Summary
Marriott International, Inc. reported a significant improvement in financial performance for the first half of 2010 compared to the same period in 2009. Net income attributable to Marriott shareholders surged to $202 million from $14 million, reflecting a strong recovery in the lodging sector as business conditions improved, with higher occupancies and stabilizing room rates. The company experienced growth across most of its segments, particularly in North America and International Lodging, and saw a substantial rebound in its Luxury Lodging segment. The Timeshare segment also showed a significant improvement in segment income, driven by higher financing revenue and services revenue. A key operational highlight was the company's adoption of new accounting standards (ASU Nos. 2009-16 and 2009-17) which led to the consolidation of previously off-balance sheet special purpose entities. This resulted in a one-time non-cash reduction to shareholders' equity but also contributed to increased reported financing revenue in the Timeshare segment. Despite economic headwinds, Marriott maintained rigorous cost controls across its operations, contributing to improved profitability. The company ended the period with a solid liquidity position, supported by its credit facilities and operating cash flow, and maintained its leverage covenant compliance.
Financial Highlights
49 data points| Revenue | $2.77B |
| Operating Expenses | $2.54B |
| Operating Income | $226.00M |
| Interest Expense | $44.00M |
| Net Income | $119.00M |
| EPS (Basic) | $0.33 |
| EPS (Diluted) | $0.31 |
| Shares Outstanding (Basic) | 362.10M |
| Shares Outstanding (Diluted) | 377.40M |
Key Highlights
- 1Marriott International reported a substantial increase in Net Income Attributable to Marriott shareholders to $202 million for the first half of 2010, up from $14 million in the prior year period, indicating a strong recovery in profitability.
- 2Revenues increased by 7% to $5.4 billion for the first half of 2010, driven by higher cost reimbursements, Timeshare sales and services revenue, and improvements in base management and franchise fees.
- 3Operating income more than doubled to $406 million for the first half of 2010, a significant improvement from $139 million in the prior year, reflecting operational efficiencies and revenue growth.
- 4The company adopted new accounting standards (ASU Nos. 2009-16 and 2009-17), leading to the consolidation of 13 special purpose entities. This resulted in a one-time after-tax reduction to shareholders' equity of $146 million but positively impacted reported financing revenue in the Timeshare segment.
- 5Systemwide RevPAR (Revenue Per Available Room) for comparable properties showed positive growth, with a 2.3% increase in North America and a 6.5% increase internationally for the first half of 2010, signaling a recovery in lodging demand.
- 6Marriott maintained strict cost controls across its operations, which, combined with improved demand, led to higher property-level house profit margins and contributed to the overall earnings improvement.