EX-99.2 4 dex992.htm EXHIBIT 99.2 EXHIBIT 99.2

Exhibit 99.2

 

November 11, 2003

 

MARRIOTT INTERNATIONAL, INC.

Non-GAAP Financial Measure Reconciliation

Timeshare Return on Invested Capital

($ in millions)

 

     1999
     2000
     2001
     2002
     2003 E
  

Timeshare financial results

    $ 123     $ 138     $ 147     $ 183     $ 147  

Interval International gain 1

      —         —         —         (44 )     —    

Timeshare capitalized interest

      8       21       30       23       22  
    
 
 
 
 

Earnings before interest expense and income taxes

    $ 131     $ 159     $ 177     $ 162     $ 169  
    
 
 
 
 

Average Capital Investment

    $ 1,105     $ 1,336     $ 1,748     $ 2,050     $ 2,178  
    
 
 
 
 

Return on invested capital 2

      12 %     12 %     10 %     8 %     8 %

 

1 Adjustment reflects a non-recurring gain related to the sale of our investment in Interval International.

 

2 Return on invested capital is a financial measure that is not presented in accordance with accounting principles generally accepted in the United States. We consider return on invested capital to be a meaningful indicator of our operating performance because it measures how effectively we use the money invested in our timeshare operations. Timeshare financial results as adjusted is a meaningful indicator of timeshare performance because it reflects that portion of our financial results which is recurring and as such is useful for comparability purposes and measuring the Company's trends. However, return on invested capital and financial results as adjusted should not be considered an alternative to net income, income from continuing operations or any other operating measure prescribed by accounting principles generally accepted in the United States.

 

1

 

MARRIOTT INTERNATIONAL, INC.

Non-GAAP Financial Measure Reconciliation

Adjusted Financial Results and Earnings per Share from Continuing Operations

($ in millions)

 

     FY 2001
  
    

As

Reported

    

Restructuring

Costs 1

    

Other

Charges 2

    

As

Adjusted 4

  

FINANCIAL RESULTS

                                 

Full-Service

    $ 294     $ 26     $ 58     $ 378  

Select-Service

      145       5       8       158  

Extended-Stay

      55       11       5       71  
    
 
 
 

Core Lodging Total

      494       42       71       607  

Timeshare

      147       2       —         149  
    
 
 
 

Total Lodging

      641       44       71       756  

Interest Expense

      (109 )     —         —         (109 )

Interest Income

      94       —         6       100  

Provision for Loan Losses

      (48 )     —         43       (5 )

Corporate Expenses

      (139 )     —         22       (117 )

Restructuring Costs

      (18 )     18       —         —    
    
 
 
 

Income from Continuing Operations before Income Taxes

      421       62       142       625  

Income Tax Provision

      (152 )     (23 )     (52 )     (227 )
    
 
 
 

Income from Continuing Operations

    $ 269     $ 39     $ 90     $ 398  
    
 
 
 

Diluted earnings per share from continuing operations 3

    $ 1.05                     $ 1.54  

Diluted Shares

      256.7                       260.8  

 

1 Adjustment reflects non-recurring restructuring costs, as noted in our fiscal 2002 Form 10-K.

 

2 Adjustment reflects non-recurring other charges, as noted in our fiscal 2002 Form 10-K.

 

3 Adjusted earnings per share from continuing operations is a financial measure that is not presented in accordance with accounting principles generally accepted in the United States. We consider adjusted earnings per share from continuing operations to be a meaningful indicator of our operating performance because it reflects that portion of our earnings per share from continuing operations which is recurring and as such is useful for comparability purposes and measuring the Company’s financial trends. However, adjusted earnings per share from continuing operations should not be considered an alternative to earnings per share from continuing operations or any other operating measure prescribed by accounting principles generally accepted in the United States.

 

4 Adjusted financial results is a financial measure that is not presented in accordance with accounting principles generally accepted in the United States. We consider adjusted financial results to be a meaningful indicator of our operating performance because it reflects that portion of our financial results which is recurring and as such is useful for comparability purposes and measuring the Company’s trends. However, adjusted financial results should not be considered an alternative to net income, financial results, operating profit, or any other operating measure prescribed by accounting principles generally accepted in the United States.

 

2

MARRIOTT INTERNATIONAL, INC.

Non-GAAP Financial Measure Reconciliation

Adjusted Financial Results and Earnings per Share from Continuing Operations

($ in millions)

 

     FY 2002
  
    

As

Reported

    

Goodwill

Write-down 1

    

Interval

International

Gain 2

    

As

Adjusted 4

  

FINANCIAL RESULTS

                                 

Lodging

                                 

Full-Service

    $ 397     $ —       $ —       $ 397  

Select-Service

      130       —         —         130  

Extended-Stay

      (3 )     50       —         47  
    
 
 
 

Core Lodging Total

      524       50       —         574  

Timeshare

      183       —         (44 )     139  
    
 
 
 

Total Lodging

      707       50       (44 )     713  

Synthetic Fuel

      (134 )     —         —         (134 )
    
 
 
 
       573       50       (44 )     579  

Interest Expense

      (86 )     —         —         (86 )

Interest Income

      122       —         —         122  

Provision for Loan Losses

      (12 )     —         —         (12 )

Corporate Expenses

      (126 )     —         —         (126 )
    
 
 
 

Income from Continuing Operations before Income Taxes

      471       50       (44 )     477  

Income Tax (Provision)/Benefit

      (32 )     (18 )     15       (35 )
    
 
 
 

Income from Continuing Operations

    $ 439     $ 32     $ (29 )   $ 442  
    
 
 
 

Diluted earnings per share from continuing operations 3

    $ 1.74                     $ 1.75  

Diluted Shares

      254.6                       254.6  

 

1 Adjustment reflects a non-recurring write-down of acquisition goodwill associated with our executive housing business, as noted in our fiscal 2002 Form 10-K.

 

2 Adjustment reflects a non-recurring gain related to the sale of our investment in Interval International, as noted in our fiscal 2002 Form 10-K.

 

3 Adjusted earnings per share from continuing operations is a financial measure that is not presented in accordance with accounting principles generally accepted in the United States. We consider adjusted earnings per share from continuing operations to be a meaningful indicator of our operating performance because it reflects that portion of our earnings per share from continuing operations which is recurring and as such is useful for comparability purposes and measuring the Company’s financial trends. However, adjusted earnings per share from continuing operations should not be considered an alternative to earnings per share from continuing operations or any other operating measure prescribed by accounting principles generally accepted in the United States.

 

4 Adjusted financial results is a financial measure that is not presented in accordance with accounting principles generally accepted in the United States. We consider adjusted financial results to be a meaningful indicator of our operating performance because it reflects that portion of our financial results which is recurring and as such is useful for comparability purposes and measuring the Company’s trends. However, adjusted financial results should not be considered an alternative to net income, financial results, operating profit, or any other operating measure prescribed by accounting principles generally accepted in the United States.

 

3

MARRIOTT INTERNATIONAL, INC.

Non-GAAP Financial Measure Reconciliation

Earnings Before Interest Expense, Taxes, Depreciation and

Amortization from continuing operations 2

($ in millions)

 

     Q4 2002
     Q1 2003
     Q2 2003
     Q3 2003
    LTM 1
  

Income from continuing operations

    $ 116     $ 87     $ 126     $ 93    $ 422  

Depreciation

      38       29       27       30      124  

Amortization

      10       5       7       7      29  

Interest expense

      27       26       25       26      104  

Income tax (benefit)/provision

      (8 )     (40 )     (16 )     33      (31 )
    
 
 
 
  

EBITDA from continuing operations 2

    $ 183     $ 107     $ 169     $ 189    $ 648  
    
 
 
 
  

 

 

1 Reflects the four quarters ended September 12, 2003.

 

2 Earnings before interest expense, income taxes, depreciation and amortization (EBITDA) from continuing operations is a financial measure that is not presented in accordance with accounting principles generally accepted in the United States. We consider EBITDA from continuing operations to be an indicator of operating performance, which can be used to measure our ability to service debt, fund capital expenditures and expand our business. However, EBITDA from continuing operations is not an alternative to net income, financial results, or any other operating measure prescribed by accounting principles generally accepted in the United States.

 

4

MARRIOTT INTERNATIONAL, INC.

Detail

Timeshare Cash from Operations

($ in millions)

 

     2000
     2001
     2002
     2003E
     2006E
  

Timeshare financial results

    $ 138     $ 147     $ 183     $ 147     $ 287  

Gain on sale 1

      —         —         (44 )     —         —    

Tax expense 2

      (51 )     (53 )     (48 )     (51 )     (102 )

Timeshare operating activity, net

      (195 )     (358 )     (63 )     (114 )     36  

Depreciation and amortization

      22       34       38       44       49  
    
 
 
 
 

Timeshare cash (used in) provided by operations

    $ (86 )   $ (230 )   $ 66     $ 26     $ 270  
    
 
 
 
 

 

1 The gain on sale is not an operating activity and therefore is deducted. The proceeds from the sale are included in investing activities on the statement of cash flows.

 

2 Tax expense is computed using the Company’s core tax rates for the respective years and assumes the taxes are paid in cash at the time the tax expense is incurred.

 

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