10-KPeriod: FY2014

MARRIOTT INTERNATIONAL INC /MD/ Annual Report, Year Ended Dec 31, 2014

Filed February 19, 2015For Securities:MAR

Summary

Marriott International Inc. (MAR) reported strong performance in its 2014 annual report, with revenues growing 8% year-over-year to $13.8 billion. This growth was primarily driven by increased cost reimbursements, higher franchise fees, and improved management fees, reflecting a healthy lodging market with increased demand and pricing power across most regions. The company's asset-light, management and franchising-focused business model continues to provide stable earnings and minimize financial leverage. Marriott's extensive brand portfolio, including flagship brands like Marriott Hotels and Courtyard, coupled with its robust loyalty programs, positions it favorably for continued growth. The company also highlighted its commitment to development, with a significant pipeline of nearly 240,000 hotel rooms in development, and a strategic focus on expanding its international presence.

Financial Highlights

50 data points
Beta

Revenue

$13.80B

Net Income

$753.00M

5.5% Net Margin

EPS (Diluted)

$2.54

Total Assets

$6.83B

Cash & Equivalents

$104.00M

Free Cash Flow

$813.00M

Financial Statements
Beta
Revenue$13.80B
Operating Expenses$12.64B
Operating Income$1.16B
Interest Expense$115.00M
Net Income$753.00M
EPS (Basic)$2.60
EPS (Diluted)$2.54
Shares Outstanding (Basic)289.90M
Shares Outstanding (Diluted)296.80M

Key Highlights

  • 1Revenues increased by 8% to $13.8 billion in 2014, driven by higher cost reimbursements, franchise fees, and management fees.
  • 2Worldwide comparable systemwide RevPAR increased by 6.6% in 2014, indicating a strong operational performance.
  • 3Marriott's business model emphasizes management and franchising, with only 2% of rooms owned or leased, leading to reduced financial leverage and risk.
  • 4The company added 311 new properties (46,050 rooms) in 2014, with a significant portion (60%) of new rooms added outside the United States, indicating international expansion.
  • 5Marriott's loyalty programs, with over 49 million members, continue to be a key driver of repeat business, with members accounting for over 50% of room nights in 2014.
  • 6The company repurchased approximately 24.2 million shares of its common stock in 2014, demonstrating a commitment to returning capital to shareholders.
  • 7A strong development pipeline of nearly 240,000 hotel rooms signals continued future growth opportunities.

Frequently Asked Questions

Marriott's revenue grew by 8% to $13.8 billion in 2014. This growth was primarily driven by an increase in cost reimbursements (up $764 million), higher franchise fees (up $79 million), and improved base and incentive management fees, reflecting increased demand and higher RevPAR across its portfolio.

Marriott operates primarily as a manager and franchisor of hotels, rather than a significant owner of properties. At the end of 2014, only 2% of the rooms in its system were owned or leased, while 41% were managed and 56% were franchised. This asset-light strategy reduces capital investment, financial leverage, and the direct impact of real estate market fluctuations, leading to more stable earnings.

Marriott is actively expanding its international presence. In 2014, approximately 60% of new rooms added to its system were outside the United States. The acquisition of Protea Hotels in Africa and a robust development pipeline in international markets demonstrate a clear focus on growing its global footprint.

Marriott's loyalty programs, Marriott Rewards and The Ritz-Carlton Rewards, are a significant competitive advantage. With over 49 million members, these programs drive substantial repeat business, with members accounting for over 50% of room nights in 2014. The company continuously enhances its loyalty offerings to maintain and grow this valuable customer base.