10-KPeriod: FY2012

MARRIOTT INTERNATIONAL INC /MD/ Annual Report, Year Ended Dec 28, 2012

Filed February 20, 2013For Securities:MAR

Summary

Marriott International, Inc. reported significant year-over-year growth in net income and diluted earnings per share for the fiscal year ending December 28, 2012, driven primarily by a rebound in lodging demand and operational efficiencies. The company's strategic focus on its core lodging business, emphasizing management and franchising, has proven effective in navigating the economic landscape. The completion of the timeshare spin-off in late 2011 streamlined operations and allowed for a clearer focus on the lodging segment. The acquisition of the Gaylord brand in October 2012 further bolstered the company's portfolio, particularly in the full-service segment. Marriott's diverse brand portfolio, spanning full-service, limited-service, and luxury segments, continues to perform well across various geographic regions, with notable RevPAR (Revenue Per Available Room) growth reported globally. The company's loyalty programs and digital platforms remain key drivers of customer engagement and repeat business. Despite facing competitive pressures and economic uncertainties in some international markets, Marriott's business model, characterized by a strong franchise and management fee structure with minimal capital investment, positions it for continued resilience and growth.

Financial Highlights

52 data points
Beta

Revenue

$11.81B

Net Income

$571.00M

4.8% Net Margin

EPS (Diluted)

$1.72

Total Assets

$6.34B

Cash & Equivalents

$88.00M

Free Cash Flow

$552.00M

Financial Statements
Beta
Revenue$11.81B
Operating Expenses$10.87B
Operating Income$940.00M
Interest Expense$137.00M
Net Income$571.00M
EPS (Basic)$1.77
EPS (Diluted)$1.72
Shares Outstanding (Basic)322.60M
Shares Outstanding (Diluted)332.90M

Key Highlights

  • 1Net income increased significantly by $373 million to $571 million in 2012, with diluted earnings per share rising to $1.72 from $0.55 in the prior year.
  • 2The company successfully integrated the Gaylord brand and hotel management company in October 2012, adding four hotels and approximately 7,800 rooms.
  • 3Worldwide comparable systemwide RevPAR increased by 6.1% to $97.34 in 2012, with occupancy rising to 70.8%.
  • 4The North American Limited-Service Lodging segment showed strong performance, with segment results increasing by 24% year-over-year.
  • 5Marriott's loyalty programs, Marriott Rewards and The Ritz-Carlton Rewards, have over 41 million members, contributing significantly to repeat guest business.
  • 6The company has a robust development pipeline with nearly 130,000 hotel rooms under construction, awaiting conversion, or approved for development.
  • 7Marriott maintained strong liquidity with $1.321 billion in available borrowing capacity at year-end 2012.

Frequently Asked Questions

In fiscal year 2012, Marriott International, Inc. reported a substantial increase in net income to $571 million, up from $198 million in 2011. Diluted earnings per share also saw a significant rise to $1.72, compared to $0.55 in the previous year. This strong performance was driven by an increase in lodging revenues, primarily due to improved RevPAR and system-wide unit growth.

A major strategic event for Marriott in 2012 was the acquisition of the Gaylord brand and hotel management company in October for $210 million. This acquisition added four hotels and approximately 7,800 rooms to its North American Full-Service segment. Additionally, the company continued to focus on its core lodging business, building upon the positive momentum following the spin-off of its timeshare operations in late 2011.

All of Marriott's lodging segments showed positive performance in 2012. The North American Full-Service segment saw its results increase by 16%, driven by higher management and franchise fees. The North American Limited-Service segment reported a strong 24% increase in segment results, boosted by higher fees and a significant gain from the sale of an equity interest in a joint venture. The International segment's results grew by 10%, attributed to increased incentive management fees and unit growth. The Luxury segment experienced a notable 38% increase in segment results, largely due to reduced general, administrative, and other expenses.

Marriott has a strong development pipeline with nearly 130,000 hotel rooms under construction, awaiting conversion, or approved for development. The company expects to add approximately 30,000 to 35,000 hotel rooms gross to its system in 2013. This growth is supported by access to sufficient financial resources, including a credit facility and capital markets, reinforcing the company's confidence in its ability to fund expansion plans.