How did Marriott's core lodging business perform in the first nine months of 2006?

Marriott's lodging segments showed strong performance, with total lodging revenues increasing by 8% to $8.2 billion for the first nine months of 2006 compared to the same period in 2005. This growth was driven by higher RevPAR, resulting from increased room rates and occupancy across its Full-Service, Select-Service, and Extended-Stay brands.

What impact did the Synthetic Fuel segment have on the company's financial results?

The Synthetic Fuel segment significantly impacted overall results negatively. Revenue from this segment decreased substantially due to production suspensions and a 51% estimated phase-out of tax credits resulting from high oil prices. For the first nine months of 2006, the segment contributed only $4 million to income from continuing operations, compared to $92 million in the prior year period.

Did Marriott undertake any significant accounting changes during this period?

Yes, Marriott adopted two new accounting standards. First, it adopted Statement of Position 04-2 ('SOP 04-2') for timeshare transactions at the beginning of 2006, which resulted in a $105 million after-tax charge as a cumulative effect of a change in accounting principle. Second, it adopted FAS No. 123R for share-based compensation, which changed the timing and recognition of compensation expenses related to stock options and other equity awards.

What is the company's outlook on liquidity and capital resources?

Marriott's liquidity appears sufficient. The company had $136 million in cash and equivalents at September 8, 2006, and a $2.0 billion multicurrency revolving credit agreement, with $1.921 billion in available borrowing capacity after accounting for outstanding letters of credit and commercial paper. The company believes these resources, along with expected operational cash flow, are adequate to meet its liquidity needs and fund growth plans.

MAR 10-Q Quarterly Report Q3 FY2006 — Revenue, Net Income, EPS

Summary

Marriott International, Inc. (MAR) reported its financial results for the third quarter and the first nine months of fiscal year 2006. The company demonstrated robust performance in its core lodging segments, driven by strong RevPAR (Revenue Per Available Room) increases, primarily attributed to higher room rates and improved occupancy. Overall revenues for the first nine months increased by 5% to $8.3 billion, with operating income seeing a substantial rise of $372 million year-over-year to $706 million. A significant factor influencing the results was the substantial decline in revenue and operational performance from the Synthetic Fuel segment due to a 51% estimated phase-out of tax credits because of high oil prices, leading to production suspensions. Despite this headwind, the company's lodging operations showcased resilience and growth. Additionally, Marriott adopted new accounting standards, including SOP 04-2 for timeshare transactions and FAS No. 123R for share-based compensation, which impacted reported figures.

Key Highlights

1Total revenues for the first nine months of fiscal 2006 reached $8.3 billion, a 5% increase year-over-year, driven by strong lodging demand.
2Operating income for the first nine months significantly increased by $372 million to $706 million, reflecting improved profitability in lodging operations.
3Comparable company-operated North American full-service hotels saw an 8.0% RevPAR increase in Q3 2006 and a 9.2% increase year-to-date, primarily due to rate increases.
4The Synthetic Fuel segment experienced a significant downturn, with income from continuing operations declining from $30 million in Q3 2005 to a loss of $3 million in Q3 2006, largely due to reduced tax credits and production suspensions.
5Marriott adopted new accounting standards: SOP 04-2, impacting timeshare accounting with a $105 million after-tax charge, and FAS No. 123R, affecting share-based compensation reporting.
6The company continued its share repurchase program, buying back 30.1 million shares of Class A Common Stock in the first nine months of 2006.
7Interest expense increased due to higher debt levels and interest rates, while interest income decreased reflecting prior year loan repayments.

MARRIOTT INTERNATIONAL INC /MD/ Quarterly Report for Q3 Ended Sep 8, 2006

Summary

Key Highlights

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