What drove the significant increase in Marriott's revenue and income?

The growth was primarily driven by increased demand for hotel rooms, leading to higher occupancy and REVPAR across its lodging segments. The company also benefited from new property additions and strong performance in its Timeshare business. Favorable international travel trends and recovery in business travel also contributed positively.

What is the current status of the synthetic fuel operations and its impact?

Marriott's synthetic fuel operations continue to be complex. While they incurred operating losses, these were largely offset by tax credits under Section 29 of the Internal Revenue Code. However, the company is facing an IRS challenge regarding the 'placed-in-service' date of three facilities, which could impact eligibility for these tax credits. The company strongly believes its facilities meet the requirements and is confident in a favorable resolution, but acknowledges the uncertainty.

How is Marriott managing its debt?

Marriott reduced its long-term debt by $21 million in the first half of 2004. This was achieved through the repurchase of its Liquid Yield Option Notes (LYONs) for $62 million and the maturity of other senior notes, partially offset by increased commercial paper borrowings used for capital expenditures and share repurchases.

What is the outlook for international operations?

International operations showed strong performance, with a significant increase in REVPAR, particularly in Asia, the Caribbean, Mexico, the Middle East, and the UK. This reflects a recovery from the unfavorable impacts of the war in Iraq and SARS experienced in the prior year, indicating a positive trend in global travel.

MAR 10-Q Quarterly Report Q2 FY2004 — Revenue, Net Income, EPS

Summary

Marriott International, Inc. reported a strong performance for the quarter ended June 18, 2004, with significant year-over-year increases in revenue and income from continuing operations. Total revenues grew by 19% to $2.4 billion, driven by robust demand across its lodging segments, particularly Full-Service and Timeshare, and an improved international performance. Income from continuing operations rose by 27% to $160 million, leading to a 29% increase in diluted earnings per share to $0.67. The company highlighted broad-based strength in its lodging operations, with REVPAR increasing across most brands, indicating healthy occupancy and average daily rates. The Timeshare segment showed particularly strong revenue growth. While the synthetic fuel segment continues to present complexities due to ongoing IRS scrutiny regarding tax credits, its overall financial contribution to income from continuing operations remained positive, largely due to these tax benefits, though the associated risks are noted.

Key Highlights

1Total revenues increased 19% to $2.4 billion for the twelve weeks ended June 18, 2004, compared to $2.0 billion in the prior year period.
2Income from continuing operations grew 27% to $160 million for the twelve weeks ended June 18, 2004, compared to $126 million in the prior year period.
3Diluted earnings per share from continuing operations increased 29% to $0.67 for the twelve weeks ended June 18, 2004.
4Total lodging revenues increased 17% to $2.3 billion for the twelve weeks ended June 18, 2004.
5Systemwide REVPAR for comparable North American properties increased 9.3% and international REVPAR increased 24.6% for the twelve weeks ended June 18, 2004.
6The Timeshare segment revenues grew 34% to $350 million for the twelve weeks ended June 18, 2004.
7Marriott announced the repurchase of all outstanding Liquid Yield Option Notes (LYONs) for approximately $62 million.

MARRIOTT INTERNATIONAL INC /MD/ Quarterly Report for Q2 Ended Jun 18, 2004

Summary

Key Highlights

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