10-QPeriod: Q3 FY2014

MARRIOTT INTERNATIONAL INC /MD/ Quarterly Report for Q3 Ended Sep 30, 2014

Filed October 29, 2014For Securities:MAR

Summary

Marriott International reported strong financial results for the nine months ended September 30, 2014, with net income increasing by 17% to $556 million and diluted EPS growing by 23% to $1.86 compared to the same period in 2013. This growth was driven by robust performance across all segments, particularly in North America, with RevPAR increasing by 6.7% globally. The company also saw significant system-wide room growth, bolstered by the acquisition of Protea Hotels in Africa and strategic development. Key financial highlights include a substantial increase in operating income and improved RevPAR driven by higher occupancy and average daily rates. Marriott continued its disciplined approach to capital allocation, including significant share repurchases and dividend payments. The company's business model, focused on management and franchising, demonstrates resilience and ability to generate stable earnings while minimizing capital investment, positioning it well for continued growth.

Financial Highlights

50 data points
Beta

Revenue

$3.46B

Net Income

$192.00M

5.5% Net Margin

EPS (Diluted)

$0.65

Total Assets

$6.85B

Cash & Equivalents

$150.00M

Free Cash Flow

$170.00M

Financial Statements
Beta
Revenue$3.46B
Operating Expenses$3.16B
Operating Income$298.00M
Interest Expense$29.00M
Net Income$192.00M
EPS (Basic)$0.66
EPS (Diluted)$0.65
Shares Outstanding (Basic)288.90M
Shares Outstanding (Diluted)295.40M

Key Highlights

  • 1Net income for the first nine months of 2014 rose to $556 million, a 17% increase year-over-year.
  • 2Diluted Earnings Per Share (EPS) grew by 23% to $1.86 for the first nine months of 2014.
  • 3Worldwide comparable systemwide RevPAR increased by 6.7% for the first nine months of 2014.
  • 4The company expanded its global footprint with the acquisition of Protea Hotels in Sub-Saharan Africa.
  • 5Operating income for the first nine months of 2014 increased by $118 million to $868 million.
  • 6Marriott returned significant capital to shareholders through $167 million in dividends paid and substantial share repurchases.
  • 7The company maintained a strong development pipeline, adding nearly 225,000 rooms to its system by the end of the third quarter.

Frequently Asked Questions

Marriott's revenue growth was primarily driven by higher cost reimbursements ($481 million increase), franchise fees ($57 million increase), base management fees ($40 million increase), and owned, leased, and other revenue ($57 million increase). This was supported by higher occupancies, system-wide room growth, and increased RevPAR due to strong demand across various markets.

The acquisition of Protea Hotels in the second quarter of 2014 added 113 hotels with 10,016 rooms to Marriott's International segment portfolio. This contributed to the increase in owned, leased, and other revenue and expanded Marriott's presence in the Sub-Saharan African market, supporting overall system growth and international segment performance.

Marriott focuses on a capital-light business model emphasizing management and franchising. During the first nine months of 2014, the company paid $167 million in dividends and repurchased 16.5 million shares of its common stock. It also maintained a strong credit facility and access to capital markets to support growth and liquidity.

All segments showed positive performance. North America continued to be strong with good RevPAR growth. The International segment also saw an 11% increase in segment revenue for the third quarter, driven by acquisitions like Protea Hotels and strong demand in regions like Asia Pacific and Caribbean & Latin America, despite some headwinds in Eastern Europe due to geopolitical issues.