What was Marriott's overall financial performance in the first quarter of 2007?

Marriott International reported a 7% increase in total revenues to $2.904 billion and a 7% increase in income from continuing operations to $182 million. Diluted earnings per share from continuing operations also improved to $0.44. This growth was supported by strong lodging demand, increased room rates, and significantly lower tax expenses.

How did the different business segments perform?

The lodging segments generally performed well, with strong RevPAR growth. The North American Full-Service segment saw a decrease in segment results (-17%) despite revenue growth, mainly due to lower gains and other income. The North American Limited-Service segment showed a 21% increase in segment results. International Lodging also saw a 16% increase. The Timeshare segment's results decreased by 14% despite revenue growth, primarily due to increased development expenses. The Synthetic Fuel segment, while operating at a loss, contributed positively to net income due to substantial tax credits.

What is the impact of the Synthetic Fuel segment on Marriott's financials?

The Synthetic Fuel segment generated revenues of $68 million and an operating loss of $36 million in the first quarter of 2007. However, it provided significant tax benefits and credits totaling $72 million, contributing $18 million to income from continuing operations. Management views this segment's impact as temporary due to the expected expiration of tax credits at the end of 2007.

What are the key liquidity and capital resource highlights?

Marriott had $124 million in cash and equivalents at the end of the quarter, a decrease of $69 million from year-end 2006. This decrease was largely due to significant share repurchases ($492 million) and capital expenditures ($158 million), partially offset by debt issuances ($587 million). The company has $1.118 billion in available borrowing capacity, which it deems sufficient to meet its liquidity needs.

MAR 10-Q Quarterly Report Q1 FY2007 — Revenue, Net Income, EPS

Summary

Marriott International Inc. reported its first quarter 2007 results, showing a 7% increase in total revenues to $2.904 billion, primarily driven by a strong performance in lodging demand and increased room rates. While overall revenue grew, operating income saw a slight decrease of $2 million to $201 million due to a decline in owned, leased, and corporate housing revenue, an increase in synthetic fuel operating losses, and a reduction in timeshare sales and services revenue net of direct expenses. However, these were partially offset by stronger fee income and lower general, administrative, and other expenses. The company's net income from continuing operations rose by 7% to $182 million, with diluted earnings per share increasing to $0.44 from $0.39 in the prior year's comparable quarter. This improvement was significantly bolstered by a substantial reduction in the tax provision, largely due to higher tax credits and benefits from its synthetic fuel operations. Marriott also highlighted strong RevPAR (Revenue per Available Room) growth across its various segments, both domestically and internationally, indicating a healthy lodging market.

Key Highlights

1Total revenues increased by 7% to $2.904 billion for the twelve weeks ended March 23, 2007, compared to $2.705 billion in the prior year period.
2Income from continuing operations increased by 7% to $182 million, and diluted earnings per share from continuing operations rose to $0.44 from $0.39.
3The company experienced a significant decrease in its tax provision, from $56 million to $14 million, largely due to a $43 million increase in tax credits and benefits from its Synthetic Fuel segment.
4Systemwide RevPAR for comparable properties increased by 6.0%, with international properties showing a strong 11.1% increase.
5Marriott added a net of 138 lodging properties (21,422 rooms) to its system during the quarter.
6The company repurchased approximately 9.5 million shares of its Class A Common Stock during the quarter.
7The Synthetic Fuel segment's operating loss increased to $36 million from $27 million, but its net contribution to income from continuing operations was positive due to tax credits.

MARRIOTT INTERNATIONAL INC /MD/ Quarterly Report for Q1 Ended Mar 23, 2007

Summary

Key Highlights

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