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press release

Nov. 4, 2019, 4:30 p.m. EST

Marriott International Reports Third Quarter 2019 Results

BETHESDA, Md., Nov. 4, 2019 /PRNewswire/ -- 

HIGHLIGHTS

  • Third quarter reported diluted EPS totaled $1.16, compared to $1.43 in the year-ago quarter. Third quarter adjusted diluted EPS totaled $1.47, compared to third quarter 2018 adjusted diluted EPS of $1.70. Reported and adjusted diluted EPS for the 2018 third quarter included $0.26 of asset sale gains;

  • Third quarter 2019 comparable systemwide constant dollar RevPAR rose 1.5 percent worldwide, 1.9 percent outside North America and 1.3 percent in North America;

  • The company added more than 17,700 rooms during the third quarter, including roughly 3,100 rooms converted from competitor brands and approximately 6,700 rooms in international markets;

  • At quarter-end, Marriott's worldwide development pipeline totaled roughly 2,950 hotels and nearly 495,000 rooms, including more than 31,000 rooms approved, but not yet subject to signed contracts. Approximately 214,000 pipeline rooms were under construction at the end of the third quarter;

  • Third quarter reported net income totaled $387 million, a 23 percent decrease from prior year results. Third quarter adjusted net income totaled $488 million, an 18 percent decrease from prior year adjusted results;

  • Adjusted EBITDA totaled $901 million in the quarter, flat compared to third quarter 2018 adjusted EBITDA;

  • Marriott repurchased 3.8 million shares of the company's common stock for $500 million during the third quarter. Year-to-date through November 1, the company has repurchased 14.2 million shares for $1.83 billion.

Marriott International, Inc. /zigman2/quotes/200170042/composite MAR +0.73% today reported solid third quarter 2019 results.

Arne M. Sorenson, president and chief executive officer of Marriott International, said, "It's been just over three years since the completion of the Starwood acquisition.  In that time, we've realized meaningful synergies, enhanced guest satisfaction, and recycled more than $2.2 billion of assets.  Earlier this year, we launched our new loyalty program, Marriott Bonvoy, which provides meaningfully enhanced member benefits while leveraging our broad portfolio and significant hotel distribution.  With more than 12 million guests joining Marriott Bonvoy since the beginning of the year, program membership reached 137 million in the quarter and the percentage of occupancy from members increased 320 basis points worldwide.

"In the third quarter, our worldwide comparable systemwide constant dollar RevPAR increased 1.5 percent, consistent with our guidance, while our global RevPAR index rose 210 basis points.  Our sales organization is hitting its stride.  For comparable hotels in North America, group revenue booked in the third quarter for all future periods increased 6 percent and, today, group revenue pace for 2020 is up at a mid-single digit growth rate.  

"Year-to-date through November 1, we have already returned nearly $2.3 billion to shareholders.  For full year 2019, we expect cash returned to shareholders through dividends and share repurchases could approach $3 billion.

"We expect continued strong demand for our products.  For the fourth quarter of 2019, we expect comparable RevPAR on a constant dollar basis will increase 0 to 1 percent in North America, roughly 1 percent outside North America, and roughly 1 percent worldwide.  For full year 2020, we expect comparable systemwide RevPAR on a constant dollar basis will be flat to up 2 percent worldwide, with RevPAR growth in North America around the middle of that range." 

Third Quarter 2019 Results Marriott's reported net income totaled $387 million in the 2019 third quarter, compared to 2018 third quarter reported net income of $503 million.  Reported diluted earnings per share (EPS) totaled $1.16 in the quarter, compared to reported diluted EPS of $1.43 in the year-ago quarter.

Third quarter 2019 adjusted net income totaled $488 million, compared to 2018 third quarter adjusted net income of $598 million.  Adjusted diluted EPS in the third quarter totaled $1.47, compared to adjusted diluted EPS of $1.70 in the year-ago quarter.  Adjusted results for the 2019 third quarter include a $9 million pretax ($0.02 per share) asset sale gain in gains and other income, net. Adjusted results for the 2018 third quarter include $71 million pretax ($0.26 per share) of asset sale gains in gains and other income, net and equity in earnings.  See page A-3 for the calculation of adjusted results.  Adjusted results exclude merger-related costs and charges, cost reimbursement revenue, and reimbursed expenses.

Base management and franchise fees totaled $821 million in the 2019 third quarter, a 5 percent increase over base management and franchise fees of $781 million in the year-ago quarter.  The year-over-year increase in these fees is primarily attributable to rooms growth and RevPAR growth, partially offset by $15 million of lower residential branding fees.

Third quarter 2019 incentive management fees totaled $134 million, an 11 percent decrease compared to incentive management fees of $151 million in the year-ago quarter.  The year-over-year decrease largely reflects lower net house profits at North American managed hotels.

Owned, leased, and other revenue, net of direct expenses, totaled $67 million in the 2019 third quarter, compared to $82 million in the year-ago quarter.  Compared to the year-ago quarter, results decreased largely due to $12 million of lower termination fees.

In the 2019 third quarter, the company incurred $6 million of expenses and recognized $9 million of insurance recoveries related to the data security incident it disclosed on November 30, 2018.  The expenses and insurance recoveries are reflected in either the reimbursed expenses or merger-related costs and charges lines of the Income Statement, both of which have been excluded from adjusted net income, adjusted EPS and adjusted EBITDA. 

Gains and other income, net, totaled $10 million, compared to $18 million in the year-ago quarter.  Gains and other income, net, in the 2019 third quarter largely reflects a $9 million payment received for our share of the proceeds from the sale of a managed North American limited-service hotel.  Gains and other income, net, in the 2018 third quarter largely reflected a $12 million adjustment to the gain on the 2018 second quarter sale of two hotels in the Asia Pacific region, and a $4 million gain on the sale of a joint venture's asset. 

Interest expense, net, totaled $92 million in the third quarter compared to $81 million in the year-ago quarter.  The increase is largely due to higher debt balances.

Equity in earnings for the third quarter totaled $2 million, compared to $61 million in the year-ago quarter.  The 2018 third quarter included a $55 million gain on a joint venture's sale of a hotel in Latin America.

Selected Performance Information The company added 117 new properties (17,720 rooms) to its worldwide lodging portfolio during the 2019 third quarter, including The West Hollywood EDITION, JW Marriott Marquis Hotel Shanghai Pudong, and Sheraton Bishkek, the company's first hotel in Kyrgyzstan.  Eleven properties (1,464 rooms) exited the system during the quarter.  At quarter-end, Marriott's lodging system encompassed 7,200 properties and timeshare resorts with nearly 1,362,000 rooms.

At quarter-end, the company's worldwide development pipeline totaled 2,947 properties with nearly 495,000 rooms, including 1,172 properties with approximately 214,000 rooms under construction and 201 properties with more than 31,000 rooms approved for development, but not yet subject to signed contracts.

In the 2019 third quarter, worldwide comparable systemwide constant dollar RevPAR increased 1.5 percent (a 0.9 percent increase using actual dollars).  North American comparable systemwide constant dollar RevPAR increased 1.3 percent (a 1.3 percent increase using actual dollars), and international comparable systemwide constant dollar RevPAR increased 1.9 percent (a 0.2 percent decrease using actual dollars) for the same period.

Worldwide comparable company-operated house profit margins decreased 30 basis points in the third quarter, reflecting the impact of modest RevPAR growth and higher wages offset by solid cost controls and synergies from the Starwood acquisition.  House profit margins for international comparable company-operated properties increased 10 basis points and North American comparable company-operated house profit margins decreased 70 basis points in the third quarter.

Balance Sheet At quarter-end, Marriott's total debt was $10,779 million and cash balances totaled $276 million, compared to $9,347 million in debt and $316 million of cash at year-end 2018.

In October 2019, the company issued $550 million of Series DD Senior Notes due in 2022. The company expects to use the net proceeds for general corporate purposes.

Marriott Common Stock Weighted average fully diluted shares outstanding used to calculate both reported and adjusted diluted EPS totaled 332.5 million in the 2019 third quarter, compared to 350.6 million shares in the year-ago quarter.

The company repurchased 3.8 million shares of common stock in the 2019 third quarter for $500 million at an average price of $133.41 per share.  Year-to-date through November 1, the company has repurchased 14.2 million shares for $1.83 billion at an average price of $128.79 per share.

2019 Outlook The following outlook for fourth quarter and full year 2019 does not include merger-related costs and charges, cost reimbursement revenue or reimbursed expenses, which the company cannot accurately forecast, and which may be significant, nor does it include the expected gain on the sale of the St. Regis New York.

For the 2019 fourth quarter, Marriott expects comparable systemwide RevPAR on a constant dollar basis will be flat to up 1 percent in North America, increase roughly 1 percent outside North America, and increase roughly 1 percent worldwide.

The company assumes fourth quarter 2019 gross fee revenues will total $960 million to $970 million, a 5 to 7 percent increase over fourth quarter 2018 gross fee revenues of $910 million.  The company anticipates fourth quarter 2019 incentive management fees will be roughly flat compared to fourth quarter 2018 incentive management fees of $167 million.  Compared to the estimate the company provided on August 5, this gross fee revenues estimate largely reflects more modest RevPAR growth and margins, including the impact of the recent events in Hong Kong, and unfavorable foreign exchange.

The company expects fourth quarter 2019 general, administrative, and other expenses could total $250 million to $255 million. General, administrative, and other expenses in the 2018 fourth quarter included a $7 million expense for the company's supplemental investments in its workforce.

Marriott expects fourth quarter 2019 adjusted EBITDA could total $898 million to $913 million, a 4 to 6 percent increase over fourth quarter 2018 adjusted EBITDA of $864 million.  This estimate reflects the sale of the St. Regis New York, but not any gain associated with the transaction, nor any additional asset sales that may occur in the fourth quarter of 2019.  See page A-12 for the adjusted EBITDA calculation.

For the full year 2019, Marriott expects comparable systemwide RevPAR on a constant dollar basis will increase roughly 1 percent in North America, roughly 2 percent outside North America, and roughly 1 percent worldwide.

Marriott anticipates global net room additions of 5.0 to 5.25 percent for full year 2019.

The company expects full year 2019 gross fee revenues will total $3,809 million to $3,819 million, a 5 percent increase over 2018 gross fee revenues of $3,638 million, including $20 million of unfavorable foreign exchange.  Full year 2019 estimated gross fee revenues include $400 million to $410 million of credit card branding fees, compared to $380 million for full year 2018.

Marriott anticipates full year 2019 owned, leased, and other revenue, net of direct expenses, could total $289 million.  This estimate reflects approximately $35 million of lower termination fees year-over-year.  This outlook for full year 2019 reflects the sale of the St. Regis New York in the fourth quarter, but does not reflect any additional asset sales that may occur during the remainder of the year. 

The company expects full year 2019 general, administrative, and other expenses could total $921 million to $926 million, flat to down 1 percent from full year 2018 expenses of $927 million.  Full year 2018 general, administrative, and other expenses included a $51 million expense for the company's supplemental investments in its workforce.

The company anticipates full year 2019 diluted EPS could total $5.87 to $5.90, a 5 percent decline compared to 2018 adjusted diluted EPS of $6.21.  Full year 2019 guidance includes the $9 million pre-tax ($0.02 per share) asset sale gain in gains and other income, net, recognized in the 2019 third quarter, but does not include any gain on the sale of the St. Regis New York.  Full year adjusted 2018 results include $183 million pre-tax ($0.44 per share) of asset sale gains in gains and other income, net and $65 million pre-tax ($0.21 per share) of asset sale gains in equity in earnings.  

Marriott expects full year 2019 adjusted EBITDA could total $3,572 million to $3,587 million, a 3 percent increase over 2018 adjusted EBITDA of $3,473 million.  See page A-13 for the adjusted EBITDA calculation.


Fourth Quarter 20191 Full Year 20191
Gross fee revenues $960 million to $970 million $3,809 million to $3,819 million
Contract investment      amortization Approx. $20 million Approx. $65 million
Owned, leased and other     revenue, net of direct      expenses Approx. $85 million Approx. $289 million
Depreciation, amortization,      and other expenses Approx. $55 million Approx. $217 million
General, administrative,      and other expenses $250 million to $255 million $921 million to $926 million
Operating income $715 million to $730 million $2,890 million to $2,905 million
Gains and other income Approx. $2 million Approx. $18 million
Net interest expense Approx. $93 million Approx. $372 million
Equity in earnings (losses) Approx. $10 million Approx. $20 million
Earnings per share - diluted $1.44 to $1.47 $5.87 to $5.90
Effective tax rate 25.0 percent 22.9 percent




1The outlook provided in this table does not include merger-related costs and charges, cost reimbursement revenue or reimbursed expenses, which the company cannot accurately forecast, and which may be significant.

The company expects investment spending in 2019 will total approximately $1,000 million to $1,100 million, including approximately $225 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.  Compared to the forecasted investment spending the company provided on August 5, 2019, the increase in spending reflects the purchase of the W New York – Union Square and the expected acquisition of Elegant Hotels Group plc.  The company estimates $550 million to $600 million of its 2019 investment spending will be reimbursed or recycled over time. 

In the fourth quarter, the company sold the St Regis New York for $310 million subject to a long-term management agreement.  Assuming the level of investment spending noted above and no additional asset sales, cash returned to shareholders through share repurchases and dividends could approach $3 billion for full year 2019.

2020 Outlook For the full year 2020, Marriott expects comparable systemwide RevPAR on a constant dollar basis will be flat to up 2 percent worldwide with the increase in North America in the middle of the range.

Marriott anticipates its global net rooms growth rate in 2020 will be comparable to its expectation for 2019.

Marriott International, Inc. /zigman2/quotes/200170042/composite MAR +0.73% will conduct its quarterly earnings review for the investment community and news media on Tuesday, November 5, 2019 at 11:00 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 5, 2020.

The telephone dial-in number for the conference call is 706-679-3455 and the conference ID is 3781075.  A telephone replay of the conference call will be available from 4:00 p.m. ET, Tuesday, November 5, 2019 until 8:00 p.m. ET, Monday, November 11, 2019.  To access the replay, call 404-537-3406.  The conference ID for the recording is 3781075.

Note on forward-looking statements:   This press release and accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including our RevPAR, profit margin and earnings outlook and assumptions; the number of lodging properties we expect to add to or remove from our system in the future; our expectations regarding planned acquisitions and dispositions; our expectations regarding new product offerings; our expectations regarding the estimates of the impact of new accounting standards; our expectations about investment spending and tax rate; and similar statements concerning anticipated future events and expectations that are not historical facts.  We caution you that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those we identify below and other risk factors that we identify in our most recent quarterly report on Form 10-Q or annual report on Form 10-K.  Risks that could affect forward-looking statements in this press release include changes in market conditions; changes in global and regional economies; supply and demand changes for hotel rooms; competitive conditions in the lodging industry; relationships with clients and property owners; the availability of capital to finance hotel growth and refurbishment; the extent to which we experience adverse effects from the data security incident; changes in tax laws in countries in which we earn significant income; and changes to our estimates of the impact of new accounting standards.  Any of these factors could cause actual results to differ materially from the expectations we express or imply in this press release.  We make these forward-looking statements as of November 4, 2019.  We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Marriott International, Inc.   /zigman2/quotes/200170042/composite MAR +0.73% is based in Bethesda, Maryland, USA, and encompasses a portfolio of more than 7,200 properties under 30 leading brands spanning 134 countries and territories. Marriott operates and franchises hotels and licenses vacation ownership resorts all around the world.   The company now offers one travel program, Marriott Bonvoy™, replacing Marriott Rewards®, The Ritz-Carlton Rewards®, and Starwood Preferred Guest®(SPG).  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  Twitter  and  Instagram .

IRPR#1

Tables follow

 

MARRIOTT INTERNATIONAL, INC.
PRESS RELEASE SCHEDULES
TABLE OF CONTENTS
QUARTER 3, 2019
































































Consolidated Statements of Income - As Reported







A-1
















Non-GAAP Financial Measures










A-3
















Total Lodging Products












A-4
















Key Lodging Statistics












A-7
















Adjusted EBITDA












A-11
















Adjusted EBITDA Forecast - Fourth Quarter 2019







A-12
















Adjusted EBITDA Forecast - Full Year 2019








A-13
















Explanation of Non-GAAP Financial and Performance Measures




A-14
















 

 


MARRIOTT INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED

THIRD QUARTER 2019 AND 2018

(in millions except per share amounts, unaudited)



















As Reported
As Reported 10
Percent



Three Months Ended
Three Months Ended
Better/(Worse)



September 30, 2019
September 30, 2018
Reported 2019 vs. 2018

REVENUES






Base management fees
$                                           291
$                                           279
4

Franchise fees 1
530
502
6

Incentive management fees
134
151
(11)

Gross Fee Revenues
955
932
2

Contract investment amortization 2
(16)
(13)
(23)

Net Fee Revenues
939
919
2

Owned, leased, and other revenue 3
393
397
(1)

Cost reimbursement revenue 4
3,952
3,735
6

  Total Revenues
5,284
5,051
5









OPERATING COSTS AND EXPENSES






Owned, leased, and other - direct 5
326
315
(3)

Depreciation, amortization, and other 6
52
52
-

General, administrative, and other 7
220
221
-

Merger-related costs and charges
9
12
25

Reimbursed expenses 4
4,070
3,855
(6)

  Total Expenses
4,677
4,455
(5)









OPERATING INCOME
607
596
2









Gains and other income, net 8
10
18
(44)

Interest expense
(100)
(86)
(16)

Interest income 
8
5
60

Equity in earnings 9
2
61
(97)









INCOME BEFORE INCOME TAXES
527
594
(11)









Provision for income taxes
(140)
(91)
(54)









NET INCOME
$                                           387
$                                           503
(23)









EARNINGS PER SHARE






  Earnings per share - basic
$                                          1.17
$                                          1.45
(19)

  Earnings per share - diluted
$                                          1.16
$                                          1.43
(19)









Basic Shares
329.9
346.7


Diluted Shares
332.5
350.6









1 Franchise fees include fees from our franchise agreements, application and relicensing fees, licensing fees from our timeshare, credit card programs, 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.

10 Reflects revised information as presented in our 2018 Annual Report on Form 10-K.


A-1

 

 


MARRIOTT INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED

THIRD QUARTER YEAR-TO-DATE 2019 AND 2018

(in millions except per share amounts, unaudited)



















As Reported
As Reported10
Percent



Nine Months Ended
Nine Months Ended
Better/(Worse)



September 30, 2019
September 30, 2018
Reported 2019 vs. 2018

REVENUES






Base management fees
$                                           882
$                                           852
4

Franchise fees 1
1,505
1,394
8

Incentive management fees
462
482
(4)

Gross Fee Revenues
2,849
2,728
4

Contract investment amortization 2
(45)
(44)
(2)

Net Fee Revenues
2,804
2,684
4

Owned, leased, and other revenue 3
1,186
1,226
(3)

Cost reimbursement revenue 4
11,611
11,559
-

  Total Revenues
15,601
15,469
1









OPERATING COSTS AND EXPENSES






Owned, leased, and other - direct 5
982
985
-

Depreciation, amortization, and other 6
162
164
1

General, administrative, and other 7
671
685
2

Merger-related costs and charges
191
64
(198)

Reimbursed expenses 4
12,069
11,627
(4)

  Total Expenses
14,075
13,525
(4)









OPERATING INCOME
1,526
1,944
(22)









Gains and other income, net 8
16
191
(92)

Interest expense
(299)
(246)
(22)

Interest income 
20
16
25

Equity in earnings 9
10
95
(89)









INCOME BEFORE INCOME TAXES
1,273
2,000
(36)









Provision for income taxes
(279)
(410)
32









NET INCOME
$                                           994
$                                        1,590
(37)









EARNINGS PER SHARE






  Earnings per share - basic
$                                          2.97
$                                          4.51
(34)

  Earnings per share - diluted
$                                          2.95
$                                          4.45
(34)









Basic Shares
334.4
352.8


Diluted Shares
337.2
357.1









1 Franchise fees include fees from our franchise agreements, application and relicensing fees, licensing fees from our timeshare, credit card programs, 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.

10 Reflects revised information as presented in our 2018 Annual Report on Form 10-K.


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 EPS, 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/


2019
2018 1
(Worse)
2019
2018 1
(Worse)

Total revenues, as reported $            5,284
$            5,051


$           15,601
$           15,469


Less: Cost reimbursement revenue (3,952)
(3,735)


(11,611)
(11,559)


Adjusted total revenues** 1,332
1,316


3,990
3,910















Operating income, as reported 607
596


1,526
1,944


Less: Cost reimbursement revenue (3,952)
(3,735)


(11,611)
(11,559)


Add: Reimbursed expenses 4,070
3,855


12,069
11,627


Add: Merger-related costs and charges 9
12


191
64


Adjusted operating income ** 734
728
1%
2,175
2,076
5%














Operating income margin 11%
12%


10%
13%


Adjusted operating income margin ** 55%
55%


55%
53%















Net income, as reported 387
503


994
1,590


Less: Cost reimbursement revenue (3,952)
(3,735)


(11,611)
(11,559)


Add: Reimbursed expenses 4,070
3,855


12,069
11,627


Add: Merger-related costs and charges 9
12


191
64


Less: Gain on sale of Avendra -
-


-
(6)


Income tax effect of above adjustments (26)
(37)


(148)
(34)


Add: U.S. Tax Cuts and Jobs Act of 2017 -
-


-
22


Adjusted net income ** $              488
$               598
-18%
$            1,495
$            1,704
-12%














Diluted EPS, as reported $             1.16
$              1.43


$              2.95
$              4.45


Adjusted Diluted EPS** $             1.47
$              1.70
-14%
$              4.43
$              4.77
-7%













** 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 Reflects revised information as presented in our 2018 Annual Report on Form 10-K.





A-3

 

 

MARRIOTT INTERNATIONAL, INC.
TOTAL LODGING PRODUCTS
As of September 30, 2019








North America Total International Total Worldwide

Units Rooms Units Rooms Units Rooms
 Managed  757 240,287 1,205 313,453 1,962 553,740
 Marriott Hotels  120 64,703 175 51,582 295 116,285
 Marriott Hotels Serviced Apartments  - - 1 154 1 154
 Sheraton  27 23,386 187 63,965 214 87,351
 Courtyard  233 37,020 98 21,238 331 58,258
 Westin  43 23,638 71 22,090 114 45,728
 JW Marriott  18 11,210 52 20,325 70 31,535
 Renaissance  28 12,018 56 17,460 84 29,478
 The Ritz-Carlton  38 10,981 56 14,943 94 25,924
 The Ritz-Carlton Serviced Apartments  - - 5 697 5 697
 Le Méridien  3 570 72 20,103 75 20,673
 Four Points  1 134 75 19,496 76 19,630
 Residence Inn  107 16,387 5 565 112 16,952
 W Hotels  25 7,163 29 7,296 54 14,459
 The Luxury Collection  5 2,234 51 9,120 56 11,354
 Gaylord Hotels  6 9,918 - - 6 9,918
 Aloft  1 330 38 8,936 39 9,266
 St. Regis  9 1,730 33 7,458 42 9,188
 St. Regis Serviced Apartments  - - 1 70 1 70
 AC Hotels by Marriott  3 517 59 7,099 62 7,616
 Delta Hotels  25 6,770 1 360 26 7,130
 Fairfield by Marriott  7 1,539 32 4,879 39 6,418
 SpringHill Suites  30 4,896 - - 30 4,896
 Marriott Executive Apartments  - - 31 4,525 31 4,525
 Protea Hotels  - - 35 4,228 35 4,228
 Autograph Collection  6 1,806 15 2,406 21 4,212
 EDITION  4 1,209 6 1,287 10 2,496
 TownePlace Suites  17 1,948 - - 17 1,948
 Element  1 180 7 1,421 8 1,601
 Tribute Portfolio  - - 5 713 5 713
 Moxy  - - 4 599 4 599
 Bulgari  - - 5 438 5 438
 Franchised  4,395 634,993 601 123,910 4,996 758,903
 Courtyard  791 105,276 79 14,677 870 119,953
 Fairfield by Marriott  985 91,706 19 3,177 1,004 94,883
 Residence Inn  709 84,480 8 1,041 717 85,521
 Marriott Hotels  214 67,377 54 15,563 268 82,940
 Sheraton  161 47,584 64 18,056 225 65,640
 SpringHill Suites  411 47,495 - - 411 47,495
 TownePlace Suites  388 39,169 - - 388 39,169
 Westin  87 28,854 24 7,596 111 36,450
 Autograph Collection  98 20,160 62 13,094 160 33,254
 Four Points  159 24,012 52 8,270 211 32,282
 Renaissance  58 16,537 28 7,691 86 24,228
 Aloft  113 16,687 19 3,127 132 19,814
 AC Hotels by Marriott  56 9,495 40 5,897 96 15,392
 The Luxury Collection  11 2,565 45 8,590 56 11,155
 Delta Hotels  46 10,197 2 562 48 10,759
 Moxy  16 3,334 30 6,125 46 9,459
 Le Méridien  17 3,665 16 4,254 33 7,919
 JW Marriott  12 5,643 6 1,624 18 7,267
 Tribute Portfolio  22 4,843 11 1,211 33 6,054
 Element  40 5,485 2 293 42 5,778
 Protea Hotels  - - 38 2,911 38 2,911
 The Ritz-Carlton  1 429 - - 1 429
 Bulgari  - - 1 85 1 85
 Marriott Executive Apartments  - - 1 66 1 66
 

 

 

MARRIOTT INTERNATIONAL, INC.
TOTAL LODGING PRODUCTS
As of September 30, 2019








North America Total International Total Worldwide

Units Rooms Units Rooms Units Rooms
 Owned/Leased  29 8,281 34 8,820 63 17,101
 Courtyard  19 2,814 4 894 23 3,708
 Sheraton  2 1,474 4 1,830 6 3,304
 Marriott Hotels  3 1,664 5 1,631 8 3,295
 W Hotels  1 509 2 665 3 1,174
 Protea Hotels  - - 7 1,168 7 1,168
 Westin  1 1,073 - - 1 1,073
 Renaissance  1 317 3 749 4 1,066
 The Ritz-Carlton  - - 2 553 2 553
 JW Marriott  - - 1 496 1 496
 St. Regis  1 238 1 160 2 398
 Residence Inn  1 192 1 140 2 332
 The Luxury Collection  - - 2 287 2 287
 Autograph Collection  - - 2 247 2 247
 Residences  60 6,557 35 3,314 95 9,871
 The Ritz-Carlton Residences  36 4,421 11 938 47 5,359
 W Residences  10 1,089 5 519 15 1,608
 St. Regis Residences  7 585 7 598 14 1,183
 Westin Residences  3 266 1 264 4 530
 Bulgari Residences  - - 4 448 4 448
 The Luxury Collection Residences  2 151 3 115 5 266
 Sheraton Residences  - - 2 262 2 262
 Marriott Hotels Residences  - - 1 108 1 108
 Autograph Collection Residences  - - 1 62 1 62
 EDITION Residences  2 45 - - 2 45
 Timeshare*  70 18,424 19 3,873 89 22,297
Grand Total 5,311 908,542 1,894 453,370 7,205 1,361,912







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

A-5

 

 

MARRIOTT INTERNATIONAL, INC.
TOTAL LODGING PRODUCTS
As of September 30, 2019








North America Total International Total Worldwide
Total Systemwide Units Rooms Units Rooms Units Rooms
 Luxury  182 50,202 328 76,712 510 126,914
 JW Marriott  30 16,853 59 22,445 89 39,298
 The Ritz-Carlton  39 11,410 58 15,496 97 26,906
 The Ritz-Carlton Residences  36 4,421 11 938 47 5,359
 The Ritz-Carlton Serviced Apartments  - - 5 697 5 697
 The Luxury Collection  16 4,799 98 17,997 114 22,796
 The Luxury Collection Residences  2 151 3 115 5 266
 W Hotels  26 7,672 31 7,961 57 15,633
 W Residences  10 1,089 5 519 15 1,608
 St. Regis  10 1,968 34 7,618 44 9,586
 St. Regis Residences  7 585 7 598 14 1,183
 St. Regis Serviced Apartments  - - 1 70 1 70
 EDITION  4 1,209 6 1,287 10 2,496
 EDITION Residences  2 45 - - 2 45
 Bulgari  - - 6 523 6 523
 Bulgari Residences  - - 4 448 4 448
 Full-Service  971 346,820 895 256,604 1,866 603,424
 Marriott Hotels  337 133,744 234 68,776 571 202,520
 Marriott Hotels Residences  - - 1 108 1 108
 Marriott Hotels Serviced Apartments  - - 1 154 1 154
 Sheraton  190 72,444 255 83,851 445 156,295
 Sheraton Residences  - - 2 262 2 262
 Westin  131 53,565 95 29,686 226 83,251
 Westin Residences  3 266 1 264 4 530
 Renaissance  87 28,872 87 25,900 174 54,772
 Autograph Collection  104 21,966 79 15,747 183 37,713
 Autograph Collection Residences  - - 1 62 1 62
 Le Méridien  20 4,235 88 24,357 108 28,592
 Delta Hotels  71 16,967 3 922 74 17,889
 Gaylord Hotels  6 9,918 - - 6 9,918
 Tribute Portfolio  22 4,843 16 1,924 38 6,767
 Marriott Executive Apartments  - - 32 4,591 32 4,591
 Limited-Service  4,088 493,096 652 116,181 4,740 609,277
 Courtyard  1,043 145,110 181 36,809 1,224 181,919
 Residence Inn  817 101,059 14 1,746 831 102,805
 Fairfield by Marriott  992 93,245 51 8,056 1,043 101,301
 SpringHill Suites  441 52,391 - - 441 52,391
 Four Points  160 24,146 127 27,766 287 51,912
 TownePlace Suites  405 41,117 - - 405 41,117
 Aloft  114 17,017 57 12,063 171 29,080
 AC Hotels by Marriott  59 10,012 99 12,996 158 23,008
 Moxy  16 3,334 34 6,724 50 10,058
 Protea Hotels  - - 80 8,307 80 8,307
 Element  41 5,665 9 1,714 50 7,379
 Timeshare*  70 18,424 19 3,873 89 22,297
 Grand Total  5,311 908,542 1,894 453,370 7,205 1,361,912







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

A-6

 

 

MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
In Constant $











Comparable Company-Operated North American Properties













Three Months Ended September 30, 2019 and September 30, 2018


REVPAR
Occupancy
Average Daily Rate
Brand
2019  vs. 2018
2019  vs. 2018
2019  vs. 2018
JW Marriott
$205.96 3.1%
81.2% 0.5% pts.
$253.49 2.5%
The Ritz-Carlton
$274.58 3.1%
74.0% 0.6% pts.
$371.04 2.2%
W Hotels
$233.79 -2.9%
81.0% -1.4% pts.
$288.79 -1.2%
Composite North American Luxury1
$257.40 1.5%
78.7% 0.6% pts.
$327.21 0.8%
Marriott Hotels
$155.82 2.6%
79.0% 1.0% pts.
$197.21 1.3%
Sheraton
$156.80 -1.6%
81.5% 0.0% pts.
$192.43 -1.6%
Westin
$167.10 -1.2%
79.6% 0.0% pts.
$210.02 -1.2%
Composite North American Upper Upscale2 $155.24 1.5%
79.2% 0.7% pts.
$196.08 0.6%
North American Full-Service3 
$173.08 1.5%
79.1% 0.7% pts.
$218.86 0.6%
Courtyard
$105.87 -0.7%
74.4% -0.4% pts.
$142.33 -0.2%
Residence Inn
$132.80 0.6%
81.9% -0.3% pts.
$162.09 1.0%
Composite North American Limited-Service4 $112.96 -0.5%
77.0% -0.4% pts.
$146.77 0.1%
North American - All5
$153.80 1.0%
78.4% 0.3% pts.
$196.17 0.6%






















Comparable Systemwide North American Properties













Three Months Ended September 30, 2019 and September 30, 2018


REVPAR
Occupancy
Average Daily Rate
Brand
2019  vs. 2018
2019  vs. 2018
2019  vs. 2018
JW Marriott
$197.91 3.9%
81.0% 0.6% pts.
$244.18 3.1%
The Ritz-Carlton
$276.42 3.1%
74.7% 0.8% pts.
$369.85 2.0%
W Hotels
$233.79 -2.9%
81.0% -1.4% pts.
$288.79 -1.2%
Composite North American Luxury1
$247.88 2.3%
79.3% 0.9% pts.
$312.51 1.1%
Marriott Hotels
$134.75 2.9%
75.5% 0.7% pts.
$178.43 2.0%
Sheraton
$123.61 0.2%
77.0% 0.4% pts.
$160.50 -0.3%
Westin
$153.65 0.9%
78.5% 0.3% pts.
$195.79 0.6%
Composite North American Upper Upscale2 $138.32 2.4%
76.7% 0.6% pts.
$180.31 1.6%
North American Full-Service3 
$149.14 2.4%
77.0% 0.7% pts.
$193.77 1.5%
Courtyard
$107.79 0.1%
75.7% -0.1% pts.
$142.43 0.3%
Residence Inn
$126.18 0.4%
82.6% -0.2% pts.
$152.69 0.7%
Fairfield by Marriott
$90.14 -0.1%
76.1% 0.0% pts.
$118.37 -0.1%
Composite North American Limited-Service4 $106.57 0.3%
77.8% 0.0% pts.
$137.02 0.3%
North American - All5
$124.55 1.3%
77.4% 0.3% pts.
$160.85 1.0%











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, Gaylord Hotels,
  and Le Méridien.  Systemwide also includes Tribute Portfolio.


3 Includes Composite North American Luxury and Composite North American Upper Upscale.
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 North American Full-Service and Composite North American Limited-Service.

A-7

 

 

MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
In Constant $











Comparable Company-Operated International Properties













Three Months Ended September 30, 2019 and September 30, 2018


REVPAR
Occupancy
Average Daily Rate
Region
2019  vs. 2018
2019  vs. 2018
2019  vs. 2018
Greater China
$83.66 -0.4%
72.0% 1.7% pts.
$116.20 -2.8%
Rest of Asia Pacific
$123.15 3.0%
77.6% 2.4% pts.
$158.76 -0.1%
Asia Pacific
$100.50 1.4%
74.4% 2.0% pts.
$135.13 -1.3%











Caribbean & Latin America
$110.70 4.9%
63.5% 1.3% pts.
$174.43 2.7%
Europe
$178.25 2.2%
80.7% 1.4% pts.
$220.87 0.5%
Middle East & Africa
$92.73 1.5%
66.4% 2.3% pts.
$139.65 -2.1%











International - All1
$117.74 1.9%
73.6% 1.9% pts.
$159.91 -0.6%











Worldwide2
$135.55 1.4%
76.0% 1.1% pts.
$178.39 0.0%






















Comparable Systemwide International Properties













Three Months Ended September 30, 2019 and September 30, 2018


REVPAR
Occupancy
Average Daily Rate
Region
2019  vs. 2018
2019  vs. 2018
2019  vs. 2018
Greater China
$82.82 -0.4%
71.3% 1.8% pts.
$116.13 -2.8%
Rest of Asia Pacific
$125.29 3.0%
77.3% 2.3% pts.
$162.12 -0.2%
Asia Pacific
$103.41 1.6%
74.2% 2.0% pts.
$139.35 -1.2%











Caribbean & Latin America
$88.15 3.1%
61.2% 0.4% pts.
$143.94 2.4%
Europe
$156.31 2.1%
79.7% 0.9% pts.
$196.06 1.0%
Middle East & Africa
$88.50 1.6%
66.3% 2.1% pts.
$133.55 -1.6%











International - All1
$115.68 1.9%
73.3% 1.5% pts.
$157.83 -0.2%











Worldwide2
$122.03 1.5%
76.3% 0.6% pts.
$160.02 0.7%











1 Includes Asia Pacific, Caribbean & Latin America, Europe, and Middle East & Africa.



2 Includes North American - All and International - All.
















A-8

 

 

MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
In Constant $











Comparable Company-Operated North American Properties













Nine Months Ended September 30, 2019 and September 30, 2018


REVPAR
Occupancy
Average Daily Rate
Brand
2019  vs. 2018
2019  vs. 2018
2019  vs. 2018
JW Marriott
$216.32 1.7%
79.3% -1.5% pts.
$272.93 3.6%
The Ritz-Carlton
$297.09 3.7%
75.7% 0.8% pts.
$392.36 2.7%
W Hotels
$239.65 -3.2%
79.2% -2.4% pts.
$302.44 -0.2%
Composite North American Luxury1
$273.09 1.4%
78.1% -0.6% pts.
$349.77 2.3%
Marriott Hotels
$158.35 1.9%
77.7% 0.3% pts.
$203.88 1.5%
Sheraton
$150.09 -2.3%
78.4% -0.6% pts.
$191.36 -1.5%
Westin
$160.90 -1.1%
77.3% -0.5% pts.
$208.24 -0.5%
Composite North American Upper Upscale2 $155.01 1.0%
77.6% 0.1% pts.
$199.88 0.8%
North American Full-Service3 
$175.64 1.1%
77.6% 0.0% pts.
$226.21 1.1%
Courtyard
$105.04 -1.2%
72.6% -1.4% pts.
$144.61 0.7%
Residence Inn
$130.27 0.5%
80.1% -0.2% pts.
$162.70 0.8%
Composite North American Limited-Service4 $111.73 -0.8%
75.1% -1.2% pts.
$148.68 0.7%
North American - All5
$155.14 0.6%
76.8% -0.4% pts.
$201.90 1.1%






















Comparable Systemwide North American Properties













Nine Months Ended September 30, 2019 and September 30, 2018


REVPAR
Occupancy
Average Daily Rate
Brand
2019  vs. 2018
2019  vs. 2018
2019  vs. 2018
JW Marriott
$206.82 2.2%
79.2% -1.1% pts.
$261.17 3.6%
The Ritz-Carlton
$295.39 3.7%
75.9% 0.8% pts.
$389.16 2.5%
W Hotels
$239.65 -3.2%
79.2% -2.4% pts.
$302.44 -0.2%
Composite North American Luxury1
$258.23 1.7%
78.1% -0.5% pts.
$330.70 2.4%
Marriott Hotels
$135.37 2.3%
74.2% 0.3% pts.
$182.36 2.0%
Sheraton
$117.94 -0.7%
73.8% -0.6% pts.
$159.75 0.2%
Westin
$151.93 0.6%
76.4% -0.2% pts.
$198.93 0.9%
Composite North American Upper Upscale2 $137.07 1.9%
74.8% 0.1% pts.
$183.23 1.7%
North American Full-Service3 
$149.04 1.8%
75.1% 0.0% pts.
$198.37 1.8%
Courtyard
$104.26 -0.2%
73.3% -0.8% pts.
$142.25 0.9%
Residence Inn
$120.55 0.0%
79.9% -0.5% pts.
$150.84 0.7%
Fairfield by Marriott
$84.30 -0.5%
72.4% -0.7% pts.
$116.43 0.4%
Composite North American Limited-Service4 $102.06 0.1%
75.0% -0.5% pts.
$136.03 0.8%
North American - All5
$121.90 1.0%
75.1% -0.3% pts.
$162.38 1.4%











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, Gaylord Hotels,

  and Le Méridien.  Systemwide also includes Tribute Portfolio.







3 Includes Composite North American Luxury and Composite North American Upper Upscale.



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 North American Full-Service and Composite North American Limited-Service.










A-9

 

 

MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
In Constant $











Comparable Company-Operated International Properties













Nine Months Ended September 30, 2019 and September 30, 2018


REVPAR
Occupancy
Average Daily Rate
Region
2019  vs. 2018
2019  vs. 2018
2019  vs. 2018
Greater China
$84.63 1.7%
69.1% 1.8% pts.
$122.46 -0.9%
Rest of Asia Pacific
$122.94 4.3%
75.5% 2.6% pts.
$162.76 0.7%
Asia Pacific
$100.98 3.0%
71.9% 2.1% pts.
$140.54 0.0%











Caribbean & Latin America
$132.96 3.0%
65.3% 1.0% pts.
$203.54 1.4%
Europe
$152.89 2.9%
74.9% 0.9% pts.
$204.05 1.6%
Middle East & Africa
$102.23 -1.1%
67.0% 2.3% pts.
$152.64 -4.5%











International - All1
$115.44 2.3%
71.2% 1.8% pts.
$162.10 -0.3%











Worldwide2
$135.08 1.4%
74.0% 0.7% pts.
$182.54 0.4%






















Comparable Systemwide International Properties













Nine Months Ended September 30, 2019 and September 30, 2018


REVPAR
Occupancy
Average Daily Rate
Region
2019  vs. 2018
2019  vs. 2018
2019  vs. 2018
Greater China
$83.86 1.8%
68.6% 1.9% pts.
$122.27 -1.1%
Rest of Asia Pacific
$122.98 3.9%
75.2% 2.3% pts.
$163.52 0.8%
Asia Pacific
$102.83 3.0%
71.8% 2.1% pts.
$143.23 0.0%











Caribbean & Latin America
$103.69 2.5%
63.1% 0.0% pts.
$164.26 2.6%
Europe
$133.89 2.8%
73.8% 0.7% pts.
$181.41 1.8%
Middle East & Africa
$97.25 -0.9%
66.5% 2.1% pts.
$146.26 -3.9%











International - All1
$111.54 2.4%
70.7% 1.4% pts.
$157.86 0.3%











Worldwide2
$118.97 1.3%
73.8% 0.2% pts.
$161.15 1.1%











1 Includes Asia Pacific, Caribbean & Latin America, Europe, and Middle East & Africa.



2 Includes North American - All and International - All.












A-10

 

 


MARRIOTT INTERNATIONAL, INC.

NON-GAAP FINANCIAL MEASURES

ADJUSTED EBITDA

($ in millions)













Fiscal Year 2019



First Quarter
Second Quarter
ThirdQuarter
Total


Net income, as reported $                 375
$             232
$             387
$             994


Cost reimbursement revenue (3,756)
(3,903)
(3,952)
(11,611)


Reimbursed expenses 3,892
4,107
4,070
12,069


Interest expense 97
102
100
299


Interest expense from unconsolidated joint ventures 2
1
3
6


Tax provision 57
82
140
279


Depreciation and amortization 54
56
52
162


Contract investment amortization 14
15
16
45


Depreciation classified in reimbursed expenses 30
29
33
92


Depreciation and amortization from unconsolidated joint ventures 7
8
5
20


Share-based compensation 40
50
47
137


Gain on asset dispositions -
-
(9)
(9)


Merger-related costs and charges 9
173
9
191


Adjusted EBITDA ** $                 821
$             952
$             901
$           2,674













Increase over 2018 Adjusted EBITDA ** 7%
1%
0%
2% 1













Fiscal Year 2018 2


First Quarter
Second Quarter
ThirdQuarter
Fourth Quarter
Total

Net income, as reported $                 420
$             667
$             503
$             317
$           1,907

Cost reimbursement revenue (3,776)
(4,048)
(3,735)
(3,984)
(15,543)

Reimbursed expenses 3,808
3,964
3,855
4,151
15,778

Interest expense 75
85
86
94
340

Interest expense from unconsolidated joint ventures 2
3
2
3
10

Tax provision 112
207
91
28
438

Depreciation and amortization 54
58
52
62
226

Contract investment amortization 18
13
13
14
58

Depreciation classified in reimbursed expenses 33
34
39
41
147

Depreciation and amortization from unconsolidated joint ventures 10
10
10
10
40

Share-based compensation 38
47
43
43
171

Gain on asset dispositions (58)
(109)
(16)
(6)
(189)

Gain on investees' property sales -
(10)
(55)
-
(65)

Merger-related costs and charges 34
18
12
91
155

Adjusted EBITDA ** $                 770
$             939
$             900
$             864
$           3,473























** 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.



















1 Represents the percentage increase of Adjusted EBITDA of $2,674 million for the first three quarters of 2019 over Adjusted EBITDA of $2,609 million for the first

three quarters of 2018.








2 Reflects revised information for our 2018 first, second, and third quarters as presented in our 2018 Annual Report on Form 10-K.





A-11

 

 


MARRIOTT INTERNATIONAL, INC.

NON-GAAP FINANCIAL MEASURES

ADJUSTED EBITDA FORECAST

FOURTH QUARTER 2019

($ in millions)


















Range




EstimatedFourth Quarter 2019
Fourth Quarter 2018 **

Net income excluding certain items 1  $            475
$            486



Interest expense  99
99



Interest expense from unconsolidated joint ventures  4
4



Tax provision 159
163



Depreciation and amortization 55
55



Contract investment amortization 20
20



Depreciation classified in reimbursed expenses 33
33



Depreciation and amortization from unconsolidated joint ventures 10
10



Share-based compensation 43
43



Adjusted EBITDA ** $            898
$            913
$                                  864









Increase over 2018 Adjusted EBITDA ** 4%
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.








1 Guidance excludes cost reimbursement revenue, reimbursed expenses, and merger-related costs and charges, which the company cannot

accurately forecast and which may be significant, except for depreciation classified in reimbursed expenses, which is included in the caption 

"Depreciation classified in reimbursed expenses" above.


A-12

 

 


MARRIOTT INTERNATIONAL, INC.

NON-GAAP FINANCIAL MEASURES

ADJUSTED EBITDA FORECAST

FULL YEAR 2019

($ in millions)


















Range




EstimatedFull Year 2019
Full Year 2018**

Net income excluding certain items 1  $         1,970
$         1,981



Interest expense  398
398



Interest expense from unconsolidated joint ventures  10
10



Tax provision 586
590



Depreciation and amortization 217
217



Contract investment amortization 65
65



Depreciation classified in reimbursed expenses 125
125



Depreciation and amortization from unconsolidated joint ventures 30
30



Share-based compensation 180
180



Gain on asset dispositions (9)
(9)



Adjusted EBITDA ** $         3,572
$         3,587
$                                3,473









Increase over 2018 Adjusted EBITDA ** 3%
3%



















** 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.








1 Guidance excludes cost reimbursement revenue, reimbursed expenses, and merger-related costs and charges, which the company cannot

accurately forecast and which may be significant, except for depreciation classified in reimbursed expenses, which is included in the caption 

"Depreciation classified in reimbursed expenses" above.


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"). 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. 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, and merger-related costs and 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 EPS. Adjusted net income and Adjusted diluted EPS reflect our net income and diluted earnings per share excluding the impact of cost reimbursement revenue, reimbursed expenses, merger-related costs and charges, the gain on the sale of our ownership interest in Avendra, and the income tax effect of these adjustments, as well as the impact of the U.S. Tax Cuts and Jobs Act of 2017. We calculate the income tax effect of the adjustments using an estimated tax rate applicable to each adjustment. 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 (including depreciation classified in "Reimbursed expenses," as discussed below), amortization, and provision for income taxes, pre-tax merger-related costs and charges, and share-based compensation expense for all periods presented. When applicable, Adjusted EBITDA also excludes 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 EPS, we exclude transaction and transition costs associated with the Starwood merger, which we record in the "Merger-related costs and charges" caption 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 contract 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 and facilitates our comparison of results before these items with results from other lodging companies. We use Adjusted EBITDA to evaluate companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company's capital structure, debt levels, and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provisions for income taxes can vary considerably among companies. Our Adjusted EBITDA also excludes depreciation and amortization expense which we report under "Depreciation, amortization, and other" as well as depreciation classified in "Reimbursed expenses" and "Contract investment amortization" in our Consolidated Statements of Income (our "Income Statements"), because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. Depreciation classified in "Reimbursed expenses" reflects depreciation 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 share-based compensation expense in all periods presented to address the 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.

A-14

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

RevPAR. In addition to the foregoing non-GAAP financial measures, we present Revenue per Available Room ("RevPAR") as a performance measure. We believe RevPAR is a meaningful indicator of our performance because it measures the period-over-period change in room revenues for comparable properties. RevPAR may not be comparable to similarly titled measures, such as revenues. We calculate RevPAR by dividing room sales (recorded in local currency) for comparable properties by room nights available for the period. We present growth in 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.

A-15

Cision
View original content: http://www.prnewswire.com/news-releases/marriott-international-reports-third-quarter-2019-results-300951066.html

SOURCE Marriott International, Inc.

Copyright (C) 2019 PR Newswire. All rights reserved

/zigman2/quotes/200170042/composite
US : U.S.: Nasdaq
$ 146.16
+1.06 +0.73%
Volume: 1.62M
Dec. 13, 2019 4:00p
P/E Ratio
35.21
Dividend Yield
1.31%
Market Cap
$47.79 billion
Rev. per Employee
$117,943
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/zigman2/quotes/200170042/composite
US : U.S.: Nasdaq
$ 146.16
+1.06 +0.73%
Volume: 1.62M
Dec. 13, 2019 4:00p
P/E Ratio
35.21
Dividend Yield
1.31%
Market Cap
$47.79 billion
Rev. per Employee
$117,943
loading...
/zigman2/quotes/200170042/composite
US : U.S.: Nasdaq
$ 146.16
+1.06 +0.73%
Volume: 1.62M
Dec. 13, 2019 4:00p
P/E Ratio
35.21
Dividend Yield
1.31%
Market Cap
$47.79 billion
Rev. per Employee
$117,943
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