10-QPeriod: Q1 FY2011

MARRIOTT INTERNATIONAL INC /MD/ Quarterly Report for Q1 Ended Mar 25, 2011

Filed April 22, 2011For Securities:MAR

Summary

Marriott International, Inc. (MAR) reported its first quarter 2011 financial results, demonstrating a continued recovery in the lodging sector. Total revenues increased by 6% year-over-year, driven by higher cost reimbursements, base management fees, and franchise fees, reflecting strengthening RevPAR and unit growth. Operating income saw a modest increase, though this was partially offset by a significant rise in general, administrative, and other expenses. Net income rose by 22% to $101 million, with diluted EPS improving to $0.26. The company highlighted positive RevPAR growth across most segments and regions, particularly in Asia, Europe, and North America, though the Middle East and Japan faced headwinds. Notably, Marriott announced plans to spin off its timeshare operations into a separate, publicly traded company later in 2011, aiming to unlock value and allow both entities to focus on their respective core businesses. The company also resumed issuing commercial paper, indicating improved liquidity.

Financial Highlights

51 data points
Beta

Revenue

$2.78B

Net Income

$101.00M

3.6% Net Margin

EPS (Diluted)

$0.26

Total Assets

$8.76B

Cash & Equivalents

$144.00M

Free Cash Flow

$77.00M

Financial Statements
Beta
Revenue$2.78B
Operating Expenses$2.59B
Operating Income$191.00M
Interest Expense$41.00M
Net Income$101.00M
EPS (Basic)$0.27
EPS (Diluted)$0.26
Shares Outstanding (Basic)367.10M
Shares Outstanding (Diluted)381.80M

Key Highlights

  • 1Total revenues increased 6% to $2.78 billion compared to the prior year, driven by growth in management and franchise fees and higher cost reimbursements.
  • 2Net income grew 22% to $101 million ($0.26 per diluted share), indicating a recovering operational performance.
  • 3Worldwide RevPAR (Revenue Per Available Room) for comparable properties increased by 6.5% on a constant dollar basis, signaling a strengthening lodging demand.
  • 4Marriott announced plans to spin off its timeshare business into a separate company, expected to be completed by late 2011.
  • 5General, administrative, and other expenses increased by 15% to $159 million, primarily due to higher incentive compensation and other international costs.
  • 6The company resumed issuing commercial paper in March 2011, reflecting improved liquidity and credit ratings.
  • 7Company-operated house profit margins increased by 30 basis points globally, driven by higher occupancy, rate increases, and cost controls.

Frequently Asked Questions

Marriott International showed positive financial performance in the first quarter of 2011. Revenues increased by 6% year-over-year to $2.78 billion, driven by higher management and franchise fees and increased cost reimbursements. Net income rose by 22% to $101 million, with diluted earnings per share improving to $0.26. This indicates a recovery in the company's core lodging business.

The revenue increase was primarily driven by higher base management and franchise fees, which grew due to stronger RevPAR (Revenue Per Available Room) and system-wide unit growth. Cost reimbursements also increased significantly, reflecting higher property-level demand and system growth, although this revenue has no impact on operating income or net income.

Marriott announced its plan to spin off its timeshare operations and development business into a new, independent, publicly traded company. This separation is expected to be completed by late 2011 and aims to allow both the lodging management/franchise business and the timeshare business to focus on their respective strategic priorities and unlock shareholder value.

The report indicates an improving lodging industry. Worldwide RevPAR for comparable properties increased by 6.5%, with occupancy and average daily rates also showing positive trends. While recovery is evident, RevPAR remains below 2008 levels. Asia, Europe, and North America showed strengthening performance, while the Middle East and Japan experienced weaker demand due to regional instability and natural disaster aftermath, respectively.