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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): November 7, 2016
 _______________________________________ 
MARRIOTT INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
 _______________________________________ 
 
 
 
 
 
 
Delaware
 
1-13881
 
52-2055918
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
 
 
 
10400 Fernwood Road, Bethesda, Maryland
 
20817
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (301) 380-3000
 _______________________________________ 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 




Item 2.02.
Results of Operations and Financial Condition.

Financial Results for the Quarter Ended September 30, 2016
Marriott International, Inc. (“Marriott”) today issued a press release reporting financial results for the quarter ended September 30, 2016.
A copy of Marriott’s press release is attached as Exhibit 99 and incorporated by reference.

 
Item 9.01.
Financial Statements and Exhibits.

(d) Exhibits. The following exhibits are furnished with this report:
Exhibit 99
Press release issued on November 7, 2016, reporting financial results for the quarter ended September 30, 2016.

2


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: November 7, 2016
 
 
 
 
 
By: 
 
/s/ Bao Giang Val Bauduin
 
 
 
 
 
 
 
 
Bao Giang Val Bauduin
 
 
 
 
 
 
 
 
Controller and Chief Accounting Officer

3


EXHIBIT INDEX
 
 
 
 
Exhibit No.
  
Description
 
 
99
  
Press release issued on November 7, 2016, reporting financial results for the quarter ended September 30, 2016.


4
Exhibit
Exhibit 99


https://cdn.kscope.io/bfe464c9bff1bed61045fe79fa32574b-marq32016pressrelease_image1.jpg    https://cdn.kscope.io/bfe464c9bff1bed61045fe79fa32574b-marq32016pressrelease_image2.jpg
 
NEWS

CONTACT:    Felicia Farrar McLemore
    (301) 380-2702
    felicia.mclemore@marriott.com

MARRIOTT INTERNATIONAL REPORTS THIRD QUARTER 2016 RESULTS

HIGHLIGHTS

•
Marriott International’s acquisition of Starwood Hotels & Resorts Worldwide closed on September 23, 2016. At quarter-end, the company had nearly 1.6 million rooms open or in the development pipeline;

•
Third quarter reported diluted EPS totaled $0.26, a 67 percent decrease over prior year results. Third quarter adjusted diluted EPS totaled $0.91, a 17 percent increase over prior year results. Adjusted third quarter results exclude merger-related costs and eight days of Starwood Hotels & Resorts Worldwide’s results in the quarter;
 
•
On a pro forma basis reflecting the performance for both companies for the three months ended September 30, 2016, North American comparable systemwide constant dollar RevPAR rose 2.6 percent, while worldwide comparable systemwide constant dollar RevPAR rose 2.2 percent;

•
During the three months ended September 30, 2016, Marriott and Starwood together added more than 17,600 rooms, including approximately 1,600 rooms converted from competitor brands and nearly 8,600 rooms in international markets;

•
At the end of the third quarter, Marriott’s worldwide development pipeline increased to nearly 420,000 rooms, including more than 46,000 rooms approved, but not yet subject to signed contracts. The development pipeline for Legacy-Starwood brands alone totaled nearly 130,000 rooms, including roughly 12,000 rooms approved, but not yet subject to signed contracts;

•
Third quarter reported net income totaled $70 million, a 67 percent decrease over prior year results. Third quarter adjusted net income totaled $235 million, a 12 percent increase over prior year results;

•
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $474 million in the quarter, a 10 percent increase over third quarter 2015 adjusted EBITDA.


1

BETHESDA, MD – November 7, 2016 - Marriott International, Inc. (NASDAQ: MAR) today reported third quarter 2016 results.
On September 23, 2016, Marriott completed its acquisition of Starwood Hotels & Resorts Worldwide (Starwood). The discussion in the first section below reflects reported results for the third quarter as calculated in accordance with US generally accepted accounting principles (GAAP). To further assist investors, the company is also providing (a) adjusted results that exclude Starwood results from September 23 to September 30, 2016, as well as merger-related costs; and (b) selected pro forma information for the third quarter that assumes Marriott’s acquisition of Starwood and Starwood’s sale of its timeshare business had been completed on January 1, 2015, but uses the estimated fair value of assets and liabilities as of the actual closing date of the acquisition.
Arne M. Sorenson, president and chief executive officer of Marriott International, said, “We were thrilled to close the acquisition of Starwood in late September. We are enthusiastically engaged in welcoming Starwood’s associates around the world into the Marriott family and are working diligently on integrating the companies and realizing revenue and cost synergies as quickly as possible.
“We’ve already had a big win on the integration front. The day the acquisition closed, we offered status match to our more than 85 million combined loyalty members, along with the ability to transfer and redeem points between Marriott Rewards, which includes The Ritz-Carlton Rewards, and Starwood Preferred Guest, the industry’s leading loyalty programs. In mid-October, we also announced an industry-first benefit for members of our co-brand credit cards, letting members earn bonus points for stays at hotels across all 30 brands. In just a few short weeks after closing, our most loyal guests are already reaping the most important benefits of the merger and they are telling us they love it.
“Looking forward to 2017, we expect systemwide constant dollar RevPAR for the combined portfolio will be flat to up 2 percent in North America, outside North America and worldwide. Our group booking pace at company-operated North American full-service hotels for 2017 is up 2 percent with about 70 percent of 2017 expected group business volume booked thus far. While special corporate rate negotiations are still underway, we expect room rates for comparable customers will increase at a mid-single digit rate in most markets.

2

“The Marriott and Starwood development teams continued their great work in the quarter, delivering a combined global pipeline of nearly 420,000 rooms, over half of which are outside North America. Given this strong development pipeline, we anticipate 6 percent worldwide net room additions in 2017.
“We remain committed to our asset-light strategy, which should deliver meaningful management and franchise fees in 2017. On a pro forma basis assuming the Starwood acquisition and Starwood’s sale of its timeshare business had closed on January 1, 2015, Marriott anticipates earning more than $2.8 billion in fee revenue for full year 2016. In addition, as part of that asset-light strategy, we are working toward generating more than $1.5 billion from asset sales over the next two years, in transactions where we expect to retain long-term operating agreements. Based on our preliminary estimates for the combined company, we believe we are already within our targeted leverage range of 3 to 3.25x adjusted debt to adjusted EBITDAR, excluding merger-related costs and charges. Given our continued strong, sustainable cash flow we expect to resume share repurchases in the 2016 fourth quarter.”
Marriott International GAAP - Financial Results As Reported
Marriott reported net income totaled $70 million in the third quarter, a 67 percent decrease over 2015 third quarter net income of $210 million. Reported diluted earnings per share (EPS) was $0.26 in the quarter, a 67 percent decrease from diluted EPS in the year-ago quarter.
Marriott revenues totaled more than $3.9 billion in the 2016 third quarter, compared to revenues of approximately $3.6 billion for the third quarter of 2015. Revenues for the third quarter of 2016 include $168 million related to the eight days of Starwood’s results in the quarter.
Base management and franchise fees totaled $430 million in the 2016 third quarter, compared to $397 million in the year-ago quarter. The year-over-year increase in fees largely reflects $16 million related to the eight days of Starwood’s results in the quarter, higher RevPAR and unit growth, partially offset by $7 million of unfavorable foreign exchange and $3 million of lower relicensing fees.
Third quarter worldwide incentive management fees increased 19 percent to $81 million, primarily due to $4 million related to the eight days of Starwood’s results in the quarter, higher RevPAR and house profit margins, as well as increased international distribution, partially offset by $2 million of unfavorable foreign exchange.

3

Owned, leased, and other revenue, net of direct expenses, totaled $85 million in the 2016 third quarter, compared to $54 million in the year-ago quarter. The year-over-year increase largely reflects $12 million related to the eight days of Starwood’s results in the quarter, improved results at several leased properties, including recently renovated hotels, the results for two recently opened owned properties in Rio de Janeiro and $4 million of higher residential and credit card branding fees.
Depreciation, amortization, and other expenses totaled $36 million in the third quarter compared to $31 million in the year-ago quarter. The year-over-year increase largely reflects $4 million related to the eight days of Starwood’s results.
Merger-related costs and charges totaled $228 million in the third quarter compared to none in the year-ago quarter. Included in the merger-related costs and charges are $186 million of severance and retention costs, $24 million of integration costs and $18 million of transaction costs.
General, administrative, and other expenses for the 2016 third quarter totaled $161 million compared to $149 million in the year-ago quarter. The increase in expenses year-over-year was largely due to $7 million of expenses related to the eight days of Starwood’s results in the quarter and higher routine administrative costs.
Gains and other income increased to $3 million in the 2016 third quarter. The year-over-year increase was largely due to a distribution related to the sale of a hotel in an investment fund.
Interest expense, net totaled $46 million in the third quarter, an $8 million increase over the year-ago quarter, largely due to $9 million of interest expense related to the debt raised for the Starwood acquisition and $1 million related to the eight days of Starwood results, partially offset by interest earned on a larger portfolio of loans.
Equity in earnings totaled $3 million in the third quarter, compared to $8 million in the year-ago quarter. The year-over-year decrease was largely due to the favorable adjustment of liabilities in an International joint venture in the third quarter of 2015, partially offset by $1 million related to the eight days of Starwood results in the quarter.

4

Legacy-Marriott Only - Financial Results As Adjusted
The adjusted financial results presented in this section relate only to the results of Marriott excluding the impact of the Starwood acquisition (referred to as the Legacy-Marriott business). This information is being presented to allow shareholders to more easily compare the results of the Legacy-Marriott business with the reported results for the third quarter of 2015. All of the adjusted results discussed in this section exclude Starwood results from September 23 to September 30, 2016 and merger-related costs. See page A-1 for the calculation of adjusted results.
Third quarter 2016 adjusted net income totaled $235 million, a 12 percent increase over 2015 third quarter net income of $210 million. Adjusted net income for the third quarter of 2016 excludes $237 million ($179 million after-tax) of merger-related costs and $20 million ($14 million after-tax) of Starwood results. Adjusted diluted EPS in the third quarter totaled $0.91, a 17 percent increase from diluted EPS in the year-ago quarter.
Adjusted revenues totaled nearly $3.8 billion in the 2016 third quarter compared to reported revenues of approximately $3.6 billion for the third quarter of 2015.
Adjusted base management and franchise fees totaled $414 million compared to reported fees of $397 million in the year-ago quarter. The year-over-year increase in adjusted fees largely reflects higher RevPAR and unit growth, partially offset by $7 million of unfavorable foreign exchange and $3 million of lower relicensing fees.
Third quarter adjusted worldwide incentive management fees increased 13 percent to $77 million, primarily due to higher RevPAR and house profit margins, as well as increased international distribution, partially offset by $2 million of unfavorable foreign exchange. In the third quarter, 63 percent of Legacy-Marriott worldwide company-managed hotels earned incentive management fees compared to 64 percent in the year-ago quarter.
On July 27, the company estimated total fee revenue for the third quarter would total $495 million to $500 million, not including the impact of the Starwood acquisition. Actual adjusted total fee revenue of $491 million in the quarter was modestly lower than estimated, reflecting RevPAR below the guidance range, as well as lower than expected relicensing and application fees.

5

Adjusted owned, leased, and other revenue, net of direct expenses, totaled $73 million, compared to $54 million in the year-ago quarter. The adjusted year-over-year increase largely reflects improved results at several leased properties, including recently renovated hotels, the results for two recently opened owned properties in Rio de Janeiro and $4 million of higher residential and credit card branding fees.
Adjusted general, administrative, and other expenses for the 2016 third quarter totaled $154 million compared to $149 million in the year-ago quarter. The increase in adjusted expenses year-over-year was largely due to higher routine administrative costs.
On July 27, Marriott estimated general, administrative, and other expenses for the third quarter would total approximately $160 million, not including the impact of the Starwood acquisition. Adjusted general, administrative, and other expenses in the quarter were lower than expected largely due to solid cost controls and delays in filling open positions.
Adjusted gains and other income increased $4 million in the third quarter of 2016 compared to the year-ago quarter. The adjusted year-over-year increase was largely due to a distribution related to the sale of a hotel in an investment fund.
Adjusted equity in earnings totaled $2 million in the third quarter compared to $8 million in the year-ago quarter. The adjusted year-over-year decrease was largely due to the favorable adjustment of liabilities in an International joint venture in the third quarter of 2015.
For the third quarter, adjusted EBITDA totaled $474 million, a 10 percent increase over third quarter 2015 adjusted EBITDA of $431 million. See page A-15 for the adjusted EBITDA calculation.
Selected Pro Forma Financial Information
Pro forma information presented in this section reflects the combined company assuming Marriott’s acquisition of Starwood and Starwood’s sale of its timeshare business had been completed on January 1, 2015, but using the estimated fair value of assets and liabilities as of the actual closing date of the acquisition.
On a pro forma basis, the company added 102 new properties (17,627 rooms) to its worldwide lodging portfolio during the three months ended September 30, 2016 and 10 properties (1,778 rooms) exited the system.

6

Legacy-Marriott brands added 82 new properties (12,155 rooms) during the three months ended September 30, 2016, including the Kigali Marriott Hotel in Rwanda, the Domes Noruz Chania, an Autograph Collection hotel in Greece and the Playa Largo Resort & Spa, an Autograph Collection hotel in Florida. Six properties (911 rooms) exited the system.
Legacy-Starwood brands (Starwood’s brands before Marriott’s acquisition) added 20 new properties (5,472 rooms) during the three months ended September 30, 2016, including The Westin Jakarta, the Aloft Riyadh and The Prince Gallery Tokyo Kioicho, a Luxury Collection Hotel. Four properties (867 rooms) exited the system.
The company’s worldwide development pipeline totaled 2,454 properties with nearly 420,000 rooms at quarter-end, including 881 properties with roughly 160,000 rooms under construction and 297 properties with more than 46,000 rooms approved for development, but not yet subject to signed contracts.
Legacy-Marriott’s worldwide development pipeline totaled 1,809 properties with nearly 290,000 rooms at quarter-end, including 629 properties with roughly 106,000 rooms under construction and 236 properties with more than 34,000 rooms approved for development, but not yet subject to signed contracts.
Using Marriott pipeline methodology, Legacy-Starwood’s worldwide development pipeline totaled 645 properties with nearly 130,000 rooms at quarter-end, including 252 properties with more than 54,000 rooms under construction and 61 properties with roughly 12,000 rooms approved for development, but not yet subject to signed contracts.
For the three months ended September 30, 2016, combined Marriott and Starwood worldwide comparable pro forma systemwide constant dollar RevPAR increased 2.2 percent. Combined North American comparable pro forma systemwide constant dollar RevPAR increased 2.6 percent, and combined international comparable pro forma systemwide constant dollar RevPAR increased 1.1 percent for the same period, as shown on page A-14.
For the three months ended September 30, 2016, Legacy-Marriott worldwide comparable systemwide constant dollar RevPAR increased 2.5 percent (a 1.8 percent increase in actual dollars). Legacy-Marriott North American comparable pro forma systemwide constant dollar RevPAR increased 2.4 percent (a 2.3 percent increase in actual dollars), and Legacy-Marriott

7

international comparable pro forma systemwide constant dollar RevPAR increased 2.9 percent (a 0.2 percent decline in actual dollars) for the same period.
Using Marriott’s methodology for determining comparability, for the three months ended September 30, 2016, Legacy-Starwood worldwide comparable systemwide constant dollar RevPAR increased 1.5 percent (a 0.8 percent increase in actual dollars). Legacy-Starwood North American comparable pro forma systemwide constant dollar RevPAR increased 3.1 percent (a 3.0 percent increase in actual dollars), and Legacy-Starwood international comparable pro forma systemwide constant dollar RevPAR decreased 0.6 percent (a 2.2 percent decrease in actual dollars) for the same period.
Additional RevPAR statistics for Legacy-Marriott properties are presented on pages A-6 through A-9 and additional RevPAR statistics for Legacy-Starwood properties are presented on pages A-10 through A-13.
Marriott and Starwood combined pro forma fee revenue totaled $723 million in the third quarter of 2016 compared to $685 million in the year-ago quarter. Pro forma combined owned, leased, and other revenue, net of direct expenses totaled $166 million compared to $137 million in the year-ago quarter. See page A-16 for pro forma financial measures.
Worldwide comparable company-operated house profit margins for Legacy-Marriott branded properties increased 90 basis points in the third quarter with higher room rates, improved productivity and lower utility costs. House profit margins for Legacy-Marriott branded comparable company-operated properties outside North America increased 40 basis points and Legacy-Marriott North American comparable company-operated house profit margins increased 120 basis points from the year-ago quarter.
Worldwide comparable company-operated gross operating profit margins for Legacy-Starwood branded properties increased 80 basis points in the third quarter. Gross operating profit margins for Legacy-Starwood branded comparable company-operated properties outside North America increased 110 basis points and Legacy-Starwood North American comparable company-operated gross operating profit margins increased 20 basis points from the year-ago quarter.
On September 30, 2016, Marriott owned 15 Legacy-Starwood branded hotels with approximately 8,300 rooms.

8

Balance Sheet
At quarter-end, Marriott’s total debt was $8,823 million and cash balances totaled $1,078 million, compared to $4,107 million in debt and $96 million of cash at year-end 2015.
Marriott Common Stock
Weighted average fully diluted shares outstanding used to calculate reported diluted EPS totaled 270.5 million in the 2016 third quarter, compared to 267.3 million in the year-ago quarter. Marriott issued 136.1 million shares upon closing of the Starwood acquisition on September 23, 2016.
OUTLOOK
Unless otherwise stated, the following outlook for the fourth quarter is for the combined company and does not include merger-related costs.
For the combined company, Marriott anticipates pro forma gross room additions of 6 percent, or 5 percent, net, for full year 2016.
For the 2016 fourth quarter, Marriott expects comparable systemwide RevPAR on a constant dollar basis will be flat to up 1 percent in North America and worldwide. Outside North America, the company expects comparable systemwide RevPAR on a constant dollar basis will be roughly flat.
The company assumes fourth quarter total fee revenue could total $695 million to $705 million, growth of 1 to 2 percent over pro forma fourth quarter 2015 total fee revenue of $688 million. See page A-16 for pro forma financial measures.
Marriott expects fourth quarter 2016 owned, leased, and other revenue, net of direct expenses could total $150 million to $155 million, a 7 to 10 percent decrease compared to pro forma fourth quarter 2015 results, largely due to lower termination fees and the sale of five owned hotels in previous months. See page A-16 for pro forma financial measures.
For the 2016 fourth quarter, the company anticipates depreciation, amortization, and other expenses will total $70 million to $75 million, a 5 to 11 percent decline compared to pro forma 2015 fourth quarter expenses of $79 million. The company also expects general, administrative,

9

and other expenses will total $235 million to $240 million in the 2016 fourth quarter, a 16 to 18 percent decline compared to pro forma 2015 fourth quarter expenses of $287 million.
Marriott expects fourth quarter 2016 operating income could total $530 million to $555 million, a 9 to 14 percent increase compared to pro forma fourth quarter 2015 operating income of $488 million.
 

Fourth Quarter 2016
Selected Pro Forma2 Financial Information
Fourth Quarter 2015
Total fee revenue
$695 million to $705 million
$688 million
Owned, leased and other revenue, net of direct expenses
$150 million to $155 million
$166 million
Depreciation, amortization, and other expenses
$70 million to $75 million
$79 million
General, administrative, and other expenses
$235 million to $240 million
$287 million
Operating income
$530 million to $555 million
$488 million
Gains and other income
Approx. $0 million
 
Net interest expense1
Approx. $65 million
 
Equity in earnings (losses)
Approx. $5 million
 
Earnings per share
$0.80 to $0.85
 
Tax rate
32.5 percent
 
1Net of interest income
2Pro forma information reflects the combined company assuming Marriott’s acquisition of Starwood and Starwood’s sale of its timeshare business had been completed on January 1, 2015, but using the estimated fair value of assets and liabilities as of the actual closing date of the acquisition.
The company expects investment spending in 2016 will total approximately $425 million to $475 million, including approximately $100 million for maintenance capital. Investment spending also includes other capital expenditures (including property acquisitions), new mezzanine financing and mortgage notes, contract acquisition costs, and equity and other investments. Investment spending for 2016 includes approximately $350 million to $400 million associated with Legacy-Marriott brands, a roughly $125 million decrease from the company’s estimates provided on July 27, and approximately $75 million associated with Legacy-Starwood brands, reflecting anticipated spending only in the fourth quarter of 2016.
In the fourth quarter of 2016 and thereafter, the company plans to disclose adjusted results and EBITDA that include Starwood results, but exclude merger-related costs and charges arising from the Starwood acquisition.


10

Marriott International, Inc. (NASDAQ: MAR) will conduct its quarterly earnings review for the investment community and news media on Tuesday, November 8, 2016 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 November 8, 2017.
The telephone dial-in number for the conference call is 706-679-3455 and the conference ID is 23011661. A telephone replay of the conference call will be available from 1 p.m. ET, Tuesday, November 8, 2016 until 8 p.m. ET, Tuesday, November 15, 2016. To access the replay, call 404-537-3406. The conference ID for the recording is 23011661.
Note on forward-looking statements: 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; the number of lodging properties we expect to add to or remove from our system in the future; our expectations about investment spending; 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 those we identify below and other risk factors that we identify in our most recent quarterly report on Form 10-Q. Risks that could affect forward-looking statements in this press release include changes in market conditions; the pace of the economy; supply and demand changes for hotel rooms; competitive conditions in the lodging industry; relationships with clients and property owners; the availability of capital to finance hotel growth and refurbishment; and the extent to which we are able to successfully integrate Starwood, manage our expanded operations, and realize the anticipated benefits of combining Starwood and Marriott. Any of these factors could cause actual results to differ materially from the expectations we express or imply in this press release. We make these forward-looking statements as of November 7, 2016. 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. (NASDAQ: MAR) is the world’s largest hotel company based in Bethesda, Maryland, USA, with nearly 6,000 properties in 120 countries and territories. Marriott operates and franchises hotels and licenses vacation ownership resorts. The company’s 30 leading brands include: Bulgari Hotels and Resorts®, The Ritz-Carlton® and The Ritz-Carlton Reserve®, St. Regis®, W®, EDITION®, JW Marriott®, The Luxury Collection®, Marriott Hotels®, Westin®, Le Méridien®, Renaissance® Hotels, Sheraton®, Delta Hotels by MarriottSM, Marriott Executive Apartments®, Marriott Vacation Club®, Autograph Collection® Hotels, Tribute Portfolio™, Design Hotels™, Gaylord Hotels®, Courtyard®, Four Points® by Sheraton, SpringHill Suites®, Fairfield Inn & Suites®, Residence Inn®, TownePlace Suites®, AC Hotels by Marriott®, Aloft®, Element®, Moxy Hotels®, and Protea Hotels by Marriott®. The company also operates award-winning loyalty programs: Marriott Rewards®, which includes The Ritz-Carlton Rewards®, and Starwood Preferred Guest®. For more information,

11

please visit our website at www.marriott.com, and for the latest company news, visit www.marriottnewscenter.com and @MarriottIntl.


IRPR#1

Tables follow


12

MARRIOTT INTERNATIONAL, INC.
PRESS RELEASE SCHEDULES
QUARTER 3, 2016
TABLE OF CONTENTS
 
 
Consolidated Statements of Income
Total Lodging Products
Key Lodging Statistics: Legacy-Marriott
Key Lodging Statistics: Legacy-Starwood
Key Lodging Statistics: Pro Forma Combined Company
Adjusted EBITDA
Marriott and Starwood Total Fees and Owned, Leased, and Other, Net
Non-GAAP Financial and Performance Measures



MARRIOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
THIRD QUARTER 2016 AND 2015
(in millions except per share amounts, unaudited)
 
As Reported
 
Less:
 
Less:
 
As Adjusted**
 
As Reported
 
Percent
 
Percent
 
Three Months Ended
 
 
 
Starwood Results
Eight Days Ended 8
 
Three Months Ended
 
Three Months Ended
 
Better/(Worse)
 
Better/(Worse)
 
September 30, 2016
 
Merger-Related Costs 8
 
September 30, 2016
 
September 30, 2016
 
September 30, 2015
 
Reported 2016 vs. 2015
 
Adjusted 2016 vs. 2015
REVENUES
 
 
 
 
 
 
 
 
 
 
 
 
 
Base management fees
$
180

 
$
—

 
$
8

 
$
172

 
$
170

 
6

 
1

Franchise fees
250

 
—

 
8

 
242

 
227

 
10

 
7

Incentive management fees
81

 
—

 
4

 
77

 
68

 
19

 
13

   Total fees
511


—


20


491


465

 
10

 
6

Owned, leased, and other revenue 1
279

 
—

 
30

 
249

 
229

 
22

 
9

Cost reimbursements 2
3,152

 
—

 
118

 
3,034

 
2,884

 
9

 
5

   Total Revenues
3,942


—


168


3,774


3,578

 
10

 
5

OPERATING COSTS AND EXPENSES
 
 
 
 
 
 
 
 
 
 
 
 
 
Owned, leased, and other - direct3
194

 
—

 
18

 
176

 
175

 
(11
)
 
(1
)
Reimbursed costs
3,152

 
—

 
118

 
3,034

 
2,884

 
(9
)
 
(5
)
Depreciation, amortization, and other 4
36

 
—

 
4

 
32

 
31

 
(16
)
 
(3
)
Merger-related costs and charges
228

 
228

 
—

 
—

 
—

 
*

 
-

General, administrative, and other 5
161

 
—

 
7

 
154

 
149

 
(8
)
 
(3
)
   Total Expenses
3,771

 
228

 
147

 
3,396

 
3,239

 
(16
)
 
(5
)
OPERATING INCOME / (LOSS)
171

 
(228
)
 
21

 
378

 
339

 
(50
)
 
12

Gains (losses) and other income, net 6
3

 
—

 
(1
)
 
4

 
—

 
*

 
*

Interest expense
(55
)
 
(9
)
 
(1
)
 
(45
)
 
(43
)
 
(28
)
 
(5
)
Interest income
9

 
—

 
—

 
9

 
5

 
80

 
80

Equity in earnings 7
3

 
—

 
1

 
2

 
8

 
(63
)
 
(75
)
INCOME / (LOSS) BEFORE INCOME TAXES
131

 
(237
)
 
20

 
348

 
309

 
(58
)
 
13

(Provision) benefit for income taxes
(61
)
 
58

 
(6
)
 
(113
)
 
(99
)
 
38

 
(14
)
NET INCOME / (LOSS)
$
70

 
$
(179
)
 
$
14

 
$
235

 
$
210

 
(67
)
 
12

EARNINGS PER SHARE
 
 
 
 
 
 
 
 
 
 
 
 
 
   Earnings per share - basic
$
0.26

 
 
 
 
 
$
0.92

 
$
0.80

 
(68
)
 
15

   Earnings per share - diluted
$
0.26

 
 
 
 
 
$
0.91

 
$
0.78

 
(67
)
 
17


 
 
 
 
 
 
 
 
 
 
 
 
 
Basic Shares
266.2

 
 
 
 
 
254.5

 
262.2

 
 
 
 
Diluted Shares
270.5

 
 
 
 
 
258.7

 
267.3

 
 
 
 
* Calculated percentage is not meaningful.
** Denotes non-GAAP financial measures. See page A-17 for more information about these non-GAAP measures.
1
Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, branding fees, and other revenue.
2
Cost reimbursements include reimbursements from properties for Marriott-funded operating expenses.
3
Owned, leased, and other - direct expenses include operating expenses related to our owned or leased hotels, including lease payments and pre-opening expenses.
4
Depreciation, amortization, and other expenses include depreciation for fixed assets, amortization of capitalized costs incurred to acquire management, franchise, and license agreements, and any related impairments, accelerations, or write-offs.
5
General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses.
6
Gains and other income, net includes gains and losses on the sale of real estate, the sale or other-than-temporary impairment of joint ventures and investments, and results from cost method investments.
7
Equity in earnings include our equity in earnings or losses of unconsolidated equity method investments.
8
The adjusted consolidated statements of income are presented before the impact of merger-related costs and Starwood results for the eight days ended September 30, 2016.

A-1


MARRIOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
THIRD QUARTER YEAR-TO-DATE 2016 AND 2015
(in millions except per share amounts, unaudited)
 
As Reported
 
Less:
 
Less:
 
As Adjusted**
 
As Reported
 
Percent
 
Percent
 
Nine Months Ended
 
 
 
Starwood Results
Eight Days Ended 8
 
Nine Months Ended
 
Nine Months Ended
 
Better/(Worse)
 
Better/(Worse)
 
September 30, 2016
 
Merger-Related Costs 8
 
September 30, 2016
 
September 30, 2016
 
September 30, 2015
 
Reported 2016 vs. 2015
 
Adjusted 2016 vs. 2015
REVENUES
 
 
 
 
 
 
 
 
 
 
 
 
 
Base management fees
$
538

 
$
—

 
$
8

 
$
530

 
$
526

 
2

 
1

Franchise fees
692

 
—

 
8

 
684

 
652

 
6

 
5

Incentive management fees
276

 
—

 
4

 
272

 
238

 
16

 
14

   Total fees
1,506


—


20


1,486


1,416

 
6

 
5

Owned, leased, and other revenue 1
771

 
—

 
30

 
741

 
729

 
6

 
2

Cost reimbursements 2
9,339

 
—

 
118

 
9,221

 
8,635

 
8

 
7

   Total Revenues
11,616


—


168


11,448


10,780

 
8

 
6

OPERATING COSTS AND EXPENSES
 
 
 
 
 
 
 
 
 
 
 
 
 
Owned, leased, and other - direct3
533

 
—

 
18

 
515

 
552

 
3

 
7

Reimbursed costs
9,339

 
—

 
118

 
9,221

 
8,635

 
(8
)
 
(7
)
Depreciation, amortization, and other 4
97

 
—

 
4

 
93

 
107

 
9

 
13

Merger-related costs and charges
250

 
250

 
—

 
—

 
—

 
*

 
-

General, administrative, and other 5
470

 
—

 
7

 
463

 
446

 
(5
)
 
(4
)
   Total Expenses
10,689

 
250

 
147

 
10,292

 
9,740

 
(10
)
 
(6
)
OPERATING INCOME / (LOSS)
927

 
(250
)
 
21

 
1,156

 
1,040

 
(11
)
 
11

Gains (losses) and other income, net 6
3

 
—

 
(1
)
 
4

 
20

 
(85
)
 
(80
)
Interest expense
(159
)
 
(22
)
 
(1
)
 
(136
)
 
(121
)
 
(31
)
 
(12
)
Interest income
22

 
—

 
—

 
22

 
19

 
16

 
16

Equity in earnings 7
8

 
—

 
1

 
7

 
13

 
(38
)
 
(46
)
INCOME / (LOSS) BEFORE INCOME TAXES
801

 
(272
)
 
20

 
1,053

 
971

 
(18
)
 
8

(Provision) benefit for income taxes
(265
)
 
68

 
(6
)
 
(327
)
 
(314
)
 
16

 
(4
)
NET INCOME / (LOSS)
$
536

 
$
(204
)
 
$
14

 
$
726

 
$
657

 
(18
)
 
11

EARNINGS PER SHARE
 
 
 
 
 
 
 
 
 
 
 
 
 
   Earnings per share - basic
$
2.08

 
 
 
 
 
$
2.85

 
$
2.43

 
(14
)
 
17

   Earnings per share - diluted
$
2.04

 
 
 
 
 
$
2.81

 
$
2.38

 
(14
)
 
18


 
 
 
 
 
 
 
 
 
 
 
 
 
Basic Shares
258.3

 
 
 
 
 
254.4

 
270.7

 
 
 
 
Diluted Shares
262.7

 
 
 
 
 
258.7

 
276.1

 
 
 
 
* Calculated percentage is not meaningful.
** Denotes non-GAAP financial measures. See page A-17 for more information about these non-GAAP measures.
1
Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, branding fees, and other revenue.
2
Cost reimbursements include reimbursements from properties for Marriott-funded operating expenses.
3
Owned, leased, and other - direct expenses include operating expenses related to our owned or leased hotels, including lease payments and pre-opening expenses.
4
Depreciation, amortization, and other expenses include depreciation for fixed assets, amortization of capitalized costs incurred to acquire management, franchise, and license agreements, and any related impairments, accelerations, or write-offs.
5
General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses.
6
Gains and other income, net includes gains and losses on the sale of real estate, the sale or other-than-temporary impairment of joint ventures and investments, and results from cost method investments.
7
Equity in earnings include our equity in earnings or losses of unconsolidated equity method investments.
8
The adjusted consolidated statements of income are presented before the impact of merger-related costs and Starwood results for the eight days ended September 30, 2016.

A-2

MARRIOTT INTERNATIONAL, INC.
TOTAL LODGING PRODUCTS
AS OF SEPTEMBER 30, 2016
 
North America
Total International
Total Worldwide
 
Units

Rooms

Units

Rooms

Units

Rooms

Managed
824

248,767

968

263,140

1,792

511,907

JW Marriott Hotels
15

9,695

45

17,934

60

27,629

The Ritz-Carlton Hotels
39

11,410

50

14,135

89

25,545

The Ritz-Carlton Residences
34

4,733

8

416

42

5,149

The Ritz-Carlton Serviced Apartments
 
 
4

579

4

579

W Hotels
24

7,441

22

5,148

46

12,589

Luxury Collection
5

2,294

46

7,931

51

10,225

St. Regis
8

1,464

26

5,964

34

7,428

EDITION Hotels
2

567

1

173

3

740

EDITION Residences
1

25





1

25

Bulgari Hotels & Resorts
 
 
2

117

2

117

Bulgari Residences
 
 
1

5

1

5

Marriott Hotels
130

67,427

150

42,184

280

109,611

Sheraton
31

23,654

185

62,917

216

86,571

Westin
48

25,129

65

21,346

113

46,475

Renaissance Hotels
26

11,625

50

16,207

76

27,832

Le Meridien
4

719

74

21,045

78

21,764

Autograph Collection Hotels
3

1,065

3

584

6

1,649

Delta Hotels and Resorts
25

6,764





25

6,764

Gaylord Hotels
5

8,098





5

8,098

Marriott Executive Apartments

 
28

4,195

28

4,195

Tribute Portfolio
 
 
2

372

2

372

Courtyard
256

40,821

75

15,892

331

56,713

Residence Inn
114

17,155

5

517

119

17,672

Fairfield Inn & Suites
5

1,324

7

1,070

12

2,394

SpringHill Suites
31

4,973





31

4,973

Four Points
1

134

60

14,650

61

14,784

TownePlace Suites
15

1,740





15

1,740

Aloft
1

330

22

5,478

23

5,808

Protea Hotels
 
 
36

4,093

36

4,093

Element
1

180

1

188

2

368

Franchised
3,523

515,300

405

88,607

3,928

603,907

JW Marriott Hotels
10

4,469

6

1,473

16

5,942

The Ritz-Carlton Hotels
1

429





1

429

The Ritz-Carlton Residences
1

55





1

55

Luxury Collection
10

2,009

34

6,600

44

8,609

Bulgari Hotels & Resorts
 
 
1

85

1

85

Marriott Hotels
208

64,821

43

12,582

251

77,403

Sheraton
161

47,693

59

17,443

220

65,136

Westin
75

24,399

24

7,478

99

31,877

Renaissance Hotels
57

16,103

25

6,956

82

23,059

Le Meridien
16

3,753

11

2,863

27

6,616

Autograph Collection Hotels
58

12,804

36

9,473

94

22,277

Delta Hotels and Resorts
12

3,020





12

3,020

Tribute Portfolio
7

3,423

3

184

10

3,607

Courtyard
673

89,786

54

10,411

727

100,197

Residence Inn
601

70,570

2

200

603

70,770

Fairfield Inn & Suites
807

73,219

2

386

809

73,605

SpringHill Suites
322

36,992





322

36,992

Four Points
127

19,409

36

5,844

163

25,253

TownePlace Suites
278

27,709





278

27,709


A-3

 
North America
Total International
Total Worldwide
 
Units

Rooms

Units

Rooms

Units

Rooms

Aloft
79

11,637

12

1,988

91

13,625

Protea Hotels
 
 
51

3,548

51

3,548

Element
18

2,706

2

293

20

2,999

Moxy Hotels
2

294

4

800

6

1,094

Owned/Leased
34

11,065

37

10,034

71

21,099

JW Marriott Hotels
 
 
1

496

1

496

The Ritz-Carlton Hotels
 
 
2

553

2

553

W Hotels
1

509

2

665

3

1,174

Luxury Collection
 
 
3

467

3

467

St. Regis
2

498

1

160

3

658

Marriott Hotels
4

2,102

4

1,445

8

3,547

Sheraton
3

2,671

6

2,868

9

5,539

Westin
2

1,832

1

246

3

2,078

Renaissance Hotels
1

310

3

749

4

1,059

Tribute Portfolio
1

135





1

135

Courtyard
19

2,816

3

644

22

3,460

Residence Inn
1

192

1

140

2

332

Protea Hotels
 
 
10

1,601

10

1,601

Unconsolidated Joint Ventures
9

1,518

90

11,234

99

12,752

Autograph Collection Hotels
 
 
5

348

5

348

AC Hotels by Marriott
9

1,518

85

10,886

94

12,404

Timeshare*
67

17,127

17

3,575

84

20,702

Marriott Vacations Worldwide
48

10,665

14

2,355

62

13,020

Vistana
19

6,462

3

1,220

22

7,682

Grand Total
4,457

793,777

1,517

376,590

5,974

1,170,367


* Timeshare property and room counts are included on this table in their geographical locations.  For external reporting purposes, these counts are captured in the Corporate segment.

A-4



MARRIOTT INTERNATIONAL, INC.
TOTAL LODGING PRODUCTS
AS OF SEPTEMBER 30, 2016
 
North America
Total International
Total Worldwide
Total Systemwide
Units

Rooms

Units

Rooms

Units

Rooms

Luxury
153

45,598

255

62,901

408

108,499

JW Marriott Hotels
25

14,164

52

19,903

77

34,067

The Ritz-Carlton Hotels
40

11,839

52

14,688

92

26,527

The Ritz-Carlton Residences
35

4,788

8

416

43

5,204

The Ritz-Carlton Serviced Apartments
 
 
4

579

4

579

W Hotels
25

7,950

24

5,813

49

13,763

Luxury Collection
15

4,303

83

14,998

98

19,301

St. Regis
10

1,962

27

6,124

37

8,086

EDITION Hotels
2

567

1

173

3

740

EDITION Residences
1

25





1

25

Bulgari Hotels & Resorts
 
 
3

202

3

202

Bulgari Residences
 
 
1

5

1

5

Full Service
877

327,547

777

231,485

1,654

559,032

Marriott Hotels
342

134,350

197

56,211

539

190,561

Sheraton
195

74,018

250

83,228

445

157,246

Westin
125

51,360

90

29,070

215

80,430

Renaissance Hotels
84

28,038

78

23,912

162

51,950

Le Meridien
20

4,472

85

23,908

105

28,380

Autograph Collection Hotels
61

13,869

44

10,405

105

24,274

Delta Hotels and Resorts
37

9,784





37

9,784

Gaylord Hotels
5

8,098





5

8,098

Marriott Executive Apartments
 
 
28

4,195

28

4,195

Tribute Portfolio
8

3,558

5

556

13

4,114

Limited Service
3,360

403,505

468

78,629

3,828

482,134

Courtyard
948

133,423

132

26,947

1,080

160,370

Residence Inn
716

87,917

8

857

724

88,774

Fairfield Inn & Suites
812

74,543

9

1,456

821

75,999

SpringHill Suites
353

41,965





353

41,965

Four Points
128

19,543

96

20,494

224

40,037

TownePlace Suites
293

29,449





293

29,449

Aloft
80

11,967

34

7,466

114

19,433

AC Hotels by Marriott
9

1,518

85

10,886

94

12,404

Protea Hotels
 
 
97

9,242

97

9,242

Element
19

2,886

3

481

22

3,367

Moxy Hotels
2

294

4

800

6

1,094

Timeshare*
67

17,127

17

3,575

84

20,702

Marriott Vacations Worldwide
48

10,665

14

2,355

62

13,020

Vistana
19

6,462

3

1,220

22

7,682

Grand Total
4,457

793,777

1,517

376,590

5,974

1,170,367


* Timeshare property and room counts are included on this table in their geographical locations.  For external reporting purposes, these counts are captured in the Corporate segment.

A-5


MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS: LEGACY-MARRIOTT
Constant $

Comparable Company-Operated International Properties1
 
 
Three Months Ended September 30, 2016 and September 30, 2015
 
 
REVPAR
 
Occupancy
 
Average Daily Rate
Region
 
2016
vs. 2015
 
2016
vs. 2015
 
2016
vs. 2015
Caribbean & Latin America
 
$
145.82

10.3
 %
 
70.4
%
2.0
 %
pts.
 
$
207.25

7.2
 %
Europe
 
$
116.07

-0.1
 %
 
77.1
%
-1.4
 %
pts.
 
$
150.47

1.7
 %
Middle East & Africa
 
$
81.48

4.8
 %
 
64.5
%
4.6
 %
pts.
 
$
126.34

-2.6
 %
Asia Pacific
 
$
104.27

5.7
 %
 
76.0
%
4.7
 %
pts.
 
$
137.23

-0.8
 %
Total International2
 
$
108.00

4.0
 %
 
73.5
%
2.4
 %
pts.
 
$
146.90

0.7
 %
Worldwide4
 
$
126.22

4.0
 %
 
76.1
%
1.6
 %
pts.
 
$
165.78

1.8
 %

Comparable Systemwide International Properties1
 
 
Three Months Ended September 30, 2016 and September 30, 2015
 
 
REVPAR
 
Occupancy
 
Average Daily Rate
Region
 
2016
vs. 2015
 
2016
vs. 2015
 
2016
vs. 2015
Caribbean & Latin America
 
$
130.54

2.9
%
 
68.0
%
0.0
 %
pts.
 
$
191.91

2.8
 %
Europe
 
$
112.44

0.7
%
 
76.4
%
-0.7
 %
pts.
 
$
147.11

1.7
 %
Middle East & Africa
 
$
76.58

4.5
%
 
63.5
%
3.2
 %
pts.
 
$
120.68

-0.9
 %
Asia Pacific
 
$
115.25

5.2
%
 
76.7
%
4.1
 %
pts.
 
$
150.19

-0.5
 %
Total International3
 
$
110.14

2.9
%
 
72.9
%
1.5
 %
pts.
 
$
151.00

0.8
 %
Worldwide5
 
$
115.27

2.5
%
 
76.7
%
0.3
 %
pts.
 
$
150.26

2.1
 %

1
International includes properties located outside the United States and Canada, except for Worldwide which includes the United States and Canada.
2
Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Protea Hotels, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, and AC Hotels by Marriott.
3
Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Protea Hotels, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, AC Hotels by Marriott, and Moxy Hotels.
4
Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, Protea Hotels, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, SpringHill Suites, and AC Hotels by Marriott.
5
Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, Protea Hotels, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, Springhill Suites, AC Hotels by Marriott, and Moxy Hotels.












A-6

MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS: LEGACY-MARRIOTT
Constant $

Comparable Company-Operated International Properties1
 
 
Nine Months Ended September 30, 2016 and September 30, 2015
 
 
REVPAR
 
Occupancy
 
Average Daily Rate
Region
 
2016
vs. 2015
 
2016
vs. 2015
 
2016
vs. 2015
Caribbean & Latin America
 
$
172.08

4.5
 %
 
72.0
%
0.1
 %
pts.
 
$
239.07

4.4
 %
Europe
 
$
109.24

1.7
 %
 
72.7
%
-0.7
 %
pts.
 
$
150.20

2.7
 %
Middle East & Africa
 
$
93.31

-2.2
 %
 
65.1
%
1.1
 %
pts.
 
$
143.28

-3.8
 %
Asia Pacific
 
$
106.29

5.9
 %
 
73.9
%
4.4
 %
pts.
 
$
143.73

-0.4
 %
Total International2
 
$
111.51

2.9
 %
 
71.6
%
1.6
 %
pts.
 
$
155.75

0.6
 %
Worldwide4
 
$
128.94

3.4
 %
 
74.7
%
1.3
 %
pts.
 
$
172.51

1.7
 %

Comparable Systemwide International Properties1
 
 
Nine Months Ended September 30, 2016 and September 30, 2015
 
 
REVPAR
 
Occupancy
 
Average Daily Rate
Region
 
2016
vs. 2015
 
2016
vs. 2015
 
2016
vs. 2015
Caribbean & Latin America
 
$
147.87

2.3
 %
 
68.5
%
0.0
 %
pts.
 
$
215.85

2.3
 %
Europe
 
$
103.41

2.4
 %
 
70.6
%
-0.1
 %
pts.
 
$
146.51

2.5
 %
Middle East & Africa
 
$
86.83

-1.4
 %
 
64.1
%
0.6
 %
pts.
 
$
135.56

-2.4
 %
Asia Pacific
 
$
113.31

6.0
 %
 
74.7
%
3.9
 %
pts.
 
$
151.72

0.4
 %
Total International3
 
$
110.78

2.9
 %
 
70.3
%
1.2
 %
pts.
 
$
157.50

1.1
 %
Worldwide5
 
$
113.39

2.7
 %
 
74.4
%
0.4
 %
pts.
 
$
152.39

2.1
 %

1
International includes properties located outside the United States and Canada, except for Worldwide which includes the United States and Canada.
2
Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Protea Hotels, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, and AC Hotels by Marriott.
3
Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Protea Hotels, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, AC Hotels by Marriott, and Moxy Hotels.
4
Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, Protea Hotels, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, SpringHill Suites, and AC Hotels by Marriott.
5
Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, Protea Hotels, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, Springhill Suites, AC Hotels by Marriott, and Moxy Hotels.













A-7

MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS: LEGACY-MARRIOTT
Constant $
Comparable Company-Operated North American Properties
 
 
Three Months Ended September 30, 2016 and September 30, 2015
 
 
REVPAR
 
Occupancy
 
Average Daily Rate
Brand
 
2016
vs. 2015
 
2016
vs. 2015
 
2016
vs. 2015
Marriott Hotels
 
$
151.00

4.1
%
 
78.2
%
1.4
 %
pts.
 
$
193.14

2.2
%
Renaissance Hotels
 
$
135.93

6.3
%
 
77.5
%
2.3
 %
pts.
 
$
175.42

3.2
%
The Ritz-Carlton
 
$
233.60

1.4
%
 
71.9
%
-1.0
 %
pts.
 
$
324.94

2.8
%
Composite North American Full-Service1
 
$
156.20

4.4
%
 
77.2
%
1.5
 %
pts.
 
$
202.23

2.3
%
Courtyard
 
$
108.40

1.8
%
 
76.0
%
0.1
 %
pts.
 
$
142.70

1.6
%
SpringHill Suites
 
$
100.12

3.6
%
 
79.7
%
0.6
 %
pts.
 
$
125.63

2.8
%
Residence Inn
 
$
128.13

5.8
%
 
83.4
%
1.6
 %
pts.
 
$
153.61

3.9
%
TownePlace Suites
 
$
92.21

9.5
%
 
81.1
%
3.0
 %
pts.
 
$
113.72

5.3
%
Composite North American Limited-Service2
 
$
112.07

3.2
%
 
78.3
%
0.6
 %
pts.
 
$
143.15

2.3
%
Composite - All3
 
$
137.05

3.9
%
 
77.7
%
1.1
 %
pts.
 
$
176.39

2.4
%

Comparable Systemwide North American Properties
 
 
Three Months Ended September 30, 2016 and September 30, 2015
 
 
REVPAR
 
Occupancy
 
Average Daily Rate
Brand
 
2016
vs. 2015
 
2016
vs. 2015
 
2016
vs. 2015
Marriott Hotels
 
$
131.78

2.5
%
 
75.6
%
0.1
 %
pts.
 
$
174.23

2.3
%
Renaissance Hotels
 
$
126.23

5.6
%
 
77.1
%
1.7
 %
pts.
 
$
163.69

3.3
%
Autograph Collection Hotels
 
$
175.01

5.1
%
 
79.6
%
1.9
 %
pts.
 
$
219.94

2.5
%
The Ritz-Carlton
 
$
233.60

1.4
%
 
71.9
%
-1.0
 %
pts.
 
$
324.94

2.8
%
Composite North American Full-Service1
 
$
138.99

3.3
%
 
75.9
%
0.6
 %
pts.
 
$
183.16

2.5
%
Courtyard
 
$
108.28

1.2
%
 
76.7
%
-0.4
 %
pts.
 
$
141.21

1.7
%
Fairfield Inn & Suites
 
$
86.98

1.2
%
 
75.6
%
-0.5
 %
pts.
 
$
115.04

1.9
%
SpringHill Suites
 
$
97.71

1.7
%
 
78.6
%
-0.1
 %
pts.
 
$
124.29

1.8
%
Residence Inn
 
$
123.15

2.6
%
 
83.6
%
-0.1
 %
pts.
 
$
147.33

2.7
%
TownePlace Suites
 
$
86.43

2.7
%
 
79.5
%
-0.3
 %
pts.
 
$
108.73

3.1
%
Composite North American Limited-Service4
 
$
104.91

1.7
%
 
78.6
%
-0.3
 %
pts.
 
$
133.55

2.1
%
Composite - All5
 
$
116.53

2.4
%
 
77.6
%
0.0
 %
pts.
 
$
150.08

2.4
%

1
Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, The Ritz-Carlton, and EDITION.
2
Includes Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, and SpringHill Suites.
3
Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, The Ritz-Carlton, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, and SpringHill Suites.
4
Includes Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, SpringHill Suites, and AC Hotels by Marriott.
5
Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, The Ritz-Carlton, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, SpringHill Suites, and AC Hotels by Marriott.









A-8

MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS: LEGACY-MARRIOTT
Constant $
Comparable Company-Operated North American Properties
 
 
Nine Months Ended September 30, 2016 and September 30, 2015
 
 
REVPAR
 
Occupancy
 
Average Daily Rate
Brand
 
2016
vs. 2015
 
2016
vs. 2015
 
2016
vs. 2015
Marriott Hotels
 
$
153.92

3.6
%
 
77.2
%
1.2
%
pts.
 
$
199.34

1.9
%
Renaissance Hotels
 
$
146.12

5.3
%
 
78.3
%
1.6
%
pts.
 
$
186.57

3.2
%
The Ritz-Carlton
 
$
256.50

3.1
%
 
72.9
%
0.6
%
pts.
 
$
352.03

2.3
%
Composite North American Full-Service1
 
$
162.42

3.9
%
 
76.7
%
1.3
%
pts.
 
$
211.71

2.1
%
Courtyard
 
$
106.71

2.8
%
 
74.7
%
0.7
%
pts.
 
$
142.90

1.8
%
SpringHill Suites
 
$
100.41

3.7
%
 
78.3
%
1.4
%
pts.
 
$
128.17

1.9
%
Residence Inn
 
$
121.32

4.0
%
 
80.3
%
0.7
%
pts.
 
$
151.13

3.1
%
TownePlace Suites
 
$
82.37

5.6
%
 
76.1
%
1.1
%
pts.
 
$
108.18

4.1
%
Composite North American Limited-Service2
 
$
109.13

3.2
%
 
76.5
%
0.8
%
pts.
 
$
142.71

2.2
%
Composite - All3
 
$
139.29

3.7
%
 
76.6
%
1.1
%
pts.
 
$
181.82

2.2
%

Comparable Systemwide North American Properties
 
 
Nine Months Ended September 30, 2016 and September 30, 2015
 
 
REVPAR
 
Occupancy
 
Average Daily Rate
Brand
 
2016
vs. 2015
 
2016
vs. 2015
 
2016
vs. 2015
Marriott Hotels
 
$
132.98

2.9
%
 
74.3
%
0.5
 %
pts.
 
$
179.01

2.1
%
Renaissance Hotels
 
$
129.00

4.5
%
 
76.3
%
1.0
 %
pts.
 
$
169.02

3.1
%
Autograph Collection Hotels
 
$
175.50

3.4
%
 
77.4
%
1.3
 %
pts.
 
$
226.80

1.6
%
The Ritz-Carlton
 
$
256.50

3.1
%
 
72.9
%
0.6
 %
pts.
 
$
352.03

2.3
%
Composite North American Full-Service1
 
$
141.77

3.3
%
 
74.7
%
0.7
 %
pts.
 
$
189.75

2.3
%
Courtyard
 
$
104.72

2.3
%
 
74.6
%
0.1
 %
pts.
 
$
140.39

2.1
%
Fairfield Inn & Suites
 
$
80.21

1.1
%
 
71.7
%
-0.6
 %
pts.
 
$
111.93

2.0
%
SpringHill Suites
 
$
93.50

2.1
%
 
76.2
%
0.1
 %
pts.
 
$
122.65

2.0
%
Residence Inn
 
$
115.89

2.5
%
 
80.5
%
-0.2
 %
pts.
 
$
144.01

2.7
%
TownePlace Suites
 
$
81.54

3.1
%
 
76.6
%
0.3
 %
pts.
 
$
106.49

2.6
%
Composite North American Limited-Service4
 
$
99.68

2.2
%
 
75.8
%
-0.1
 %
pts.
 
$
131.55

2.3
%
Composite - All5
 
$
114.03

2.7
%
 
75.4
%
0.2
 %
pts.
 
$
151.21

2.4
%

1
Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, The Ritz-Carlton, and EDITION.
2
Includes Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, and SpringHill Suites.
3
Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, The Ritz-Carlton, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, and SpringHill Suites.
4
Includes Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, SpringHill Suites, and AC Hotels by Marriott.
5
Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, The Ritz-Carlton, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, SpringHill Suites, and AC Hotels by Marriott.



A-9

MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS: LEGACY-STARWOOD
SYSTEMWIDE(1) - COMPARABLE
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2016
ACTUAL $
 
 
 
Systemwide - Worldwide
 
Systemwide - North America
 
Systemwide - International
 
 
 
2016
 
2015
 
Var. USD
 
2016
 
2015
 
Var. USD
 
2016
 
2015
 
Var. USD
TOTAL HOTELS
 
REVPAR ($)
 
123.23

 
122.29

 
0.8
 %
 
142.92

 
138.73

 
3.0
 %
 
103.55

 
105.87

 
-2.2
 %
 
ADR ($)
 
165.89

 
166.97

 
-0.6
 %
 
179.67

 
175.42

 
2.4
 %
 
150.02

 
157.08

 
-4.5
 %
 
Occupancy (%)
 
74.3
%
 
73.2
%
 
1.1

 
79.5
%
 
79.1
%
 
0.4

 
69.0
%
 
67.4
%
 
1.6

SHERATON
 
REVPAR ($)
 
105.83

 
104.63

 
1.1
 %
 
124.00

 
119.39

 
3.9
 %
 
88.33

 
90.42

 
-2.3
 %
 
ADR ($)
 
145.33

 
145.44

 
-0.1
 %
 
159.61

 
155.05

 
2.9
 %
 
129.65

 
134.82

 
-3.8
 %
 
Occupancy (%)
 
72.8
%
 
71.9
%
 
0.9

 
77.7
%
 
77.0
%
 
0.7

 
68.1
%
 
67.1
%
 
1.0

WESTIN
 
REVPAR ($)
 
147.92

 
144.82

 
2.1
 %
 
160.34

 
155.48

 
3.1
 %
 
127.62

 
127.42

 
0.2
 %
 
ADR ($)
 
188.71

 
186.59

 
1.1
 %
 
197.93

 
192.18

 
3.0
 %
 
172.23

 
176.35

 
-2.3
 %
 
Occupancy (%)
 
78.4
%
 
77.6
%
 
0.8

 
81.0
%
 
80.9
%
 
0.1

 
74.1
%
 
72.3
%
 
1.8

ST. REGIS/LUXURY COLLECTION
 
REVPAR ($)
 
195.79

 
193.81

 
1.0
 %
 
360.10

 
337.34

 
6.7
 %
 
158.60

 
161.39

 
-1.7
 %
 
ADR ($)
 
285.89

 
286.93

 
-0.4
 %
 
443.81

 
427.06

 
3.9
 %
 
241.70

 
248.45

 
-2.7
 %
 
Occupancy (%)
 
68.5
%
 
67.5
%
 
1.0

 
81.1
%
 
79.0
%
 
2.1

 
65.6
%
 
65.0
%
 
0.6

LE MERIDIEN
 
REVPAR ($)
 
120.96

 
123.25

 
-1.9
 %
 
189.53

 
182.56

 
3.8
 %
 
102.38

 
107.23

 
-4.5
 %
 
ADR ($)
 
169.78

 
179.04

 
-5.2
 %
 
237.50

 
232.83

 
2.0
 %
 
148.54

 
161.84

 
-8.2
 %
 
Occupancy (%)
 
71.2
%
 
68.8
%
 
2.4

 
79.8
%
 
78.4
%
 
1.4

 
68.9
%
 
66.3
%
 
2.6

W
 
REVPAR ($)
 
227.82

 
234.19

 
-2.7
 %
 
240.14

 
244.93

 
-2.0
 %
 
211.99

 
220.39

 
-3.8
 %
 
ADR ($)
 
287.81

 
299.04

 
-3.8
 %
 
284.62

 
290.17

 
-1.9
 %
 
292.59

 
312.68

 
-6.4
 %
 
Occupancy (%)
 
79.2
%
 
78.3
%
 
0.9

 
84.4
%
 
84.4
%
 
0.0

 
72.5
%
 
70.5
%
 
2.0

FOUR POINTS
 
REVPAR ($)
 
77.39

 
77.68

 
-0.4
 %
 
95.10

 
93.31

 
1.9
 %
 
57.11

 
59.79

 
-4.5
 %
 
ADR ($)
 
104.90

 
108.04

 
-2.9
 %
 
119.89

 
118.64

 
1.1
 %
 
84.71

 
93.18

 
-9.1
 %
 
Occupancy (%)
 
73.8
%
 
71.9
%
 
1.9

 
79.3
%
 
78.6
%
 
0.7

 
67.4
%
 
64.2
%
 
3.2

ALOFT
 
REVPAR ($)
 
86.26

 
85.92

 
0.4
 %
 
109.92

 
108.02

 
1.8
 %
 
46.92

 
49.25

 
-4.7
 %
 
ADR ($)
 
114.33

 
115.28

 
-0.8
 %
 
136.53

 
134.02

 
1.9
 %
 
69.99

 
76.42

 
-8.4
 %
 
Occupancy (%)
 
75.5
%
 
74.5
%
 
1.0

 
80.5
%
 
80.6
%
 
-0.1

 
67.0
%
 
64.5
%
 
2.5

ELEMENT
 
REVPAR ($)
 
130.95

 
131.67

 
-0.5
 %
 
135.54

 
137.11

 
-1.1
 %
 
68.58

 
57.71

 
18.8
 %
 
ADR ($)
 
152.72

 
152.17

 
0.4
 %
 
155.28

 
154.84

 
0.3
 %
 
105.89

 
97.85

 
8.2
 %
 
Occupancy (%)
 
85.7
%
 
86.5
%
 
-0.8

 
87.3
%
 
88.6
%
 
-1.3

 
64.8
%
 
59.0
%
 
5.8

OTHER
 
REVPAR ($)
 
151.67

 
159.13

 
-4.7
 %
 
151.67

 
159.13

 
-4.7
 %
 
0.00

 
0.00

 
0.0
 %
 
ADR ($)
 
175.48

 
173.55

 
1.1
 %
 
175.48

 
173.55

 
1.1
 %
 
0.00

 
0.00

 
0.0
 %
 
Occupancy (%)
 
86.4
%
 
91.7
%
 
-5.3

 
86.4
%
 
91.7
%
 
-5.3

 
0.0
%
 
0.0
%
 
0.0

(1)Includes comparable Owned, managed and franchised hotels

A-10

MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS: LEGACY-STARWOOD
SYSTEMWIDE(1) - COMPARABLE
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2016
ACTUAL $
 
 
 
Systemwide (1)
 
Company Operated (2)
 
 
 
2016
 
2015
 
Var. USD
 
2016
 
2015
 
Var. USD
TOTAL WORLDWIDE
 
REVPAR ($)
 
123.23

 
122.29

 
0.8
 %
 
133.43

 
134.75

 
-1.0
 %
 
ADR ($)
 
165.89

 
166.97

 
-0.6
 %
 
182.11

 
186.64

 
-2.4
 %
 
Occupancy (%)
 
74.3
%
 
73.2
%
 
1.1

 
73.3
%
 
72.2
%
 
1.1

AMERICAS
 
REVPAR ($)
 
135.95

 
132.30

 
2.8
 %
 
174.46

 
170.70

 
2.2
 %
 
ADR ($)
 
176.08

 
172.30

 
2.2
 %
 
224.89

 
218.77

 
2.8
 %
 
Occupancy (%)
 
77.2
%
 
76.8
%
 
0.4

 
77.6
%
 
78.0
%
 
-0.4

North America
 
REVPAR ($)
 
142.92

 
138.73

 
3.0
 %
 
186.74

 
182.57

 
2.3
 %
 
ADR ($)
 
179.67

 
175.42

 
2.4
 %
 
231.38

 
225.13

 
2.8
 %
 
Occupancy (%)
 
79.5
%
 
79.1
%
 
0.4

 
80.7
%
 
81.1
%
 
-0.4

Latin America
 
REVPAR ($)
 
75.22

 
76.40

 
-1.5
 %
 
91.07

 
90.14

 
1.0
 %
 
ADR ($)
 
132.39

 
134.60

 
-1.6
 %
 
161.75

 
157.55

 
2.7
 %
 
Occupancy (%)
 
56.8
%
 
56.8
%
 
0.0

 
56.3
%
 
57.2
%
 
-0.9

ASIA PACIFIC
 
REVPAR ($)
 
93.83

 
95.22

 
-1.5
 %
 
92.83

 
96.28

 
-3.6
 %
 
ADR ($)
 
133.04

 
140.70

 
-5.4
 %
 
130.72

 
141.62

 
-7.7
 %
 
Occupancy (%)
 
70.5
%
 
67.7
%
 
2.8

 
71.0
%
 
68.0
%
 
3.0

Greater China
 
REVPAR ($)
 
80.66

 
86.55

 
-6.8
 %
 
80.50

 
86.41

 
-6.8
 %
 
ADR ($)
 
118.12

 
133.13

 
-11.3
 %
 
116.82

 
132.09

 
-11.6
 %
 
Occupancy (%)
 
68.3
%
 
65.0
%
 
3.3

 
68.9
%
 
65.4
%
 
3.5

Rest of Asia Pacific
 
REVPAR ($)
 
115.45

 
109.43

 
5.5
 %
 
123.44

 
120.75

 
2.2
 %
 
ADR ($)
 
155.59

 
151.88

 
2.4
 %
 
161.92

 
162.40

 
-0.3
 %
 
Occupancy (%)
 
74.2
%
 
72.0
%
 
2.2

 
76.2
%
 
74.4
%
 
1.8

EAME
 
REVPAR ($)
 
133.18

 
137.68

 
-3.3
 %
 
141.25

 
147.25

 
-4.1
 %
 
ADR ($)
 
188.20

 
194.18

 
-3.1
 %
 
201.44

 
209.66

 
-3.9
 %
 
Occupancy (%)
 
70.8
%
 
70.9
%
 
-0.1

 
70.1
%
 
70.2
%
 
-0.1

Europe
 
REVPAR ($)
 
158.88

 
163.22

 
-2.7
 %
 
183.39

 
190.42

 
-3.7
 %
 
ADR ($)
 
206.49

 
206.82

 
-0.2
 %
 
234.83

 
235.69

 
-0.4
 %
 
Occupancy (%)
 
76.9
%
 
78.9
%
 
-2.0

 
78.1
%
 
80.8
%
 
-2.7

Africa & Middle East
 
REVPAR ($)
 
91.51

 
96.36

 
-5.0
 %
 
91.19

 
96.05

 
-5.1
 %
 
ADR ($)
 
150.63

 
166.33

 
-9.4
 %
 
150.38

 
166.44

 
-9.6
 %
 
Occupancy (%)
 
60.8
%
 
57.9
%
 
2.9

 
60.6
%
 
57.7
%
 
2.9


(1)Includes comparable Owned, managed, and franchised hotels.
(2)Includes comparable Owned and managed hotels.

A-11



MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS: LEGACY-STARWOOD
SYSTEMWIDE(1) - COMPARABLE
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016
ACTUAL $
 
 
 
Systemwide - Worldwide
 
Systemwide - North America
 
            Systemwide - International
 
 
 
2016
 
2015
 
Var. USD
 
2016
 
2015
 
Var. USD
 
2016
 
2015
 
Var. USD
TOTAL HOTELS
 
REVPAR ($)
 
119.58

 
119.59

 
0.0
 %
 
137.19

 
133.82

 
2.5
 %
 
101.99

 
105.40

 
-3.2
 %
 
ADR ($)
 
167.17

 
169.81

 
-1.6
 %
 
178.59

 
175.73

 
1.6
 %
 
153.94

 
162.86

 
-5.5
 %
 
Occupancy (%)
 
71.5
%
 
70.4
%
 
1.1

 
76.8
%
 
76.1
%
 
0.7

 
66.3
%
 
64.7
%
 
1.6

SHERATON
 
REVPAR ($)
 
101.60

 
101.98

 
-0.4
 %
 
118.04

 
114.99

 
2.7
 %
 
85.80

 
89.46

 
-4.1
 %
 
ADR ($)
 
145.85

 
147.95

 
-1.4
 %
 
157.35

 
154.46

 
1.9
 %
 
132.99

 
140.62

 
-5.4
 %
 
Occupancy (%)
 
69.7
%
 
68.9
%
 
0.8

 
75.0
%
 
74.4
%
 
0.6

 
64.5
%
 
63.6
%
 
0.9

WESTIN
 
REVPAR ($)
 
145.54

 
142.70

 
2.0
 %
 
156.15

 
151.61

 
3.0
 %
 
128.20

 
128.14

 
0.0
 %
 
ADR ($)
 
190.86

 
190.00

 
0.5
 %
 
198.65

 
194.08

 
2.4
 %
 
177.04

 
182.57

 
-3.0
 %
 
Occupancy (%)
 
76.3
%
 
75.1
%
 
1.2

 
78.6
%
 
78.1
%
 
0.5

 
72.4
%
 
70.2
%
 
2.2

ST. REGIS/LUXURY COLLECTION
 
REVPAR ($)
 
187.70

 
188.71

 
-0.5
 %
 
333.67

 
312.32

 
6.8
 %
 
154.67

 
160.78

 
-3.8
 %
 
ADR ($)
 
284.91

 
289.64

 
-1.6
 %
 
442.15

 
423.21

 
4.5
 %
 
242.77

 
254.40

 
-4.6
 %
 
Occupancy (%)
 
65.9
%
 
65.2
%
 
0.7

 
75.5
%
 
73.8
%
 
1.7

 
63.7
%
 
63.2
%
 
0.5

LE MERIDIEN
 
REVPAR ($)
 
117.15

 
118.61

 
-1.2
 %
 
185.68

 
177.04

 
4.9
 %
 
98.58

 
102.84

 
-4.1
 %
 
ADR ($)
 
170.95

 
178.98

 
-4.5
 %
 
234.49

 
231.99

 
1.1
 %
 
150.18

 
161.80

 
-7.2
 %
 
Occupancy (%)
 
68.5
%
 
66.3
%
 
2.2

 
79.2
%
 
76.3
%
 
2.9

 
65.6
%
 
63.6
%
 
2.0

W
 
REVPAR ($)
 
225.53

 
233.10

 
-3.2
 %
 
236.61

 
242.43

 
-2.4
 %
 
211.28

 
221.12

 
-4.5
 %
 
ADR ($)
 
291.30

 
303.61

 
-4.1
 %
 
287.90

 
295.40

 
-2.5
 %
 
296.35

 
315.98

 
-6.2
 %
 
Occupancy (%)
 
77.4
%
 
76.8
%
 
0.6

 
82.2
%
 
82.1
%
 
0.1

 
71.3
%
 
70.0
%
 
1.3

FOUR POINTS
 
REVPAR ($)
 
75.09

 
75.99

 
-1.2
 %
 
88.35

 
87.12

 
1.4
 %
 
59.91

 
63.27

 
-5.3
 %
 
ADR ($)
 
106.38

 
110.40

 
-3.6
 %
 
117.70

 
117.18

 
0.4
 %
 
91.52

 
101.19

 
-9.6
 %
 
Occupancy (%)
 
70.6
%
 
68.8
%
 
1.8

 
75.1
%
 
74.3
%
 
0.8

 
65.5
%
 
62.5
%
 
3.0

ALOFT
 
REVPAR ($)
 
84.56

 
83.54

 
1.2
 %
 
106.52

 
104.22

 
2.2
 %
 
48.05

 
49.26

 
-2.5
 %
 
ADR ($)
 
115.30

 
117.52

 
-1.9
 %
 
135.77

 
135.08

 
0.5
 %
 
74.11

 
80.72

 
-8.2
 %
 
Occupancy (%)
 
73.3
%
 
71.1
%
 
2.2

 
78.5
%
 
77.2
%
 
1.3

 
64.8
%
 
61.0
%
 
3.8

ELEMENT
 
REVPAR ($)
 
124.63

 
123.59

 
0.8
 %
 
128.35

 
127.97

 
0.3
 %
 
74.18

 
64.13

 
15.7
 %
 
ADR ($)
 
149.06

 
150.09

 
-0.7
 %
 
151.21

 
152.05

 
-0.6
 %
 
111.75

 
111.28

 
0.4
 %
 
Occupancy (%)
 
83.6
%
 
82.3
%
 
1.3

 
84.9
%
 
84.2
%
 
0.7

 
66.4
%
 
57.6
%
 
8.8

OTHER
 
REVPAR ($)
 
116.24

 
128.73

 
-9.7
 %
 
116.24

 
128.73

 
-9.7
 %
 
0.00

 
0.00

 
0.0
 %
 
ADR ($)
 
164.36

 
164.08

 
0.2
 %
 
164.36

 
164.08

 
0.2
 %
 
0.00

 
0.00

 
0.0
 %
 
Occupancy (%)
 
70.7
%
 
78.5
%
 
-7.8

 
70.7
%
 
78.5
%
 
-7.8

 
0.0
%
 
0.0
%
 
0.0

(1)Includes comparable Owned, managed and franchised hotels


A-12

MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS: LEGACY-STARWOOD
SYSTEMWIDE(1) - COMPARABLE
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016
ACTUAL $
 
 
 
Systemwide (1)
 
            Company Operated (2)
 
 
 
2016
 
2015
 
Var. USD
 
2016
 
2015
 
Var. USD
TOTAL WORLDWIDE
 
REVPAR ($)
 
119.58

 
119.59

 
—
 %
 
129.80

 
132.10

 
-1.7
 %
 
ADR ($)
 
167.17

 
169.81

 
-1.6
 %
 
184.34

 
190.36

 
-3.2
 %
 
Occupancy (%)
 
71.5
%
 
70.4
%
 
1.1

 
70.4
%
 
69.4
%
 
1.0

AMERICAS
 
REVPAR ($)
 
132.03

 
129.35

 
2.1
 %
 
169.71

 
167.72

 
1.2
 %
 
ADR ($)
 
176.02

 
174.00

 
1.2
 %
 
223.19

 
220.08

 
1.4
 %
 
Occupancy (%)
 
75.0
%
 
74.3
%
 
0.7

 
76.0
%
 
76.2
%
 
-0.2

North America
 
REVPAR ($)
 
137.19

 
133.82

 
2.5
 %
 
179.51

 
176.66

 
1.6
 %
 
ADR ($)
 
178.59

 
175.73

 
1.6
 %
 
228.17

 
224.49

 
1.6
 %
 
Occupancy (%)
 
76.8
%
 
76.1
%
 
0.7

 
78.7
%
 
78.7
%
 
0.0

Latin America
 
REVPAR ($)
 
87.18

 
90.61

 
-3.8
 %
 
103.19

 
107.04

 
-3.6
 %
 
ADR ($)
 
147.08

 
154.51

 
-4.8
 %
 
177.49

 
180.42

 
-1.6
 %
 
Occupancy (%)
 
59.3
%
 
58.6
%
 
0.7

 
58.1
%
 
59.3
%
 
-1.2

ASIA PACIFIC
 
REVPAR ($)
 
91.71

 
93.88

 
-2.3
 %
 
91.04

 
94.63

 
-3.8
 %
 
ADR ($)
 
136.72

 
146.07

 
-6.4
 %
 
135.76

 
147.80

 
-8.1
 %
 
Occupancy (%)
 
67.1
%
 
64.3
%
 
2.8

 
67.1
%
 
64.0
%
 
3.1

Greater China
 
REVPAR ($)
 
79.88

 
84.48

 
-5.4
 %
 
79.38

 
83.90

 
-5.4
 %
 
ADR ($)
 
124.90

 
139.34

 
-10.4
 %
 
123.55

 
138.06

 
-10.5
 %
 
Occupancy (%)
 
64.0
%
 
60.6
%
 
3.4

 
64.2
%
 
60.8
%
 
3.4

Rest of Asia Pacific
 
REVPAR ($)
 
111.13

 
109.28

 
1.7
 %
 
120.00

 
121.21

 
-1.0
 %
 
ADR ($)
 
153.90

 
155.58

 
-1.1
 %
 
162.08

 
168.18

 
-3.6
 %
 
Occupancy (%)
 
72.2
%
 
70.2
%
 
2.0

 
74.0
%
 
72.1
%
 
1.9

EAME
 
REVPAR ($)
 
127.55

 
133.31

 
-4.3
 %
 
136.00

 
143.27

 
-5.1
 %
 
ADR ($)
 
189.50

 
196.32

 
-3.5
 %
 
202.64

 
210.65

 
-3.8
 %
 
Occupancy (%)
 
67.3
%
 
67.9
%
 
-0.6

 
67.1
%
 
68.0
%
 
-0.9

Europe
 
REVPAR ($)
 
138.48

 
141.43

 
-2.1
 %
 
158.11

 
162.68

 
-2.8
 %
 
ADR ($)
 
196.76

 
197.57

 
-0.4
 %
 
221.69

 
221.91

 
-0.1
 %
 
Occupancy (%)
 
70.4
%
 
71.6
%
 
-1.2

 
71.3
%
 
73.3
%
 
-2.0

Africa & Middle East
 
REVPAR ($)
 
109.83

 
120.17

 
-8.6
 %
 
109.72

 
120.26

 
-8.8
 %
 
ADR ($)
 
176.22

 
193.99

 
-9.2
 %
 
176.63

 
194.80

 
-9.3
 %
 
Occupancy (%)
 
62.3
%
 
61.9
%
 
0.4

 
62.1
%
 
61.7
%
 
0.4


(1)Includes comparable Owned, managed, and franchised hotels.
(2)Includes comparable Owned and managed hotels.


A-13

MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS: PRO FORMA COMBINED COMPANY
Constant $

Comparable Systemwide Properties
 
 
 
 
 
Three Months Ended September 30, 2016 and September 30, 2015
 
 
REVPAR
 
Occupancy
 
Average Daily Rate
Region
 
2016
vs. 2015
 
2016
vs. 2015
 
2016
vs. 2015
Total North America1
 
$
122.44

2.6
%
 
78.1
%
0.1
%
pts.
 
$
156.84

2.4
 %
 
 
 
 
 
 
 
 
 
 
 
Total International2
 
$
107.51

1.1
%
 
70.8
%
1.6
%
pts.
 
$
151.78

-1.2
 %
 
 
 
 
 
 
 
 
 
 
 
Worldwide3
 
$
118.07

2.2
%
 
75.9
%
0.5
%
pts.
 
$
155.45

1.4
 %

1
North America includes properties located in the United States, Canada, and French Polynesia. Brands included are JW Marriott Hotels, The Ritz-Carlton, W Hotels, Luxury Collection, St. Regis Hotels, EDITION, Marriott Hotels, Sheraton Hotels, Westin Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, Le Meridien Hotels, Courtyard, Residence Inn, Fairfield Inn & Suites, SpringHill Suites, TownePlace Suites, Four Points Hotels, Aloft Hotels, Element Hotels, and AC by Marriott Hotels.
2
International includes properties located outside of the United States, Canada, and French Polynesia. Brands included are JW Marriott Hotels, The Ritz-Carlton, W Hotels, Luxury Collection, St. Regis Hotels, EDITION, Bulgari, Marriott Hotels, Sheraton Hotels, Westin Hotels, Renaissance Hotels, Autograph Collection Hotels, Protea Hotels, Le Meridien Hotels, Courtyard, Residence Inn, Fairfield Inn & Suites, Four Points Hotels, Aloft Hotels, Element Hotels, AC by Marriott Hotels and Moxy Hotels.
3
Includes JW Marriott Hotels, The Ritz-Carlton, W Hotels, Luxury Collection, St. Regis Hotels, EDITION, Bulgari, Marriott Hotels, Sheraton Hotels, Westin Hotels, Renaissance Hotels, Autograph Collection Hotels, Protea Hotels, Gaylord Hotels, Le Meridien Hotels, Courtyard, Residence Inn, Fairfield Inn & Suites, SpringHill Suites, TownePlace Suites, Four Points Hotels, Aloft Hotels, Element Hotels, AC by Marriott Hotels and Moxy Hotels.

A-14


MARRIOTT INTERNATIONAL, INC.
NON-GAAP FINANCIAL MEASURES
ADJUSTED EBITDA
($ in millions)
 
Fiscal Year 2016
 
First
Quarter
 
Second Quarter
 
Third Quarter
 
Total
Net income
$
219

 
$
247

 
$
70

 
$
536

Interest expense
47

 
57

 
55

 
159

Tax provision
107

 
97

 
61

 
265

Depreciation and amortization
31

 
30

 
36

 
97

Depreciation classified in Reimbursed costs
14

 
14

 
15

 
43

Interest expense from unconsolidated joint ventures
1

 
1

 
1

 
3

Depreciation and amortization from unconsolidated joint ventures
3

 
3

 
4

 
10

EBITDA**
422


449


242


1,113

 
 
 
 
 
 
 
 
Merger-related costs
8

 
14

 
228

 
250

Share-based compensation (including share-based compensation reimbursed by third-party owners)
28

 
31

 
36

 
95

Starwood results for the 8 days ended September 30, 2016
—

 
—

 
(32
)
 
(32
)
Adjusted EBITDA **
$
458


$
494

 
$
474


$
1,426

 
 
 
 
 
 
 
 
Increase over 2015 Quarterly Adjusted EBITDA **
7
%

8
%
 
10
%

8
%
 
Fiscal Year 2015
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
 
Total
Net income
$
207

 
$
240

 
$
210

 
$
202

 
$
859

Interest expense
36

 
42

 
43

 
46

 
167

Tax provision
100

 
115

 
99

 
82

 
396

Depreciation and amortization
32

 
32

 
31

 
32

 
127

Depreciation classified in Reimbursed costs
14

 
14

 
15

 
15

 
58

Interest expense from unconsolidated joint ventures
1

 
—

 
1

 
—

 
2

Depreciation and amortization from unconsolidated joint ventures
3

 
2

 
3

 
2

 
10

EBITDA**
393


445


402


379


1,619

 
 
 
 
 
 
 
 
 
 
EDITION impairment charge
12

 
—

 
—

 
—

 
12

Loss (gain) on disposition of real estate
—

 
22

 
—

 
(7
)
 
15

Gain on redemption of preferred equity ownership interest
—


(41
)

—


—


(41
)
Share-based compensation (including share-based compensation reimbursed by third-party owners)
24

 
31

 
29

 
29

 
113

Adjusted EBITDA **
$
429

 
$
457

 
$
431

 
$
401

 
$
1,718


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



A-15


MARRIOTT INTERNATIONAL, INC.
PRO FORMA FINANCIAL MEASURES
MARRIOTT AND STARWOOD TOTAL FEES AND OWNED, LEASED, AND OTHER, NET
($ in millions)

 
Pro Forma Fiscal Year 2016
 
 
 
 
 
 
 
 
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Total
Base management fees
$
257

 
$
281

 
$
266

 
$
804

Franchise fees
281

 
323

 
330

 
934

Incentive management fees
150

 
136

 
127

 
413

Marriott and Starwood Pro Forma Fees
$
688

 
$
740

 
$
723

 
$
2,151

 
 
 
 
 
 
 
 
Increase over 2015 Marriott and Starwood Pro Forma Fees
4.4
%
 
4.6
%
 
5.5
%
 
 
 
 
 
 
 
 
 
 
Owned, leased, and other revenue
503

 
553

 
548

 
1,604

Owned, leased, and other expense
(365
)
 
(388
)
 
(382
)
 
(1,135
)
Marriott and Starwood Owned, leased, and other, net
$
138

 
$
165

 
$
166

 
$
469

 
 
 
 
 
 
 
 
Increase over 2015 Marriott and Starwood Pro Forma Owned, Leased and Other, net
9.5
%
 
3.8
%
 
21.2
%
 
 

 
Pro Forma Fiscal Year 2015
 
 
 
 
 
 
 
 
 
 
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
 
Total
Base management fees
$
250

 
$
284

 
$
265

 
$
265

 
$
1,064

Franchise fees
272

 
296

 
305

 
273

 
1,146

Incentive management fees
137

 
127

 
115

 
150

 
529

Marriott and Starwood Pro Forma Fees
$
659

 
$
707

 
$
685

 
$
688

 
$
2,739

 
 
 
 
 
 
 
 
 
 
Owned, leased, and other revenue
562

 
589

 
535

 
565

 
2,251

Owned, leased, and other expense
(436
)
 
(430
)
 
(398
)
 
(399
)
 
(1,663
)
Marriott and Starwood Owned, leased, and other, net
$
126

 
$
159

 
$
137

 
$
166

 
$
588


The unaudited pro forma combined financial information presented above illustrates the estimated impact of the September 23, 2016 acquisition of Starwood Hotels & Resorts Worldwide. This financial information is presented as if the acquisition had been completed on January 1, 2015 and combines the historical results of Marriott and Starwood. This financial information is not necessarily indicative of what the Company's results of operations would have been had the acquisition been completed as of January 1, 2015. In addition, the financial information is not indicative of future results or current financial conditions and does not reflect any anticipated synergies, operating efficiencies, cost savings, or integration costs that may results from the transaction.

This information should be read in conjunction with historical financial statements and accompanying notes filed with the SEC. Starwood historical franchise fees were adjusted to include fixed and variable components of license fees that Starwood expects to receive from ILG under the Vistana agreement. Reclassifications of Starwood historical results have been made to align with Marriott's presentation in all periods presented.



A-16


MARRIOTT INTERNATIONAL, INC.
NON-GAAP FINANCIAL AND PERFORMANCE MEASURES

In our press release and schedules, and on the related conference call, we report certain financial measures that are not required by, or presented in accordance with, 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 in the press release schedules). Although management evaluates and presents these non-GAAP measures for the reasons described below, please be aware that these non-GAAP measures have limitations and should not be considered in isolation or as a substitute for revenue, operating income, income from continuing operations, net income, earnings per share or any other comparable operating measure prescribed by GAAP. In addition, we may calculate and/or present these non-GAAP financial measures differently than measures with the same or similar names that other companies report, and as a result, the non-GAAP measures we report may not be comparable to those reported by others.
 
Adjusted Measures That Exclude Merger-Related Costs, and Eight Days of Starwood Results. Management evaluates certain non-GAAP measures that exclude merger-related costs and charges and Starwood results for the eight days ended September 30, 2016, which are both associated with the Starwood merger because those non-GAAP measures allow for period-over period comparisons of Marriott’s legacy operations before the impact of the Starwood merger. These non-GAAP measures, which we reconcile to the comparable GAAP measures on pages A-1 and A-2, include adjusted net income, adjusted general, administrative, and other expenses, adjusted interest expense, and adjusted EPS. Non-GAAP adjusted net income and its components and adjusted EPS are not, and should not be viewed as, substitutes for net income and EPS.
 
Adjusted Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“Adjusted EBITDA”). EBITDA reflects net income excluding the impact of interest expense, depreciation, amortization, and provision for income taxes. Our non-GAAP measure of Adjusted EBITDA further adjusts EBITDA to exclude the following items: (1) the 2016 pre-tax transaction and transition costs associated with the Starwood merger, which we recorded in the “Merger-related costs and charges” caption of our Consolidated Statements of Income (our “Income Statements”); (2) the impact on Adjusted EBITDA of the eight days of Starwood results from the date the merger closed to September 30, 2016; (3) the pre-tax EDITION impairment charges in the 2015 first quarter, which we recorded in the “Depreciation, amortization, and other” caption of our Income Statements; (4) the pre-tax expected loss on dispositions of real estate in the 2015 second quarter, the reversal of a portion of the pre-tax loss on disposition upon sale of one property in the 2015 fourth quarter, and the pre-tax preferred equity investment gain in the 2015 second quarter, all of which we recorded in the “Gains and other income, net” caption of our Income Statements; and (5) share-based compensation expense for all periods presented.
 
We believe that Adjusted EBITDA is a meaningful indicator of our operating performance because it permits period-over-period comparisons of our ongoing core operations before these items and facilitates our comparison of results before these items with results from other lodging companies. We use Adjusted EBITDA 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 provisions for income taxes can vary considerably among companies. Our Adjusted EBITDA also excludes depreciation and amortization expense which we report under “Depreciation, amortization, and other” as well as depreciation included under “Reimbursed costs” in our Income Statements, 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. We also excluded share-based compensation expense in all periods presented in order to address considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted.

RevPAR. In addition to the foregoing non-GAAP financial measures, we present Revenue per Available Room (“RevPAR”) as a performance measure. We believe RevPAR is a meaningful indicator of our performance because it measures the period-over-period change in room revenues for comparable properties. RevPAR may not be comparable to similarly titled measures, such as revenues. We calculate RevPAR by dividing room sales (recorded in local currency) for comparable properties by room nights available for the period. We present growth in both comparative Legacy-Marriott RevPAR and comparative pro forma combined company RevPAR on a constant dollar basis, which we calculate by applying exchange rates for the current period to each period presented. We believe constant dollar analysis provides valuable information regarding our properties’ performance as it removes currency fluctuations from the presentation of such results.

A-17