10-QPeriod: Q1 FY2014

MARRIOTT INTERNATIONAL INC /MD/ Quarterly Report for Q1 Ended Mar 31, 2014

Filed April 30, 2014For Securities:MAR

Summary

Marriott International reported a solid first quarter for 2014, with net income increasing by 26.5% to $172 million, or $0.57 per diluted share, compared to $136 million, or $0.43 per diluted share, in the prior year period. This growth was driven by a 5% increase in total revenues to $3.3 billion, primarily due to higher cost reimbursements and franchise fees. Operating income also saw a healthy increase of 12.4% to $254 million. The company's performance benefited from a favorable economic climate in many markets, low supply growth, and improved pricing. Comparable systemwide RevPAR increased by 6.2%, indicating strong operational performance across its properties. Marriott also continues to expand its global footprint, adding 5,855 rooms to its system in the quarter and maintaining a robust development pipeline of over 200,000 rooms. Financially, Marriott demonstrated effective cost management, with general, administrative, and other expenses decreasing by 10%. The company also returned capital to shareholders through $50 million in dividend payments and significant share repurchases totaling $320 million in the quarter, underscoring a focus on shareholder value alongside strategic growth.

Financial Highlights

48 data points
Beta

Revenue

$3.29B

Net Income

$172.00M

5.2% Net Margin

EPS (Diluted)

$0.57

Total Assets

$6.67B

Cash & Equivalents

$184.00M

Free Cash Flow

$121.00M

Financial Statements
Beta
Revenue$3.29B
Operating Expenses$3.04B
Operating Income$254.00M
Interest Expense$30.00M
Net Income$172.00M
EPS (Basic)$0.58
EPS (Diluted)$0.57
Shares Outstanding (Basic)296.10M
Shares Outstanding (Diluted)303.30M

Key Highlights

  • 1Net income increased by 26.5% to $172 million ($0.57/share diluted) in Q1 2014, up from $136 million ($0.43/share diluted) in Q1 2013.
  • 2Total revenues grew 5% to $3.3 billion, driven by an increase in cost reimbursements and franchise fees.
  • 3Operating income rose 12.4% to $254 million.
  • 4Comparable systemwide RevPAR increased by 6.2%, indicating strong performance in revenue per available room.
  • 5Marriott added 5,855 rooms to its system, reflecting continued global expansion.
  • 6Shareholders were rewarded with $50 million in dividends and $320 million in share repurchases during the quarter.
  • 7General, administrative, and other expenses decreased by 10% to $148 million, demonstrating effective cost control.

Frequently Asked Questions

Marriott's revenue growth was primarily driven by a 5% increase in total revenues to $3.3 billion. Key contributors included higher cost reimbursements ($122 million increase) and increased franchise fees ($12 million increase), alongside growth in owned, leased, and other revenue, incentive management fees, and base management fees.

Profitability saw a significant improvement. Net income increased by 26.5% to $172 million in the first quarter of 2014, up from $136 million in the same period of 2013. Diluted earnings per share also increased by 33% to $0.57 from $0.43.

Marriott continued its global expansion, adding 5,855 rooms to its system in the first quarter of 2014. The company reported a robust development pipeline exceeding 200,000 rooms, which includes hotels under construction, under signed contracts, and approved for development.

Marriott demonstrated effective cost management. General, administrative, and other expenses decreased by 10% to $148 million in the first quarter of 2014 compared to the prior year. Depreciation and amortization expenses increased, largely due to an impairment charge on three EDITION hotels, but overall operating income still saw substantial growth.