Delaware | 1-13881 | 52-2055918 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
10400 Fernwood Road, Bethesda, Maryland | 20817 | |
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
Financial Results for the Quarter Ended June 30, 2016 Marriott International, Inc. (“Marriott”) today issued a press release reporting financial results for the quarter ended June 30, 2016. A copy of Marriott’s press release is attached as Exhibit 99 and incorporated by reference. |
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits. The following exhibits are furnished with this report: |
Exhibit 99 | Press release issued on July 27, 2016, reporting financial results for the quarter ended June 30, 2016. |
MARRIOTT INTERNATIONAL, INC. | ||||||||
Date: July 27, 2016 | By: | /s/ Bao Giang Val Bauduin | ||||||
Bao Giang Val Bauduin | ||||||||
Controller and Chief Accounting Officer |
Exhibit No. | Description | |
99 | Press release issued on July 27, 2016, reporting financial results for the quarter ended June 30, 2016. |
• | Second quarter reported diluted EPS totaled $0.96, a 10 percent increase over prior year results. Excluding transition and transaction costs related to the Starwood acquisition, second quarter adjusted diluted EPS totaled $1.03, an 18 percent increase over prior year results; |
• | North American comparable systemwide constant dollar RevPAR rose 3.2 percent in the second quarter. On a constant dollar basis, worldwide comparable systemwide RevPAR rose 2.9 percent in the second quarter; |
• | At the end of the second quarter, Marriott’s worldwide development pipeline increased to more than 285,000 rooms, including approximately 33,000 rooms approved, but not yet subject to signed contracts; |
• | Marriott added nearly 11,000 rooms during the second quarter, including approximately 1,700 rooms converted from competitor brands and roughly 3,600 rooms in international markets; |
• | Second quarter reported net income totaled $247 million, a 3 percent increase over prior year results. Excluding transition and transaction costs related to the Starwood acquisition, second quarter adjusted net income totaled $265 million, a 10 percent increase over prior year results; |
• | Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $494 million in the quarter, an 8 percent increase over second quarter 2015 adjusted EBITDA; |
• | Acquisition of Starwood Hotels & Resorts Worldwide is expected to close in the coming weeks. |
Third Quarter 2016 | Fourth Quarter 2016 | |
Total fee revenue | $495 million to $500 million | $485 million to $490 million |
Owned, leased and other revenue, net of direct expenses | Approx. $70 million | $80 million to $85 million |
Depreciation, amortization, and other expenses | Approx. $35 million | Approx. $34 million |
General, administrative, and other expenses | Approx. $160 million | Approx. $170 million |
Operating income | $370 million to $375 million | $361 million to $371 million |
Gains and other income | Approx. $5 million | Approx. $0 million |
Equity in earnings (losses) | Approx. $5 million | Approx. $0 million |
Adjusted EBITDA | $476 million to $481 million | $461 million to $471 million |
MARRIOTT INTERNATIONAL, INC. | |
PRESS RELEASE SCHEDULES | |
QUARTER 2, 2016 | |
TABLE OF CONTENTS | |
Consolidated Statements of Income | |
Total Lodging Products | |
Key Lodging Statistics | |
Adjusted EBITDA | |
Adjusted EBITDA Third Quarter Forecast | |
Adjusted EBITDA Fourth Quarter Forecast | |
Adjusted EBITDA Full Year Forecast | |
Adjusted Operating Income Margin and Adjusted EBITDA Margin | |
Return on Invested Capital | |
Non-GAAP Financial Measures |
As Reported | As Adjusted** | As Reported | Percent | |||||||||||||||
Three Months Ended | Merger-Related | Three Months Ended | Three Months Ended | Better/(Worse) | ||||||||||||||
June 30, 2016 | Costs** | June 30, 2016 | June 30, 2015 | Adjusted 2016 vs. 2015 | ||||||||||||||
REVENUES | ||||||||||||||||||
Base management fees | $ | 186 | $ | — | $ | 186 | $ | 191 | (3 | ) | ||||||||
Franchise fees | 235 | — | 235 | 221 | 6 | |||||||||||||
Incentive management fees | 94 | — | 94 | 81 | 16 | |||||||||||||
Owned, leased, and other revenue 1 | 245 | — | 245 | 243 | 1 | |||||||||||||
Cost reimbursements 2 | 3,142 | — | 3,142 | 2,953 | 6 | |||||||||||||
Total Revenues | 3,902 | — | 3,902 | 3,689 | 6 | |||||||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||||||
Owned, leased, and other - direct3 | 173 | — | 173 | 183 | 5 | |||||||||||||
Reimbursed costs | 3,142 | — | 3,142 | 2,953 | (6 | ) | ||||||||||||
Depreciation, amortization, and other 4 | 30 | — | 30 | 32 | 6 | |||||||||||||
General, administrative, and other 5 | 168 | 14 | 154 | 152 | (1 | ) | ||||||||||||
Total Expenses | 3,513 | 14 | 3,499 | 3,320 | (5 | ) | ||||||||||||
OPERATING INCOME | 389 | (14 | ) | 403 | 369 | 9 | ||||||||||||
Gains and other income, net 6 | — | — | — | 20 | (100 | ) | ||||||||||||
Interest expense | (57 | ) | (11 | ) | (46 | ) | (42 | ) | (10 | ) | ||||||||
Interest income | 7 | — | 7 | 6 | 17 | |||||||||||||
Equity in earnings 7 | 5 | — | 5 | 2 | 150 | |||||||||||||
INCOME BEFORE INCOME TAXES | 344 | (25 | ) | 369 | 355 | 4 | ||||||||||||
Provision for income taxes | (97 | ) | 7 | (104 | ) | (115 | ) | 10 | ||||||||||
NET INCOME | $ | 247 | $ | (18 | ) | $ | 265 | $ | 240 | 10 | ||||||||
EARNINGS PER SHARE | ||||||||||||||||||
Earnings per share - basic | $ | 0.97 | $ | (0.07 | ) | $ | 1.04 | $ | 0.88 | 18 | ||||||||
Earnings per share - diluted | $ | 0.96 | $ | (0.07 | ) | $ | 1.03 | $ | 0.87 | 18 | ||||||||
Basic Shares | 254.3 | 254.3 | 254.4 | 272.4 | ||||||||||||||
Diluted Shares | 258.0 | 258.0 | 258.9 | 277.3 |
1 | Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, branding fees, and other revenue. |
2 | Cost reimbursements include reimbursements from properties for Marriott-funded operating expenses. |
3 | Owned, leased, and other - direct expenses include operating expenses related to our owned or leased hotels, including lease payments and pre-opening expenses. |
4 | Depreciation, amortization, and other expenses include depreciation for fixed assets, amortization of capitalized costs incurred to acquire management, franchise, and license agreements, and any related impairments, accelerations, or write-offs. |
5 | General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses. |
6 | Gains and other income, net includes gains and losses on the sale of real estate, the sale or other-than-temporary impairment of joint ventures and investments, and results from cost method investments. |
7 | Equity in earnings include our equity in earnings or losses of unconsolidated equity method investments. |
As Reported | As Adjusted** | As Reported | Percent | |||||||||||||||
Six Months Ended | Merger-Related | Six Months Ended | Six Months Ended | Better/(Worse) | ||||||||||||||
June 30, 2016 | Costs** | June 30, 2016 | June 30, 2015 | Adjusted 2016 vs. 2015 | ||||||||||||||
REVENUES | ||||||||||||||||||
Base management fees | $ | 358 | $ | — | $ | 358 | $ | 356 | 1 | |||||||||
Franchise fees | 442 | — | 442 | 425 | 4 | |||||||||||||
Incentive management fees | 195 | — | 195 | 170 | 15 | |||||||||||||
Owned, leased, and other revenue 1 | 492 | — | 492 | 500 | (2 | ) | ||||||||||||
Cost reimbursements 2 | 6,187 | — | 6,187 | 5,751 | 8 | |||||||||||||
Total Revenues | 7,674 | — | 7,674 | 7,202 | 7 | |||||||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||||||
Owned, leased, and other - direct 3 | 339 | — | 339 | 377 | 10 | |||||||||||||
Reimbursed costs | 6,187 | — | 6,187 | 5,751 | (8 | ) | ||||||||||||
Depreciation, amortization, and other 4 | 61 | — | 61 | 76 | 20 | |||||||||||||
General, administrative, and other 5 | 331 | 22 | 309 | 297 | (4 | ) | ||||||||||||
Total Expenses | 6,918 | 22 | 6,896 | 6,501 | (6 | ) | ||||||||||||
OPERATING INCOME | 756 | (22 | ) | 778 | 701 | 11 | ||||||||||||
Gains and other income, net 6 | — | — | — | 20 | (100 | ) | ||||||||||||
Interest expense | (104 | ) | (13 | ) | (91 | ) | (78 | ) | (17 | ) | ||||||||
Interest income | 13 | — | 13 | 14 | (7 | ) | ||||||||||||
Equity in earnings 7 | 5 | — | 5 | 5 | 0 | |||||||||||||
INCOME BEFORE INCOME TAXES | 670 | (35 | ) | 705 | 662 | 6 | ||||||||||||
Provision for income taxes | (204 | ) | 10 | (214 | ) | (215 | ) | 0 | ||||||||||
NET INCOME | $ | 466 | $ | (25 | ) | $ | 491 | $ | 447 | 10 | ||||||||
EARNINGS PER SHARE | ||||||||||||||||||
Earnings per share - basic | $ | 1.83 | $ | (0.10 | ) | $ | 1.93 | $ | 1.63 | 18 | ||||||||
Earnings per share - diluted | $ | 1.80 | $ | (0.10 | ) | $ | 1.90 | $ | 1.59 | 19 | ||||||||
Basic Shares | 254.3 | 254.3 | 254.3 | 275.1 | ||||||||||||||
Diluted Shares | 258.7 | 258.7 | 258.7 | 280.6 |
1 | Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, branding fees, and other revenue. |
2 | Cost reimbursements include reimbursements from properties for Marriott-funded operating expenses. |
3 | Owned, leased, and other - direct expenses include operating expenses related to our owned or leased hotels, including lease payments and pre-opening expenses. |
4 | Depreciation, amortization, and other expenses include depreciation for fixed assets, amortization of capitalized costs incurred to acquire management, franchise, and license agreements, and any related impairments, accelerations, or write-offs. |
5 | General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses. |
6 | Gains and other income, net includes gains and losses on the sale of real estate, the sale or other-than-temporary impairment of joint ventures and investments, and results from cost method investments. |
7 | Equity in earnings include our equity in earnings or losses of unconsolidated equity method investments. |
Number of Properties | Number of Rooms | |||||||||||||
Brand | June 30, 2016 | June 30, 2015 | vs. June 30, 2015 | June 30, 2016 | June 30, 2015 | vs. June 30, 2015 | ||||||||
North American Full-Service | ||||||||||||||
Marriott Hotels | 365 | 364 | 1 | 147,935 | 146,874 | 1,061 | ||||||||
Renaissance Hotels | 84 | 81 | 3 | 28,038 | 28,322 | (284 | ) | |||||||
Autograph Collection Hotels | 60 | 49 | 11 | 13,714 | 11,562 | 2,152 | ||||||||
Gaylord Hotels | 5 | 5 | — | 8,098 | 8,098 | — | ||||||||
Delta Hotels and Resorts | 37 | 37 | — | 9,784 | 9,595 | 189 | ||||||||
The Ritz-Carlton Hotels | 40 | 40 | — | 11,839 | 11,691 | 148 | ||||||||
The Ritz-Carlton Residences | 33 | 32 | 1 | 4,056 | 3,812 | 244 | ||||||||
EDITION Hotels | 2 | 2 | — | 567 | 568 | (1 | ) | |||||||
EDITION Residences | 1 | 1 | — | 25 | 25 | — | ||||||||
North American Limited-Service | ||||||||||||||
Courtyard | 936 | 895 | 41 | 131,647 | 126,409 | 5,238 | ||||||||
Residence Inn | 703 | 681 | 22 | 86,088 | 83,227 | 2,861 | ||||||||
TownePlace Suites | 288 | 260 | 28 | 28,954 | 26,111 | 2,843 | ||||||||
Fairfield Inn & Suites | 793 | 743 | 50 | 72,856 | 68,375 | 4,481 | ||||||||
SpringHill Suites | 349 | 327 | 22 | 41,497 | 38,652 | 2,845 | ||||||||
AC Hotels by Marriott1 | 8 | 5 | 3 | 1,352 | 911 | 441 | ||||||||
Moxy Hotels | 2 | — | 2 | 294 | — | 294 | ||||||||
International | ||||||||||||||
Marriott Hotels | 247 | 228 | 19 | 75,684 | 69,892 | 5,792 | ||||||||
Marriott Executive Apartments | 27 | 27 | — | 4,131 | 4,149 | (18 | ) | |||||||
Renaissance Hotels | 78 | 78 | — | 23,913 | 24,361 | (448 | ) | |||||||
Autograph Collection Hotels1 | 42 | 37 | 5 | 10,223 | 9,428 | 795 | ||||||||
Protea Hotels | 97 | 105 | (8 | ) | 9,284 | 9,864 | (580 | ) | ||||||
The Ritz-Carlton Hotels | 52 | 48 | 4 | 14,686 | 14,057 | 629 | ||||||||
The Ritz-Carlton Serviced Apartments | 4 | 4 | — | 579 | 579 | — | ||||||||
The Ritz-Carlton Residences | 8 | 8 | — | 416 | 416 | — | ||||||||
Bulgari Hotels & Resorts | 3 | 3 | — | 202 | 202 | — | ||||||||
Bulgari Residences | 1 | 1 | — | 5 | 5 | — | ||||||||
EDITION Hotels | 2 | 2 | — | 251 | 251 | — | ||||||||
Courtyard | 127 | 107 | 20 | 25,753 | 21,374 | 4,379 | ||||||||
Residence Inn | 7 | 7 | — | 717 | 717 | — | ||||||||
Fairfield Inn & Suites | 8 | 4 | 4 | 1,234 | 622 | 612 | ||||||||
AC Hotels by Marriott1 | 83 | 77 | 6 | 10,277 | 9,448 | 829 | ||||||||
Moxy Hotels | 2 | 1 | 1 | 414 | 162 | 252 | ||||||||
Timeshare2 | 60 | 58 | 2 | 12,889 | 12,876 | 13 | ||||||||
Total Lodging | 4,554 | 4,317 | 237 | 777,402 | 742,635 | 34,767 |
1 | Results for all AC Hotels by Marriott properties and five Autograph Collection properties are presented in the “Equity in earnings” caption of our Consolidated Statements of Income. |
2 | Timeshare property and room counts are as of June 17, 2016 and June 19, 2015, the end of Marriott Vacation Worldwide’s second quarter for 2016 and 2015, respectively. |
Comparable Company-Operated International Properties1 | ||||||||||||||||||
Three Months Ended June 30, 2016 and June 30, 2015 | ||||||||||||||||||
REVPAR | Occupancy | Average Daily Rate | ||||||||||||||||
Region | 2016 | vs. 2015 | 2016 | vs. 2015 | 2016 | vs. 2015 | ||||||||||||
Caribbean & Latin America | $ | 153.47 | -2.6 | % | 70.2 | % | -1.7 | % | pts. | $ | 218.68 | -0.1 | % | |||||
Europe | $ | 121.50 | 2.5 | % | 76.7 | % | -0.3 | % | pts. | $ | 158.42 | 2.9 | % | |||||
Middle East & Africa | $ | 87.07 | -7.1 | % | 61.0 | % | -2.1 | % | pts. | $ | 142.68 | -3.8 | % | |||||
Asia Pacific | $ | 106.95 | 5.2 | % | 74.8 | % | 4.2 | % | pts. | $ | 142.97 | -0.7 | % | |||||
Total International2 | $ | 112.91 | 1.1 | % | 72.3 | % | 0.8 | % | pts. | $ | 156.25 | -0.1 | % | |||||
Worldwide4 | $ | 134.89 | 2.8 | % | 77.1 | % | 1.3 | % | pts. | $ | 174.92 | 1.1 | % |
Comparable Systemwide International Properties1 | ||||||||||||||||||
Three Months Ended June 30, 2016 and June 30, 2015 | ||||||||||||||||||
REVPAR | Occupancy | Average Daily Rate | ||||||||||||||||
Region | 2016 | vs. 2015 | 2016 | vs. 2015 | 2016 | vs. 2015 | ||||||||||||
Caribbean & Latin America | $ | 144.97 | -0.7 | % | 69.2 | % | -0.7 | % | pts. | $ | 209.44 | 0.2 | % | |||||
Europe | $ | 114.17 | 3.4 | % | 74.1 | % | 0.3 | % | pts. | $ | 154.18 | 2.9 | % | |||||
Middle East & Africa | $ | 81.66 | -5.9 | % | 60.5 | % | -2.1 | % | pts. | $ | 135.01 | -2.6 | % | |||||
Asia Pacific | $ | 113.21 | 5.7 | % | 75.5 | % | 3.7 | % | pts. | $ | 149.94 | 0.5 | % | |||||
Total International3 | $ | 113.53 | 1.9 | % | 71.4 | % | 0.7 | % | pts. | $ | 159.03 | 0.9 | % | |||||
Worldwide5 | $ | 118.97 | 2.9 | % | 77.1 | % | 0.8 | % | pts. | $ | 154.25 | 1.9 | % |
1 | International includes properties located outside the United States and Canada, except for Worldwide which includes the United States and Canada. |
2 | Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Protea Hotels, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, and AC Hotels by Marriott. |
3 | Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Protea Hotels, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, AC Hotels by Marriott, and Moxy Hotels. |
4 | Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, Protea Hotels, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, SpringHill Suites, and AC Hotels by Marriott. |
5 | Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, Protea Hotels, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, Springhill Suites, AC Hotels by Marriott, and Moxy Hotels. |
Comparable Company-Operated International Properties1 | ||||||||||||||||||
Six Months Ended June 30, 2016 and June 30, 2015 | ||||||||||||||||||
REVPAR | Occupancy | Average Daily Rate | ||||||||||||||||
Region | 2016 | vs. 2015 | 2016 | vs. 2015 | 2016 | vs. 2015 | ||||||||||||
Caribbean & Latin America | $ | 183.34 | 1.8 | % | 72.6 | % | -1.0 | % | pts. | $ | 252.69 | 3.2 | % | |||||
Europe | $ | 106.12 | 2.4 | % | 70.4 | % | -0.5 | % | pts. | $ | 150.76 | 3.1 | % | |||||
Middle East & Africa | $ | 99.27 | -4.9 | % | 65.4 | % | -0.7 | % | pts. | $ | 151.71 | -3.9 | % | |||||
Asia Pacific | $ | 107.31 | 6.0 | % | 72.9 | % | 4.2 | % | pts. | $ | 147.16 | -0.2 | % | |||||
Total International2 | $ | 113.41 | 2.2 | % | 70.6 | % | 1.1 | % | pts. | $ | 160.71 | 0.5 | % | |||||
Worldwide4 | $ | 130.26 | 3.1 | % | 74.0 | % | 1.1 | % | pts. | $ | 175.91 | 1.6 | % |
Comparable Systemwide International Properties1 | ||||||||||||||||||
Six Months Ended June 30, 2016 and June 30, 2015 | ||||||||||||||||||
REVPAR | Occupancy | Average Daily Rate | ||||||||||||||||
Region | 2016 | vs. 2015 | 2016 | vs. 2015 | 2016 | vs. 2015 | ||||||||||||
Caribbean & Latin America | $ | 156.18 | 1.8 | % | 68.7 | % | -0.1 | % | pts. | $ | 227.30 | 1.9 | % | |||||
Europe | $ | 99.18 | 3.1 | % | 67.6 | % | 0.1 | % | pts. | $ | 146.72 | 2.9 | % | |||||
Middle East & Africa | $ | 92.00 | -3.8 | % | 64.3 | % | -0.7 | % | pts. | $ | 142.97 | -2.7 | % | |||||
Asia Pacific | $ | 112.33 | 6.5 | % | 73.7 | % | 3.9 | % | pts. | $ | 152.52 | 0.9 | % | |||||
Total International3 | $ | 111.22 | 2.7 | % | 69.0 | % | 1.0 | % | pts. | $ | 161.20 | 1.2 | % | |||||
Worldwide5 | $ | 112.45 | 2.8 | % | 73.2 | % | 0.5 | % | pts. | $ | 153.53 | 2.2 | % |
1 | International includes properties located outside the United States and Canada, except for Worldwide which includes the United States and Canada. |
2 | Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Protea Hotels, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, and AC Hotels by Marriott. |
3 | Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Protea Hotels, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, AC Hotels by Marriott, and Moxy Hotels. |
4 | Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, Protea Hotels, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, SpringHill Suites, and AC Hotels by Marriott. |
5 | Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, Protea Hotels, The Ritz-Carlton, Bulgari, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, Springhill Suites, AC Hotels by Marriott, and Moxy Hotels. |
Comparable Company-Operated North American Properties | ||||||||||||||||||
Three Months Ended June 30, 2016 and June 30, 2015 | ||||||||||||||||||
REVPAR | Occupancy | Average Daily Rate | ||||||||||||||||
Brand | 2016 | vs. 2015 | 2016 | vs. 2015 | 2016 | vs. 2015 | ||||||||||||
Marriott Hotels | $ | 165.48 | 3.2 | % | 80.8 | % | 1.5 | % | pts. | $ | 204.79 | 1.2 | % | |||||
Renaissance Hotels | $ | 160.06 | 7.6 | % | 82.1 | % | 3.0 | % | pts. | $ | 194.98 | 3.7 | % | |||||
The Ritz-Carlton | $ | 257.21 | 1.5 | % | 74.5 | % | 1.0 | % | pts. | $ | 345.03 | 0.2 | % | |||||
Composite North American Full-Service1 | $ | 172.97 | 3.8 | % | 80.1 | % | 1.8 | % | pts. | $ | 215.97 | 1.4 | % | |||||
Courtyard | $ | 113.81 | 3.4 | % | 78.6 | % | 1.4 | % | pts. | $ | 144.88 | 1.5 | % | |||||
SpringHill Suites | $ | 107.94 | 3.2 | % | 82.2 | % | 1.3 | % | pts. | $ | 131.25 | 1.5 | % | |||||
Residence Inn | $ | 125.64 | 3.0 | % | 82.5 | % | 0.7 | % | pts. | $ | 152.21 | 2.1 | % | |||||
TownePlace Suites | $ | 86.56 | 4.3 | % | 81.0 | % | 0.2 | % | pts. | $ | 106.92 | 4.0 | % | |||||
Composite North American Limited-Service2 | $ | 115.38 | 3.3 | % | 79.9 | % | 1.2 | % | pts. | $ | 144.35 | 1.7 | % | |||||
Composite - All3 | $ | 148.04 | 3.6 | % | 80.0 | % | 1.6 | % | pts. | $ | 185.01 | 1.6 | % |
Comparable Systemwide North American Properties | ||||||||||||||||||
Three Months Ended June 30, 2016 and June 30, 2015 | ||||||||||||||||||
REVPAR | Occupancy | Average Daily Rate | ||||||||||||||||
Brand | 2016 | vs. 2015 | 2016 | vs. 2015 | 2016 | vs. 2015 | ||||||||||||
Marriott Hotels | $ | 141.10 | 3.4 | % | 77.7 | % | 1.3 | % | pts. | $ | 181.68 | 1.6 | % | |||||
Renaissance Hotels | $ | 138.49 | 6.1 | % | 79.7 | % | 2.0 | % | pts. | $ | 173.84 | 3.5 | % | |||||
Autograph Collection Hotels | $ | 182.88 | 2.4 | % | 78.5 | % | 0.6 | % | pts. | $ | 233.04 | 1.6 | % | |||||
The Ritz-Carlton | $ | 257.21 | 1.5 | % | 74.5 | % | 1.0 | % | pts. | $ | 345.03 | 0.2 | % | |||||
Composite North American Full-Service1 | $ | 149.68 | 3.7 | % | 77.9 | % | 1.4 | % | pts. | $ | 192.26 | 1.8 | % | |||||
Courtyard | $ | 111.32 | 3.2 | % | 78.1 | % | 0.7 | % | pts. | $ | 142.56 | 2.3 | % | |||||
Fairfield Inn & Suites | $ | 84.92 | 1.4 | % | 74.7 | % | -0.4 | % | pts. | $ | 113.62 | 2.0 | % | |||||
SpringHill Suites | $ | 98.90 | 3.6 | % | 79.5 | % | 1.0 | % | pts. | $ | 124.40 | 2.3 | % | |||||
Residence Inn | $ | 120.63 | 2.6 | % | 83.1 | % | 0.3 | % | pts. | $ | 145.15 | 2.3 | % | |||||
TownePlace Suites | $ | 85.04 | 4.4 | % | 79.7 | % | 1.1 | % | pts. | $ | 106.68 | 2.9 | % | |||||
Composite North American Limited-Service4 | $ | 105.09 | 2.8 | % | 78.9 | % | 0.4 | % | pts. | $ | 133.15 | 2.3 | % | |||||
Composite - All5 | $ | 120.33 | 3.2 | % | 78.6 | % | 0.8 | % | pts. | $ | 153.17 | 2.2 | % |
1 | Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, The Ritz-Carlton, and EDITION. |
2 | Includes Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, and SpringHill Suites. |
3 | Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, The Ritz-Carlton, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, and SpringHill Suites. |
4 | Includes Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, SpringHill Suites, and AC Hotels by Marriott. |
5 | Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, The Ritz-Carlton, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, SpringHill Suites, and AC Hotels by Marriott. |
Comparable Company-Operated North American Properties | ||||||||||||||||||
Six Months Ended June 30, 2016 and June 30, 2015 | ||||||||||||||||||
REVPAR | Occupancy | Average Daily Rate | ||||||||||||||||
Brand | 2016 | vs. 2015 | 2016 | vs. 2015 | 2016 | vs. 2015 | ||||||||||||
Marriott Hotels | $ | 155.15 | 3.3 | % | 76.9 | % | 1.1 | % | pts. | $ | 201.82 | 1.8 | % | |||||
Renaissance Hotels | $ | 150.75 | 4.8 | % | 78.6 | % | 1.1 | % | pts. | $ | 191.71 | 3.4 | % | |||||
The Ritz-Carlton | $ | 268.08 | 3.9 | % | 73.4 | % | 1.4 | % | pts. | $ | 365.46 | 2.0 | % | |||||
Composite North American Full-Service1 | $ | 165.25 | 3.7 | % | 76.6 | % | 1.2 | % | pts. | $ | 215.86 | 2.0 | % | |||||
Courtyard | $ | 105.85 | 3.3 | % | 74.0 | % | 1.0 | % | pts. | $ | 143.00 | 1.9 | % | |||||
SpringHill Suites | $ | 100.56 | 3.8 | % | 77.7 | % | 1.8 | % | pts. | $ | 129.48 | 1.3 | % | |||||
Residence Inn | $ | 118.06 | 3.0 | % | 78.8 | % | 0.3 | % | pts. | $ | 149.87 | 2.6 | % | |||||
TownePlace Suites | $ | 77.41 | 3.4 | % | 73.7 | % | 0.1 | % | pts. | $ | 105.09 | 3.2 | % | |||||
Composite North American Limited-Service2 | $ | 107.71 | 3.3 | % | 75.6 | % | 0.9 | % | pts. | $ | 142.52 | 2.1 | % | |||||
Composite - All3 | $ | 140.34 | 3.5 | % | 76.1 | % | 1.1 | % | pts. | $ | 184.35 | 2.1 | % |
Comparable Systemwide North American Properties | ||||||||||||||||||
Six Months Ended June 30, 2016 and June 30, 2015 | ||||||||||||||||||
REVPAR | Occupancy | Average Daily Rate | ||||||||||||||||
Brand | 2016 | vs. 2015 | 2016 | vs. 2015 | 2016 | vs. 2015 | ||||||||||||
Marriott Hotels | $ | 133.46 | 3.1 | % | 73.7 | % | 0.7 | % | pts. | $ | 181.09 | 2.1 | % | |||||
Renaissance Hotels | $ | 130.42 | 3.9 | % | 75.9 | % | 0.6 | % | pts. | $ | 171.82 | 3.0 | % | |||||
Autograph Collection Hotels | $ | 175.75 | 2.6 | % | 76.3 | % | 1.0 | % | pts. | $ | 230.42 | 1.2 | % | |||||
The Ritz-Carlton | $ | 268.08 | 3.9 | % | 73.4 | % | 1.4 | % | pts. | $ | 365.46 | 2.0 | % | |||||
Composite North American Full-Service1 | $ | 143.02 | 3.3 | % | 74.2 | % | 0.8 | % | pts. | $ | 192.79 | 2.2 | % | |||||
Courtyard | $ | 102.92 | 2.9 | % | 73.5 | % | 0.4 | % | pts. | $ | 139.96 | 2.3 | % | |||||
Fairfield Inn & Suites | $ | 76.83 | 1.0 | % | 69.6 | % | -0.7 | % | pts. | $ | 110.38 | 2.0 | % | |||||
SpringHill Suites | $ | 91.36 | 2.4 | % | 75.0 | % | 0.2 | % | pts. | $ | 121.78 | 2.1 | % | |||||
Residence Inn | $ | 112.26 | 2.4 | % | 78.9 | % | -0.1 | % | pts. | $ | 142.26 | 2.6 | % | |||||
TownePlace Suites | $ | 79.06 | 3.3 | % | 75.1 | % | 0.6 | % | pts. | $ | 105.30 | 2.4 | % | |||||
Composite North American Limited-Service4 | $ | 97.04 | 2.4 | % | 74.4 | % | 0.1 | % | pts. | $ | 130.51 | 2.3 | % | |||||
Composite - All5 | $ | 112.75 | 2.8 | % | 74.3 | % | 0.3 | % | pts. | $ | 151.76 | 2.4 | % |
1 | Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, The Ritz-Carlton, and EDITION. |
2 | Includes Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, and SpringHill Suites. |
3 | Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, The Ritz-Carlton, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, and SpringHill Suites. |
4 | Includes Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, SpringHill Suites, and AC Hotels by Marriott. |
5 | Includes Marriott Hotels, Renaissance Hotels, Autograph Collection Hotels, Gaylord Hotels, The Ritz-Carlton, EDITION, Residence Inn, Courtyard, Fairfield Inn & Suites, TownePlace Suites, SpringHill Suites, and AC Hotels by Marriott. |
Fiscal Year 2016 | |||||||||||
First Quarter | Second Quarter | Total | |||||||||
Net income | $ | 219 | $ | 247 | $ | 466 | |||||
Interest expense | 47 | 57 | 104 | ||||||||
Tax provision | 107 | 97 | 204 | ||||||||
Depreciation and amortization | 31 | 30 | 61 | ||||||||
Depreciation classified in Reimbursed costs | 14 | 14 | 28 | ||||||||
Interest expense from unconsolidated joint ventures | 1 | 1 | 2 | ||||||||
Depreciation and amortization from unconsolidated joint ventures | 3 | 3 | 6 | ||||||||
EBITDA** | 422 | 449 | 871 | ||||||||
Starwood transaction and transition costs | 8 | 14 | 22 | ||||||||
Share-based compensation (including share-based compensation reimbursed by third-party owners) | 28 | 31 | 59 | ||||||||
Adjusted EBITDA ** | $ | 458 | $ | 494 | $ | 952 | |||||
Increase over 2015 Quarterly Adjusted EBITDA ** | 7 | % | 8 | % | 7 | % |
Fiscal Year 2015 | |||||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total | |||||||||||||||
Net income | $ | 207 | $ | 240 | $ | 210 | $ | 202 | $ | 859 | |||||||||
Interest expense | 36 | 42 | 43 | 46 | 167 | ||||||||||||||
Tax provision | 100 | 115 | 99 | 82 | 396 | ||||||||||||||
Depreciation and amortization | 32 | 32 | 31 | 32 | 127 | ||||||||||||||
Depreciation classified in Reimbursed costs | 14 | 14 | 15 | 15 | 58 | ||||||||||||||
Interest expense from unconsolidated joint ventures | 1 | — | 1 | — | 2 | ||||||||||||||
Depreciation and amortization from unconsolidated joint ventures | 3 | 2 | 3 | 2 | 10 | ||||||||||||||
EBITDA** | 393 | 445 | 402 | 379 | 1,619 | ||||||||||||||
EDITION impairment charge | 12 | — | — | — | 12 | ||||||||||||||
Loss (gain) on disposition of real estate | — | 22 | — | (7 | ) | 15 | |||||||||||||
Gain on redemption of preferred equity ownership interest | — | (41 | ) | — | — | (41 | ) | ||||||||||||
Share-based compensation (including share-based compensation reimbursed by third-party owners) | 24 | 31 | 29 | 29 | 113 | ||||||||||||||
Adjusted EBITDA ** | $ | 429 | $ | 457 | $ | 431 | $ | 401 | $ | 1,718 |
** | Denotes non-GAAP financial measures. Please see page A-14 for information about our reasons for providing these alternative financial measures and the limitations on their use. |
Range1 | |||||||||||
Estimated Adjusted EBITDA Third Quarter 2016 | As Reported Third Quarter 2015 | ||||||||||
Operating income | $ | 370 | $ | 375 | $ | 339 | |||||
Gains and other income, net | 5 | 5 | — | ||||||||
Interest income | 12 | 12 | 5 | ||||||||
Equity in earnings | 5 | 5 | 8 | ||||||||
Depreciation and amortization | 35 | 35 | 31 | ||||||||
Depreciation classified in Reimbursed costs | 16 | 16 | 15 | ||||||||
Interest expense from unconsolidated joint ventures | 1 | 1 | 1 | ||||||||
Depreciation and amortization from unconsolidated joint ventures | 2 | 2 | 3 | ||||||||
446 | 451 | 402 | |||||||||
Share-based compensation (including share-based compensation reimbursed by third-party owners) | 30 | 30 | 29 | ||||||||
Adjusted EBITDA ** | $ | 476 | $ | 481 | $ | 431 | |||||
Increase over Q3 2015 Adjusted EBITDA** | 10 | % | 12 | % |
1 | Excludes the impact of pending Starwood acquisition, including transaction and transition costs. |
Range1 | |||||||||||
Estimated Adjusted EBITDA Fourth Quarter 2016 | As Reported Fourth Quarter 2015 | ||||||||||
Operating income | $ | 361 | $ | 371 | $ | 310 | |||||
Gains and other income, net | — | — | 7 | ||||||||
Interest income | 15 | 15 | 10 | ||||||||
Equity in earnings | — | — | 3 | ||||||||
Depreciation and amortization | 34 | 34 | 32 | ||||||||
Depreciation classified in Reimbursed costs | 16 | 16 | 15 | ||||||||
Interest expense from unconsolidated joint ventures | 2 | 2 | — | ||||||||
Depreciation and amortization from unconsolidated joint ventures | 2 | 2 | 2 | ||||||||
430 | 440 | 379 | |||||||||
Loss (gain) on disposition of real estate | — | — | (7 | ) | |||||||
Share-based compensation (including share-based compensation reimbursed by third-party owners) | 31 | 31 | 29 | ||||||||
Adjusted EBITDA ** | $ | 461 | $ | 471 | $ | 401 | |||||
Increase over Q4 2015 Adjusted EBITDA** | 15 | % | 17 | % |
1 | Excludes the impact of pending Starwood acquisition, including transaction and transition costs. |
Range1 | |||||||||||
Estimated Adjusted EBITDA Fiscal Year 2016 | As Reported Fiscal Year 2015 | ||||||||||
Operating income | $ | 1,509 | $ | 1,524 | $ | 1,350 | |||||
Gains and other income, net | 5 | 5 | 27 | ||||||||
Interest income | 40 | 40 | 29 | ||||||||
Equity in earnings | 10 | 10 | 16 | ||||||||
Depreciation and amortization | 130 | 130 | 127 | ||||||||
Depreciation classified in Reimbursed costs | 60 | 60 | 58 | ||||||||
Interest expense from unconsolidated joint ventures | 5 | 5 | 2 | ||||||||
Depreciation and amortization from unconsolidated joint ventures | 10 | 10 | 10 | ||||||||
1,769 | 1,784 | 1,619 | |||||||||
EDITION impairment charge | — | — | 12 | ||||||||
Loss (gain) on disposition of real estate | — | — | 15 | ||||||||
Gain on redemption of preferred equity ownership interest | — | — | (41 | ) | |||||||
Share-based compensation (including share-based compensation reimbursed by third-party owners) | 120 | 120 | 113 | ||||||||
Adjusted EBITDA ** | $ | 1,889 | $ | 1,904 | $ | 1,718 | |||||
Increase over 2015 Adjusted EBITDA** | 10 | % | 11 | % |
1 | Excludes the impact of pending Starwood acquisition, including transaction and transition costs. |
Second Quarter 2016 | Second Quarter 2015 | ||||||
Total revenues, as reported | $ | 3,902 | $ | 3,689 | |||
Less: cost reimbursements | (3,142 | ) | (2,953 | ) | |||
Total revenues, as adjusted ** | $ | 760 | $ | 736 | |||
Operating income, as reported | $ | 389 | $ | 369 | |||
Add: Starwood transaction and transition costs | 14 | — | |||||
Operating income, as adjusted** | $ | 403 | $ | 369 | |||
Adjusted operating income margin** | 53 | % | 50 | % | |||
Adjusted EBITDA** | $ | 494 | |||||
Adjusted EBITDA margin** | 65 | % |
** | Denotes non-GAAP financial measures. Please see page A-14 for information about our reasons for providing these alternative financial measures and the limitations on their use. |
The reconciliation of net income to earnings before interest expense and taxes is as follows: | |||||||
Twelve Months Ended June 30, 2016 | |||||||
Net income | $ | 878 | |||||
Interest expense | 193 | ||||||
Tax provision | 385 | ||||||
Earnings before interest expense and taxes ** | $ | 1,456 | |||||
The reconciliations of assets to invested capital are as follows: | |||||||
June 30, 2016 | June 30, 2015 | ||||||
Assets | $ | 6,650 | $ | 6,311 | |||
Less: current liabilities, net of current portion of long-term debt | (2,941 | ) | (2,903 | ) | |||
Less: deferred tax assets1 | (586 | ) | (684 | ) | |||
Invested capital ** | $ | 3,123 | $ | 2,724 | |||
Average invested capital 2 ** | $ | 2,924 | |||||
Return on invested capital ** | 49.8 | % |
1 | At June 30, 2015 “deferred tax assets” is net of current deferred income tax liabilities of $22M. |
2 | Calculated as “Invested capital” for June 30, 2016 and June 30, 2015, divided by two. |
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