBITDA adjustment for synthetic
fuel $ 42 $ 22 $ (7) (1)$ 56
======= ======= ======= ======= ======
(1) Does not include depreciation reimbursed by third party owners.
Fiscal Year 2004
--------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
------- ------- ------- ------- ------
Net income $ 114 $ 160 $ 133 $ 189 $ 596
Interest expense 22 24 23 30 99
Tax provision continuing
operations 18 33 28 21 100
Tax provision discontinued
operations - - 1 - 1
Depreciation 32 29 32 40 133
Amortization 7 8 7 11 33
Interest expense from unconsolidated
joint ventures 10 11 9 15 45
Depreciation and amortization from
unconsolidated joint ventures 13 9 13 17 52
------- ------- ------- ------- ------
EBITDA $ 216 $ 274 $ 246 $ 323 $1,059
Synthetic fuel adjustment 28 5 (6) 21 48
Pre-tax gain discontinued
operations (1) - (1) (1) (3)
------- ------- ------- ------- ------
Adjusted EBITDA $243 $279 $239 $343 $1,104
======= ======= ======= ======= ======
The following items make up the
synthetic fuel adjustment:
Pre-tax synthetic fuel losses $ - $ 21 $ 12 $ 37 $ 70
Pre-tax synthetic fuel equity
losses 28 - - - 28
Pre-tax minority interest -
synthetic fuel - (14) (15) (11) (40)
Synthetic fuel depreciation - (2) (3) (5) (10)
------- ------- ------- ------- ------
EBITDA adjustment for synthetic
fuel $ 28 $ 5 $ (6)$ 21 $ 48
======= ======= ======= ======= ======
IRPR#1
SOURCE Marriott International, Inc.
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