Summary
Marriott International, Inc. reported its third-quarter and nine-month results for the period ending September 30, 2016. The most significant event during this period was the completion of the acquisition of Starwood Hotels & Resorts Worldwide on September 23, 2016. This transaction substantially increased Marriott's scale, brand portfolio, and global reach. Financially, the company experienced a decrease in net income for the third quarter and the first nine months of 2016 compared to the prior year, largely due to substantial merger-related costs and charges associated with the Starwood acquisition. While the legacy Marriott business showed positive revenue growth and improvements in comparable metrics like RevPAR, the reported net income was impacted by integration expenses. The balance sheet reflects a significant increase in assets, liabilities, and equity due to the Starwood acquisition. Looking ahead, investors should note the company's focus on integrating Starwood, realizing synergies, and managing the expanded operations. While the acquisition brings considerable opportunities, it also introduces integration risks and increased debt levels, which will be key areas to monitor.
Financial Highlights
49 data points| Revenue | $3.94B |
| Operating Expenses | $3.77B |
| Operating Income | $171.00M |
| Interest Expense | $55.00M |
| Net Income | $70.00M |
| EPS (Basic) | $0.26 |
| EPS (Diluted) | $0.26 |
| Shares Outstanding (Basic) | 266.20M |
| Shares Outstanding (Diluted) | 270.50M |
Key Highlights
- 1Completed the transformative acquisition of Starwood Hotels & Resorts Worldwide on September 23, 2016, significantly expanding Marriott's global footprint and brand portfolio.
- 2Reported a decrease in net income for the three and nine months ended September 30, 2016, primarily driven by substantial merger-related costs and charges associated with the Starwood acquisition.
- 3Legacy Marriott comparable systemwide RevPAR showed modest growth, increasing by 2.5% for the third quarter and 2.7% for the first nine months.
- 4Total assets and liabilities saw a significant increase on the balance sheet due to the Starwood acquisition, with total assets rising to $25.0 billion from $6.1 billion at year-end 2015.
- 5Long-term debt increased substantially to $8.5 billion from $3.8 billion, largely due to debt issued to finance the cash portion of the Starwood acquisition.
- 6The company has substantial goodwill and intangible assets on its balance sheet following the acquisition, totaling $17.2 billion.
- 7While reporting a net loss for the eight days of Starwood operations included in the period ($131 million), the pro forma combined revenues for the nine months were $15.0 billion, an increase from $14.4 billion in the prior year.