10-QPeriod: Q3 FY2021

MARRIOTT INTERNATIONAL INC /MD/ Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 3, 2021For Securities:MAR

Summary

Marriott International, Inc. (MAR) reported a strong recovery in its third quarter and the first nine months of 2021, driven by a rebound in lodging demand, particularly leisure travel. Net income for the nine months ended September 30, 2021, was $631 million, a significant improvement from a net loss of $103 million in the same period of 2020. Revenues across all fee categories (base management, franchise, and incentive management) saw substantial year-over-year increases, reflecting higher RevPAR (Revenue Per Available Room) and unit growth. The company's operational performance is closely tied to the global lodging demand, which, while recovering, remains sensitive to factors like the COVID-19 Delta variant and the pace of business transient and group travel recovery. Despite the ongoing impact of the pandemic, Marriott has actively managed its financial position, including debt management and cost control measures. The company's liquidity remains adequate, supported by its credit facility and cash on hand, though share repurchases and dividends are suspended.

Financial Highlights

44 data points
Beta

Revenue

$3.95B

Net Income

$220.00M

5.6% Net Margin

EPS (Diluted)

$0.67

Total Assets

$24.51B

Cash & Equivalents

$772.00M

Free Cash Flow

$575.00M

Financial Statements
Beta
Revenue$3.95B
Operating Expenses$3.40B
Operating Income$545.00M
Interest Expense$107.00M
Net Income$220.00M
EPS (Basic)$0.67
EPS (Diluted)$0.67
Shares Outstanding (Basic)327.30M
Shares Outstanding (Diluted)329.30M

Key Highlights

  • 1Net income for the nine months ended September 30, 2021, was $631 million, a substantial turnaround from a net loss of $103 million in the prior year period.
  • 2Gross fee revenues increased by 48% to $1,863 million for the first nine months of 2021 compared to $1,260 million in the same period of 2020, driven by strong performance in base management and franchise fees.
  • 3Worldwide comparable systemwide RevPAR improved significantly, up 118.4% in Q3 2021 and 42.2% for the first nine months of 2021 compared to the prior year periods.
  • 4The company's development pipeline remains robust with nearly 477,000 rooms in development at the end of Q3 2021.
  • 5Marriott completed a tender offer to repurchase $1 billion of its Senior Notes, funded by a new $700 million Series II Notes issuance, demonstrating active debt management.
  • 6Despite recovery, RevPAR for the nine months ended September 30, 2021, remained below pre-pandemic 2019 levels, declining 42.3% worldwide.
  • 7The company suspended share repurchases and dividends, with plans to resume them when business conditions improve and credit facility covenants permit.

Frequently Asked Questions

Marriott is showing a strong recovery from the COVID-19 pandemic, with significant improvements in net income and revenues for the first nine months of 2021 compared to the same period in 2020. While demand is recovering, particularly leisure travel, business transient and group travel are still in the process of returning to pre-pandemic levels. The company expects the recovery to continue, though it remains sensitive to the ongoing impact of COVID-19 and its variants.

Marriott is actively managing its debt. In the third quarter of 2021, they redeemed $1 billion of Senior Notes and issued $700 million in new Series II Notes. The company's credit facility provides substantial borrowing capacity, and as of September 30, 2021, they had $0.8 billion in borrowings and $3.7 billion in remaining capacity. Share repurchases and dividends remain suspended to preserve financial flexibility.

COVID-19 continues to materially impact Marriott's business, although recovery is underway. The Delta variant temporarily constrained the recovery pace in Q3 2021, particularly for business travel. While leisure demand has been strong, the overall recovery is ongoing and the company cannot predict the full duration of the impact. They continue to implement cost-saving measures and support hotel owners and franchisees.

Marriott is involved in ongoing litigation related to the 2018 Starwood data security incident. While some securities-related claims have been dismissed, other lawsuits and governmental investigations are still active. The company is unable to estimate the range of future losses beyond amounts already incurred but does not believe it will impact their long-term financial health. Additionally, they have a significant contingent purchase obligation related to the Sheraton Grand Chicago.