10-QPeriod: Q2 FY2001

MARRIOTT INTERNATIONAL INC /MD/ Quarterly Report for Q2 Ended Jun 15, 2001

Filed July 27, 2001For Securities:MAR

Summary

Marriott International reported net income of $130 million for the second quarter of 2001, a slight increase from $126 million in the prior year's comparable quarter. Diluted earnings per share remained flat at $0.50. Total sales for the quarter rose by 2% to $2.43 billion. While the company saw a modest increase in overall sales and net income, the lodging segment experienced a 5% decrease in operating profit, with REVPAR declining by an average of 4.4% across comparable company-operated U.S. properties due to lower occupancy rates, despite a 2.5% increase in average room rates. For the first half of 2001, net income increased by 14% to $251 million on a 7% sales increase to $4.87 billion, with diluted EPS rising to $0.97. The company reported strong performance in its Marriott Vacation Club International segment and improved operating profit in Senior Living Services. Marriott Distribution Services saw increased sales but a decline in profits due to customer shifts. The company ended the period with $674 million in cash and equivalents and substantial available borrowing capacity, indicating sufficient liquidity for its operations and growth plans.

Key Highlights

  • 1Net income for Q2 2001 was $130 million, a 3% increase year-over-year.
  • 2Diluted EPS remained flat at $0.50 for Q2 2001.
  • 3Total sales increased by 2% to $2.43 billion in Q2 2001.
  • 4Lodging segment operating profit decreased by 5% in Q2 2001, with REVPAR for comparable U.S. company-operated properties down 4.4% due to lower occupancy.
  • 5Marriott Vacation Club International showed strong performance with an 11% increase in operating profit.
  • 6The company ended the period with a healthy cash balance of $674 million and ample liquidity.
  • 7Marriott Distribution Services faced profitability challenges due to customer shifts, despite increased sales.

Frequently Asked Questions

Marriott International reported a slight increase in net income to $130 million for the second quarter of 2001, up from $126 million in the same period of 2000. Sales also saw a modest increase of 2% to $2.43 billion. However, diluted earnings per share remained flat at $0.50.

The Lodging segment experienced a 5% decrease in operating profit. This was primarily driven by a 4.4% decline in Revenue Per Available Room (REVPAR) for comparable U.S. company-operated properties. While average room rates increased by 2.5%, this was offset by a significant drop in occupancy rates, down 5.5 percentage points.

Marriott maintained a strong liquidity position, ending the period with $674 million in cash and equivalents. The company also has substantial available borrowing capacity under its credit facilities. Management believes these resources, along with expected cash from operations, are adequate to meet short-term and long-term liquidity requirements and finance growth plans.

Yes, The Ritz-Carlton Hotel Company and Marriott International are facing a lawsuit filed by Green Isle Partners, Ltd. The complaint asserts multiple causes of action, including RICO and breach of contract, seeking damages up to $420 million. Green Isle has also filed for Chapter 11 Bankruptcy. The company is vigorously defending itself, but the outcome and potential loss are uncertain.