What was the financial impact of the Marriott Vacations Worldwide (MVW) spin-off?

The spin-off of MVW in November 2011 created an independent entity. Marriott International no longer consolidates MVW's financial results post-spin-off but continues to receive license fees. The spin-off resulted in a $1,162 million decrease in Marriott's shareholders' equity and involved transaction-related expenses of $34 million in 2011. Historically, the timeshare segment's results remain included in Marriott's historical financial results as continuing operations due to ongoing involvement.

How did the impairment charge affect the company's profitability?

Marriott recorded a significant pre-tax non-cash impairment charge of $324 million ($234 million after-tax) in 2011 related to assets of its former timeshare segment. This charge negatively impacted operating income and net income for the year, contributing to the decrease in net income compared to 2010.

What are the key drivers of Marriott's revenue growth?

Marriott's revenue growth is primarily driven by base management fees, franchise fees, and incentive management fees, which are influenced by system-wide RevPAR and unit growth. Cost reimbursements also contribute significantly to total revenues. The company benefits from its extensive brand portfolio and loyalty programs, which encourage repeat business and drive revenue across its segments.

How is Marriott positioned in terms of liquidity and financing?

Marriott believes it has adequate financial resources to meet its liquidity requirements, fund growth plans, and service debt. The company amended and restated its revolving credit facility in June 2011, extending its expiration to 2016 and reducing its size to $1.75 billion. At year-end 2011, the company had $1.52 billion in available borrowing capacity. Its growth strategy relies on third-party owners and franchisees, which typically requires minimal capital investment from Marriott.

MAR 10-K FY2011 Annual Report — Revenue, Net Income, EPS

Summary

Marriott International, Inc. (MAR) in its 2011 10-K filing, reported total revenues of $12.3 billion, demonstrating a 5% increase over the previous year, largely driven by growth in management and franchise fees and cost reimbursements. The company completed a significant spin-off of its timeshare operations (Marriott Vacations Worldwide Corporation) in November 2011, which impacted its financial structure and reporting, but the historical financial results of the timeshare segment remain included as continuing operations due to ongoing involvement. Despite a notable impairment charge of $324 million related to its former timeshare segment's assets, Marriott reported net income attributable to Marriott of $198 million, or $0.55 per diluted share. The company's core lodging business showed resilience, with worldwide RevPAR increasing by 6.4% driven by improvements in occupancy and average daily rates. Marriott continued to expand its global footprint, adding 206 new properties in 2011, and maintained a strong focus on cost control and brand development.

Financial Highlights

52 data points

Beta

Revenue

$12.32B

Net Income

$198.00M

0.0% Net Margin

EPS (Diluted)

$0.55

Total Assets

$5.91B

Cash & Equivalents

$102.00M

Free Cash Flow

$906.00M

Financial Statements

Beta

Revenue	$12.32B
Operating Expenses	$11.79B
Operating Income	$526.00M
Interest Expense	$164.00M
Net Income	$198.00M
EPS (Basic)	$0.56
EPS (Diluted)	$0.55
Shares Outstanding (Basic)	350.10M
Shares Outstanding (Diluted)	362.30M

Key Highlights

1Total revenues reached $12.3 billion in 2011, a 5% increase year-over-year, primarily due to higher management, franchise, and cost reimbursement fees.
2Completed the spin-off of its timeshare business (Marriott Vacations Worldwide Corporation) in November 2011.
3Recorded a $324 million pre-tax non-cash impairment charge related to assets of the former timeshare segment.
4Reported net income attributable to Marriott of $198 million, or $0.55 per diluted share.
5Worldwide RevPAR (Revenue Per Available Room) increased by 6.4% driven by improved occupancy and average daily rates.
6Added 206 new properties to its system in 2011, expanding its global presence.
7Maintained a strong focus on cost controls and brand development across its diverse portfolio of lodging brands.

MARRIOTT INTERNATIONAL INC /MD/ Annual Report, Year Ended Dec 30, 2011

Summary

Financial Highlights

Key Highlights

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