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 2, 2023
_______________________________________
MARRIOTT INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
_______________________________________
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||||||||
(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:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter) | ||
| Emerging growth company | ||||||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | |||||||
| Item 2.02. | Results of Operations and Financial Condition. | ||||
Financial Results for the Quarter Ended September 30, 2023
Marriott International, Inc. (“Marriott”) issued a press release reporting financial results for the quarter ended September 30, 2023.
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: | |||||
| 99 | |||||
| 104 | The cover page to this Current Report on Form 8-K, formatted in inline XBRL. | ||||
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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 2, 2023 | By: | /s/ Felitia O. Lee | ||||||||||||||||||||||||
| Felitia O. Lee | ||||||||||||||||||||||||||
| Controller and Chief Accounting Officer | ||||||||||||||||||||||||||
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Exhibit 99
NEWS
MARRIOTT INTERNATIONAL REPORTS THIRD QUARTER 2023 RESULTS
•Third quarter 2023 comparable systemwide constant dollar RevPAR increased 8.8 percent worldwide, 4.3 percent in the U.S. & Canada, and 21.8 percent in international markets, compared to the 2022 third quarter;
•Third quarter reported diluted EPS totaled $2.51, compared to reported diluted EPS of $1.94 in the year-ago quarter. Third quarter adjusted diluted EPS totaled $2.11, compared to third quarter 2022 adjusted diluted EPS of $1.69;
•Third quarter reported net income totaled $752 million, compared to reported net income of $630 million in the year-ago quarter. Third quarter adjusted net income totaled $634 million, compared to third quarter 2022 adjusted net income of $551 million;
•Adjusted EBITDA totaled $1,142 million in the 2023 third quarter, compared to third quarter 2022 adjusted EBITDA of $985 million;
•The company added approximately 17,200 rooms globally during the third quarter, including roughly 13,000 rooms in international markets and more than 4,900 conversion rooms;
•At the end of the quarter, Marriott’s worldwide development pipeline totaled more than 3,200 properties and nearly 557,000 rooms, including roughly 40,300 of pipeline rooms approved, but not yet subject to signed contracts. Approximately 238,000 rooms in the pipeline were under construction as of the end of the third quarter;
•Marriott repurchased 4.8 million shares of common stock for $950 million during the third quarter. Year to date through October 31, the company has returned $3.7 billion to shareholders through dividends and share repurchases.
BETHESDA, MD – November 2, 2023 - Marriott International, Inc. (NASDAQ: MAR) today reported third quarter 2023 results.
Anthony Capuano, President and Chief Executive Officer, said, “We are extremely pleased with our results in the quarter. Worldwide RevPAR1 grew 9 percent year over year, reflecting robust demand around the world. International RevPAR increased 22 percent, with particular strength in Asia Pacific. Both occupancy and rate contributed to global RevPAR gains in the third quarter, and cross-border travel continued to rise.
1 All occupancy, Average Daily Rate (ADR) and RevPAR statistics and estimates are systemwide constant dollar. Unless otherwise stated, all changes refer to year-over-year changes for the comparable period. Occupancy, ADR and RevPAR comparisons between 2023 and 2022 reflect properties that are comparable in both years.
1
“In the U.S. & Canada, RevPAR rose more than 4 percent, with many urban markets showing outsized growth. Group and business transient saw mid-single digit hotel revenue gains in the quarter, largely driven by rate increases. Leisure transient demand in the region has also remained solid, leading to 4 percent hotel revenue growth for the segment compared to the year-ago quarter.
“Given the meaningful benefits we deliver to owners, demand for our brands remains strong. Through the first three quarters of 2023, we’ve signed more than 100,000 organic rooms, including the MGM Resorts International deal, an impressive 60 percent increase compared to the same period last year. Even with 5 percent net rooms growth in the last four quarters, our development pipeline continues to grow. Of our record 557,000-room pipeline, 43 percent is under construction.
“With continued momentum in our business around the world, we are raising our full year 2023 worldwide RevPAR growth guidance to 14 to 15 percent year over year and expect to return $4.3 billion to $4.5 billion to shareholders through share repurchases and dividends.”
Third Quarter 2023 Results
Marriott’s reported operating income totaled $1,099 million in the 2023 third quarter, compared to 2022 third quarter reported operating income of $958 million. Reported net income totaled $752 million in the 2023 third quarter, compared to 2022 third quarter reported net income of $630 million. Reported diluted earnings per share (EPS) totaled $2.51 in the quarter, compared to reported diluted EPS of $1.94 in the year-ago quarter.
Adjusted operating income in the 2023 third quarter totaled $959 million, compared to 2022 third quarter adjusted operating income of $815 million. Third quarter 2023 adjusted net income totaled $634 million, compared to 2022 third quarter adjusted net income of $551 million. Adjusted diluted EPS in the 2023 third quarter totaled $2.11, compared to adjusted diluted EPS of $1.69 in the year-ago quarter. The 2023 third quarter adjusted results excluded a $24 million ($16 million after-tax and $0.05 per share) gain on the sale of a hotel in the Caribbean & Latin America (CALA) region. The 2022 third quarter adjusted results excluded special tax items of $30 million ($0.09 per share) and a $2 million ($2 million after-tax and $0.01 per share) gain on an investee’s property sale.
Adjusted results also excluded cost reimbursement revenue, reimbursed expenses and merger-related charges and other expenses. See pages A-3 and A-11 for the calculation of adjusted results and the manner in which the adjusted measures are determined in this press release.
Base management and franchise fees totaled $1,054 million in the 2023 third quarter, an 11 percent increase compared to base management and franchise fees of $953 million in the year-ago quarter. The increase is primarily attributable to RevPAR increases and unit growth. Non-RevPAR-related franchise fees in the 2023 third quarter totaled $208 million, an 8 percent increase compared to $192 million in the year-ago quarter, largely driven by higher co-brand credit card fees.
2
Incentive management fees totaled $143 million in the 2023 third quarter, a 35 percent increase compared to $106 million in the 2022 third quarter. Managed hotels in international markets contributed 77 percent of the incentive fees earned in the quarter.
Owned, leased, and other revenue, net of direct expenses, totaled $70 million in the 2023 third quarter, compared to $44 million in the year-ago quarter. Results in the 2022 quarter included a $19 million expense accrual related to a portfolio of 12 leased hotels in the U.S. & Canada.
General, administrative, and other expenses for the 2023 third quarter totaled $239 million, compared to $216 million in the year-ago quarter. The year-over-year change largely reflects higher staffing levels.
Gains and other income, net, totaled $28 million, compared to $3 million in the 2022 third quarter. Gains and other income, net, in the 2023 third quarter primarily reflected a $24 million gain associated with the sale of a hotel in the CALA region.
Interest expense, net, totaled $139 million in the 2023 third quarter, compared to $93 million in the year-ago quarter. The increase was largely due to higher interest expense associated with higher debt balances.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $1,142 million in the 2023 third quarter, compared to third quarter 2022 adjusted EBITDA of $985 million. See page A-11 for the adjusted EBITDA calculation.
Selected Performance Information
Marriott added 97 properties (17,192 rooms) to its worldwide lodging portfolio during the 2023 third quarter, including roughly 13,000 rooms in international markets and more than 4,900 conversion rooms. Eleven properties (1,494 rooms) exited the system during the quarter. At the end of the quarter, Marriott’s global lodging system totaled nearly 8,700 properties, with approximately 1,581,000 rooms.
At the end of the quarter, the company’s worldwide development pipeline totaled 3,239 properties with nearly 557,000 rooms, including 242 properties with roughly 40,300 rooms approved for development, but not yet subject to signed contracts. The pipeline includes 1,081 properties with approximately 238,000 rooms under construction, or 43 percent, including approximately 37,000 rooms from the MGM deal.
In the 2023 third quarter, worldwide RevPAR increased 8.8 percent (an 8.7 percent increase using actual dollars) compared to the 2022 third quarter. RevPAR in the U.S. & Canada increased 4.3 percent (a 4.2 percent increase using actual dollars), and RevPAR in international markets increased 21.8 percent (a 22.0 percent increase using actual dollars).
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Balance Sheet & Common Stock
At the end of the quarter, Marriott’s total debt was $11.8 billion and cash and equivalents totaled $0.7 billion, compared to $10.1 billion in debt and $0.5 billion of cash and equivalents at year-end 2022.
Year to date through October 31, the company has repurchased 18.3 million shares for $3.3 billion.
In the third quarter, the company issued $450 million of Series LL Senior Notes due in 2026 with a 5.45 percent interest rate coupon and $700 million of Series MM Senior Notes due in 2028 with a 5.55 percent interest rate coupon.
Company Outlook
Marriott anticipates that the 37,000 rooms related to its deal with MGM will now be added to its distribution in early 2024. As such, the company now expects full year 2023 net rooms growth of 4.2 to 4.5 percent, higher than its August 2, 2023 guidance when excluding the MGM rooms.
Fourth Quarter 2023 vs Fourth Quarter 2022 | Full Year 2023 vs Full Year 2022 | |||||||
| Comparable systemwide constant $ RevPAR growth | ||||||||
| Worldwide | 6% to 7.5% | 14% to 15% | ||||||
| U.S. & Canada | 3% to 4% | 8% to 9% | ||||||
| International | 14% to 16% | 31% to 32% | ||||||
Year-End 2023 vs Year-End 2022 | ||||||||
| Net Rooms Growth | 4.2% to 4.5% | |||||||
| ($ in millions, except EPS) | Fourth Quarter 2023 | Full Year 2023 | ||||||
| Gross fee revenues | $1,185 to $1,215 | $4,765 to $4,795 | ||||||
| Owned, leased, and other revenue, net of direct expenses | $80 to $85 | $328 to $333 | ||||||
| General, administrative, and other expenses | Approx. $255 | Approx. $935 | ||||||
Adjusted EBITDA1,2 | $1,115 to $1,150 | $4,574 to $4,609 | ||||||
Adjusted EPS – diluted2,3 | $2.04 to $2.13 | $8.50 to $8.59 | ||||||
Investment Spending4 | $900 to $950 | |||||||
Capital Return to Shareholders5 | $4,300 to $4,500 | |||||||
1See pages A-12 and A-13 for the adjusted EBITDA calculations.
2Adjusted EBITDA and Adjusted EPS – diluted for fourth quarter and full year 2023 do not include cost reimbursement revenue, reimbursed expenses, merger-related charges and other expenses, special tax items, or any additional asset sales that may occur during the year, each of which the company cannot forecast with sufficient accuracy and without unreasonable efforts, and which may be significant. Adjusted EPS – diluted for full year 2023 excludes a special tax item of $100 million and an asset sale gain of $24 million reported in the first three quarters of 2023. See page A-3 for the Adjusted EPS – diluted calculation for the first three quarters of 2023.
3Assumes the level of capital return to shareholders noted above.
4
4Investment spending includes capital and technology expenditures, loan advances, contract acquisition costs, and other investing activities.
5 Assumes the level of investment spending noted above and that no asset sales occur during the remainder of the year.
Marriott International, Inc. (NASDAQ: MAR) will conduct its quarterly earnings review for the investment community and news media on Thursday, November 2, 2023, at 8:00 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 on “Events & Presentations” and click on the quarterly conference call link. A replay will be available at that same website until November 2, 2024.
The telephone dial-in number for the conference call is US Toll Free: 800-579-2543, or Global: +1 785-424-1789. The conference ID is MAR3Q23. A telephone replay of the conference call will be available from 1:00 p.m. ET, Thursday, November 2, 2023, until 8:00 p.m. ET, Thursday, November 9, 2023. To access the replay, call US Toll Free: 800-839-1246 or Global: +1 402-220-0464.
Note on forward-looking statements: All statements in this press release and the accompanying schedules are made as of November 2, 2023. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events or otherwise. This press release and the accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including statements related to our RevPAR, rooms growth and other financial metric estimates, outlook and assumptions; travel and lodging demand trends and expectations; our development pipeline and growth expectations; 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 evolving risks and uncertainties that we may not be able to accurately predict or assess, including the risk factors that we describe in our Securities and Exchange Commission filings, including our most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q. Any of these factors could cause actual results to differ materially from the expectations we express or imply in this press release.
Marriott International, Inc. (NASDAQ: MAR) is based in Bethesda, Maryland, USA, and encompasses a portfolio of nearly 8,700 properties across more than 30 leading brands in 139 countries and territories. Marriott operates and franchises hotels and licenses vacation ownership resorts all around the world. The company offers Marriott Bonvoy®, its highly awarded travel program. For more information, please visit our website at www.marriott.com, and for the latest company news, visit www.marriottnewscenter.com. In addition, connect with us on Facebook and @MarriottIntl on X and Instagram.
Marriott encourages investors, the media, and others interested in the company to review and subscribe to the information Marriott posts on its investor relations website at www.marriott.com/investor or Marriott's news center website at www.marriottnewscenter.com, which may be material. The contents of these websites are not incorporated by reference into this press release or any report or document Marriott files with the SEC, and any references to the websites are intended to be inactive textual references only.
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CONTACTS: | Melissa Froehlich Flood | ||||
| Corporate Communications | |||||
| (301) 380-4839 | |||||
| newsroom@marriott.com | |||||
| Jackie Burka McConagha | |||||
| Investor Relations | |||||
| (301) 380-5126 | |||||
| jackie.mcconagha@marriott.com | |||||
| Betsy Dahm | |||||
| Investor Relations | |||||
| (301) 380-3372 | |||||
| betsy.dahm@marriott.com | |||||
IRPR#1
Tables follow
6
| MARRIOTT INTERNATIONAL, INC. | |||||
| PRESS RELEASE SCHEDULES | |||||
| TABLE OF CONTENTS | |||||
QUARTER 3, 2023 | |||||
| Consolidated Statements of Income - As Reported | |||||
| Non-GAAP Financial Measures | |||||
| Total Lodging Products by Ownership Type | |||||
| Total Lodging Products by Tier | |||||
| Key Lodging Statistics | |||||
| Adjusted EBITDA | |||||
Adjusted EBITDA Forecast - Fourth Quarter 2023 | |||||
| Adjusted EBITDA Forecast - Full Year 2023 | |||||
| Explanation of Non-GAAP Financial and Performance Measures | |||||
| MARRIOTT INTERNATIONAL, INC. | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED | |||||||||||||||||
| THIRD QUARTER 2023 AND 2022 | |||||||||||||||||
| (in millions except per share amounts, unaudited) | |||||||||||||||||
| As Reported | As Reported | Percent | |||||||||||||||
| Three Months Ended | Three Months Ended | Better/(Worse) | |||||||||||||||
| September 30, 2023 | September 30, 2022 | Reported 2023 vs. 2022 | |||||||||||||||
| REVENUES | |||||||||||||||||
| Base management fees | $ | 306 | $ | 275 | 11 | ||||||||||||
Franchise fees1 | 748 | 678 | 10 | ||||||||||||||
| Incentive management fees | 143 | 106 | 35 | ||||||||||||||
| Gross Fee Revenues | 1,197 | 1,059 | 13 | ||||||||||||||
Contract investment amortization2 | (23) | (22) | (5) | ||||||||||||||
| Net Fee Revenues | 1,174 | 1,037 | 13 | ||||||||||||||
Owned, leased, and other revenue3 | 363 | 345 | 5 | ||||||||||||||
Cost reimbursement revenue4 | 4,391 | 3,931 | 12 | ||||||||||||||
| Total Revenues | 5,928 | 5,313 | 12 | ||||||||||||||
| OPERATING COSTS AND EXPENSES | |||||||||||||||||
Owned, leased, and other - direct5 | 293 | 301 | 3 | ||||||||||||||
Depreciation, amortization, and other6 | 46 | 50 | 8 | ||||||||||||||
General, administrative, and other7 | 239 | 216 | (11) | ||||||||||||||
| Merger-related charges and other | 13 | 2 | (550) | ||||||||||||||
Reimbursed expenses4 | 4,238 | 3,786 | (12) | ||||||||||||||
| Total Expenses | 4,829 | 4,355 | (11) | ||||||||||||||
| OPERATING INCOME | 1,099 | 958 | 15 | ||||||||||||||
Gains and other income, net8 | 28 | 3 | 833 | ||||||||||||||
| Interest expense | (146) | (100) | (46) | ||||||||||||||
| Interest income | 7 | 7 | — | ||||||||||||||
Equity in earnings9 | 1 | 1 | — | ||||||||||||||
| INCOME BEFORE INCOME TAXES | 989 | 869 | 14 | ||||||||||||||
| Provision for income taxes | (237) | (239) | 1 | ||||||||||||||
| NET INCOME | $ | 752 | $ | 630 | 19 | ||||||||||||
| EARNINGS PER SHARE | |||||||||||||||||
| Earnings per share - basic | $ | 2.52 | $ | 1.94 | 30 | ||||||||||||
| Earnings per share - diluted | $ | 2.51 | $ | 1.94 | 29 | ||||||||||||
| Basic Shares | 298.6 | 324.5 | |||||||||||||||
| Diluted Shares | 300.1 | 325.7 | |||||||||||||||
1 Franchise fees include fees from our franchise agreements, application and relicensing fees, timeshare and yacht fees, co-branded credit card fees, and residential branding fees. | |||||||||||||||||
2 Contract investment amortization includes amortization of capitalized costs to obtain contracts with our owner and franchisee customers, and any related impairments, accelerations, or write-offs. | |||||||||||||||||
3 Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, and other revenue. | |||||||||||||||||
4 Cost reimbursement revenue includes reimbursements from properties for property-level and centralized programs and services that we operate for the benefit of our hotel owners. Reimbursed expenses include costs incurred by Marriott for certain property-level operating expenses and centralized programs and services. | |||||||||||||||||
5 Owned, leased, and other - direct expenses include operating expenses related to our owned or leased hotels, including lease payments and pre-opening expenses. | |||||||||||||||||
6 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. | |||||||||||||||||
7 General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses. | |||||||||||||||||
8 Gains and other income, net includes gains and losses on the sale of real estate, the sale of joint venture interests and other investments, and adjustments from other equity investments. | |||||||||||||||||
9 Equity in earnings include our equity in earnings or losses of unconsolidated equity method investments. | |||||||||||||||||
A-1
| MARRIOTT INTERNATIONAL, INC. | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED | |||||||||||||||||
| THIRD QUARTER YEAR-TO-DATE 2023 AND 2022 | |||||||||||||||||
| (in millions except per share amounts, unaudited) | |||||||||||||||||
| As Reported | As Reported | Percent | |||||||||||||||
| Nine Months Ended | Nine Months Ended | Better/(Worse) | |||||||||||||||
| September 30, 2023 | September 30, 2022 | Reported 2023 vs. 2022 | |||||||||||||||
| REVENUES | |||||||||||||||||
| Base management fees | $ | 917 | $ | 757 | 21 | ||||||||||||
Franchise fees 1 | 2,126 | 1,847 | 15 | ||||||||||||||
| Incentive management fees | 537 | 343 | 57 | ||||||||||||||
| Gross Fee Revenues | 3,580 | 2,947 | 21 | ||||||||||||||
Contract investment amortization 2 | (66) | (65) | (2) | ||||||||||||||
| Net Fee Revenues | 3,514 | 2,882 | 22 | ||||||||||||||
Owned, leased, and other revenue 3 | 1,109 | 971 | 14 | ||||||||||||||
Cost reimbursement revenue 4 | 12,995 | 10,997 | 18 | ||||||||||||||
| Total Revenues | 17,618 | 14,850 | 19 | ||||||||||||||
| OPERATING COSTS AND EXPENSES | |||||||||||||||||
Owned, leased, and other - direct 5 | 861 | 779 | (11) | ||||||||||||||
Depreciation, amortization, and other 6 | 138 | 147 | 6 | ||||||||||||||
General, administrative, and other 7 | 681 | 655 | (4) | ||||||||||||||
| Merger-related charges and other | 52 | 11 | (373) | ||||||||||||||
Reimbursed expenses 4 | 12,740 | 10,792 | (18) | ||||||||||||||
| Total Expenses | 14,472 | 12,384 | (17) | ||||||||||||||
| OPERATING INCOME | 3,146 | 2,466 | 28 | ||||||||||||||
Gains and other income, net 8 | 33 | 9 | 267 | ||||||||||||||
| Interest expense | (412) | (288) | (43) | ||||||||||||||
| Interest income | 21 | 18 | 17 | ||||||||||||||
Equity in earnings 9 | 9 | 18 | (50) | ||||||||||||||
| INCOME BEFORE INCOME TAXES | 2,797 | 2,223 | 26 | ||||||||||||||
| Provision for income taxes | (562) | (538) | (4) | ||||||||||||||
| NET INCOME | $ | 2,235 | $ | 1,685 | 33 | ||||||||||||
| EARNINGS PER SHARE | |||||||||||||||||
| Earnings per share - basic | $ | 7.36 | $ | 5.15 | 43 | ||||||||||||
| Earnings per share - diluted | $ | 7.32 | $ | 5.13 | 43 | ||||||||||||
| Basic Shares | 303.9 | 327.0 | |||||||||||||||
| Diluted Shares | 305.3 | 328.4 | |||||||||||||||
1 Franchise fees include fees from our franchise agreements, application and relicensing fees, timeshare and yacht fees, co-branded credit card fees, and residential branding fees. | |||||||||||||||||
2 Contract investment amortization includes amortization of capitalized costs to obtain contracts with our owner and franchisee customers, and any related impairments, accelerations, or write-offs. | |||||||||||||||||
3 Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, and other revenue. | |||||||||||||||||
4 Cost reimbursement revenue includes reimbursements from properties for property-level and centralized programs and services that we operate for the benefit of our hotel owners. Reimbursed expenses include costs incurred by Marriott for certain property-level operating expenses and centralized programs and services. | |||||||||||||||||
5 Owned, leased, and other - direct expenses include operating expenses related to our owned or leased hotels, including lease payments and pre-opening expenses. | |||||||||||||||||
6 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. | |||||||||||||||||
7 General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses. | |||||||||||||||||
8 Gains and other income, net includes gains and losses on the sale of real estate, the sale of joint venture interests and other investments, and adjustments from other equity investments. | |||||||||||||||||
9 Equity in earnings include our equity in earnings or losses of unconsolidated equity method investments. | |||||||||||||||||
A-2
| MARRIOTT INTERNATIONAL, INC. | |||||||||||||||||||||||||||||||||||
| NON-GAAP FINANCIAL MEASURES | |||||||||||||||||||||||||||||||||||
| (in millions except per share amounts) | |||||||||||||||||||||||||||||||||||
| The following table presents our reconciliations of Adjusted operating income, Adjusted operating income margin, Adjusted net income, and Adjusted diluted earnings per share, to the most directly comparable GAAP measure. Adjusted total revenues is used in the determination of Adjusted operating income margin. | |||||||||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
| Percent | Percent | ||||||||||||||||||||||||||||||||||
| September 30, | September 30, | Better/ | September 30, | September 30, | Better/ | ||||||||||||||||||||||||||||||
| 2023 | 2022 | (Worse) | 2023 | 2022 | (Worse) | ||||||||||||||||||||||||||||||
| Total revenues, as reported | $ | 5,928 | $ | 5,313 | $ | 17,618 | $ | 14,850 | |||||||||||||||||||||||||||
| Less: Cost reimbursement revenue | (4,391) | (3,931) | (12,995) | (10,997) | |||||||||||||||||||||||||||||||
Add: Impairments1 | — | — | — | 5 | |||||||||||||||||||||||||||||||
Adjusted total revenues** | 1,537 | 1,382 | 4,623 | 3,858 | |||||||||||||||||||||||||||||||
| Operating income, as reported | 1,099 | 958 | 3,146 | 2,466 | |||||||||||||||||||||||||||||||
| Less: Cost reimbursement revenue | (4,391) | (3,931) | (12,995) | (10,997) | |||||||||||||||||||||||||||||||
| Add: Reimbursed expenses | 4,238 | 3,786 | 12,740 | 10,792 | |||||||||||||||||||||||||||||||
| Add: Merger-related charges and other | 13 | 2 | 52 | 11 | |||||||||||||||||||||||||||||||
Add: Impairments1 | — | — | — | 5 | |||||||||||||||||||||||||||||||
Adjusted operating income** | 959 | 815 | 18% | 2,943 | 2,277 | 29% | |||||||||||||||||||||||||||||
| Operating income margin | 19 | % | 18 | % | 18 | % | 17 | % | |||||||||||||||||||||||||||
Adjusted operating income margin** | 62 | % | 59 | % | 64 | % | 59 | % | |||||||||||||||||||||||||||
| Net income, as reported | 752 | 630 | 2,235 | 1,685 | |||||||||||||||||||||||||||||||
| Less: Cost reimbursement revenue | (4,391) | (3,931) | (12,995) | (10,997) | |||||||||||||||||||||||||||||||
| Add: Reimbursed expenses | 4,238 | 3,786 | 12,740 | 10,792 | |||||||||||||||||||||||||||||||
| Add: Merger-related charges and other | 13 | 2 | 52 | 11 | |||||||||||||||||||||||||||||||
Add: Impairments2 | — | — | — | 11 | |||||||||||||||||||||||||||||||
Less: Gains on investees' property sales3 | — | (2) | — | (23) | |||||||||||||||||||||||||||||||
Less: Gain on asset dispositions4 | (24) | — | (24) | (2) | |||||||||||||||||||||||||||||||
| Income tax effect of above adjustments | 46 | 36 | 64 | 50 | |||||||||||||||||||||||||||||||
| Less: Income tax special items | — | 30 | (100) | 30 | |||||||||||||||||||||||||||||||
Adjusted net income** | $ | 634 | $ | 551 | 15% | $ | 1,972 | $ | 1,557 | 27% | |||||||||||||||||||||||||
| Diluted earnings per share, as reported | $ | 2.51 | $ | 1.94 | $ | 7.32 | $ | 5.13 | |||||||||||||||||||||||||||
Adjusted diluted earnings per share** | $ | 2.11 | $ | 1.69 | 25% | $ | 6.46 | $ | 4.74 | 36% | |||||||||||||||||||||||||
** Denotes non-GAAP financial measures. Please see pages A-14 and A-15 for information about our reasons for providing these alternative financial measures and the limitations on their use. | |||||||||||||||||||||||||||||||||||
1 Nine months ended September 30, 2022 includes impairment charges reported in Contract investment amortization of $5 million. | |||||||||||||||||||||||||||||||||||
2 Nine months ended Septemer 30, 2022 includes impairment charges reported in Contract investment amortization of $5 million and Equity in earnings of $6 million. | |||||||||||||||||||||||||||||||||||
3 Gains on investees' property sales reported in Equity in earnings. | |||||||||||||||||||||||||||||||||||
4 Gain on asset dispositions reported in Gains and other income, net. | |||||||||||||||||||||||||||||||||||
A-3
| MARRIOTT INTERNATIONAL, INC. | ||||||||||||||||||||
| TOTAL LODGING PRODUCTS BY OWNERSHIP TYPE | ||||||||||||||||||||
| As of September 30, 2023 | ||||||||||||||||||||
| US & Canada | Total International | Total Worldwide | ||||||||||||||||||
| Properties | Rooms | Properties | Rooms | Properties | Rooms | |||||||||||||||
| Managed | 629 | 215,952 | 1,410 | 358,039 | 2,039 | 573,991 | ||||||||||||||
| Marriott Hotels | 102 | 56,990 | 179 | 56,334 | 281 | 113,324 | ||||||||||||||
| Sheraton | 26 | 20,869 | 185 | 62,318 | 211 | 83,187 | ||||||||||||||
| Courtyard | 164 | 26,628 | 120 | 25,552 | 284 | 52,180 | ||||||||||||||
| Westin | 40 | 21,862 | 82 | 25,271 | 122 | 47,133 | ||||||||||||||
| JW Marriott | 23 | 13,189 | 73 | 25,893 | 96 | 39,082 | ||||||||||||||
| The Ritz-Carlton | 40 | 12,154 | 75 | 17,832 | 115 | 29,986 | ||||||||||||||
| Renaissance | 23 | 10,245 | 55 | 17,545 | 78 | 27,790 | ||||||||||||||
| Four Points | 1 | 134 | 85 | 23,839 | 86 | 23,973 | ||||||||||||||
| Le Méridien | 1 | 100 | 73 | 20,180 | 74 | 20,280 | ||||||||||||||
| W Hotels | 23 | 6,516 | 41 | 11,107 | 64 | 17,623 | ||||||||||||||
| Residence Inn | 73 | 11,857 | 9 | 1,116 | 82 | 12,973 | ||||||||||||||
| St. Regis | 11 | 2,169 | 44 | 9,880 | 55 | 12,049 | ||||||||||||||
| Delta Hotels by Marriott | 25 | 6,770 | 27 | 5,052 | 52 | 11,822 | ||||||||||||||
| Fairfield by Marriott | 6 | 1,431 | 74 | 9,207 | 80 | 10,638 | ||||||||||||||
| Aloft | 2 | 505 | 46 | 10,096 | 48 | 10,601 | ||||||||||||||
| The Luxury Collection | 6 | 2,296 | 41 | 7,983 | 47 | 10,279 | ||||||||||||||
| Gaylord Hotels | 6 | 10,220 | — | — | 6 | 10,220 | ||||||||||||||
| AC Hotels by Marriott | 8 | 1,512 | 68 | 8,466 | 76 | 9,978 | ||||||||||||||
| Autograph Collection | 9 | 2,870 | 24 | 3,569 | 33 | 6,439 | ||||||||||||||
| Marriott Executive Apartments | — | — | 36 | 5,159 | 36 | 5,159 | ||||||||||||||
| SpringHill Suites | 25 | 4,241 | — | — | 25 | 4,241 | ||||||||||||||
| Element | 3 | 810 | 15 | 3,132 | 18 | 3,942 | ||||||||||||||
| EDITION | 5 | 1,379 | 11 | 2,309 | 16 | 3,688 | ||||||||||||||
| Protea Hotels | — | — | 24 | 2,901 | 24 | 2,901 | ||||||||||||||
| Moxy | 1 | 380 | 7 | 1,393 | 8 | 1,773 | ||||||||||||||
| Tribute Portfolio | — | — | 9 | 1,251 | 9 | 1,251 | ||||||||||||||
| TownePlace Suites | 6 | 825 | — | — | 6 | 825 | ||||||||||||||
| Bulgari | — | — | 7 | 654 | 7 | 654 | ||||||||||||||
| Franchised | 5,217 | 747,617 | 1,155 | 210,458 | 6,372 | 958,075 | ||||||||||||||
| Courtyard | 891 | 119,004 | 117 | 21,823 | 1,008 | 140,827 | ||||||||||||||
| Fairfield by Marriott | 1,142 | 107,585 | 56 | 9,760 | 1,198 | 117,345 | ||||||||||||||
| Residence Inn | 785 | 93,648 | 30 | 3,857 | 815 | 97,505 | ||||||||||||||
| Marriott Hotels | 232 | 74,195 | 64 | 18,378 | 296 | 92,573 | ||||||||||||||
| Sheraton | 143 | 44,473 | 75 | 22,011 | 218 | 66,484 | ||||||||||||||
| SpringHill Suites | 518 | 60,135 | — | — | 518 | 60,135 | ||||||||||||||
| Autograph Collection | 143 | 28,022 | 117 | 24,778 | 260 | 52,800 | ||||||||||||||
| TownePlace Suites | 491 | 49,725 | — | — | 491 | 49,725 | ||||||||||||||
| Westin | 92 | 31,078 | 28 | 8,253 | 120 | 39,331 | ||||||||||||||
| Four Points | 154 | 23,323 | 66 | 10,995 | 220 | 34,318 | ||||||||||||||
| Aloft | 158 | 22,580 | 22 | 4,283 | 180 | 26,863 | ||||||||||||||
| AC Hotels by Marriott | 107 | 17,616 | 50 | 8,882 | 157 | 26,498 | ||||||||||||||
| Renaissance | 65 | 18,286 | 30 | 7,671 | 95 | 25,957 | ||||||||||||||
| Moxy | 31 | 5,797 | 94 | 17,676 | 125 | 23,473 | ||||||||||||||
| Delta Hotels by Marriott | 66 | 14,929 | 14 | 3,266 | 80 | 18,195 | ||||||||||||||
| City Express by Marriott | — | — | 149 | 17,300 | 149 | 17,300 | ||||||||||||||
| Tribute Portfolio | 60 | 9,762 | 35 | 4,140 | 95 | 13,902 | ||||||||||||||
| The Luxury Collection | 11 | 3,112 | 52 | 9,588 | 63 | 12,700 | ||||||||||||||
| Le Méridien | 25 | 5,749 | 21 | 5,488 | 46 | 11,237 | ||||||||||||||
| Element | 80 | 10,712 | 2 | 269 | 82 | 10,981 | ||||||||||||||
| JW Marriott | 12 | 6,072 | 12 | 2,733 | 24 | 8,805 | ||||||||||||||
| Design Hotels | 10 | 1,385 | 82 | 5,956 | 92 | 7,341 | ||||||||||||||
| Protea Hotels | — | — | 34 | 2,802 | 34 | 2,802 | ||||||||||||||
| The Ritz-Carlton | 1 | 429 | — | — | 1 | 429 | ||||||||||||||
| W Hotels | — | — | 1 | 246 | 1 | 246 | ||||||||||||||
| Bulgari | — | — | 2 | 161 | 2 | 161 | ||||||||||||||
| Marriott Executive Apartments | — | — | 2 | 142 | 2 | 142 | ||||||||||||||
A-4
| MARRIOTT INTERNATIONAL, INC. | ||||||||||||||||||||
| TOTAL LODGING PRODUCTS BY OWNERSHIP TYPE | ||||||||||||||||||||
| As of September 30, 2023 | ||||||||||||||||||||
| US & Canada | Total International | Total Worldwide | ||||||||||||||||||
| Properties | Rooms | Properties | Rooms | Properties | Rooms | |||||||||||||||
| Owned/Leased | 14 | 4,656 | 37 | 8,776 | 51 | 13,432 | ||||||||||||||
| Marriott Hotels | 2 | 1,308 | 5 | 1,631 | 7 | 2,939 | ||||||||||||||
| Courtyard | 7 | 987 | 4 | 894 | 11 | 1,881 | ||||||||||||||
| Sheraton | — | — | 4 | 1,830 | 4 | 1,830 | ||||||||||||||
| W Hotels | 2 | 779 | 2 | 665 | 4 | 1,444 | ||||||||||||||
| Westin | 1 | 1,073 | — | — | 1 | 1,073 | ||||||||||||||
| Protea Hotels | — | — | 5 | 912 | 5 | 912 | ||||||||||||||
| Renaissance | 1 | 317 | 2 | 505 | 3 | 822 | ||||||||||||||
| The Ritz-Carlton | — | — | 2 | 550 | 2 | 550 | ||||||||||||||
| JW Marriott | — | — | 1 | 496 | 1 | 496 | ||||||||||||||
| The Luxury Collection | — | — | 3 | 383 | 3 | 383 | ||||||||||||||
| Autograph Collection | — | — | 5 | 361 | 5 | 361 | ||||||||||||||
| Residence Inn | 1 | 192 | 1 | 140 | 2 | 332 | ||||||||||||||
| Tribute Portfolio | — | — | 2 | 249 | 2 | 249 | ||||||||||||||
| St. Regis | — | — | 1 | 160 | 1 | 160 | ||||||||||||||
| Residences | 67 | 7,166 | 52 | 5,444 | 119 | 12,610 | ||||||||||||||
| The Ritz-Carlton Residences | 40 | 4,437 | 17 | 1,502 | 57 | 5,939 | ||||||||||||||
| St. Regis Residences | 10 | 1,198 | 12 | 1,628 | 22 | 2,826 | ||||||||||||||
| W Residences | 10 | 1,092 | 7 | 547 | 17 | 1,639 | ||||||||||||||
| Westin Residences | 3 | 266 | 2 | 353 | 5 | 619 | ||||||||||||||
| Bulgari Residences | — | — | 5 | 519 | 5 | 519 | ||||||||||||||
| Sheraton Residences | — | — | 3 | 472 | 3 | 472 | ||||||||||||||
| Marriott Hotels Residences | — | — | 2 | 246 | 2 | 246 | ||||||||||||||
| The Luxury Collection Residences | 1 | 91 | 3 | 115 | 4 | 206 | ||||||||||||||
| EDITION Residences | 3 | 82 | — | — | 3 | 82 | ||||||||||||||
| Le Méridien Residences | — | — | 1 | 62 | 1 | 62 | ||||||||||||||
| Timeshare* | 72 | 18,839 | 21 | 3,906 | 93 | 22,745 | ||||||||||||||
| Yacht* | — | — | 1 | 149 | 1 | 149 | ||||||||||||||
| Grand Total | 5,999 | 994,230 | 2,676 | 586,772 | 8,675 | 1,581,002 | ||||||||||||||
| *Timeshare and Yacht counts are included in this table by geographical location. For external reporting purposes, these offerings are captured within “Unallocated corporate and other.” | ||
| In the above table, The Luxury Collection, Autograph Collection and Tribute Portfolio include seven total properties that we acquired when we purchased Elegant Hotels Group plc in December 2019 which we currently intend to re-brand under such brands after the completion of planned renovations. | ||
A-5
| MARRIOTT INTERNATIONAL, INC. | ||||||||||||||||||||
| TOTAL LODGING PRODUCTS BY TIER | ||||||||||||||||||||
| As of September 30, 2023 | ||||||||||||||||||||
| US & Canada | Total International | Total Worldwide | ||||||||||||||||||
| Total Systemwide | Properties | Rooms | Properties | Rooms | Properties | Rooms | ||||||||||||||
| Luxury | 198 | 54,995 | 412 | 94,951 | 610 | 149,946 | ||||||||||||||
| JW Marriott | 35 | 19,261 | 86 | 29,122 | 121 | 48,383 | ||||||||||||||
| The Ritz-Carlton | 41 | 12,583 | 77 | 18,382 | 118 | 30,965 | ||||||||||||||
| The Ritz-Carlton Residences | 40 | 4,437 | 17 | 1,502 | 57 | 5,939 | ||||||||||||||
| The Luxury Collection | 17 | 5,408 | 96 | 17,954 | 113 | 23,362 | ||||||||||||||
| The Luxury Collection Residences | 1 | 91 | 3 | 115 | 4 | 206 | ||||||||||||||
| W Hotels | 25 | 7,295 | 44 | 12,018 | 69 | 19,313 | ||||||||||||||
| W Residences | 10 | 1,092 | 7 | 547 | 17 | 1,639 | ||||||||||||||
| St. Regis | 11 | 2,169 | 45 | 10,040 | 56 | 12,209 | ||||||||||||||
| St. Regis Residences | 10 | 1,198 | 12 | 1,628 | 22 | 2,826 | ||||||||||||||
| EDITION | 5 | 1,379 | 11 | 2,309 | 16 | 3,688 | ||||||||||||||
| EDITION Residences | 3 | 82 | — | — | 3 | 82 | ||||||||||||||
| Bulgari | — | — | 9 | 815 | 9 | 815 | ||||||||||||||
| Bulgari Residences | — | — | 5 | 519 | 5 | 519 | ||||||||||||||
| Premium | 1,075 | 360,769 | 1,164 | 302,471 | 2,239 | 663,240 | ||||||||||||||
| Marriott Hotels | 336 | 132,493 | 248 | 76,343 | 584 | 208,836 | ||||||||||||||
| Marriott Hotels Residences | — | — | 2 | 246 | 2 | 246 | ||||||||||||||
| Sheraton | 169 | 65,342 | 264 | 86,159 | 433 | 151,501 | ||||||||||||||
| Sheraton Residences | — | — | 3 | 472 | 3 | 472 | ||||||||||||||
| Westin | 133 | 54,013 | 110 | 33,524 | 243 | 87,537 | ||||||||||||||
| Westin Residences | 3 | 266 | 2 | 353 | 5 | 619 | ||||||||||||||
| Autograph Collection | 152 | 30,892 | 146 | 28,708 | 298 | 59,600 | ||||||||||||||
| Renaissance | 89 | 28,848 | 87 | 25,721 | 176 | 54,569 | ||||||||||||||
| Le Méridien | 26 | 5,849 | 94 | 25,668 | 120 | 31,517 | ||||||||||||||
| Le Méridien Residences | — | — | 1 | 62 | 1 | 62 | ||||||||||||||
| Delta Hotels by Marriott | 91 | 21,699 | 41 | 8,318 | 132 | 30,017 | ||||||||||||||
| Tribute Portfolio | 60 | 9,762 | 46 | 5,640 | 106 | 15,402 | ||||||||||||||
| Gaylord Hotels | 6 | 10,220 | — | — | 6 | 10,220 | ||||||||||||||
| Design Hotels | 10 | 1,385 | 82 | 5,956 | 92 | 7,341 | ||||||||||||||
| Marriott Executive Apartments | — | — | 38 | 5,301 | 38 | 5,301 | ||||||||||||||
| Select | 4,654 | 559,627 | 1,078 | 185,295 | 5,732 | 744,922 | ||||||||||||||
| Courtyard | 1,062 | 146,619 | 241 | 48,269 | 1,303 | 194,888 | ||||||||||||||
| Fairfield by Marriott | 1,148 | 109,016 | 130 | 18,967 | 1,278 | 127,983 | ||||||||||||||
| Residence Inn | 859 | 105,697 | 40 | 5,113 | 899 | 110,810 | ||||||||||||||
| SpringHill Suites | 543 | 64,376 | — | — | 543 | 64,376 | ||||||||||||||
| Four Points | 155 | 23,457 | 151 | 34,834 | 306 | 58,291 | ||||||||||||||
| TownePlace Suites | 497 | 50,550 | — | — | 497 | 50,550 | ||||||||||||||
| Aloft | 160 | 23,085 | 68 | 14,379 | 228 | 37,464 | ||||||||||||||
| AC Hotels by Marriott | 115 | 19,128 | 118 | 17,348 | 233 | 36,476 | ||||||||||||||
| Moxy | 32 | 6,177 | 101 | 19,069 | 133 | 25,246 | ||||||||||||||
| City Express by Marriott | — | — | 149 | 17,300 | 149 | 17,300 | ||||||||||||||
| Element | 83 | 11,522 | 17 | 3,401 | 100 | 14,923 | ||||||||||||||
| Protea Hotels | — | — | 63 | 6,615 | 63 | 6,615 | ||||||||||||||
| Timeshare* | 72 | 18,839 | 21 | 3,906 | 93 | 22,745 | ||||||||||||||
| Yacht* | — | — | 1 | 149 | 1 | 149 | ||||||||||||||
| Grand Total | 5,999 | 994,230 | 2,676 | 586,772 | 8,675 | 1,581,002 | ||||||||||||||
| *Timeshare and Yacht counts are included in this table by geographical location. For external reporting purposes, these offerings are captured within “Unallocated corporate and other.” | ||||||||||||||||||||
| In the above table, The Luxury Collection, Autograph Collection and Tribute Portfolio include seven total properties that we acquired when we purchased Elegant Hotels Group plc in December 2019 which we currently intend to re-brand under such brands after the completion of planned renovations. | ||||||||||||||||||||
A-6
| MARRIOTT INTERNATIONAL, INC. | |||||||||||||||||||||||||||||||||||||||||
| KEY LODGING STATISTICS | |||||||||||||||||||||||||||||||||||||||||
| In Constant $ | |||||||||||||||||||||||||||||||||||||||||
| Comparable Company-Operated US & Canada Properties | |||||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2023 and September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | |||||||||||||||||||||||||||||||||||||||
| Brand | 2023 | vs. 2022 | 2023 | vs. 2022 | 2023 | vs. 2022 | |||||||||||||||||||||||||||||||||||
| JW Marriott | $ | 188.80 | 5.0 | % | 67.6 | % | 2.2 | % | pts. | $ | 279.35 | 1.5 | % | ||||||||||||||||||||||||||||
| The Ritz-Carlton | $ | 301.93 | -1.4 | % | 64.1 | % | -0.6 | % | pts. | $ | 471.29 | -0.5 | % | ||||||||||||||||||||||||||||
| W Hotels | $ | 218.78 | 5.4 | % | 70.9 | % | 5.2 | % | pts. | $ | 308.55 | -2.4 | % | ||||||||||||||||||||||||||||
Composite US & Canada Luxury1 | $ | 253.41 | 1.8 | % | 67.3 | % | 1.4 | % | pts. | $ | 376.78 | -0.3 | % | ||||||||||||||||||||||||||||
| Marriott Hotels | $ | 168.41 | 7.0 | % | 72.2 | % | 2.0 | % | pts. | $ | 233.38 | 4.1 | % | ||||||||||||||||||||||||||||
| Sheraton | $ | 154.05 | 9.3 | % | 69.8 | % | 3.6 | % | pts. | $ | 220.76 | 3.7 | % | ||||||||||||||||||||||||||||
| Westin | $ | 177.84 | 4.5 | % | 72.5 | % | 1.0 | % | pts. | $ | 245.18 | 3.0 | % | ||||||||||||||||||||||||||||
Composite US & Canada Premium2 | $ | 164.92 | 6.3 | % | 71.6 | % | 2.0 | % | pts. | $ | 230.28 | 3.4 | % | ||||||||||||||||||||||||||||
US & Canada Full-Service3 | $ | 184.04 | 4.9 | % | 70.7 | % | 1.8 | % | pts. | $ | 260.40 | 2.2 | % | ||||||||||||||||||||||||||||
| Courtyard | $ | 111.09 | 2.4 | % | 68.0 | % | -0.2 | % | pts. | $ | 163.30 | 2.8 | % | ||||||||||||||||||||||||||||
| Residence Inn | $ | 152.08 | 1.6 | % | 78.4 | % | -0.9 | % | pts. | $ | 194.02 | 2.8 | % | ||||||||||||||||||||||||||||
Composite US & Canada Select4 | $ | 123.56 | 2.1 | % | 71.1 | % | -0.4 | % | pts. | $ | 173.70 | 2.6 | % | ||||||||||||||||||||||||||||
US & Canada - All5 | $ | 169.46 | 4.4 | % | 70.8 | % | 1.3 | % | pts. | $ | 239.40 | 2.5 | % | ||||||||||||||||||||||||||||
| Comparable Systemwide US & Canada Properties | |||||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2023 and September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | |||||||||||||||||||||||||||||||||||||||
| Brand | 2023 | vs. 2022 | 2023 | vs. 2022 | 2023 | vs. 2022 | |||||||||||||||||||||||||||||||||||
| JW Marriott | $ | 187.89 | 4.6 | % | 69.3 | % | 2.3 | % | pts. | $ | 271.02 | 1.2 | % | ||||||||||||||||||||||||||||
| The Ritz-Carlton | $ | 302.23 | -1.2 | % | 64.8 | % | -0.4 | % | pts. | $ | 466.59 | -0.5 | % | ||||||||||||||||||||||||||||
| W Hotels | $ | 218.78 | 5.4 | % | 70.9 | % | 5.2 | % | pts. | $ | 308.55 | -2.4 | % | ||||||||||||||||||||||||||||
Composite US & Canada Luxury1 | $ | 241.80 | 2.0 | % | 68.3 | % | 1.5 | % | pts. | $ | 353.80 | -0.2 | % | ||||||||||||||||||||||||||||
| Marriott Hotels | $ | 143.32 | 6.4 | % | 70.3 | % | 1.9 | % | pts. | $ | 203.73 | 3.6 | % | ||||||||||||||||||||||||||||
| Sheraton | $ | 128.05 | 7.7 | % | 68.7 | % | 2.2 | % | pts. | $ | 186.35 | 4.1 | % | ||||||||||||||||||||||||||||
| Westin | $ | 159.36 | 6.3 | % | 72.2 | % | 3.0 | % | pts. | $ | 220.77 | 1.8 | % | ||||||||||||||||||||||||||||
Composite US & Canada Premium2 | $ | 145.89 | 5.7 | % | 70.4 | % | 2.0 | % | pts. | $ | 207.28 | 2.7 | % | ||||||||||||||||||||||||||||
US & Canada Full-Service3 | $ | 156.84 | 5.0 | % | 70.1 | % | 1.9 | % | pts. | $ | 223.58 | 2.1 | % | ||||||||||||||||||||||||||||
| Courtyard | $ | 117.54 | 3.2 | % | 72.4 | % | 0.5 | % | pts. | $ | 162.39 | 2.4 | % | ||||||||||||||||||||||||||||
| Residence Inn | $ | 137.78 | 3.3 | % | 79.9 | % | 0.1 | % | pts. | $ | 172.36 | 3.2 | % | ||||||||||||||||||||||||||||
| Fairfield by Marriott | $ | 101.45 | 3.6 | % | 73.9 | % | 0.3 | % | pts. | $ | 137.25 | 3.2 | % | ||||||||||||||||||||||||||||
Composite US & Canada Select4 | $ | 117.71 | 3.7 | % | 75.1 | % | 0.6 | % | pts. | $ | 156.67 | 2.9 | % | ||||||||||||||||||||||||||||
US & Canada - All5 | $ | 133.92 | 4.3 | % | 73.1 | % | 1.1 | % | pts. | $ | 183.28 | 2.7 | % | ||||||||||||||||||||||||||||
1 Includes JW Marriott, The Ritz-Carlton, W Hotels, The Luxury Collection, St. Regis, and EDITION. | |||||||||||||||||||||||||||||||||||||||||
2 Includes Marriott Hotels, Sheraton, Westin, Renaissance, Autograph Collection, Delta Hotels by Marriott, and Gaylord Hotels. | |||||||||||||||||||||||||||||||||||||||||
| Systemwide also includes Le Méridien and Tribute Portfolio. | |||||||||||||||||||||||||||||||||||||||||
3 Includes Composite US & Canada Luxury and Composite US & Canada Premium. | |||||||||||||||||||||||||||||||||||||||||
4 Includes Courtyard, Residence Inn, Fairfield by Marriott, SpringHill Suites, TownePlace Suites, Four Points, Aloft, Element, | |||||||||||||||||||||||||||||||||||||||||
| and AC Hotels by Marriott. Systemwide also includes Moxy. | |||||||||||||||||||||||||||||||||||||||||
5 Includes US & Canada Full-Service and Composite US & Canada Select. | |||||||||||||||||||||||||||||||||||||||||
A-7
| MARRIOTT INTERNATIONAL, INC. | |||||||||||||||||||||||||||||||||||||||||
| KEY LODGING STATISTICS | |||||||||||||||||||||||||||||||||||||||||
| In Constant $ | |||||||||||||||||||||||||||||||||||||||||
| Comparable Company-Operated US & Canada Properties | |||||||||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2023 and September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | |||||||||||||||||||||||||||||||||||||||
| Brand | 2023 | vs. 2022 | 2023 | vs. 2022 | 2023 | vs. 2022 | |||||||||||||||||||||||||||||||||||
| JW Marriott | $ | 225.75 | 12.8 | % | 70.7 | % | 6.1 | % | pts. | $ | 319.11 | 3.0 | % | ||||||||||||||||||||||||||||
| The Ritz-Carlton | $ | 324.94 | 0.6 | % | 65.7 | % | 1.5 | % | pts. | $ | 494.85 | -1.7 | % | ||||||||||||||||||||||||||||
| W Hotels | $ | 215.00 | 9.8 | % | 66.8 | % | 5.8 | % | pts. | $ | 322.06 | 0.3 | % | ||||||||||||||||||||||||||||
Composite US & Canada Luxury1 | $ | 281.83 | 6.5 | % | 68.5 | % | 4.1 | % | pts. | $ | 411.56 | 0.2 | % | ||||||||||||||||||||||||||||
| Marriott Hotels | $ | 167.88 | 16.9 | % | 70.6 | % | 5.7 | % | pts. | $ | 237.65 | 7.5 | % | ||||||||||||||||||||||||||||
| Sheraton | $ | 151.65 | 17.5 | % | 68.5 | % | 6.8 | % | pts. | $ | 221.48 | 5.8 | % | ||||||||||||||||||||||||||||
| Westin | $ | 172.73 | 12.3 | % | 70.1 | % | 4.2 | % | pts. | $ | 246.46 | 5.6 | % | ||||||||||||||||||||||||||||
Composite US & Canada Premium2 | $ | 163.74 | 16.3 | % | 70.1 | % | 6.1 | % | pts. | $ | 233.64 | 6.1 | % | ||||||||||||||||||||||||||||
US & Canada Full-Service3 | $ | 189.27 | 12.9 | % | 69.7 | % | 5.7 | % | pts. | $ | 271.40 | 3.7 | % | ||||||||||||||||||||||||||||
| Courtyard | $ | 110.53 | 11.2 | % | 67.1 | % | 2.5 | % | pts. | $ | 164.71 | 7.0 | % | ||||||||||||||||||||||||||||
| Residence Inn | $ | 150.54 | 7.5 | % | 77.5 | % | 0.8 | % | pts. | $ | 194.16 | 6.4 | % | ||||||||||||||||||||||||||||
Composite US & Canada Select4 | $ | 123.41 | 9.9 | % | 70.4 | % | 2.1 | % | pts. | $ | 175.28 | 6.7 | % | ||||||||||||||||||||||||||||
US & Canada - All5 | $ | 173.39 | 12.4 | % | 69.9 | % | 4.8 | % | pts. | $ | 248.07 | 4.7 | % | ||||||||||||||||||||||||||||
| Comparable Systemwide US & Canada Properties | |||||||||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2023 and September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | |||||||||||||||||||||||||||||||||||||||
| Brand | 2023 | vs. 2022 | 2023 | vs. 2022 | 2023 | vs. 2022 | |||||||||||||||||||||||||||||||||||
| JW Marriott | $ | 219.51 | 10.4 | % | 71.6 | % | 5.4 | % | pts. | $ | 306.56 | 2.1 | % | ||||||||||||||||||||||||||||
| The Ritz-Carlton | $ | 322.24 | 1.1 | % | 65.9 | % | 1.8 | % | pts. | $ | 488.79 | -1.8 | % | ||||||||||||||||||||||||||||
| W Hotels | $ | 215.00 | 9.8 | % | 66.8 | % | 5.8 | % | pts. | $ | 322.06 | 0.3 | % | ||||||||||||||||||||||||||||
Composite US & Canada Luxury1 | $ | 266.22 | 6.4 | % | 69.2 | % | 4.1 | % | pts. | $ | 384.70 | 0.1 | % | ||||||||||||||||||||||||||||
| Marriott Hotels | $ | 140.80 | 15.2 | % | 68.4 | % | 5.5 | % | pts. | $ | 205.83 | 5.9 | % | ||||||||||||||||||||||||||||
| Sheraton | $ | 121.24 | 15.8 | % | 66.2 | % | 5.8 | % | pts. | $ | 183.26 | 5.6 | % | ||||||||||||||||||||||||||||
| Westin | $ | 158.29 | 13.4 | % | 70.3 | % | 5.3 | % | pts. | $ | 225.17 | 4.8 | % | ||||||||||||||||||||||||||||
Composite US & Canada Premium2 | $ | 143.11 | 14.0 | % | 68.4 | % | 5.6 | % | pts. | $ | 209.26 | 4.8 | % | ||||||||||||||||||||||||||||
US & Canada Full-Service3 | $ | 157.17 | 12.5 | % | 68.5 | % | 5.4 | % | pts. | $ | 229.51 | 3.6 | % | ||||||||||||||||||||||||||||
| Courtyard | $ | 112.28 | 9.9 | % | 70.3 | % | 2.8 | % | pts. | $ | 159.79 | 5.5 | % | ||||||||||||||||||||||||||||
| Residence Inn | $ | 130.43 | 7.8 | % | 77.4 | % | 0.8 | % | pts. | $ | 168.47 | 6.6 | % | ||||||||||||||||||||||||||||
| Fairfield by Marriott | $ | 93.77 | 8.0 | % | 70.7 | % | 2.0 | % | pts. | $ | 132.70 | 5.0 | % | ||||||||||||||||||||||||||||
Composite US & Canada Select4 | $ | 111.60 | 9.1 | % | 72.7 | % | 2.2 | % | pts. | $ | 153.55 | 5.7 | % | ||||||||||||||||||||||||||||
US & Canada - All5 | $ | 130.48 | 10.8 | % | 70.9 | % | 3.5 | % | pts. | $ | 183.93 | 5.2 | % | ||||||||||||||||||||||||||||
1 Includes JW Marriott, The Ritz-Carlton, W Hotels, The Luxury Collection, St. Regis, and EDITION. | |||||||||||||||||||||||||||||||||||||||||
2 Includes Marriott Hotels, Sheraton, Westin, Renaissance, Autograph Collection, Delta Hotels by Marriott, and Gaylord Hotels. | |||||||||||||||||||||||||||||||||||||||||
| Systemwide also includes Le Méridien and Tribute Portfolio. | |||||||||||||||||||||||||||||||||||||||||
3 Includes Composite US & Canada Luxury and Composite US & Canada Premium. | |||||||||||||||||||||||||||||||||||||||||
4 Includes Courtyard, Residence Inn, Fairfield by Marriott, SpringHill Suites, TownePlace Suites, Four Points, Aloft, Element, | |||||||||||||||||||||||||||||||||||||||||
| and AC Hotels by Marriott. Systemwide also includes Moxy. | |||||||||||||||||||||||||||||||||||||||||
5 Includes US & Canada Full-Service and Composite US & Canada Select. | |||||||||||||||||||||||||||||||||||||||||
A-8
| MARRIOTT INTERNATIONAL, INC. | |||||||||||||||||||||||||||||||||||||||||
| KEY LODGING STATISTICS | |||||||||||||||||||||||||||||||||||||||||
| In Constant $ | |||||||||||||||||||||||||||||||||||||||||
| Comparable Company-Operated International Properties | |||||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2023 and September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | |||||||||||||||||||||||||||||||||||||||
| Region | 2023 | vs. 2022 | 2023 | vs. 2022 | 2023 | vs. 2022 | |||||||||||||||||||||||||||||||||||
| Greater China | $ | 93.41 | 48.6 | % | 72.5 | % | 14.5 | % | pts. | $ | 128.93 | 18.9 | % | ||||||||||||||||||||||||||||
| Asia Pacific excluding China | $ | 116.21 | 35.2 | % | 70.7 | % | 9.3 | % | pts. | $ | 164.45 | 17.5 | % | ||||||||||||||||||||||||||||
| Caribbean & Latin America | $ | 138.64 | 2.4 | % | 61.1 | % | 2.4 | % | pts. | $ | 226.76 | -1.6 | % | ||||||||||||||||||||||||||||
| Europe | $ | 226.46 | 10.6 | % | 75.5 | % | 3.2 | % | pts. | $ | 300.01 | 6.0 | % | ||||||||||||||||||||||||||||
| Middle East & Africa | $ | 101.11 | 18.1 | % | 65.4 | % | 4.2 | % | pts. | $ | 154.50 | 10.5 | % | ||||||||||||||||||||||||||||
International - All1 | $ | 121.93 | 25.8 | % | 70.5 | % | 9.0 | % | pts. | $ | 172.91 | 9.7 | % | ||||||||||||||||||||||||||||
Worldwide2 | $ | 142.51 | 13.8 | % | 70.6 | % | 5.7 | % | pts. | $ | 201.76 | 4.6 | % | ||||||||||||||||||||||||||||
| Comparable Systemwide International Properties | |||||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2023 and September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | |||||||||||||||||||||||||||||||||||||||
| Region | 2023 | vs. 2022 | 2023 | vs. 2022 | 2023 | vs. 2022 | |||||||||||||||||||||||||||||||||||
| Greater China | $ | 87.31 | 47.4 | % | 71.3 | % | 14.5 | % | pts. | $ | 122.40 | 17.4 | % | ||||||||||||||||||||||||||||
| Asia Pacific excluding China | $ | 117.73 | 36.4 | % | 70.4 | % | 8.6 | % | pts. | $ | 167.12 | 19.7 | % | ||||||||||||||||||||||||||||
| Caribbean & Latin America | $ | 121.87 | 2.8 | % | 62.4 | % | 2.5 | % | pts. | $ | 195.43 | -1.4 | % | ||||||||||||||||||||||||||||
| Europe | $ | 175.50 | 9.8 | % | 74.7 | % | 3.2 | % | pts. | $ | 235.04 | 5.0 | % | ||||||||||||||||||||||||||||
| Middle East & Africa | $ | 98.24 | 20.2 | % | 65.3 | % | 3.5 | % | pts. | $ | 150.50 | 13.8 | % | ||||||||||||||||||||||||||||
International - All1 | $ | 120.43 | 21.8 | % | 70.1 | % | 7.6 | % | pts. | $ | 171.85 | 8.5 | % | ||||||||||||||||||||||||||||
Worldwide2 | $ | 129.73 | 8.8 | % | 72.1 | % | 3.2 | % | pts. | $ | 179.84 | 4.1 | % | ||||||||||||||||||||||||||||
1 Includes Greater China, Asia Pacific excluding China, Caribbean & Latin America, Europe, and Middle East & Africa. | ||
2 Includes US & Canada - All and International - All. | ||
A-9
| MARRIOTT INTERNATIONAL, INC. | |||||||||||||||||||||||||||||||||||||||||
| KEY LODGING STATISTICS | |||||||||||||||||||||||||||||||||||||||||
| In Constant $ | |||||||||||||||||||||||||||||||||||||||||
| Comparable Company-Operated International Properties | |||||||||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2023 and September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | |||||||||||||||||||||||||||||||||||||||
| Region | 2023 | vs. 2022 | 2023 | vs. 2022 | 2023 | vs. 2022 | |||||||||||||||||||||||||||||||||||
| Greater China | $ | 89.14 | 78.2 | % | 68.9 | % | 22.0 | % | pts. | $ | 129.41 | 21.2 | % | ||||||||||||||||||||||||||||
| Asia Pacific excluding China | $ | 114.87 | 58.1 | % | 68.5 | % | 14.3 | % | pts. | $ | 167.63 | 25.2 | % | ||||||||||||||||||||||||||||
| Caribbean & Latin America | $ | 165.92 | 17.8 | % | 63.4 | % | 4.9 | % | pts. | $ | 261.59 | 8.7 | % | ||||||||||||||||||||||||||||
| Europe | $ | 188.49 | 25.0 | % | 70.5 | % | 9.0 | % | pts. | $ | 267.38 | 9.0 | % | ||||||||||||||||||||||||||||
| Middle East & Africa | $ | 118.53 | 17.8 | % | 66.2 | % | 4.0 | % | pts. | $ | 178.96 | 10.7 | % | ||||||||||||||||||||||||||||
International - All1 | $ | 119.30 | 42.0 | % | 68.2 | % | 14.1 | % | pts. | $ | 174.86 | 12.7 | % | ||||||||||||||||||||||||||||
Worldwide2 | $ | 142.74 | 24.7 | % | 68.9 | % | 10.1 | % | pts. | $ | 207.02 | 6.5 | % | ||||||||||||||||||||||||||||
| Comparable Systemwide International Properties | |||||||||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2023 and September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | |||||||||||||||||||||||||||||||||||||||
| Region | 2023 | vs. 2022 | 2023 | vs. 2022 | 2023 | vs. 2022 | |||||||||||||||||||||||||||||||||||
| Greater China | $ | 83.53 | 77.9 | % | 67.8 | % | 22.2 | % | pts. | $ | 123.11 | 19.8 | % | ||||||||||||||||||||||||||||
| Asia Pacific excluding China | $ | 115.15 | 58.7 | % | 68.4 | % | 13.6 | % | pts. | $ | 168.42 | 27.1 | % | ||||||||||||||||||||||||||||
| Caribbean & Latin America | $ | 141.96 | 18.2 | % | 64.4 | % | 5.2 | % | pts. | $ | 220.49 | 8.6 | % | ||||||||||||||||||||||||||||
| Europe | $ | 146.12 | 25.8 | % | 68.6 | % | 9.8 | % | pts. | $ | 212.87 | 7.9 | % | ||||||||||||||||||||||||||||
| Middle East & Africa | $ | 111.67 | 20.3 | % | 65.3 | % | 3.7 | % | pts. | $ | 171.06 | 13.5 | % | ||||||||||||||||||||||||||||
International - All1 | $ | 115.90 | 38.7 | % | 67.4 | % | 12.9 | % | pts. | $ | 171.93 | 12.3 | % | ||||||||||||||||||||||||||||
Worldwide2 | $ | 125.96 | 17.5 | % | 69.8 | % | 6.4 | % | pts. | $ | 180.34 | 6.7 | % | ||||||||||||||||||||||||||||
1 Includes Greater China, Asia Pacific excluding China, Caribbean & Latin America, Europe, and Middle East & Africa. | ||
2 Includes US & Canada - All and International - All. | ||
A-10
| MARRIOTT INTERNATIONAL, INC. | |||||||||||||||||||||||||||||
| NON-GAAP FINANCIAL MEASURES | |||||||||||||||||||||||||||||
| ADJUSTED EBITDA | |||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
| Fiscal Year 2023 | |||||||||||||||||||||||
| First Quarter | Second Quarter | Third Quarter | Total | ||||||||||||||||||||
| Net income, as reported | $ | 757 | $ | 726 | $ | 752 | $ | 2,235 | |||||||||||||||
| Cost reimbursement revenue | (4,147) | (4,457) | (4,391) | (12,995) | |||||||||||||||||||
| Reimbursed expenses | 4,136 | 4,366 | 4,238 | 12,740 | |||||||||||||||||||
| Interest expense | 126 | 140 | 146 | 412 | |||||||||||||||||||
| Interest expense from unconsolidated joint ventures | 1 | 1 | 3 | 5 | |||||||||||||||||||
| Provision for income taxes | 87 | 238 | 237 | 562 | |||||||||||||||||||
| Depreciation and amortization | 44 | 48 | 46 | 138 | |||||||||||||||||||
| Contract investment amortization | 21 | 22 | 23 | 66 | |||||||||||||||||||
| Depreciation and amortization classified in reimbursed expenses | 31 | 38 | 39 | 108 | |||||||||||||||||||
| Depreciation, amortization, and impairments from unconsolidated joint ventures | 4 | 3 | 6 | 13 | |||||||||||||||||||
| Stock-based compensation | 37 | 56 | 54 | 147 | |||||||||||||||||||
| Merger-related charges and other | 1 | 38 | 13 | 52 | |||||||||||||||||||
| Gain on asset dispositions | — | — | (24) | (24) | |||||||||||||||||||
| Adjusted EBITDA ** | $ | 1,098 | $ | 1,219 | $ | 1,142 | $ | 3,459 | |||||||||||||||
| Change from 2022 Adjusted EBITDA ** | 45 | % | 20 | % | 16 | % | 25 | % | |||||||||||||||
| Fiscal Year 2022 | |||||||||||||||||||||||||||||
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total | |||||||||||||||||||||||||
| Net income, as reported | $ | 377 | $ | 678 | $ | 630 | $ | 673 | $ | 2,358 | |||||||||||||||||||
| Cost reimbursement revenue | (3,146) | (3,920) | (3,931) | (4,420) | (15,417) | ||||||||||||||||||||||||
| Reimbursed expenses | 3,179 | 3,827 | 3,786 | 4,349 | 15,141 | ||||||||||||||||||||||||
| Interest expense | 93 | 95 | 100 | 115 | 403 | ||||||||||||||||||||||||
| Interest expense from unconsolidated joint ventures | 1 | 2 | 2 | 1 | 6 | ||||||||||||||||||||||||
| Provision for income taxes | 99 | 200 | 239 | 218 | 756 | ||||||||||||||||||||||||
| Depreciation and amortization | 48 | 49 | 50 | 46 | 193 | ||||||||||||||||||||||||
| Contract investment amortization | 24 | 19 | 22 | 24 | 89 | ||||||||||||||||||||||||
| Depreciation and amortization classified in reimbursed expenses | 26 | 29 | 32 | 31 | 118 | ||||||||||||||||||||||||
| Depreciation, amortization, and impairments from unconsolidated joint ventures | 13 | 3 | 7 | 4 | 27 | ||||||||||||||||||||||||
| Stock-based compensation | 44 | 52 | 48 | 48 | 192 | ||||||||||||||||||||||||
| Merger-related charges and other | 9 | — | 2 | 1 | 12 | ||||||||||||||||||||||||
| Gains on investees' property sales | (8) | (13) | (2) | — | (23) | ||||||||||||||||||||||||
| Gain on asset dispositions | — | (2) | — | — | (2) | ||||||||||||||||||||||||
| Adjusted EBITDA ** | $ | 759 | $ | 1,019 | $ | 985 | $ | 1,090 | $ | 3,853 | |||||||||||||||||||
** Denotes non-GAAP financial measures. Please see pages A-14 and A-15 for information about our reasons for providing these alternative financial measures and the limitations on their use.
A-11
| MARRIOTT INTERNATIONAL, INC. | |||||||||||||||||
| NON-GAAP FINANCIAL MEASURES | |||||||||||||||||
| ADJUSTED EBITDA FORECAST | |||||||||||||||||
| FOURTH QUARTER 2023 | |||||||||||||||||
| ($ in millions) | |||||||||||||||||
| Range | |||||||||||||||||
| Estimated Fourth Quarter 2023 | Fourth Quarter 2022 ** | ||||||||||||||||
Net income excluding certain items 1 | $ | 603 | $ | 630 | |||||||||||||
| Interest expense | 158 | 158 | |||||||||||||||
| Interest expense from unconsolidated joint ventures | 1 | 1 | |||||||||||||||
| Provision for income taxes | 190 | 198 | |||||||||||||||
| Depreciation and amortization | 47 | 47 | |||||||||||||||
| Contract investment amortization | 24 | 24 | |||||||||||||||
| Depreciation and amortization classified in reimbursed expenses | 36 | 36 | |||||||||||||||
| Depreciation, amortization, and impairments from unconsolidated joint ventures | 4 | 4 | |||||||||||||||
| Stock-based compensation | 52 | 52 | |||||||||||||||
| Adjusted EBITDA ** | $ | 1,115 | $ | 1,150 | $ | 1,090 | |||||||||||
| Increase over 2022 Adjusted EBITDA ** | 2 | % | 6 | % | |||||||||||||
** Denotes non-GAAP financial measures. See pages A-14 and A-15 for information about our reasons for providing these alternative financial measures and the limitations on their use.
1Guidance excludes cost reimbursement revenue, reimbursed expenses, and merger-related charges and other expenses, each of which the company cannot forecast with sufficient accuracy and without unreasonable efforts, and which may be significant, except for depreciation and amortization classified in reimbursed expenses, which is included in the caption "Depreciation and amortization classified in reimbursed expenses" above. Guidance does not reflect any additional asset sales that may occur during the year, which the company cannot forecast with sufficient accuracy and without unreasonable efforts, and which may be significant.
A-12
| MARRIOTT INTERNATIONAL, INC. | |||||||||||||||||
| NON-GAAP FINANCIAL MEASURES | |||||||||||||||||
| ADJUSTED EBITDA FORECAST | |||||||||||||||||
| FULL YEAR 2023 | |||||||||||||||||
| ($ in millions) | |||||||||||||||||
| Range | |||||||||||||||||
| Estimated Full Year 2023 | Full Year 2022** | ||||||||||||||||
Net income excluding certain items 1 | $ | 2,691 | $ | 2,718 | |||||||||||||
| Interest expense | 570 | 570 | |||||||||||||||
| Interest expense from unconsolidated joint ventures | 6 | 6 | |||||||||||||||
| Provision for income taxes | 696 | 704 | |||||||||||||||
| Depreciation and amortization | 185 | 185 | |||||||||||||||
| Contract investment amortization | 90 | 90 | |||||||||||||||
| Depreciation and amortization classified in reimbursed expenses | 144 | 144 | |||||||||||||||
| Depreciation, amortization, and impairments from unconsolidated joint ventures | 17 | 17 | |||||||||||||||
| Stock-based compensation | 199 | 199 | |||||||||||||||
| Gain on asset dispositions | (24) | (24) | |||||||||||||||
| Adjusted EBITDA ** | $ | 4,574 | $ | 4,609 | $ | 3,853 | |||||||||||
| Increase over 2022 Adjusted EBITDA ** | 19 | % | 20 | % | |||||||||||||
** Denotes non-GAAP financial measures. See pages A-14 and A-15 for information about our reasons for providing these alternative financial measures and the limitations on their use.
1Guidance excludes cost reimbursement revenue, reimbursed expenses, and merger-related charges and other expenses, each of which the company cannot forecast with sufficient accuracy and without unreasonable efforts, and which may be significant, except for depreciation and amortization classified in reimbursed expenses, which is included in the caption "Depreciation and amortization classified in reimbursed expenses" above. Guidance does not reflect any additional asset sales that may occur during the year, which the company cannot forecast with sufficient accuracy and without unreasonable efforts, and which may be significant.
A-13
MARRIOTT INTERNATIONAL, INC.
EXPLANATION OF 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”). These non-GAAP financial measures are labeled as “adjusted” and/or identified with the symbol “**”. We discuss the manner in which the non-GAAP measures reported in this press release and schedules are determined and management’s reasons for reporting these non-GAAP measures below, and the press release schedules reconcile each to the most directly comparable GAAP measures (with respect to the forward-looking non-GAAP measures, to the extent available without unreasonable efforts). 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, 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 Operating Income and Adjusted Operating Income Margin. Adjusted operating income and Adjusted operating income margin exclude cost reimbursement revenue, reimbursed expenses, merger-related charges and other expenses, and certain non-cash impairment charges. Adjusted operating income margin reflects Adjusted operating income divided by Adjusted total revenues. We believe that these are meaningful metrics because they allow for period-over-period comparisons of our ongoing operations before these items and for the reasons further described below.
Adjusted Net Income and Adjusted Diluted Earnings Per Share. Adjusted net income and Adjusted diluted earnings per share reflect our net income and diluted earnings per share excluding the impact of cost reimbursement revenue, reimbursed expenses, merger-related charges and other expenses, certain non-cash impairment charges, gains and losses on asset dispositions made by us or by our joint venture investees (when applicable). Additionally, Adjusted net income and Adjusted diluted earnings per share exclude the income tax effect of the above adjustments (calculated using an estimated tax rate applicable to each adjustment) and income tax special items, which primarily related to the resolution of tax audits. We believe that these measures are meaningful indicators of our performance because they allow for period-over-period comparisons of our ongoing operations before these items and for the reasons further described below.
Adjusted Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“Adjusted EBITDA”). Adjusted EBITDA reflects net income excluding the impact of the following items: cost reimbursement revenue and reimbursed expenses, interest expense, depreciation and amortization, provision for income taxes, merger-related charges and other expenses, and stock-based compensation expense for all periods presented. When applicable, Adjusted EBITDA also excludes certain non-cash impairment charges related to equity investments and gains and losses on asset dispositions made by us or by our joint venture investees.
In our presentations of Adjusted operating income and Adjusted operating income margin, Adjusted net income and Adjusted diluted earnings per share, and Adjusted EBITDA, we exclude a one-time cost in the 2022 first quarter related to certain property-level adjustments related to compensation and transition costs associated with the Starwood merger, which we record in the “Merger-related charges and other” caption of our Condensed Consolidated Statements of Income (our “Income Statements”), to allow for period-over period comparisons of our ongoing operations before the impact of these items. We also exclude non-cash impairment charges (if above a specified threshold) related to our management and franchise contracts (if the impairment is non-routine), leases, equity investments, and other capitalized assets, which we record in the “Contract investment amortization,” “Depreciation, amortization, and other,” and “Equity in earnings” captions of our Income Statements to allow for period-over period comparisons of our ongoing operations before the impact of these items. We exclude cost reimbursement revenue and reimbursed expenses, which relate to property-level and centralized programs and services that we operate for the benefit of our hotel owners. We do not operate these programs and services to generate a profit over the long term, and accordingly, when we recover the costs that we incur for these programs and services from our hotel owners, we do not seek a mark-up. For property-level services, our owners typically reimburse us at the same time that we incur expenses. However, for centralized programs and services, our owners may reimburse us before or after we incur expenses, causing timing differences between the costs we incur and the related reimbursement from hotel owners in our operating and net income. Over the long term, these programs and services are not designed to impact our economics, either positively or negatively. Because we do not retain any such profits or losses over time, we exclude the net impact when evaluating period-over-period changes in our operating results.
We believe that Adjusted EBITDA is a meaningful indicator of our operating performance because it permits period-over-period comparisons of our ongoing operations before these items. Our use of Adjusted EBITDA also facilitates comparison with results from other lodging 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 and amortization classified in “Contract investment amortization,” “Reimbursed expenses,” and “Equity in earnings” of our Income Statements, because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. Depreciation and amortization classified in “Reimbursed expenses” reflects depreciation and amortization of Marriott-owned assets, for which we receive cash from owners to reimburse the company for its investments made for the benefit of the system. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We exclude stock-based compensation expense in all periods presented to address the considerable variability among companies in recording compensation expense because companies use stock-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
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EXPLANATION OF NON-GAAP FINANCIAL AND PERFORMANCE MEASURES
revenues for comparable properties. RevPAR relates to property level revenue and may not be comparable to similarly titled measures, such as revenues, and should not be viewed as necessarily correlating with our fee revenue. 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 comparative 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.
Non-RevPAR Related Franchise Fees. In this press release, we also discuss non-RevPAR related franchise fees, which include co-branded credit card, timeshare and yacht fees, residential branding fees, application fees, relicensing fees, and certain other licensing fees.
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