Marriott International Results

Marriott International Q4 2015 Net Income Up 3 Percent

Fourth quarter diluted EPS totaled $0.77, a 13 percent increase over prior year results - On a constant dollar basis, worldwide comparable systemwide RevPAR rose 3.8 percent in the fourth quarter

Marriott

HIGHLIGHTS

  • Fourth quarter diluted EPS totaled $0.77, a 13 percent increase over prior year results;
  • On a constant dollar basis, worldwide comparable systemwide RevPAR rose 3.8 percent in the fourth quarter;
  • North American comparable systemwide constant dollar RevPAR rose 4.0 percent in the fourth quarter;
  • For full year 2015, Marriott repurchased 25.7 million shares of the company's common stock for $1.94 billion, including 1.3 million shares for $93 million in the fourth quarter;
  • The company added nearly 52,000 rooms during 2015, including 7,300 rooms converted from competitor brands and 9,600 rooms associated with the Delta transaction;
  • At year-end, the company's worldwide development pipeline increased to more than 270,000 rooms, including approximately 27,000 rooms approved, but not yet subject to signed contracts;
  • The company's full year 2015 adjusted operating income margin increased to 47 percent compared to 42 percent in 2014;
  • Return on invested capital reached a record 49 percent in 2015;
  • Full year 2015 diluted EPS totaled $3.15, a 24 percent increase over prior year results;
  • Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for full year 2015 totaled $1,718 million, a 13 percent increase over 2014 adjusted EBITDA;
  • For full year 2016, the company expects diluted EPS will increase 17 to 23 percent and adjusted EBITDA will increase 10 to 14 percent, not including the impact of the planned Starwood transaction.

Marriott International, Inc. (NASDAQ:  MAR) yesterday reported fourth quarter 2015 results.

Fourth quarter 2015 net income totaled $202 million, a 3 percent increase over 2014 fourth quarter net income.  Diluted earnings per share (EPS) in the fourth quarter totaled $0.77, a 13 percent increase from diluted EPS in the year-ago quarter.  On October 28, 2015, the company forecasted fourth quarter diluted EPS of $0.74 to $0.78.

Arne M. Sorenson, president and chief executive officer of Marriott International, said, "We are pleased with our results for 2015.  Worldwide systemwide comparable RevPAR rose 5 percent on a constant dollar basis for the full year with average daily rate up 4 percent.  In North America, RevPAR also grew 5 percent for systemwide comparable properties and occupancy reached a record 74 percent.  Fee revenue increased 9 percent, diluted earnings per share rose 24 percent and adjusted EBITDA increased 13 percent.  

"In 2015, we added nearly 52,000 rooms worldwide taking our system to more than 759,000 rooms.  Our development group had an outstanding year, signing new contracts for 104,000 rooms in 2015, including 9,600 rooms associated with the Delta transaction.  We expect that our owners and franchisees will invest more than $15 billion on the newly signed projects which should open over the next several years.   

"We continued our consistent execution of our asset-light strategy in 2015, generating $1.4 billion in cash from operations and roughly $650 million from the sale of four properties.  We returned $2.2 billion to our shareholders through share repurchases and dividends during 2015, and over the past five years, we have returned nearly $8 billion.  Return on invested capital reached a record 49 percent in 2015.

"We are encouraged by recent demand trends.  Fourth quarter 2015 worldwide systemwide comparable RevPAR rose 4 percent in constant dollars.  Group RevPAR in North America increased 6 percent in the quarter and new group bookings for future business increased 10 percent year-over-year.  Group booking pace for the company's full-service hotels is up 7 percent in 2016 compared to 2015.  Based on negotiations completed to date, we expect special corporate rates across our North American hotels will increase at a mid-single digit rate in 2016.

"In November, we were thrilled to announce our planned acquisition of Starwood Hotels & Resorts Worldwide, which will create the world's largest hotel company with more than 5,500 hotels and 1.1 million rooms.  We believe this transaction will offer a broader choice for guests and greater opportunities for associates while unlocking additional value for Marriott and Starwood shareholders, as well as owners and franchisees.  We are well under way with integration planning and we continue to expect the transaction will close in mid-2016.

"We remain optimistic about 2016.  Not including the impact of the pending Starwood acquisition, we expect worldwide gross rooms growth of 8 percent, or 7 percent net, with worldwide systemwide comparable RevPAR increasing 3 to 5 percent on a constant dollar basis."

For the 2015 fourth quarter, RevPAR for worldwide comparable systemwide properties increased 3.8 percent (a 1.8 percent increase using actual dollars).

In North America, comparable systemwide RevPAR increased 4.0 percent (a 3.5 percent increase using actual dollars) in the fourth quarter of 2015, including a 3.3 percent increase (a 2.9 percent increase in actual dollars) in average daily rate.  RevPAR for comparable systemwide North American full-service hotels (including Marriott HotelsThe Ritz-Carlton, Renaissance Hotels, Gaylord Hotels and Autograph Collection Hotels) increased 4.5 percent (a 4.0 percent increase in actual dollars) with a 2.7 percent increase (a 2.2 percent increase in actual dollars) in average daily rate.  RevPAR for comparable systemwide North American limited-service hotels (including Courtyard, Residence Inn, SpringHill Suites, TownePlace Suites and Fairfield Inn & Suites) increased 3.5 percent (a 3.1 percent increase in actual dollars) in the fourth quarter of 2015 with a 3.5 percent increase (a 3.1 percent increase in actual dollars) in average daily rate. 

International comparable systemwide RevPAR rose 3.0 percent (a 4.5 percent decline using actual dollars) in the fourth quarter of 2015.  

Marriott added 71 new properties (10,857 rooms) to its worldwide lodging portfolio in the 2015 fourth quarter, including Domes of Elounda, an Autograph Collection hotel in Greece, The Nile Ritz-Carlton in Cairo and the JW Marriott Los Cabos Beach Resort & Spa in Mexico.  Eleven properties (1,375 rooms) exited the system during the quarter.  At year-end, the company's lodging system encompassed 4,424 properties and timeshare resorts for a total of more than 759,000 rooms.

The company's worldwide development pipeline totaled 1,663 properties with more than 270,000 rooms at year-end, including nearly 600 properties with roughly 97,000 rooms under construction and over 160 properties with approximately 27,000 rooms approved for development, but not yet subject to signed contracts.  

MARRIOTT REVENUES totaled approximately $3.7 billion in the 2015 fourth quarter compared to revenues of nearly $3.6 billion for the fourth quarter of 2014.  Base management and franchise fees totaled $373 million in the 2015 fourth quarter compared to $348 million in the year-ago quarter, an increase of 7 percent.  The year-over-year increase largely reflects higher RevPAR and new unit growth, partially offset by $8 million of unfavorable foreign exchange.  

Fourth quarter worldwide incentive management fees totaled $81 million, a 1 percent decrease compared to the year-ago quarter primarily due to $5 million of unfavorable foreign exchange and lower results at one hotel in Mexico, as well as lower results in the Middle East and Africa region, largely offset by very strong results in North America.  In the fourth quarter, 46 percent of worldwide company-managed hotels earned incentive management fees compared to 40 percent in the year-ago quarter.  For full year 2015, 68 percent of worldwide company-managed hotels earned incentive management fees compared to 50 percent in 2014.

On October 28, 2015, the company estimated total fee revenue for the fourth quarter would total $460 million to $470 million.  Actual total fee revenue of $454 million in the quarter was modestly lower than estimated, reflecting lower than expected RevPAR growth, particularly in North America and the Middle East and Africa region. 

Worldwide comparable company-operated house profit margins increased 70 basis points in the fourth quarter with higher room rates, improved productivity, and lower food and utility costs.  House profit margins for comparable company-operated properties outside North America increased 40 basis points and North American comparable company-operated house profit margins increased 90 basis points from the year-ago quarter.

OWNED, LEASED, AND OTHER REVENUE, NET OF DIRECT EXPENSES, totaled $76 million, compared to $73 million in the year-ago quarter.  The year-over-year increase largely reflects higher termination fees and lower pre-opening expenses, partially offset by lower results from one North American full-service hotel under renovation.

On October 28, 2015 the company estimated owned, leased and other revenue, net of direct expenses for the fourth quarter would total $70 million to $75 million.  Actual results in the quarter were higher than expected due to $6 million of termination fees, partially offset by $2 million of lower than expected results at one North America leased property and $2 million of lower than expected results due to the sale of one international owned property in the quarter.

GENERAL, ADMINISTRATIVE, and OTHER expenses for the 2015 fourth quarter totaled $188 million compared to $180 million in the year-ago quarter.  Expenses increased in the quarter largely due to $5 million of transaction costs related to the planned acquisition of Starwood, routine administrative costs and hotel development expenses, partially offset by the benefit of deferred development costs associated with the growing pipeline.  

On October 28, the company estimated general, administrative, and other expenses for the fourth quarter would total approximately $175 million.  Actual expenses in the quarter were higher than expected, largely due to $5 million of transaction costs related to the planned acquisition of Starwood and $5 million of higher net development expenses.

GAINS AND OTHER INCOME totaled $7 million in the quarter, largely reflecting a favorable adjustment to the previously recorded impairment related to the sale of The Ritz-Carlton St. Thomas.  The property was sold in the fourth quarter subject to a long-term management agreement.  Gains and other income in the fourth quarter of 2014 totaled $4 million and included a $5 milliondistribution related to the sale of a hotel in an investment fund. 

INTEREST EXPENSE, NET increased $23 million in the fourth quarter.  Interest expense for the fourth quarter increased $20 million, largely due to lower capitalized interest expense, higher interest expense associated with new debt issuances and the unfavorable comparison to the $7 million one-time interest expense true-up recorded the year-ago quarter.  Interest income declined $3 million, largely due to a year-over-year decrease in loans receivable.

EQUITY IN EARNINGS totaled $3 million in the fourth quarter.  Results largely reflect the reversal of an $11 million litigation reserve, partially offset by a $6 million impairment charge associated with one joint venture.

Provision for Income Taxes

The provision for income taxes was lower than expected in the fourth quarter of 2015 and included a net tax benefit of $11 millionlargely due to a favorable IRS settlement and the sale of The Ritz-Carlton St. Thomas.

Adjusted Earnings before Interest Expense, Taxes, Depreciation and Amortization (EBITDA)

For the fourth quarter, adjusted EBITDA totaled $401 million, a 4 percent increase over fourth quarter 2014 adjusted EBITDA of $384 million.  See page A-8 for the adjusted EBITDA calculation.

Full year 2015 adjusted EBITDA totaled $1,718 million, a 13 percent increase over 2014 adjusted EBITDA of $1,524 million.

BALANCE SHEET

At year-end, total debt was $4,107 million and cash balances totaled $96 million, compared to $3,771 million in debt and $104 million of cash at year-end 2014.

COMMON STOCK

Weighted average diluted shares outstanding used to calculate diluted EPS totaled 262.4 million in the 2015 fourth quarter, compared to 289.0 million in the year-ago quarter.

The company repurchased 1.3 million shares of common stock in the fourth quarter at a cost of $93 million.  For full year 2015, Marriott repurchased 25.7 million shares of its stock for $1.94 billion at an average price of $75.48.  To date in 2016, the company has repurchased 3.7 million shares for $225 million.  On February 11, 2016, the board of directors increased the company's share authorization to repurchase shares by 25.0 million for a total authorization of 35.7 million shares as of February 17, 2016.

Since the fourth quarter of 2015, the company's ability to repurchase its shares has been limited by restrictions under the securities laws and other legal considerations relating to the proposed acquisition of Starwood.  Further, securities laws and other legal considerations will prevent the company from repurchasing any shares from the time that its Registration Statement on Form S‑4 is declared effective until the company's and Starwood's stockholders have voted on the proposed acquisition.  After the stockholder votes, the acquisition-related restrictions will end, and the company expects to resume share repurchases, subject to the legal and other considerations the company ordinarily takes into account.

OUTLOOK

The guidance provided in this Outlook section does not include the impact of the planned Starwood transaction.

For the 2016 first quarter, the company expects comparable systemwide RevPAR on a constant dollar basis will increase 2 to 4 percent in North America, outside North America and worldwide.  The company's guidance for first quarter RevPAR growth reflects the shift of the Easter holiday weeks, most of which will fall in the first quarter in 2016 compared to the second quarter in 2015. 

The company assumes first quarter 2016 fee revenue could total $475 million to $485 million, growth of 4 to 6 percent over first quarter 2015 fee revenue of $458 million.  These estimates include $13 million of lower relicensing fee revenue year-over-year, as well as $8 million of unfavorable foreign exchange.

For 2016 first quarter, the company anticipates general, administrative and other expenses will total approximately $160 million, a 10 percent increase compared to 2015 first quarter expenses of $145 million.  First quarter 2015 expenses included a benefit of $13 million associated with a favorable litigation.

For full year 2016, the company expects comparable systemwide RevPAR on a constant dollar basis will increase 3 to 5 percent in North America, outside North America and worldwide.  

The company anticipates gross room additions of approximately 8 percent, or 7 percent, net, worldwide for the full year 2016.

The company assumes full year 2016 fee revenue could total $1,995 million to $2,045 million, growth of 7 to 9 percent over 2015 fee revenue of $1,870 million.  These estimates reflect roughly $30 million of negative impact from foreign exchange year-over-year.

The company anticipates worldwide incentive management fees will increase 10 to 15 percent for full year 2016. The company estimates that incentive fees for the full year will include $9 million of unfavorable foreign exchange.

For 2016, the company anticipates general, administrative and other expenses will total $650 million to $660 million, a 3 to 4 percent increase compared to 2015 expenses of $634 million.  

Given these assumptions, 2016 full year diluted EPS could total $3.69 to $3.86, a 17 to 23 percent increase year-over-year.  

First Quarter 2016

Full Year 2016

Total fee revenue

$475 million to $485 million

$1,995 million to $2,045 million

Owned, leased, and other revenue,

  net of direct expenses

$60 million to $65 million

$300 million to $305 million

Depreciation, amortization, and

  other expenses

Approx. $30 million

Approx. $130 million

General, administrative, and other

  expenses

Approx. $160 million

$650 million to $660 million

Operating income

$345 million to $360 million

$1,505 million to $1,570 million

Gains and other income, net 

Approx. $0 million

Approx. $5 million

Net interest expense1

Approx. $35 million

Approx. $160 million

Equity in earnings (losses)

Approx. $0 million

Approx. $10 million

Earnings per share 

$0.81 to $0.85

$3.69 to $3.86

Tax rate

32.3 percent

1 Net of interest income

 

The company expects investment spending in 2016 will total approximately $450 million to $550 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.  Assuming this level of investment spending, more than $2 billion could be returned to shareholders through share repurchases and dividends.

Based upon the assumptions above, the company expects full year 2016 adjusted EBITDA will total $1,885 million to $1,950 million, a 10 to 14 percent increase over the 2015 full year adjusted EBITDA of $1,718 million.  See page A-9 for the adjusted EBITDA calculation.

IRPR#1

Tables follow

 

PRESS RELEASE SCHEDULES

QUARTER 4, 2015

TABLE OF CONTENTS

Consolidated Statements of Income

A-1

Total Lodging Products

A-3

Key Lodging Statistics

A-4

Adjusted EBITDA

A-8

Adjusted EBITDA Full Year Forecast

A-9

Adjusted Operating Income Margin

A-10

Return on Invested Capital

A-11

Non-GAAP Financial Measures

A-12

 

 

MARRIOTT INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF INCOME

FOURTH QUARTER 2015 AND 2014

(in millions except per share amounts, unaudited)

 Percent 

Three Months Ended

Three Months Ended

 Better/ 

December 31, 2015

December 31, 2014

 (Worse) 

REVENUES

Base management fees

$                        172

$                        163

6

Franchise fees

201

185

9

Incentive management fees

81

82

(1)

Owned, leased, and other revenue 1

257

275

(7)

Cost reimbursements 2

2,995

2,854

5

   Total Revenues

3,706

3,559

4

OPERATING COSTS AND EXPENSES

Owned, leased, and other - direct 3

181

202

10

Reimbursed costs

2,995

2,854

(5)

Depreciation, amortization, and other 4

32

32

-

General, administrative, and other 5

188

180

(4)

   Total Expenses

3,396

3,268

(4)

OPERATING INCOME

310

291

7

Gains and other income, net 6

7

4

75

Interest expense

(46)

(26)

(77)

Interest income 

10

13

(23)

Equity in earnings 7

3

-

   * 

INCOME BEFORE INCOME TAXES

284

282

1

Provision for income taxes

(82)

(85)

4

NET INCOME

$                        202

$                        197

3

EARNINGS PER SHARE

   Earnings per share - basic

$                       0.79

$                       0.70

13

   Earnings per share - diluted

$                       0.77

$                       0.68

13

Basic Shares

256.9

282.4

Diluted Shares

262.4

289.0

1  Owned, leased, and other revenueincludes revenue from the properties we own or lease, termination fees, branding fees, and other revenue.

2  Cost reimbursementsinclude reimbursements from properties for Marriott-funded operating expenses.

3  Owned, leased, and other - directexpenses 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, netincludes 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 earningsinclude our equity in earnings or losses of unconsolidated equity method investments.

 

 

MARRIOTT INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF INCOME

FOURTH QUARTER YEAR-TO-DATE 2015 AND 2014

(in millions except per share amounts, unaudited)

 Percent 

Twelve Months Ended

Twelve Months Ended

 Better/ 

December 31, 2015

December 31, 2014

 (Worse) 

REVENUES

Base management fees

$                            698

$                           672

4

Franchise fees

853

745

14

Incentive management fees

319

302

6

Owned, leased, and other revenue 1

986

1,022

(4)

Cost reimbursements 2

11,630

11,055

5

   Total Revenues

14,486

13,796

5

OPERATING COSTS AND EXPENSES

Owned, leased, and other - direct 3

733

775

5

Reimbursed costs

11,630

11,055

(5)

Depreciation, amortization, and other 4

139

148

6

General, administrative, and other 5

634

659

4

   Total Expenses

13,136

12,637

(4)

OPERATING INCOME

1,350

1,159

16

Gains and other income, net 6

27

8

238

Interest expense

(167)

(115)

(45)

Interest income 

29

30

(3)

Equity in earnings 7

16

6

167

INCOME BEFORE INCOME TAXES

1,255

1,088

15

Provision for income taxes

(396)

(335)

(18)

NET INCOME

$                            859

$                           753

14

EARNINGS PER SHARE

   Earnings per share - basic

$                           3.22

$                          2.60

24

   Earnings per share - diluted

$                           3.15

$                          2.54

24

Basic Shares

267.3

289.9

Diluted Shares

272.8

296.8

1  Owned, leased, and other revenueincludes revenue from the properties we own or lease, termination fees, branding fees, and other revenue.

2  Cost reimbursementsinclude reimbursements from properties for Marriott-funded operating expenses.

3  Owned, leased, and other - directexpenses 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, netincludes 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 earningsinclude our equity in earnings or losses of unconsolidated equity method investments.

 

 

MARRIOTT INTERNATIONAL, INC.

TOTAL LODGING PRODUCTS 

Number of Properties

Number of Rooms

Brand

December 31,

2015

December 31,

2014

vs. December 31,

2014

December 31,

2015

December 31,

2014

vs. December 31,

2014

North American Full-Service

Marriott Hotels 

367

363

4

148,584

146,151

2,433

Renaissance Hotels

82

81

1

27,359

28,591

(1,232)

Autograph Collection Hotels

55

45

10

13,135

10,315

2,820

Gaylord Hotels 

5

5

-

8,098

8,098

-

Delta Hotels and Resorts

36

-

36

9,385

-

9,385

The Ritz-Carlton Hotels

40

40

-

11,839

11,691

148

The Ritz-Carlton Residences

32

32

-

3,812

3,812

-

EDITION Hotels

2

1

1

568

295

273

EDITION Residences

1

1

-

25

25

-

North American Limited-Service

Courtyard

916

884

32

129,041

124,990

4,051

Residence Inn

690

668

22

84,412

81,446

2,966

TownePlace Suites

270

244

26

27,128

24,491

2,637

Fairfield Inn & Suites

761

718

43

69,970

65,969

4,001

SpringHill Suites

336

316

20

39,750

37,267

2,483

AC Hotels by Marriott1

5

1

4

911

220

691

International

Marriott Hotels 

236

215

21

72,735

65,852

6,883

Marriott Executive Apartments 

28

27

1

4,181

4,261

(80)

Renaissance Hotels

78

78

-

24,234

24,365

(131)

Autograph Collection Hotels1

40

30

10

9,673

7,195

2,478

Protea Hotels

102

112

(10)

9,609

10,107

(498)

The Ritz-Carlton Hotels

52

47

5

14,713

13,823

890

The Ritz-Carlton Serviced Apartments

4

4

-

579

579

-

The Ritz-Carlton Residences

8

8

-

416

416

-

Bulgari Hotels & Resorts

3

3

-

202

202

-

Bulgari Residences

1

1

-

5

5

-

EDITION Hotels

2

2

-

251

251

-

Courtyard

121

104

17

24,376

20,810

3,566

Residence Inn

7

7

-

717

717

-

Fairfield Inn & Suites

7

3

4

1,102

482

620

AC Hotels by Marriott1

78

76

2

9,551

9,311

240

Moxy Hotels

1

1

-

162

162

-

Timeshare2

58

58

-

12,807

12,866

(59)

  Total Lodging

4,424

4,175

249

759,330

714,765

44,565

1  Results for all AC Hotels by Marriott properties and five Autograph Collection properties are presented in the "Equity in earnings" caption of our Consolidated Statements of Income.  

2  Timeshare property and room counts are as of January 1, 2016 and January 2, 2015, the end of Marriott Vacation Worldwide's fourth quarter for 2015 and 2014, respectively.

 

 

MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

Constant $

Comparable Company-Operated International Properties1

Three Months Ended December 31, 2015 and December 31, 2014

REVPAR

Occupancy

Average Daily Rate

Region

2015

vs. 2014

2015

vs. 2014

2015

vs. 2014

Caribbean & Latin America

$173.48

3.6%

70.4%

-0.2%

pts.

$246.24

3.9%

Europe

$124.79

3.1%

73.0%

-1.3%

pts.

$171.05

4.9%

Middle East & Africa

$115.31

-7.5%

62.1%

-1.4%

pts.

$185.59

-5.5%

Asia Pacific

$118.87

3.6%

76.3%

1.9%

pts.

$155.73

1.0%

Total International2

$127.87

2.0%

72.6%

0.1%

pts.

$176.08

1.9%

Worldwide3

$128.51

3.8%

71.8%

0.9%

pts.

$179.04

2.4%

Comparable Systemwide International Properties1

Three Months Ended December 31, 2015 and December 31, 2014

REVPAR

Occupancy

Average Daily Rate

Region

2015

vs. 2014

2015

vs. 2014

2015

vs. 2014

Caribbean & Latin America

$140.69

2.9%

69.1%

0.3%

pts.

$203.56

2.5%

Europe

$123.88

4.1%

73.4%

-1.0%

pts.

$168.69

5.5%

Middle East & Africa

$113.95

-6.4%

62.3%

-0.9%

pts.

$182.91

-5.1%

Asia Pacific

$120.32

4.7%

76.8%

1.8%

pts.

$156.60

2.3%

Total International2

$124.46

3.0%

72.7%

0.2%

pts.

$171.10

2.8%

Worldwide3

$106.07

3.8%

70.0%

0.4%

pts.

$151.49

3.2%

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, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, and Fairfield Inn & Suites properties.

3Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, The Ritz-Carlton, Bulgari, EDITION Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, and SpringHill Suites properties.

 

 

MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

Constant $

Comparable Company-Operated International Properties1

Twelve Months Ended December 31, 2015 and December 31, 2014

REVPAR

Occupancy

Average Daily Rate

Region

2015

vs. 2014

2015

vs. 2014

2015

vs. 2014

Caribbean & Latin America

$179.58

5.2%

72.4%

0.2%

pts.

$248.05

4.9%

Europe

$131.43

6.5%

75.9%

1.7%

pts.

$173.07

4.1%

Middle East & Africa

$110.85

0.9%

61.2%

2.7%

pts.

$181.16

-3.5%

Asia Pacific

$114.00

4.7%

74.1%

3.4%

pts.

$153.83

0.0%

Total International2

$128.50

5.0%

72.9%

2.3%

pts.

$176.24

1.7%

Worldwide3

$132.30

5.0%

74.1%

1.2%

pts.

$178.46

3.4%

Comparable Systemwide International Properties1

Twelve Months Ended December 31, 2015 and December 31, 2014

REVPAR

Occupancy

Average Daily Rate

Region

2015

vs. 2014

2015

vs. 2014

2015

vs. 2014

Caribbean & Latin America

$148.86

4.1%

70.7%

0.6%

pts.

$210.46

3.3%

Europe

$124.59

6.2%

74.3%

1.5%

pts.

$167.63

4.0%

Middle East & Africa

$109.80

1.6%

61.6%

2.8%

pts.

$178.37

-3.0%

Asia Pacific

$115.77

5.5%

74.6%

3.2%

pts.

$155.24

0.9%

Total International2

$124.13

5.1%

72.5%

2.1%

pts.

$171.20

2.1%

Worldwide3

$112.25

5.2%

73.7%

0.8%

pts.

$152.30

4.1%

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, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, and Fairfield Inn & Suites properties.

3Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, The Ritz-Carlton, Bulgari, EDITION Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, and SpringHill Suites properties.

 

 

MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

Constant $

Comparable Company-Operated North American Properties

Three Months Ended December 31, 2015 and December 31, 2014

REVPAR

Occupancy

Average Daily Rate

Brand

2015

vs. 2014

2015

vs. 2014

2015

vs. 2014

Marriott Hotels

$142.24

4.7%

71.7%

1.7%

pts.

$198.43

2.2%

Renaissance Hotels

$128.00

5.2%

69.9%

1.6%

pts.

$183.01

2.9%

The Ritz-Carlton

$252.44

1.7%

69.0%

0.4%

pts.

$365.97

1.0%

Composite North American Full-Service1

$153.03

4.6%

71.7%

1.6%

pts.

$213.56

2.2%

Courtyard

$94.01

4.2%

69.1%

0.5%

pts.

$136.09

3.3%

SpringHill Suites

$90.38

7.3%

73.2%

3.4%

pts.

$123.41

2.2%

Residence Inn

$104.08

5.2%

75.0%

1.2%

pts.

$138.68

3.5%

TownePlace Suites

$65.29

6.9%

65.5%

0.3%

pts.

$99.71

6.5%

Composite North American Limited-Service2

$95.62

4.8%

70.9%

0.9%

pts.

$134.79

3.5%

Composite - All3

$128.82

4.6%

71.4%

1.3%

pts.

$180.54

2.7%

Comparable Systemwide North American Properties

Three Months Ended December 31, 2015 and December 31, 2014

REVPAR

Occupancy

Average Daily Rate

Brand

2015

vs. 2014

2015

vs. 2014

2015

vs. 2014

Marriott Hotels

$119.56

4.5%

68.1%

1.0%

pts.

$175.57

2.9%

Renaissance Hotels

$112.88

5.2%

69.1%

1.0%

pts.

$163.47

3.6%

Autograph Collection Hotels

$179.82

4.3%

77.3%

3.5%

pts.

$232.58

-0.5%

The Ritz-Carlton

$252.44

1.7%

69.0%

0.4%

pts.

$365.97

1.0%

Composite North American Full-Service4

$130.49

4.5%

69.1%

1.2%

pts.

$188.74

2.7%

Courtyard

$91.41

3.4%

68.4%

0.1%

pts.

$133.61

3.3%

Fairfield Inn & Suites

$69.76

2.9%

65.5%

-0.3%

pts.

$106.58

3.4%

SpringHill Suites

$80.71

3.6%

70.4%

0.1%

pts.

$114.64

3.5%

Residence Inn

$102.28

4.2%

74.9%

0.2%

pts.

$136.61

4.0%

TownePlace Suites

$68.52

2.5%

69.2%

-0.3%

pts.

$99.05

3.0%

Composite North American Limited-Service2

$86.92

3.5%

69.6%

0.0%

pts.

$124.81

3.5%

Composite - All5

$102.33

4.0%

69.5%

0.4%

pts.

$147.31

3.3%

1 Includes Marriott Hotels, Renaissance Hotels, Gaylord Hotels, and The Ritz-Carlton properties.

2 Includes Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, and SpringHill Suites properties.

3 Includes Marriott Hotels, Renaissance Hotels, Gaylord Hotels, The Ritz-Carlton, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, and SpringHill Suites properties.

4 Includes Marriott Hotels, Renaissance Hotels, Gaylord Hotels, Autograph Collection Hotels, and The Ritz-Carlton properties.

5 Includes Marriott Hotels, Renaissance Hotels, Gaylord Hotels, Autograph Collection Hotels, The Ritz-Carlton, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, and SpringHill Suites properties.

 

 

MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

Constant $

Comparable Company-Operated North American Properties

Twelve Months Ended December 31, 2015 and December 31, 2014

REVPAR

Occupancy

Average Daily Rate

Brand

2015

vs. 2014

2015

vs. 2014

2015

vs. 2014

Marriott Hotels

$147.33

4.7%

75.4%

0.6%

pts.

$195.28

3.8%

Renaissance Hotels

$136.91

5.5%

75.2%

0.8%

pts.

$182.13

4.4%

The Ritz-Carlton

$259.41

2.7%

72.1%

-0.1%

pts.

$359.92

2.9%

Composite North American Full-Service1

$157.10

4.3%

74.9%

0.6%

pts.

$209.72

3.5%

Courtyard

$101.18

6.3%

72.8%

0.7%

pts.

$139.08

5.2%

SpringHill Suites

$95.21

7.5%

76.0%

1.6%

pts.

$125.24

5.1%

Residence Inn

$112.33

6.5%

78.5%

0.4%

pts.

$143.14

6.0%

TownePlace Suites

$74.83

8.3%

72.7%

0.1%

pts.

$102.99

8.2%

Composite North American Limited-Service2

$102.76

6.5%

74.5%

0.7%

pts.

$137.92

5.5%

Composite - All3

$134.18

5.0%

74.7%

0.6%

pts.

$179.53

4.2%

Comparable Systemwide North American Properties

Twelve Months Ended December 31, 2015 and December 31, 2014

REVPAR

Occupancy

Average Daily Rate

Brand

2015

vs. 2014

2015

vs. 2014

2015

vs. 2014

Marriott Hotels

$127.52

5.0%

72.6%

0.6%

pts.

$175.53

4.2%

Renaissance Hotels

$121.20

5.4%

73.9%

0.8%

pts.

$164.02

4.3%

Autograph Collection Hotels

$178.16

3.5%

77.5%

1.1%

pts.

$229.90

1.9%

The Ritz-Carlton

$259.41

2.7%

72.1%

-0.1%

pts.

$359.92

2.9%

Composite North American Full-Service4

$136.95

4.6%

73.1%

0.6%

pts.

$187.40

3.8%

Courtyard

$99.88

6.1%

73.1%

0.8%

pts.

$136.58

5.0%

Fairfield Inn & Suites

$76.70

4.7%

70.6%

0.3%

pts.

$108.71

4.2%

SpringHill Suites

$88.80

5.2%

74.8%

0.3%

pts.

$118.64

4.8%

Residence Inn

$110.75

5.5%

79.4%

0.1%

pts.

$139.51

5.3%

TownePlace Suites

$76.15

5.0%

74.8%

0.3%

pts.

$101.83

4.6%

Composite North American Limited-Service2

$94.99

5.6%

74.4%

0.5%

pts.

$127.65

4.9%

Composite - All5

$109.83

5.2%

73.9%

0.5%

pts.

$148.53

4.5%

1 Includes Marriott Hotels, Renaissance Hotels, Gaylord Hotels, and The Ritz-Carlton properties.

2 Includes Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, and SpringHill Suites properties.

3 Includes Marriott Hotels, Renaissance Hotels, Gaylord Hotels, The Ritz-Carlton, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, and SpringHill Suites properties.

4 Includes Marriott Hotels, Renaissance Hotels, Gaylord Hotels, Autograph Collection Hotels, and The Ritz-Carlton properties.

5 Includes Marriott Hotels, Renaissance Hotels, Gaylord Hotels, Autograph Collection Hotels, The Ritz-Carlton, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, and SpringHill Suites properties.

 

 

MARRIOTT INTERNATIONAL, INC.

NON-GAAP FINANCIAL MEASURES

ADJUSTED EBITDA

($ in millions)

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

0

1

0

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 dispositions 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

Increase over 2014 Quarterly Adjusted EBITDA **

27%

12%

10%

4%

13%

Fiscal Year 2014

First 

Quarter

Second 

Quarter

Third 

Quarter

Fourth 

Quarter

Total

Net income

$             172

$             192

$             192

$             197

$             753

Interest expense 

30

30

29

26

115

Tax provision

59

93

98

85

335

Depreciation and amortization

26

32

33

32

123

Depreciation classified in Reimbursed costs

12

13

13

13

51

Interest expense from unconsolidated joint ventures 

1

1

-

1

3

Depreciation and amortization from unconsolidated joint ventures

4

3

1

2

10

EBITDA **

304

364

366

356

1,390

EDITION impairment charge

10

15

-

-

25

Share-based compensation (including share-based compensation

reimbursed by third-party owners)

25

29

27

28

109

Adjusted EBITDA **

$             339

$             408

$             393

$             384

$           1,524

** Denotes non-GAAP financial measures.  Please see page A-12 for information about our reasons for providing these alternative  financial measures and the limitations on their use.

 

 

MARRIOTT INTERNATIONAL, INC.

NON-GAAP FINANCIAL MEASURES

ADJUSTED EBITDA FULL YEAR FORECAST

FORECASTED 2016

($ in millions)

Range

Estimated EBITDA 

Fiscal Year 2016

As Reported

Fiscal Year 2015

Net income

$       921

$       965

$                     859

Interest expense 

200

200

167

Tax provision

439

460

396

Depreciation and amortization

130

130

127

Depreciation classified in Reimbursed costs

60

60

58

Interest expense from unconsolidated joint ventures 

5

5

2

Depreciation and amortization from unconsolidated joint ventures

10

10

10

EBITDA **

1,765

1,830

1,619

EDITION impairment charge

-

-

12

Loss (gain) disposition of real estate

-

-

15

Gain on redemption of preferred equity ownership interest

-

-

(41)

Share-based compensation (including share-based compensation

reimbursed by third-party owners)

120

120

113

Adjusted EBITDA **

$    1,885

$    1,950

$                   1,718

Increase over 2015 Adjusted EBITDA**

10%

14%

** Denotes non-GAAP financial measures.  See page A-12 for information about our reasons for providing these alternative financial measures and the limitations on their use.

 

 

MARRIOTT INTERNATIONAL, INC.

NON-GAAP FINANCIAL MEASURES

ADJUSTED OPERATING INCOME MARGIN

FULL YEAR 2015

($ in millions)

Fiscal

Year 

2015

Fiscal

Year 

2014

Total revenues, as reported

$         14,486

$         13,796

Less: cost reimbursements

(11,630)

(11,055)

Total revenues, as adjusted **

$          2,856

$          2,741

Operating income

$          1,350

$          1,159

Adjusted operating income margin **

47%

42%

** Denotes non-GAAP financial measures.  See page A-12 for information about our reasons for providing these alternative financial measures and the limitations on their use.

 

 

MARRIOTT INTERNATIONAL, INC.

NON-GAAP FINANCIAL MEASURES

RETURN ON INVESTED CAPITAL

($ in millions)

The reconciliation of net income to earnings before interest expense and taxes is as follows:

Twelve Months Ended

December 31,2015

Net income

$                          859

Interest expense

167

Tax provision

396

Earnings before interest expense and taxes **

$                       1,422

The reconciliations of assets to invested capital are as follows:

December 31,2015

December 31,2014

Assets

$                       6,082

$                       6,855

Less: current liabilities, net of current portion of long-term debt

(2,933)

(2,714)

Less: deferred tax assets

(672)

(841)

Invested capital **

$                       2,477

$                       3,300

Average invested capital 1** 

$                       2,889

Return on invested capital **

49.2%

1  Calculated as "Invested capital" for December 31, 2015 and 2014, divided by two.

** Denotes non-GAAP financial measures.  See page A-12 for information about our reasons for providing these alternative financial measures and the limitations on their use.

 

 

 

MARRIOTT INTERNATIONAL, INC.

NON-GAAP FINANCIAL 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 on the preceding pages). Although management evaluates and presents these non-GAAP measures for the reasons described below, please be aware that these non-GAAP measures 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.

Earnings Before Interest Expense and Taxes ("EBIT"), and Adjusted Earnings Before Interest Expense, Taxes, Depreciation and Amortization ("Adjusted EBITDA"). EBIT and Earnings Before Interest Expense, Taxes, Depreciation and Amortization ("EBITDA") are financial measures not required by, or presented in accordance with GAAP. EBIT, which we use as part of our return on invested capital calculation, reflects net income excluding the impact of interest expense and provision for income taxes, and EBITDA reflects EBIT excluding the impact of depreciation and amortization. Our non-GAAP measure of Adjusted EBITDA further adjusts EBITDA to exclude (1) the $41 million pre-tax preferred equity investment gain in the 2015 second quarter, the $22 million pre-tax expected loss on dispositions of real estate in the 2015 second quarter, and the $7 million reversal of a portion of the pre-tax loss on disposition upon sale of one property in the 2015 fourth quarter, all of which we recorded in the "Gains and other income, net" caption of our Condensed Consolidated Statements of Income (our "Income Statements"); (2) the pre-tax EDITION impairment charges of $12 million in the 2015 first quarter, $10 million in the 2014 first quarter, and $15 million in the 2014 second quarter, which we recorded in the "Depreciation, amortization, and other" caption of our Income Statements following an evaluation of our EDITION hotels and residences for recovery; and (3) 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, and analysts, lenders, investors, and others use EBITDA or Adjusted EBITDA for similar purposes. 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.

EBIT and Adjusted EBITDA have limitations and should not be considered in isolation or as substitutes for performance measures calculated under GAAP. These non-GAAP measures exclude certain cash expenses that we are obligated to make. In addition, other companies in our industry may calculate Adjusted EBITDA differently than we do or may not calculate it at all, limiting the usefulness of Adjusted EBITDA as a comparative measure.

Adjusted Operating Income Margin Excluding Cost Reimbursements. Cost reimbursements revenue represents reimbursements we receive for costs we incur on behalf of managed and franchised properties and relates, predominantly, to payroll costs at managed properties where we are the employer, but also includes reimbursements for other costs, such as those associated with our rewards programs. As we record cost reimbursements based on the costs we incur with no added markup, this revenue and the related expense have no impact on either our operating income or net income because cost reimbursements revenue net of reimbursed costs expense is zero. In calculating adjusted operating income margin, we consider total revenues, as adjusted to exclude cost reimbursements, to be meaningful metrics as they represent that portion of revenue and operating income margin that allows for period-over-period comparisons.

Return on Invested Capital ("ROIC"). We calculate ROIC as EBIT divided by average invested capital. We consider ROIC to be a meaningful indicator of our operating performance, and we evaluate ROIC because it measures how effectively we use the money we invest in our operations. We calculate invested capital by deducting from total assets: (1) current liabilities, as we intend to satisfy them in the short term, net of current portion of long-term debt, as the numerator of the calculation excludes interest expense; and (2) deferred tax assets because the numerator of the calculation is a pre-tax amount.

 



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