UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 20, 2004
MARRIOTT INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 1-13881 | 52-2055918 | ||
| (State of incorporation) | (Commission File No.) | (IRS Employer Identification No.) |
10400 Fernwood Road, Bethesda, Maryland 20817
(Address of principal executive offices, including Zip Code)
Registrant’s telephone number, including area code: (301) 380-3000
ITEM 12. DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Marriott International, Inc. (the Company) published its fourth quarter and full year 2003 and 2002 results in a financial statement format which provided detail not included in previously issued reports and reflected the reclassification of certain line items. The Company today is furnishing its Consolidated Statement of Income by Quarter for the Fiscal Years Ended January 2, 2004 and January 3, 2003, in this new format to provide comparable information for the first three quarters of 2003 and 2002. As part of our new income statement format, gains, including timeshare note sale gains, and equity in earnings/losses from our joint ventures are reflected below operating income. In addition, general, administrative and other expenses now reflect general, administrative and other expenses for the entire Company including domestic and international lodging, our ExecuStay business and our timeshare segment, as well as corporate expenses. This new format does not result in any changes to the Company’s reported earnings in any quarter. A copy of the Consolidated Statement of Income by Quarter for each of the Fiscal Years Ended January 2, 2004 and January 3, 2003 is attached as Exhibit 99 and incorporated by reference.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MARRIOTT INTERNATIONAL, INC.
| Date: February 20, 2004 | By: /s/ Carl T. Berquist
Carl T. Berquist Executive Vice President, Financial Information and Risk Management | |
2
EXHIBIT INDEX
| Exhibit No. |
Description | |
| Exhibit 99 | Marriott International, Inc. Consolidated Statement of Income by Quarter for the Fiscal Years Ended January 2, 2004 and January 3, 2003. | |
EXHIBIT 99
Page 1
MARRIOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF INCOME BY QUARTER
Fiscal Year Ended January 2, 2004
($ in millions, except per share amounts)
| First Quarter10 |
Second Quarter10 |
Third Quarter10 |
Fourth Quarter10 |
Fiscal Year 20039 |
||||||||||||||||
| REVENUES |
||||||||||||||||||||
| Base management fees |
$ | 92 | $ | 88 | $ | 86 | $ | 122 | $ | 388 | ||||||||||
| Franchise fees |
52 | 56 | 61 | 76 | 245 | |||||||||||||||
| Incentive management fees |
29 | 28 | 18 | 34 | 109 | |||||||||||||||
| Owned, leased, corporate housing and other1 |
137 | 145 | 132 | 219 | 633 | |||||||||||||||
| Timeshare interval sales and services2 |
237 | 234 | 296 | 378 | 1,145 | |||||||||||||||
| Cost reimbursements3 |
1,408 | 1,402 | 1,423 | 1,959 | 6,192 | |||||||||||||||
| Synthetic fuel |
68 | 63 | 93 | 78 | 302 | |||||||||||||||
| Total Revenues |
2,023 | 2,016 | 2,109 | 2,866 | 9,014 | |||||||||||||||
| OPERATING COSTS AND EXPENSES |
||||||||||||||||||||
| Owned, leased and corporate housing—direct4 |
110 | 119 | 118 | 158 | 505 | |||||||||||||||
| Timeshare—direct |
208 | 215 | 265 | 323 | 1,011 | |||||||||||||||
| Reimbursed costs |
1,408 | 1,402 | 1,423 | 1,959 | 6,192 | |||||||||||||||
| General, administrative and other5 |
112 | 107 | 117 | 187 | 523 | |||||||||||||||
| Synthetic fuel |
127 | 105 | 96 | 78 | 406 | |||||||||||||||
| Total Expenses |
1,965 | 1,948 | 2,019 | 2,705 | 8,637 | |||||||||||||||
| OPERATING INCOME |
58 | 68 | 90 | 161 | 377 | |||||||||||||||
| Gains and other income6 |
1 | 38 | 15 | 52 | 106 | |||||||||||||||
| Interest expense |
(26 | ) | (25 | ) | (26 | ) | (33 | ) | (110 | ) | ||||||||||
| Interest income |
20 | 27 | 31 | 51 | 129 | |||||||||||||||
| Provision for loan losses |
(5 | ) | (1 | ) | (1 | ) | — | (7 | ) | |||||||||||
| Equity in earnings (losses)—Synthetic fuel7 |
— | — | — | 10 | 10 | |||||||||||||||
| —Other8 |
(1 | ) | 3 | (3 | ) | (16 | ) | (17 | ) | |||||||||||
| INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND MINORITY INTEREST |
47 | 110 | 106 | 225 | 488 | |||||||||||||||
| Benefit (provision) for income taxes |
40 | 16 | 16 | (29 | ) | 43 | ||||||||||||||
| INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST |
87 | 126 | 122 | 196 | 531 | |||||||||||||||
| Synthetic fuel minority interest |
— | — | (29 | ) | (26 | ) | (55 | ) | ||||||||||||
| INCOME FROM CONTINUING OPERATIONS |
87 | 126 | 93 | 170 | 476 | |||||||||||||||
| Discontinued operations |
||||||||||||||||||||
| Income (loss) from Senior Living Services, net of tax |
30 | (1 | ) | — | (3 | ) | 26 | |||||||||||||
| (Loss) Income from Distribution Services, net of tax |
(1 | ) | — | (1 | ) | 2 | — | |||||||||||||
| NET INCOME |
$ | 116 | $ | 125 | $ | 92 | $ | 169 | $ | 502 | ||||||||||
| EARNINGS PER SHARE—Basic |
||||||||||||||||||||
| Earnings from continuing operations |
$ | 0.37 | $ | 0.54 | $ | 0.40 | $ | 0.74 | $ | 2.05 | ||||||||||
| Earnings (loss) from discontinued operations |
0.13 | — | (0.01 | ) | (0.01 | ) | 0.11 | |||||||||||||
| Earnings per share |
$ | 0.50 | $ | 0.54 | $ | 0.39 | $ | 0.73 | $ | 2.16 | ||||||||||
| EARNINGS PER SHARE—Diluted |
||||||||||||||||||||
| Earnings from continuing operations |
$ | 0.36 | $ | 0.52 | $ | 0.38 | $ | 0.69 | $ | 1.94 | ||||||||||
| Earnings (loss) from discontinued operations |
0.12 | (0.01 | ) | (0.01 | ) | — | 0.11 | |||||||||||||
| Earnings per share |
$ | 0.48 | $ | 0.51 | $ | 0.37 | $ | 0.69 | $ | 2.05 | ||||||||||
EXHIBIT 99
Page 2
MARRIOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF INCOME BY QUARTER
Fiscal Year Ended January 3, 2003
($ in millions, except per share amounts)
| First Quarter 11 |
Second Quarter 11 |
Third Quarter 11 |
Fourth Quarter 11 |
Fiscal Year 2002 9 |
||||||||||||||||
| REVENUES |
||||||||||||||||||||
| Base management fees |
$ | 85 | $ | 91 | $ | 82 | $ | 121 | $ | 379 | ||||||||||
| Franchise fees |
51 | 54 | 55 | 72 | 232 | |||||||||||||||
| Incentive management fees |
32 | 52 | 25 | 53 | 162 | |||||||||||||||
| Owned, leased, corporate housing and other 1 |
139 | 165 | 150 | 197 | 651 | |||||||||||||||
| Timeshare interval sales and services 2 |
221 | 261 | 259 | 318 | 1,059 | |||||||||||||||
| Cost reimbursements 3 |
1,262 | 1,343 | 1,282 | 1,852 | 5,739 | |||||||||||||||
| Synthetic fuel |
5 | 53 | 55 | 80 | 193 | |||||||||||||||
| Total Revenues |
1,795 | 2,019 | 1,908 | 2,693 | 8,415 | |||||||||||||||
| OPERATING COSTS AND EXPENSES |
||||||||||||||||||||
| Owned, leased and corporate housing—direct 4 |
117 | 126 | 123 | 214 | 580 | |||||||||||||||
| Timeshare—direct |
195 | 227 | 233 | 283 | 938 | |||||||||||||||
| Reimbursed costs |
1,262 | 1,343 | 1,282 | 1,852 | 5,739 | |||||||||||||||
| General, administrative and other 5 |
101 | 127 | 108 | 174 | 510 | |||||||||||||||
| Synthetic fuel |
11 | 96 | 87 | 133 | 327 | |||||||||||||||
| Total Expenses |
1,686 | 1,919 | 1,833 | 2,656 | 8,094 | |||||||||||||||
| OPERATING INCOME |
109 | 100 | 75 | 37 | 321 | |||||||||||||||
| Gains and other income 6 |
15 | 20 | 28 | 69 | 132 | |||||||||||||||
| Interest expense |
(19 | ) | (21 | ) | (19 | ) | (27 | ) | (86 | ) | ||||||||||
| Interest income |
19 | 28 | 28 | 47 | 122 | |||||||||||||||
| Provision for loan losses |
— | — | — | (12 | ) | (12 | ) | |||||||||||||
| Equity in earnings (losses)—Synthetic fuel 7 |
— | — | — | — | — | |||||||||||||||
| —Other 8 |
(6 | ) | 6 | — | (6 | ) | (6 | ) | ||||||||||||
| INCOME FROM CONTINUING OPERATIONS |
118 | 133 | 112 | 108 | 471 | |||||||||||||||
| (Provision) benefit for income taxes |
(36 | ) | (6 | ) | 2 | 8 | (32 | ) | ||||||||||||
| INCOME FROM CONTINUING OPERATIONS BEFORE |
82 | 127 | 114 | 116 | 439 | |||||||||||||||
| Synthetic fuel minority Interest |
— | — | — | — | — | |||||||||||||||
| INCOME FROM CONTINUING OPERATIONS |
82 | 127 | 114 | 116 | 439 | |||||||||||||||
| Discontinued operations |
||||||||||||||||||||
| Income (loss) from Senior Living Services, net of tax |
4 | 3 | 10 | (125 | ) | (108 | ) | |||||||||||||
| Loss from Distribution Services, net of tax |
(4 | ) | (1 | ) | (21 | ) | (28 | ) | (54 | ) | ||||||||||
| NET INCOME (LOSS) |
$ | 82 | $ | 129 | $ | 103 | $ | (37 | ) | $ | 277 | |||||||||
| EARNINGS PER SHARE—Basic |
||||||||||||||||||||
| Earnings from continuing operations |
$ | 0.34 | $ | 0.52 | $ | 0.47 | $ | 0.49 | $ | 1.83 | ||||||||||
| Earnings (loss) from discontinued operations |
— | 0.01 | (0.04 | ) | (0.65 | ) | (0.68 | ) | ||||||||||||
| Earnings (loss) per share |
$ | 0.34 | $ | 0.53 | $ | 0.43 | $ | (0.16 | ) | $ | 1.15 | |||||||||
| EARNINGS PER SHARE—Diluted |
||||||||||||||||||||
| Earnings from continuing operations |
$ | 0.32 | $ | 0.49 | $ | 0.45 | $ | 0.47 | $ | 1.74 | ||||||||||
| Earnings (loss) from discontinued operations |
— | 0.01 | (0.04 | ) | (0.62 | ) | (0.64 | ) | ||||||||||||
| Earnings (loss) per share |
$ | 0.32 | $ | 0.50 | $ | 0.41 | $ | (0.15 | ) | $ | 1.10 | |||||||||
EXHIBIT 99
Page 3
Notes:
| 1 | Owned, leased, corporate housing and other revenue includes revenue from the properties we own or lease, our ExecuStay business, land rent income and other revenue. |
| 2 | Timeshare interval sales and services includes total timeshare revenue except for base fees, reimbursed costs and note sale gains. |
| 3 | Cost reimbursements include reimbursements from lodging properties for Marriott funded operating expenses. Marriott earns no markup on these expenses. |
| 4 | Owned, leased and corporate housing—direct expenses include operating expenses of our ExecuStay business unit, and owned or leased hotels including lease payments, pre-opening expenses and depreciation. |
| 5 | General, administrative and other expenses include the overhead costs allocated to our lodging business segments (including ExecuStay and timeshare) and our unallocated corporate overhead costs. |
| 6 | Gains and other income includes gains on the sale of real estate, timeshare note sale gains, and gains on the sale of our interests in joint ventures. |
| 7 | Equity in earnings (losses)—Synthetic fuel includes our share of the equity in earnings of the Synthetic fuel joint venture and the earnout we received from the Synthetic fuel joint venture partner beginning November 7, 2003. The earnout we received prior to November 7, 2003, along with the revenue generated from the previously consolidated Synthetic fuel joint venture, are included in Synthetic fuel revenue. |
| 8 | Equity in earnings (losses)—Other includes our equity in earnings (losses) of unconsolidated joint ventures. |
| 9 | Fiscal Year 2003 included 52 weeks. Fiscal Year 2002 included 53 weeks. |
| 10 | The quarters consisted of 12 weeks, except the fourth quarter 2003, which consisted of 16 weeks. |
| 11 | The quarters consisted of 12 weeks, except the fourth quarter 2002, which consisted of 17 weeks. |