10-Q/APeriod: Q2 FY2014

MARRIOTT INTERNATIONAL INC /MD/ Quarterly Report (Amendment) for Q2 Ended Jun 30, 2014

Filed September 5, 2014For Securities:MAR

Summary

Marriott International, Inc. (MAR) reported solid financial results for the six months ended June 30, 2014, demonstrating year-over-year growth across key revenue and profitability metrics. Total revenues increased by 6% to $6.78 billion, driven by increases in cost reimbursements, franchise fees, and incentive management fees. Net income saw a significant rise of 16% to $364 million, resulting in diluted earnings per share of $1.21, up from $0.99 in the prior year period. This performance was supported by strong RevPAR (Revenue Per Available Room) growth across comparable properties globally, indicating healthy demand and effective pricing strategies. The company's strategic focus on its asset-light model, emphasizing management and franchising, continues to drive growth with reduced capital investment. Significant investments in system expansion were noted, particularly the acquisition of Protea Hotels and a robust development pipeline. While the company faces ongoing operational and economic uncertainties, its financial flexibility, demonstrated by a strong credit facility and consistent dividend payments, positions it well for continued growth and shareholder returns.

Financial Highlights

49 data points
Beta

Revenue

$3.48B

Net Income

$192.00M

5.5% Net Margin

EPS (Diluted)

$0.64

Total Assets

$6.83B

Cash & Equivalents

$192.00M

Free Cash Flow

$392.00M

Financial Statements
Beta
Revenue$3.48B
Operating Expenses$3.17B
Operating Income$316.00M
Interest Expense$30.00M
Net Income$192.00M
EPS (Basic)$0.66
EPS (Diluted)$0.64
Shares Outstanding (Basic)292.50M
Shares Outstanding (Diluted)298.70M

Key Highlights

  • 1Net income increased by 16% to $364 million for the first six months of 2014 compared to the same period in 2013.
  • 2Diluted Earnings Per Share (EPS) rose to $1.21 from $0.99, a 22% increase year-over-year.
  • 3Total revenues grew by 6% to $6.78 billion for the first six months of 2014.
  • 4Comparable systemwide RevPAR increased by 5.8% for the three months ended June 30, 2014.
  • 5The company acquired the Protea Hotel Group's brands and hotel management business, adding 113 hotels in Sub-Saharan Africa.
  • 6Marriott International continued its share repurchase program, buying back 12.0 million shares in the first half of 2014.
  • 7The company maintained strong liquidity with $1.1 billion in available borrowing capacity under its credit facility and cash balance.

Frequently Asked Questions

For the first six months ended June 30, 2014, Marriott International reported a 6% increase in total revenues, reaching $6.78 billion, up from $6.41 billion in the same period of 2013. This growth was primarily driven by higher cost reimbursements, owned, leased, and other revenue, franchise fees, and incentive management fees.

In the second quarter of 2014, Marriott acquired Protea Hotel Group's brands and hotel management business for $193 million. This acquisition added 113 hotels (10,016 rooms) across Sub-Saharan Africa to its 'International' segment, contributing to system growth and expanding its global footprint. The acquisition also resulted in a $20 million increase in goodwill.

Marriott International added 24,584 rooms to its system in the first half of 2014, with approximately 67% located outside the United States. The company had nearly 215,000 rooms in its development pipeline at the end of the second quarter of 2014, indicating a continued focus on expanding its global presence through new hotel development and franchising.

Marriott International maintained a strong liquidity position, with $1.1 billion in available borrowing capacity from its credit facility and cash balance of $192 million as of June 30, 2014. The company's long-term debt increased slightly to $3.4 billion, primarily due to commercial paper borrowings. The credit facility contains covenants that Marriott was meeting, ensuring its ability to finance growth and meet financial obligations.