Marriott International Reports Second Quarter 2020 Results
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Marriott International Reports Second Quarter 2020 Results

BETHESDA, Md., Aug. 10, 2020 // PRNewswire // -

  • Second quarter 2020 comparable systemwide constant dollar RevPAR declined 84.4 percent worldwide, 83.6 percent in North America and 86.7 percent outside North America;
  • Second quarter reported diluted loss per share totaled $0.72, compared to reported diluted EPS of $0.69 in the year-ago quarter. Second quarter adjusted diluted loss per share totaled $0.64, compared to second quarter 2019 adjusted diluted EPS of $1.56. Second quarter 2020 impairment charges and bad debt expense related to COVID-19 impacted reported and adjusted diluted loss per share by $0.19 and $0.17, respectively;
  • Second quarter reported net loss totaled $234 million, compared to reported net income of $232 million in the year-ago quarter. Second quarter adjusted net loss totaled $210 million, compared to second quarter 2019 adjusted net income of $525 million. Second quarter 2020 impairment charges and bad debt expense related to COVID-19 impacted reported and adjusted net loss by $61 million after-tax and $54 million after-tax, respectively;
  • Adjusted EBITDA totaled $61 million in the 2020 second quarter, compared to second quarter 2019 adjusted EBITDA of $952 million. Second quarter 2020 adjusted EBITDA included $36 million of bad debt expense related to COVID-19;
  • The company added more than 11,400 rooms globally during the second quarter, including roughly 2,000 rooms converted from competitor brands and approximately 4,700 rooms in international markets. Net rooms grew 4.1 percent from a year ago;
  • At quarter-end, Marriott's worldwide development pipeline totaled nearly 3,000 hotels and approximately 510,000 rooms, including roughly 28,000 rooms approved, but not yet subject to signed contracts. Over 230,000 rooms in the pipeline were under construction as of the end of the second quarter;
  • As of the end of the second quarter, the company's net liquidity totaled approximately $4.4 billion, representing roughly $2.3 billion in cash and cash equivalents, and $2.9 billion of unused borrowing capacity under its revolving credit facility, less $0.8 billion of commercial paper outstanding.

Marriott International, Inc. (NASDAQ: MAR) today reported second quarter 2020 results, which were dramatically impacted by the COVID-19 global pandemic and efforts to contain it (COVID-19).

Arne M. Sorenson, president and chief executive officer of Marriott International, said, "While our business continues to be profoundly impacted by COVID-19, we are seeing steady signs of demand returning. Worldwide RevPAR1 has climbed steadily since its low point of down 90 percent for the month of April, to a decline of 70 percent for the month of July. Worldwide occupancy rates, which bottomed at 11 percent for the week ended April 11, have improved each week, reaching nearly 34 percent for the week ended August 1. Currently, 91 percent of our worldwide hotels are now open compared to 74 percent in April, and 96 percent are open today in North America.

"Greater China continues to lead the recovery. As of early May, all our hotels in the region are open, and occupancy levels are now reaching 60 percent, compared to 70 percent the same time last year, and a marked improvement from single-digit levels in February. While Greater China's recovery was originally led by demand from leisure travelers, particularly in resorts and drive-to destinations, we are now seeing more widespread business demand, including some group activity.

"The improvement we have seen in Greater China exemplifies the resilience of travel demand once there is a view that the virus is under control and travel restrictions have eased. Our other regions around the world have also experienced steady improvements in demand and RevPAR over the last couple of months, though the pace varies and tends to be slower in regions that depend more on international travelers.

"Over the last few months, we have moved quickly and decisively to mitigate the impact of COVID-19 on our business. We have implemented measures to help our owners manage through the crisis and strengthened our financial position by increasing our liquidity, extending our average debt maturity, and reducing our cash outlays significantly.

"Our pipeline remains strong with approximately 510,000 rooms, 45 percent of which are under construction. We are gratified to see owners continuing to choose our brands. In the first half of the year, we signed 30 percent more deals in the Asia Pacific region than we did in the same period last year. By the end of the second quarter, our rooms distribution around the world had grown by 4.1 percent, net, compared to one year prior. With the restrictions related to the pandemic slowing construction timelines, there is uncertainty surrounding future rooms growth. Given current trends, we estimate rooms could grow by 2 to 3 percent, net, for the full year.

"While the full recovery from COVID-19 will clearly take time, the current trends we are seeing reinforce our view that when people feel safe traveling, demand returns quickly. My thoughts continue to be with all who have been impacted by the pandemic."

1 All occupancy and RevPAR statistics are comparable systemwide constant dollar and include hotels that have been temporarily closed due to COVID-19. Unless otherwise stated, all changes refer to year-over-year changes for the comparable period.

Second Quarter 2020 Results

Marriott's reported operating loss totaled $154 million in the 2020 second quarter, compared to 2019 second quarter reported operating income of $409 million. Reported net loss totaled $234 million in the 2020 second quarter, compared to 2019 second quarter reported net income of $232 million. Reported diluted loss per share totaled $0.72 in the quarter, compared to reported diluted earnings per share (EPS) of $0.69 in the year-ago quarter. Reported results in the 2020 second quarter included impairment charges and bad debt expense of $77 million pretax ($61 million after-tax and $0.19 per share), related to COVID-19.

Adjusted operating loss in the 2020 second quarter totaled $109 million, compared to 2019 second quarter adjusted operating income of $786 million. Adjusted operating loss in the 2020 second quarter included impairment charges and bad debt expense of $60 million, related to COVID-19.

Second quarter 2020 adjusted net loss totaled $210 million, compared to 2019 second quarter adjusted net income of $525 million. Adjusted diluted loss per share in the second quarter totaled $0.64, compared to adjusted diluted EPS of $1.56 in the year-ago quarter. These 2020 second quarter adjusted results included impairment charges and bad debt expense of $54 million after-tax ($0.17 per share), related to COVID-19. Adjusted results exclude restructuring and merger-related charges, cost reimbursement revenue, and reimbursed expenses. See page A-3 for the calculation of adjusted results.

Base management and franchise fees totaled $222 million in the 2020 second quarter, compared to base management and franchise fees of $834 million in the year-ago quarter. The year-over-year decline in these fees is primarily attributable to RevPAR declines related to COVID-19 and a decrease in other non-RevPAR related franchise fees. Other non-RevPAR related franchises fees in the 2020 second quarter of $107 million declined $39 million compared to the year-ago quarter, largely due to lower credit card branding fees.

Incentive management fees totaled $12 million in the 2020 second quarter, compared to incentive management fees of $165 million in the year-ago quarter. The year-over-year decline in these fees is primarily attributable to lower net house profits at many hotels related to COVID-19. Most of the incentive management fees recognized in the quarter were earned at hotels in the Asia Pacific region.

Contract investment amortization for the 2020 second quarter totaled $21 million, compared to $15 million in the year-ago quarter. The year-over-year change largely reflects impairments of investments in management and franchise contracts.

Owned, leased, and other revenue, net of direct expenses, totaled a $72 million loss in the 2020 second quarter, compared to $87 million of profit in the year-ago quarter as a result of RevPAR declines related to COVID-19.

Depreciation, amortization, and other expenses for the 2020 second quarter totaled $72 million, compared to $56 million in the year-ago quarter. The year-over-year change largely reflects a $15 million impairment charge related to COVID-19 associated with several limited-service leased hotels in North America and impairments of investments in management and franchise contracts.

General, administrative, and other expenses for the 2020 second quarter totaled $178 million, compared to $229 million in the year-ago quarter. Expenses in the 2020 second quarter reflect the company's cost reduction efforts and include $34 million of bad debt expense due to higher projected losses related to COVID-19.

Restructuring and merger-related charges totaled $6 million in the second quarter compared to $173 million in the second quarter of 2019. Charges in the second quarter of 2019 reflected a $126 million non-tax deductible accrual for the fine proposed by the U.K. Information Commissioner's Office in July 2019 in relation to the data security incident and a $34 million asset impairment for a legacy-Starwood office building.

Interest expense, net, totaled $119 million in the second quarter compared to $96 million in the year-ago quarter. The increase is largely due to higher debt balances.

Equity in losses for the second quarter totaled $30 million, largely reflecting the decline in results at joint venture properties due to COVID-19 and an $8 million asset impairment.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $61 million in the 2020 second quarter, compared to second quarter 2019 adjusted EBITDA of $952 million. Second quarter 2020 adjusted EBITDA included $36 million of bad debt expense related to COVID-19. See page A-11 for the adjusted EBITDA calculation.

Selected Performance Information

The company added 75 new properties (11,407 rooms) to its worldwide lodging portfolio during the 2020 second quarter, including roughly 2,000 rooms converted from competitor brands and approximately 4,700 rooms in international markets. Eleven properties (2,669 rooms) exited the system during the quarter. At quarter-end, Marriott's global lodging system totaled roughly 7,500 properties and timeshare resorts, with nearly 1,401,000 rooms.

At quarter-end, the company's worldwide development pipeline totaled 2,997 properties with approximately 510,000 rooms, including 1,240 properties with over 230,000 rooms under construction and 164 properties with roughly 28,000 rooms approved for development, but not yet subject to signed contracts.

In the 2020 second quarter, worldwide RevPAR declined 84.4 percent (an 84.6 percent decline using actual dollars). North American RevPAR declined 83.6 percent (an 83.6 percent decline using actual dollars), and international RevPAR declined 86.7 percent (an 87.1 percent decline using actual dollars).

Balance Sheet and Liquidity

At quarter-end, Marriott's total debt was $11.8 billion and cash balances totaled $2.3 billion, compared to $10.9 billion in debt and $225 million of cash at year-end 2019.

In the second quarter, the company issued $1.6 billion of Series EE Senior Notes due in 2025 with a 5.75 percent interest rate coupon and $1.0 billion of Series FF Senior Notes due in 2030 with a 4.625 percent interest rate coupon. In early May, Marriott raised $920 million in additional liquidity through amendments to its co-brand credit card agreements with JPMorgan Chase & Co. and American Express.

In June 2020, Marriott completed a cash tender offer and retired $853 million aggregate principal amount of Senior Notes maturing in 2022. The company used proceeds from the Series FF Senior Notes offering to complete the repurchase of such notes, including the payment of accrued interest and other costs incurred.

The company's net liquidity was approximately $4.4 billion as of the end of the second quarter, representing roughly $2.3 billion in cash and cash equivalents, and $2.9 billion of unused borrowing capacity under its revolving credit facility, less $0.8 billion of commercial paper outstanding.

The company halted share repurchases in February of this year and suspended its quarterly dividend beginning in the second quarter.

COVID-19

Due to the numerous uncertainties associated with COVID-19, Marriott cannot presently estimate the financial impact of this unprecedented situation, which is highly dependent on the severity and duration of the pandemic and its impacts, but expects that COVID-19 will continue to be material to the company's results.

The company expects to provide additional information about the current impact of COVID-19 on its business on its call later this morning.

Marriott International, Inc. (NASDAQ: MAR) will conduct its quarterly earnings review for the investment community and news media on Monday, August 10, 2020 at 8:30 a.m. Eastern Time (ET). The conference call will be webcast simultaneously via Marriott's investor relations website, click on "Events & Presentations" and click on the quarterly conference call link. A replay will be available at that same website until August 10, 2021.

The telephone dial-in number for the conference call is 706-679-3455 and the conference ID is 5581216. A telephone replay of the conference call will be available from 11:00 a.m. ET, Monday, August 10, 2020 until 8:00 p.m. ET, Monday, August 17, 2020. To access the replay, call 404-537-3406. The conference ID for the recording is 5581216.

Note on forward-looking statements:

All statements in this press release and the accompanying schedules are made as of August 10, 2020. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events or otherwise. This press release and the accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including statements related to the expected effects on our business of the COVID-19 pandemic and efforts to contain it (COVID-19); future performance of the company's hotels; RevPAR, occupancy and demand estimates and trends; our development pipeline and room openings; our liquidity expectations; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including those we identify below and other risk factors that we identify in our Securities and Exchange Commission filings, including our most recent Quarterly Report on Form 10-Q. Risks that could affect forward-looking statements in this press release include the duration and scope of COVID-19, including whether, where and to what extent resurgences of the virus occur; its short and longer-term impact on the demand for travel, transient and group business, and levels of consumer confidence; actions governments, businesses and individuals have taken or may take in response to the pandemic, including limiting or banning travel and/or in-person gatherings or imposing occupancy or other restrictions on lodging or other facilities; the impact of the pandemic and actions taken in response to the pandemic on global and regional economies, travel, and economic activity, including the duration and magnitude of COVID-19's impact on unemployment rates and consumer discretionary spending; the ability of our owners and franchisees to successfully navigate the impacts of COVID-19; the pace of recovery when the pandemic subsides or effective treatments or vaccines become available; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the effects of steps we and our property owners and franchisees take to reduce operating costs and/or enhance certain health and cleanliness protocols at our hotels; the impacts of our employee furloughs and reduced work week schedules, our voluntary transition program and other restructuring activities; 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 data security incidents; and changes in tax laws in countries in which we operate. Any of these factors could cause actual results to differ materially from the expectations we express or imply in this press release.

Marriott International, Inc. (NASDAQ: MAR) is based in Bethesda, Maryland, USA, and encompasses a portfolio of more than 7,400 properties under 30 leading brands spanning 135 countries and territories. Marriott operates and franchises hotels and licenses vacation ownership resorts all around the world. The company offers Marriott Bonvoy™, its highly-awarded travel program.

Marriott may post updates about COVID-19 and other matters on its investor relations website or Marriott's news center website. Marriott encourages investors, the media, and others interested in the company to review and subscribe to the information Marriott posts on these websites, which may be material. The contents of these websites are not incorporated by reference into this press release or any report or document Marriott files with the SEC, and any references to the websites are intended to be inactive textual references only.

IRPR#1

Tables follow

MARRIOTT INTERNATIONAL, INC.

PRESS RELEASE SCHEDULES

TABLE OF CONTENTS

QUARTER 2, 2020

         
         
         
         

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

         

Explanation of Non-GAAP Financial and Performance Measures

     

A-12

MARRIOTT INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED

SECOND QUARTER 2020 AND 2019

(in millions except per share amounts, unaudited)

             
             
   

As Reported

 

As Reported

 

Percent

   

Three Months Ended

 

Three Months Ended

 

Better/(Worse)

   

June 30, 2020

 

June 30, 2019

 

Reported 2020 vs. 2019

REVENUES

           

Base management fees

 

$                            40

 

$                          309

 

(87)

Franchise fees 1

 

182

 

525

 

(65)

Incentive management fees

 

12

 

165

 

(93)

Gross Fee Revenues

 

234

 

999

 

(77)

Contract investment amortization 2

 

(21)

 

(15)

 

(40)

Net Fee Revenues

 

213

 

984

 

(78)

Owned, leased, and other revenue 3

 

49

 

418

 

(88)

Cost reimbursement revenue 4

 

1,202

 

3,903

 

(69)

  Total Revenues

 

1,464

 

5,305

 

(72)

             

OPERATING COSTS AND EXPENSES

           

Owned, leased, and other - direct 5

 

121

 

331

 

63

Depreciation, amortization, and other 6

 

72

 

56

 

(29)

General, administrative, and other 7

 

178

 

229

 

22

Restructuring and merger-related charges 

 

6

 

173

 

97

Reimbursed expenses 4

 

1,241

 

4,107

 

70

  Total Expenses

 

1,618

 

4,896

 

67

             

OPERATING (LOSS) INCOME

 

(154)

 

409

 

(138)

             

Gains and other income, net 8

 

5

 

1

 

400

Interest expense

 

(127)

 

(102)

 

(25)

Interest income 

 

8

 

6

 

33

Equity in (losses) earnings 9

 

(30)

 

-

 

 * 

             

(LOSS) INCOME BEFORE INCOME TAXES

 

(298)

 

314

 

(195)

             

Benefit (provision) for income taxes

 

64

 

(82)

 

178

             

NET (LOSS) INCOME

 

$                         (234)

 

$                          232

 

(201)

             

(LOSS) EARNINGS PER SHARE

           

  (Loss) earnings per share - basic

 

$                        (0.72)

 

$                         0.70

 

(203)

  (Loss) earnings per share - diluted

 

$                        (0.72)

 

$                         0.69

 

(204)

             

Basic Shares

 

325.6

 

333.8

   

Diluted Shares 10

 

325.6

 

336.4

   
   

*

Calculated percentage is not meaningful.

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 (loss) earnings include our equity in earnings or losses of unconsolidated equity method investments.

10

Basic and fully diluted weighted average shares outstanding used to calculate (loss) earnings per share for the period in which we had a loss are the same because inclusion of additional equivalents would be anti-dilutive.

MARRIOTT INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED

SECOND QUARTER 2020 AND 2019

(in millions except per share amounts, unaudited)

             
             
   

As Reported

 

As Reported

 

Percent

   

Six Months Ended

 

Six Months Ended

 

Better/(Worse)

   

June 30, 2020

 

June 30, 2019

 

Reported 2020 vs. 2019

REVENUES

           

Base management fees

 

$                     254

 

$                     591

 

(57)

Franchise fees 1

 

597

 

975

 

(39)

Incentive management fees

 

12

 

328

 

(96)

Gross Fee Revenues

 

863

 

1,894

 

(54)

Contract investment amortization 2

 

(46)

 

(29)

 

(59)

Net Fee Revenues

 

817

 

1,865

 

(56)

Owned, leased, and other revenue 3

 

329

 

793

 

(59)

Cost reimbursement revenue 4

 

4,999

 

7,659

 

(35)

  Total Revenues

 

6,145

 

10,317

 

(40)

             

OPERATING COSTS AND EXPENSES

           

Owned, leased, and other - direct 5

 

393

 

656

 

40

Depreciation, amortization, and other 6

 

222

 

110

 

(102)

General, administrative, and other 7

 

448

 

451

 

1

Restructuring and merger-related charges 

 

4

 

182

 

98

Reimbursed expenses 4

 

5,118

 

7,999

 

36

  Total Expenses

 

6,185

 

9,398

 

34

             

OPERATING (LOSS) INCOME

 

(40)

 

919

 

(104)

             

Gains and other income, net 8

 

1

 

6

 

(83)

Interest expense

 

(220)

 

(199)

 

(11)

Interest income 

 

14

 

12

 

17

Equity in (losses) earnings 9

 

(34)

 

8

 

(525)

             

(LOSS) INCOME BEFORE INCOME TAXES

 

(279)

 

746

 

(137)

             

Benefit (provision) for income taxes

 

76

 

(139)

 

155

             

NET (LOSS) INCOME

 

$                    (203)

 

$                     607

 

(133)

             

(LOSS) EARNINGS PER SHARE

           

  (Loss) earnings per share - basic

 

$                   (0.63)

 

$                    1.80

 

(135)

  (Loss) earnings per share - diluted

 

$                   (0.63)

 

$                    1.79

 

(135)

             

Basic Shares

 

325.5

 

336.7

   

Diluted Shares 10

 

325.5

 

339.6

   
   

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 expensesinclude 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 (loss) earnings include our equity in earnings or losses of unconsolidated equity method investments.

10

Basic and fully diluted weighted average shares outstanding used to calculate (loss) earnings per share for the period in which we had a loss are the same because inclusion of additional equivalents would be anti-dilutive.

MARRIOTT INTERNATIONAL, INC.

NON-GAAP FINANCIAL MEASURES

($ in millions except per share amounts)

                       

The following table presents our reconciliations of Adjusted operating (loss) income, Adjusted operating (loss) income margin, Adjusted net (loss) income, and Adjusted diluted (loss) earnings per share, to the most directly comparable GAAP measure. Adjusted total revenues is used in the determination of Adjusted operating (loss) income margin.

                       
 

Three Months Ended 

 

Six Months Ended

         

Percent

         

Percent

 

June 30,

 

June 30,

 

Better/

 

June 30,

 

June 30,

 

Better/

 

2020

 

2019

 

(Worse)

 

2020

 

2019

 

(Worse)

Total revenues, as reported

$  1,464

 

$  5,305

     

$  6,145

 

$ 10,317

   

Less: Cost reimbursement revenue

(1,202)

 

(3,903)

     

(4,999)

 

(7,659)

   

Adjusted total revenues**

262

 

1,402

     

1,146

 

2,658

   
                       

Operating (loss) income, as reported

(154)

 

409

     

(40)

 

919

   

Less: Cost reimbursement revenue

(1,202)

 

(3,903)

     

(4,999)

 

(7,659)

   

Add: Reimbursed expenses

1,241

 

4,107

     

5,118

 

7,999

   

Add: Restructuring and merger-related charges

6

 

173

     

4

 

182

   

Adjusted operating (loss) income **

(109)

 

786

 

-114%

 

83

 

1,441

 

-94%

                       

Operating (loss) income margin

-11%

 

8%

     

-1%

 

9%

   

Adjusted operating (loss) income margin **

-42%

 

56%

     

7%

 

54%

   
                       

Net (loss) income, as reported

(234)

 

232

     

(203)

 

607

   

Less: Cost reimbursement revenue

(1,202)

 

(3,903)

     

(4,999)

 

(7,659)

   

Add: Reimbursed expenses

1,241

 

4,107

     

5,118

 

7,999

   

Add: Restructuring and merger-related charges

6

 

173

     

4

 

182

   

Income tax effect of above adjustments

(21)

 

(84)

     

(45)

 

(122)

   

Adjusted net (loss) income **

$    (210)

 

$     525

 

-140%

 

$    (125)

 

$  1,007

 

-112%

                       

Diluted (loss) earnings per share, as reported

$   (0.72)

 

$    0.69

     

$   (0.63)

 

$    1.79

   

Adjusted diluted (loss) earnings per share**

$   (0.64)

 

$    1.56

 

-141%

 

$   (0.38)

 

$    2.97

 

-113%

   

**

Denotes non-GAAP financial measures. Please see pages A-12 and A-13 for information about our reasons for providing these alternative financial measures and the limitations on their use.

MARRIOTT INTERNATIONAL, INC.

TOTAL LODGING PRODUCTS

As of June 30, 2020

             
 

North America

Total International

Total Worldwide

 

Units

Rooms

Units

Rooms

Units

Rooms

Managed

761

240,275

1,257

323,978

2,018

564,253

Marriott Hotels

119

64,049

177

51,890

296

115,939

Marriott Hotels Serviced Apartments

-

-

1

154

1

154

Sheraton

28

23,609

190

64,098

218

87,707

Sheraton Serviced Apartments

-

-

1

212

1

212

Courtyard

233

37,020

104

22,705

337

59,725

Westin

42

22,861

71

21,786

113

44,647

JW Marriott

18

11,210

59

22,108

77

33,318

Renaissance

28

12,019

59

18,312

87

30,331

The Ritz-Carlton

39

11,538

61

15,928

100

27,466

The Ritz-Carlton Serviced Apartments

-

-

5

713

5

713

Le Méridien

3

570

75

20,844

78

21,414

Four Points

1

134

79

20,498

80

20,632

Residence Inn

108

16,498

6

701

114

17,199

W Hotels

24

6,902

31

8,148

55

15,050

The Luxury Collection

5

2,236

51

9,241

56

11,477

Gaylord Hotels

6

9,918

-

-

6

9,918

St. Regis

10

1,968

34

7,819

44

9,787

St. Regis Serviced Apartments

-

-

1

70

1

70

Aloft

1

330

40

9,193

41

9,523

AC Hotels by Marriott

5

901

68

8,323

73

9,224

Delta Hotels

25

6,770

1

360

26

7,130

Fairfield by Marriott

7

1,539

33

5,335

40

6,874

SpringHill Suites

30

4,896

-

-

30

4,896

Marriott Executive Apartments

-

-

33

4,756

33

4,756

Autograph Collection

7

1,970

15

2,321

22

4,291

Protea Hotels

-

-

35

4,270

35

4,270

EDITION

4

1,209

6

1,282

10

2,491

TownePlace Suites

17

1,948

-

-

17

1,948

Element

1

180

7

1,421

8

1,601

Moxy

-

-

4

599

4

599

Tribute Portfolio

-

-

5

453

5

453

Bulgari

-

-

5

438

5

438

Franchised

4,570

657,347

644

131,261

5,214

788,608

Courtyard

807

107,588

87

16,074

894

123,662

Fairfield by Marriott

1,022

95,184

25

4,187

1,047

99,371

Residence Inn

727

86,781

12

1,473

739

88,254

Marriott Hotels

220

69,314

58

16,707

278

86,021

Sheraton

158

47,465

65

18,403

223

65,868

SpringHill Suites

440

50,699

-

-

440

50,699

TownePlace Suites

416

42,005

-

-

416

42,005

Westin

88

29,452

24

7,436

112

36,888

Autograph Collection

105

21,127

65

12,612

170

33,739

Four Points

158

23,948

53

8,474

211

32,422

Renaissance

58

16,657

28

7,691

86

24,348

Aloft

124

18,160

18

2,977

142

21,137

AC Hotels by Marriott

63

10,614

34

5,973

97

16,587

Moxy

21

4,149

38

7,685

59

11,834

Delta Hotels

47

10,447

6

1,067

53

11,514

The Luxury Collection

11

2,565

46

8,601

57

11,166

Le Méridien

18

3,910

17

4,240

35

8,150

JW Marriott

12

5,643

6

1,624

18

7,267

Element

48

6,527

2

293

50

6,820

Tribute Portfolio

22

3,942

15

1,840

37

5,782

Protea Hotels

-

-

38

3,059

38

3,059

Design Hotels

4

741

5

694

9

1,435

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 June 30, 2020

             
 

North America

Total International

Total Worldwide

 

Units

Rooms

Units

Rooms

Units

Rooms

Owned/Leased

26

6,483

40

9,161

66

15,644

Courtyard

19

2,814

4

894

23

3,708

Marriott Hotels

2

1,308

5

1,631

7

2,939

Sheraton

-

-

4

1,830

4

1,830

W Hotels

2

779

2

665

4

1,444

Protea Hotels

-

-

7

1,168

7

1,168

Westin

1

1,073

-

-

1

1,073

Renaissance

1

317

2

505

3

822

Autograph Collection 1

-

-

7

705

7

705

The Ritz-Carlton

-

-

2

550

2

550

JW Marriott

-

-

1

496

1

496

The Luxury Collection 2

-

-

4

417

4

417

Residence Inn

1

192

1

140

2

332

St. Regis

-

-

1

160

1

160

Residences

61

6,334

34

3,099

95

9,433

The Ritz-Carlton Residences

36

4,080

11

938

47

5,018

W Residences

10

1,089

5

519

15

1,608

St. Regis Residences

8

703

7

598

15

1,301

Westin Residences

3

266

1

264

4

530

Bulgari Residences

-

-

4

448

4

448

The Luxury Collection Residences

2

151

3

112

5

263

Marriott Hotels Residences

-

-

1

108

1

108

Autograph Collection Residences

-

-

1

62

1

62

Sheraton Residences

-

-

1

50

1

50

EDITION Residences

2

45

-

-

2

45

Timeshare*

72

18,905

19

3,850

91

22,755

Grand Total

5,490

929,344

1,994

471,349

7,484

1,400,693

             

*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.

1Includes five properties acquired when we purchased Elegant Hotels Group in December 2019 which we currently intend to re-brand under the Autograph Collection brand following the completion of planned renovations.

2 Includes two properties acquired when we purchased Elegant Hotels Group in December 2019 which we currently intend to re-brand under The Luxury Collection brand following the completion of planned renovations.

MARRIOTT INTERNATIONAL, INC.

TOTAL LODGING PRODUCTS

As of June 30, 2020

             
 

North America

Total International

 

Total Worldwide

 

Total Systemwide

Units

Rooms

Units

Rooms

Units

Rooms

Luxury

184

50,547

346

80,960

530

131,507

JW Marriott

30

16,853

66

24,228

96

41,081

The Ritz-Carlton

40

11,967

63

16,478

103

28,445

The Ritz-Carlton Residences

36

4,080

11

938

47

5,018

The Ritz-Carlton Serviced Apartments

-

-

5

713

5

713

The Luxury Collection 1

16

4,801

101

18,259

117

23,060

The Luxury Collection Residences

2

151

3

112

5

263

W Hotels

26

7,681

33

8,813

59

16,494

W Residences

10

1,089

5

519

15

1,608

St. Regis

10

1,968

35

7,979

45

9,947

St. Regis Residences

8

703

7

598

15

1,301

St. Regis Serviced Apartments

-

-

1

70

1

70

EDITION

4

1,209

6

1,282

10

2,491

EDITION Residences

2

45

-

-

2

45

Bulgari

-

-

6

523

6

523

Bulgari Residences

-

-

4

448

4

448

Full-Service

985

347,785

934

261,097

1,919

608,882

Marriott Hotels

341

134,671

240

70,228

581

204,899

Marriott Hotels Residences

-

-

1

108

1

108

Marriott Hotels Serviced Apartments

-

-

1

154

1

154

Sheraton

186

71,074

259

84,331

445

155,405

Sheraton Residences

-

-

1

50

1

50

Sheraton Serviced Apartments

-

-

1

212

1

212

Westin

131

53,386

95

29,222

226

82,608

Westin Residences

3

266

1

264

4

530

Renaissance

87

28,993

89

26,508

176

55,501

Autograph Collection 2

112

23,097

87

15,638

199

38,735

Autograph Collection Residences

-

-

1

62

1

62

Le Méridien

21

4,480

92

25,084

113

29,564

Delta Hotels

72

17,217

7

1,427

79

18,644

Gaylord Hotels

6

9,918

-

-

6

9,918

Tribute Portfolio

22

3,942

20

2,293

42

6,235

Marriott Executive Apartments

-

-

34

4,822

34

4,822

Design Hotels

4

741

5

694

9

1,435

Limited-Service

4,249

512,107

695

125,442

4,944

637,549

Courtyard

1,059

147,422

195

39,673

1,254

187,095

Residence Inn

836

103,471

19

2,314

855

105,785

Fairfield by Marriott

1,029

96,723

58

9,522

1,087

106,245

SpringHill Suites

470

55,595

-

-

470

55,595

Four Points

159

24,082

132

28,972

291

53,054

TownePlace Suites

433

43,953

-

-

433

43,953

Aloft

125

18,490

58

12,170

183

30,660

AC Hotels by Marriott

68

11,515

102

14,296

170

25,811

Moxy

21

4,149

42

8,284

63

12,433

Protea Hotels

-

-

80

8,497

80

8,497

Element

49

6,707

9

1,714

58

8,421

Timeshare*

72

18,905

19

3,850

91

22,755

Grand Total

5,490

929,344

1,994

471,349

7,484

1,400,693

*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.

1 Includes two properties acquired when we purchased Elegant Hotels Group in December 2019 which we currently intend to re-brand under The Luxury Collection brand following the completion of planned renovations.

2Includes five properties acquired when we purchased Elegant Hotels Group in December 2019 which we currently intend to re-brand under the Autograph Collection brand following the completion of planned renovations.

MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

In Constant $

                     

Comparable Company-Operated North American Properties

                     
   

Three Months Ended June 30, 2020 and June 30, 2019

   

REVPAR

 

Occupancy

 

Average Daily Rate

Brand

 

2020

 vs. 2019

 

2020

 vs. 2019

 

2020

 vs. 2019

JW Marriott

 

$14.76

-93.8%

 

6.1%

-76.8%

pts.

 

$242.38

-15.1%

The Ritz-Carlton

 

$30.82

-89.9%

 

8.3%

-67.3%

pts.

 

$373.50

-7.1%

W Hotels

 

$11.23

-95.1%

 

5.8%

-73.8%

pts.

 

$194.62

-31.8%

Composite North American Luxury1

 

$19.17

-93.0%

 

6.5%

-72.4%

pts.

 

$297.04

-14.0%

Marriott Hotels

 

$10.07

-94.0%

 

6.5%

-74.2%

pts.

 

$155.57

-24.8%

Sheraton

 

$10.47

-94.0%

 

7.9%

-74.2%

pts.

 

$132.44

-37.4%

Westin

 

$11.48

-93.7%

 

7.0%

-73.9%

pts.

 

$163.19

-27.3%

Composite North American Premium2

 

$9.19

-94.5%

 

6.0%

-74.4%

pts.

 

$151.99

-26.8%

North American Full-Service3 

 

$11.17

-94.0%

 

6.1%

-74.0%

pts.

 

$182.42

-22.2%

Courtyard

 

$12.36

-89.1%

 

12.3%

-64.4%

pts.

 

$100.10

-32.1%

Residence Inn

 

$38.45

-72.1%

 

30.5%

-52.5%

pts.

 

$126.20

-24.0%

Composite North American Limited-Service4

 

$19.38

-83.8%

 

17.4%

-61.5%

pts.

 

$111.38

-26.5%

North American - All5

 

$13.84

-91.7%

 

9.8%

-69.9%

pts.

 

$141.44

-32.0%

                     
                     

Comparable Systemwide North American Properties

                     
   

Three Months Ended June 30, 2020 and June 30, 2019

   

REVPAR

 

Occupancy

 

Average Daily Rate

Brand

 

2020

 vs. 2019

 

2020

 vs. 2019

 

2020

 vs. 2019

JW Marriott

 

$12.68

-94.2%

 

4.7%

-76.0%

pts.

 

$268.00

-1.3%

The Ritz-Carlton

 

$29.49

-90.3%

 

7.9%

-68.3%

pts.

 

$373.53

-6.5%

W Hotels

 

$11.23

-95.1%

 

5.8%

-73.8%

pts.

 

$194.62

-31.8%

Composite North American Luxury1

 

$17.36

-93.3%

 

5.9%

-72.8%

pts.

 

$293.47

-10.7%

Marriott Hotels

 

$12.68

-91.1%

 

9.4%

-68.0%

pts.

 

$134.56

-26.7%

Sheraton

 

$12.87

-89.8%

 

12.6%

-64.5%

pts.

 

$102.08

-37.7%

Westin

 

$12.80

-92.2%

 

9.2%

-70.4%

pts.

 

$138.86

-32.7%

Composite North American Premium2

 

$12.75

-91.2%

 

9.9%

-67.7%

pts.

 

$129.19

-31.0%

North American Full-Service3 

 

$13.27

-91.6%

 

9.4%

-68.3%

pts.

 

$140.76

-30.7%

Courtyard

 

$17.88

-83.9%

 

18.2%

-58.5%

pts.

 

$98.27

-32.4%

Residence Inn

 

$45.18

-64.0%

 

40.2%

-41.9%

pts.

 

$112.25

-26.6%

Fairfield by Marriott

 

$22.27

-75.3%

 

25.3%

-50.6%

pts.

 

$87.95

-26.0%

Composite North American Limited-Service4

 

$26.46

-75.6%

 

26.6%

-51.5%

pts.

 

$99.63

-28.2%

North American - All5

 

$21.08

-83.6%

 

19.6%

-58.4%

pts.

 

$107.70

-34.7%

 

Includes JW Marriott, The Ritz-Carlton, W Hotels, The Luxury Collection, St. Regis, and EDITION.

Includes Marriott Hotels, Sheraton, Westin, Renaissance, Autograph Collection, Delta Hotels, Gaylord Hotels, and Le Méridien.  Systemwide also includes Tribute Portfolio.

Includes Composite North American Luxury and Composite North American Premium.

Includes Courtyard, Residence Inn, Fairfield by Marriott, SpringHill Suites, TownePlace Suites, Four Points, Aloft, Element, and AC Hotels by Marriott.  Systemwide also includes Moxy.

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

MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

In Constant $

                     

Comparable Company-Operated International Properties

                     
   

Three Months Ended June 30, 2020 and June 30, 2019

   

REVPAR

 

Occupancy

 

Average Daily Rate

Region

 

2020

 vs. 2019

 

2020

 vs. 2019

 

2020

 vs. 2019

Greater China

 

$33.97

-59.2%

 

36.5%

-31.7%

pts.

 

$93.13

-23.7%

Rest of Asia Pacific

 

$11.72

-89.0%

 

13.1%

-57.6%

pts.

 

$89.77

-40.6%

Asia Pacific

 

$23.54

-75.0%

 

25.5%

-43.8%

pts.

 

$92.33

-32.1%

                     

Caribbean & Latin America

 

$5.47

-95.1%

 

5.7%

-56.9%

pts.

 

$95.39

-46.9%

Europe

 

$3.23

-98.0%

 

2.8%

-75.3%

pts.

 

$114.41

-44.4%

Middle East & Africa

 

$20.85

-77.3%

 

17.8%

-45.2%

pts.

 

$117.11

-19.6%

                     

International - All1

 

$17.10

-84.5%

 

17.5%

-52.1%

pts.

 

$97.62

-38.2%

                     

Worldwide2

 

$15.56

-88.6%

 

13.9%

-60.5%

pts.

 

$112.26

-38.8%

                     
                     

Comparable Systemwide International Properties

                     
   

Three Months Ended June 30, 2020 and June 30, 2019

   

REVPAR

 

Occupancy

 

Average Daily Rate

Region

 

2020

 vs. 2019

 

2020

 vs. 2019

 

2020

 vs. 2019

Greater China

 

$32.83

-60.3%

 

35.5%

-32.2%

pts.

 

$92.39

-24.3%

Rest of Asia Pacific

 

$12.93

-88.1%

 

13.7%

-57.5%

pts.

 

$94.72

-38.1%

Asia Pacific

 

$22.59

-76.5%

 

24.3%

-45.3%

pts.

 

$93.06

-32.7%

                     

Caribbean & Latin America

 

$4.65

-95.3%

 

5.8%

-55.9%

pts.

 

$80.40

-50.3%

Europe

 

$3.90

-97.2%

 

3.8%

-73.0%

pts.

 

$103.21

-42.6%

Middle East & Africa

 

$19.22

-78.0%

 

17.2%

-45.8%

pts.

 

$111.88

-19.3%

                     

International - All1

 

$14.32

-86.7%

 

14.9%

-54.9%

pts.

 

$96.27

-37.7%

                     

Worldwide2

 

$19.11

-84.4%

 

18.2%

-57.4%

pts.

 

$104.97

-35.3%

 

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

Includes North American - All and International - All.

MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

In Constant $

                     

Comparable Company-Operated North American Properties

                     
   

Six Months Ended June 30, 2020 and June 30, 2019

   

REVPAR

 

Occupancy

 

Average Daily Rate

Brand

 

2020

 vs. 2019

 

2020

 vs. 2019

 

2020

 vs. 2019

JW Marriott

 

$93.86

-59.5%

 

32.7%

-46.8%

pts.

 

$287.47

-1.4%

The Ritz-Carlton

 

$149.54

-54.0%

 

33.8%

-42.6%

pts.

 

$442.73

4.0%

W Hotels

 

$77.96

-61.7%

 

31.0%

-43.4%

pts.

 

$251.51

-8.2%

Composite North American Luxury1

 

$121.91

-56.4%

 

32.9%

-44.2%

pts.

 

$370.55

2.2%

Marriott Hotels

 

$61.98

-60.6%

 

31.9%

-44.8%

pts.

 

$194.09

-5.2%

Sheraton

 

$58.16

-62.4%

 

31.3%

-45.1%

pts.

 

$185.95

-8.1%

Westin

 

$64.11

-61.5%

 

31.9%

-44.8%

pts.

 

$201.19

-7.3%

Composite North American Premium2

 

$60.46

-61.1%

 

31.4%

-44.9%

pts.

 

$192.44

-5.4%

North American Full-Service3 

 

$72.68

-59.6%

 

31.7%

-44.8%

pts.

 

$229.17

-2.6%

Courtyard

 

$43.00

-58.9%

 

32.3%

-39.4%

pts.

 

$132.98

-8.8%

Residence Inn

 

$70.41

-45.7%

 

46.9%

-32.4%

pts.

 

$150.22

-8.2%

Composite North American Limited-Service4

 

$50.66

-54.6%

 

36.6%

-37.8%

pts.

 

$138.39

-7.7%

North American - All5

 

$65.54

-58.5%

 

33.3%

-42.5%

pts.

 

$196.84

-5.4%

                     
                     

Comparable Systemwide North American Properties

                     
   

Six Months Ended June 30, 2020 and June 30, 2019

   

REVPAR

 

Occupancy

 

Average Daily Rate

Brand

 

2020

 vs. 2019

 

2020

 vs. 2019

 

2020

 vs. 2019

JW Marriott

 

$90.30

-58.1%

 

31.6%

-45.9%

pts.

 

$285.33

2.7%

The Ritz-Carlton

 

$145.20

-54.7%

 

33.1%

-43.1%

pts.

 

$438.08

4.1%

W Hotels

 

$77.96

-61.7%

 

31.0%

-43.4%

pts.

 

$251.51

-8.2%

Composite North American Luxury1

 

$113.04

-56.7%

 

32.3%

-44.1%

pts.

 

$349.49

2.4%

Marriott Hotels

 

$55.63

-58.4%

 

32.4%

-41.2%

pts.

 

$171.80

-5.6%

Sheraton

 

$47.00

-58.8%

 

33.0%

-38.7%

pts.

 

$142.61

-10.4%

Westin

 

$63.39

-58.7%

 

33.3%

-42.1%

pts.

 

$190.45

-6.5%

Composite North American Premium2

 

$56.63

-58.3%

 

32.7%

-40.8%

pts.

 

$173.21

-6.2%

North American Full-Service3 

 

$62.96

-57.9%

 

32.7%

-41.1%

pts.

 

$192.79

-5.0%

Courtyard

 

$45.60

-55.4%

 

36.3%

-35.7%

pts.

 

$125.77

-11.5%

Residence Inn

 

$68.67

-41.4%

 

52.3%

-25.9%

pts.

 

$131.21

-12.4%

Fairfield by Marriott

 

$40.34

-50.4%

 

39.5%

-30.8%

pts.

 

$102.08

-11.7%

Composite North American Limited-Service4

 

$50.16

-49.6%

 

41.9%

-31.5%

pts.

 

$119.69

-11.8%

North American - All5

 

$55.38

-53.9%

 

38.1%

-35.4%

pts.

 

$145.21

-11.0%

 

Includes JW Marriott, The Ritz-Carlton, W Hotels, The Luxury Collection, St. Regis, and EDITION.

Includes Marriott Hotels, Sheraton, Westin, Renaissance, Autograph Collection, Delta Hotels, Gaylord Hotels, and Le Méridien.  Systemwide also includes Tribute Portfolio.

Includes Composite North American Luxury and Composite North American Premium.

Includes Courtyard, Residence Inn, Fairfield by Marriott, SpringHill Suites, TownePlace Suites, Four Points, Aloft, Element, and AC Hotels by Marriott.  Systemwide also includes Moxy.

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

MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

In Constant $

                     

Comparable Company-Operated International Properties

                     
   

Six Months Ended June 30, 2020 and June 30, 2019

   

REVPAR

 

Occupancy

 

Average Daily Rate

Region

 

2020

 vs. 2019

 

2020

 vs. 2019

 

2020

 vs. 2019

Greater China

 

$31.53

-61.4%

 

30.6%

-34.9%

pts.

 

$103.11

-17.4%

Rest of Asia Pacific

 

$49.68

-56.6%

 

33.4%

-38.0%

pts.

 

$148.53

-7.4%

Asia Pacific

 

$40.04

-58.8%

 

31.9%

-36.3%

pts.

 

$125.42

-11.9%

                     

Caribbean & Latin America

 

$67.52

-50.5%

 

29.9%

-34.3%

pts.

 

$226.12

6.4%

Europe

 

$43.39

-68.3%

 

25.5%

-45.9%

pts.

 

$170.20

-11.2%

Middle East & Africa

 

$55.09

-45.7%

 

38.3%

-27.8%

pts.

 

$143.89

-6.2%

                     

International - All1

 

$45.67

-58.4%

 

31.5%

-36.8%

pts.

 

$145.16

-9.8%

                     

Worldwide2

 

$55.09

-58.4%

 

32.3%

-39.5%

pts.

 

$170.39

-7.7%

                     
                     

Comparable Systemwide International Properties

                     
   

Six Months Ended June 30, 2020 and June 30, 2019

   

REVPAR

 

Occupancy

 

Average Daily Rate

Region

 

2020

 vs. 2019

 

2020

 vs. 2019

 

2020

 vs. 2019

Greater China

 

$31.03

-61.8%

 

30.1%

-34.9%

pts.

 

$102.92

-17.5%

Rest of Asia Pacific

 

$49.85

-56.6%

 

33.6%

-38.1%

pts.

 

$148.35

-7.5%

Asia Pacific

 

$40.72

-58.7%

 

31.9%

-36.5%

pts.

 

$127.54

-11.4%

                     

Caribbean & Latin America

 

$54.33

-53.2%

 

28.9%

-34.2%

pts.

 

$188.21

2.3%

Europe

 

$38.47

-67.5%

 

25.5%

-44.4%

pts.

 

$151.11

-10.6%

Middle East & Africa

 

$52.22

-45.9%

 

37.8%

-28.0%

pts.

 

$138.11

-5.8%

                     

International - All1

 

$43.36

-59.2%

 

30.5%

-37.4%

pts.

 

$142.34

-9.1%

                     

Worldwide2

 

$51.88

-55.3%

 

35.9%

-36.0%

pts.

 

$144.50

-10.5%

 

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

Includes North American - All and International - All.

MARRIOTT INTERNATIONAL, INC.

NON-GAAP FINANCIAL MEASURES

ADJUSTED EBITDA

($ in millions)

                   
 

Fiscal Year 2020

       
 

First
Quarter

 

Second
Quarter

 

Total

       

Net (loss) income, as reported

$        31

 

$     (234)

 

$     (203)

       

Cost reimbursement revenue

(3,797)

 

(1,202)

 

(4,999)

       

Reimbursed expenses

3,877

 

1,241

 

5,118

       

Interest expense

93

 

127

 

220

       

Interest expense from unconsolidated joint ventures 

3

 

1

 

4

       

(Benefit) provision for income taxes

(12)

 

(64)

 

(76)

       

Depreciation and amortization

150

 

72

 

222

       

Contract investment amortization

25

 

21

 

46

       

Depreciation classified in reimbursed expenses

26

 

27

 

53

       

Depreciation and amortization from unconsolidated joint ventures 

7

 

16

 

23

       

Share-based compensation

41

 

50

 

91

       

Restructuring and merger-related charges

(2)

 

6

 

4

       

Adjusted EBITDA **

$      442

 

$        61

 

$      503

       
                   

Change from 2019 Adjusted EBITDA **

-46%

 

-94%

 

-72%

       
                   
 

Fiscal Year 2019 

 

First
Quarter

 

Second
Quarter

 

Third
Quarter

 

Fourth
Quarter

 

Total

Net income, as reported

$      375

 

$      232

 

$      387

 

$      279

 

$     1,273

Cost reimbursement revenue

(3,756)

 

(3,903)

 

(3,952)

 

(3,988)

 

(15,599)

Reimbursed expenses

3,892

 

4,107

 

4,070

 

4,370

 

16,439

Interest expense

97

 

102

 

100

 

95

 

394

Interest expense from unconsolidated joint ventures

2

 

1

 

3

 

2

 

8

Provision for income taxes

57

 

82

 

140

 

47

 

326

Depreciation and amortization

54

 

56

 

52

 

179

 

341

Contract investment amortization

14

 

15

 

16

 

17

 

62

Depreciation classified in reimbursed expenses

30

 

29

 

33

 

29

 

121

Depreciation and amortization from unconsolidated joint ventures

7

 

8

 

5

 

9

 

29

Share-based compensation

40

 

50

 

47

 

49

 

186

Gain on asset dispositions

-

 

-

 

(9)

 

(134)

 

(143)

Restructuring and merger-related charges

9

 

173

 

9

 

(53)

 

138

Adjusted EBITDA **

$      821

 

$      952

 

$      901

 

$      901

 

$     3,575

   

**

Denotes non-GAAP financial measures. Please see pages A-12 and A-13 for information about our reasons for providing these alternative financial measures and the limitations on their use.

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/loss, net income/loss, earnings/loss 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/Loss and Adjusted Operating Income/Loss Margin. Adjusted operating income/loss and Adjusted operating income/loss margin exclude cost reimbursement revenue, reimbursed expenses, and restructuring and merger-related charges. Adjusted operating income/loss margin reflects Adjusted operating income/loss 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/Loss and Adjusted Diluted Earnings/Loss Per Share. Adjusted net income/loss and Adjusted diluted EPS reflect our net income/loss and diluted earnings/loss per share excluding the impact of cost reimbursement revenue, reimbursed expenses, restructuring and merger-related charges, and the income tax effect of these adjustments. 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/loss 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 benefit (provision) for income taxes, restructuring and merger-related 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/loss and Adjusted operating income/loss margin, Adjusted net income/loss, Adjusted diluted EPS and Adjusted EBITDA, we exclude restructuring charges incurred as a result of COVID-19 and transition costs associated with the Starwood merger, which we record in the "Restructuring and merger-related 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.

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 relates to property level revenue and may not be comparable to similarly titled measures, such as revenues, and should not be viewed as necessarily correlating with our fee revenue. We calculate RevPAR by dividing room sales (recorded in local currency) for comparable properties by room nights available for the period. We do not consider interruptions related to COVID-19 when determining which properties to classify as comparable. 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.

SOURCE Marriott International, Inc.

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