What was the primary driver of Marriott's revenue growth in the third quarter of 2007?

Marriott's revenue growth was primarily driven by strong demand for hotel rooms worldwide, which allowed the company to increase room rates. This resulted in higher base management and franchise fees, as well as improved incentive management fees due to better property-level performance.

What challenges did the Synthetic Fuel segment face during this period?

The Synthetic Fuel segment faced challenges including operational disruptions at its feedstock supplier's mine and, critically, the risk of reduced or eliminated tax credits due to high oil prices. While these tax credits significantly benefited overall income, their future availability was uncertain, and the company planned to cease operations by the end of 2007.

How did Marriott's share repurchase program impact its financial position?

Marriott continued an active share repurchase program, buying back approximately 28.9 million shares in the first nine months of 2007. This activity significantly reduced the number of outstanding shares, impacting the weighted average shares used in EPS calculations and demonstrating a commitment to returning capital to shareholders, although it also contributed to increased interest expense due to higher commercial paper borrowings.

What is the outlook for Marriott's lodging business based on this report?

The outlook for Marriott's lodging business appears positive, with strong RevPAR growth in both North America and international markets, driven by continued demand and effective pricing strategies. The company is also investing in future growth through new brand developments and a significant development pipeline of new rooms.

MAR 10-Q Quarterly Report Q3 FY2007 — 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 2007. The company demonstrated strong performance in its core lodging segments, driven by robust demand, increased room rates, and effective revenue management, leading to significant increases in RevPAR across its North American and International properties. This growth translated into higher fees from management and franchising, a key driver of profitability. While the lodging business showed resilience, the company's Synthetic Fuel segment experienced operational challenges and a reduction in tax credits due to rising oil prices, impacting overall profitability. Marriott also continued its aggressive share repurchase program, underscoring a commitment to returning capital to shareholders. The company maintains a strong liquidity position and adequate borrowing capacity to support its ongoing growth and operational needs.

Key Highlights

1Revenues increased by 12% for the third quarter and 10% for the first nine months of 2007 compared to the prior year, driven by strong lodging demand and increased room rates.
2Operating income for the third quarter decreased by 20% due to factors including lower timeshare sales, increased synthetic fuel operating loss, and higher general/administrative expenses, despite strong fee income growth.
3Net income for the first nine months increased by 34% to $520 million, or $1.29 per diluted share, driven by strong lodging performance and significant benefits from the Synthetic Fuel segment's tax credits.
4The company repurchased approximately 28.9 million shares of Class A Common Stock in the first nine months of 2007, demonstrating a commitment to shareholder returns.
5RevPAR for comparable company-operated North American properties increased by 7.2% for the third quarter and 6.0% year-to-date, indicating strong performance in key markets.
6The Synthetic Fuel segment, while generating significant revenue and tax credits, also incurred operational losses and faced uncertainty regarding future tax credit availability due to high oil prices, with plans to cease operations by year-end 2007.
7Marriott International announced new brand development agreements, including 'Nickelodeon Resorts by Marriott' and a global boutique lifestyle hotel brand with Ian Schrager, signaling a focus on innovation and market expansion.

MARRIOTT INTERNATIONAL INC /MD/ Quarterly Report for Q3 Ended Sep 7, 2007

Summary

Key Highlights

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