10-Q/APeriod: Q1 FY2001

MARRIOTT INTERNATIONAL INC /MD/ Quarterly Report (Amendment) for Q1 Ended Mar 23, 2001

Filed December 10, 2001For Securities:MAR

Summary

Marriott International Inc. reported a solid first quarter for 2001, with net income increasing by 29% to $121 million on sales of $2.46 billion. This growth was driven by an 11% increase in systemwide sales and a 12% rise in operating profit for its Lodging segments. The company successfully navigated a challenging economic environment, with comparable company-operated U.S. properties showing a 2.5% increase in REVPAR, supported by a 5.5% rise in average room rates, though occupancy saw a slight decrease. The report also highlights the company's strategic initiatives, including the expansion of its select-service and extended-stay brands, and positive international lodging performance. The Distribution Services segment showed significant improvement, with an 18% sales increase and a return to profitability, partly due to favorable comparisons with a prior-year charge. The company ended the quarter with strong liquidity, including $370 million in cash and equivalents and nearly $2.4 billion in cash and available borrowing capacity.

Key Highlights

  • 1Net income rose 29% to $121 million in Q1 2001 compared to Q1 2000.
  • 2Total sales increased by 13% to $2.46 billion.
  • 3Diluted earnings per share (EPS) grew 27% to $0.47.
  • 4Comparable company-operated U.S. properties saw a 2.5% increase in REVPAR, driven by a 5.5% rise in average daily rates.
  • 5The Distribution Services segment turned profitable with an 18% increase in sales.
  • 6The company ended the quarter with a strong liquidity position, including $370 million in cash and equivalents.
  • 7Marriott Vacation Club International reported substantial profit growth on a 19% increase in contract sales.

Frequently Asked Questions

The primary driver was a combination of an 11% increase in systemwide sales and a 12% rise in operating profit for its Lodging segments. Favorable comparisons with prior-year charges in the Distribution Services segment also contributed positively.

Marriott's lodging operations showed resilience. Comparable company-operated U.S. properties achieved a 2.5% increase in Revenue Per Available Room (REVPAR), with average daily rates increasing by 5.5%. International lodging operations also performed favorably.

The company reported strong liquidity, with $370 million in cash and equivalents as of March 23, 2001. Combined with available borrowing capacity under its credit facilities, this provided nearly $2.4 billion in resources, considered adequate for its short-term and long-term liquidity needs.

Yes, the company revised its consolidated financial statements to change its accounting for the Marriott Rewards Program in accordance with Staff Accounting Bulletin (SAB) No. 101. This change impacted revenues and expenses but did not alter net income or earnings per share for the periods presented.