Summary
Marriott International reported its financial results for the second quarter and first half of 2019. While net income saw a significant decrease in the second quarter compared to the prior year ($232 million vs. $667 million), this was largely due to substantial one-time charges. For the first six months, net income was $607 million, down from $1,087 million in the prior year, also impacted by significant charges. The company highlighted continued growth in its property count and systemwide rooms. Net fee revenues showed a moderate increase, driven primarily by franchise and base management fees. However, the company also incurred significant merger-related costs and charges, notably an accrual for a potential fine from the UK's Information Commissioner's Office (ICO) related to the 2018 data security incident, which materially impacted profitability. The company continues to manage its liquidity and capital resources effectively, with a strong credit facility in place.
Financial Highlights
45 data points| Revenue | $5.30B |
| Operating Expenses | $4.90B |
| Operating Income | $409.00M |
| Interest Expense | $102.00M |
| Net Income | $232.00M |
| EPS (Basic) | $0.70 |
| EPS (Diluted) | $0.69 |
| Shares Outstanding (Basic) | 333.80M |
| Shares Outstanding (Diluted) | 336.40M |
Key Highlights
- 1Net income for the three months ended June 30, 2019, was $232 million, a significant decrease from $667 million in the same period of 2018, largely due to merger-related costs and charges including an accrual for a potential ICO fine.
- 2Net fee revenues for the second quarter of 2019 increased by 5% to $984 million, primarily driven by growth in franchise fees (+11%) and base management fees (+3%).
- 3The company experienced a 4% decrease in cost reimbursement revenue, net of reimbursed expenses, for the second quarter, primarily due to lower Loyalty Program revenues and higher redemption costs.
- 4Merger-related costs and charges surged to $173 million in Q2 2019 from $18 million in Q2 2018, significantly impacted by a $126 million accrual for the potential ICO fine related to the data security incident.
- 5Comparable worldwide systemwide RevPAR increased by 1.2% for both the three and six months ended June 30, 2019, indicating stable demand.
- 6Marriott's property count grew to 7,100 properties (1,345,906 rooms) by June 30, 2019, adding 226 properties in the first half of the year.
- 7The company amended and restated its revolving credit facility, increasing the aggregate amount of available borrowings to $4.5 billion, ensuring continued financial flexibility.