EXHIBIT 99
Communications
Marriott Drive
Washington, D.C. 20858
[Marriott Logo Appears Here] (301) 380-7770
----------------------------------------------------
NEWS
Contact: Tom Marder
(301) 380-2553
thomas.marder@marriott.com
MARRIOTT INTERNATIONAL REPORTS EPS OF $0.39 FOR THE THIRD QUARTER ENDED
SEPTEMBER 7, 2001, COMPARED TO $0.43 A YEAR AGO
-- Decline in Travel following Terrorist Attacks Will Reduce
4th Quarter 2001 Results --
WASHINGTON, D.C. - October 4, 2001 - Marriott International, Inc. (NYSE:MAR)
today reported diluted earnings per share of $0.39 for the third quarter ended
September 7, 2001, down nine percent from the 2000 third quarter. Net income
decreased eight percent to $101 million from a year ago. Sales were $2.3
billion for the third quarter, up two percent from the prior year.
J.W. Marriott, Jr., chairman and chief executive officer of Marriott
International, said "Our third quarter results reflected the continued U.S.
economic slowdown, with our combined revenue per available room (REVPAR) for
company-managed U.S. properties down 10 percent from last year. We did a
tremendous job of holding onto our house profit margins at the hotels during the
quarter, with only a one-percentage-point reduction overall. Our new room
additions remained strong, as well. We estimate opening over 49,000 new rooms
for the full year 2001, including 11,000 rooms converted to Ramada International
hotels.
"The terrorist attacks in New York, Washington, D.C. and Pennsylvania have been
tragic events for our country and for the world. First and foremost, our
thoughts and prayers go out to all the families and loved ones affected by this
horrific event. Two of our hotels in downtown New York City were directly
impacted and we mourn the loss of two dedicated associates still counted among
the missing. I was very proud of the heroic job our teams at the hotels did in
evacuating guests. We are doing everything possible to support our affected
associates and guests during this difficult time.
(more)
Page 2
"Since the attacks occurred, in the first week of our fourth quarter, lodging
demand declined to unprecedented levels across the U.S. For the two weeks ending
September 28, 2001, company-operated hotels in the U.S., all brands combined,
reported a 49 percent decline in REVPAR."
Mr. Marriott also said, "Clearly, the business impact of the terrorist attacks
has been far reaching. It is too early to predict when travel will return to
normal levels, although business has improved since the first week following the
tragedy. Our group business is strengthening and new room reservations are
rising. In the meantime, we have prepared and implemented comprehensive
contingency plans to lower the breakeven profitability levels of our hotels,
while also maintaining the standards of quality and service our guests expect
and deserve."
Mr. Marriott noted that the company is in excellent financial condition, with
current long-term, committed credit capacity and excess cash balances totaling
$1.7 billion. The company is also reevaluating its new unit development plans.
The pipeline of properties approved for development or under construction at the
end of the third quarter was approximately 60,000 rooms.
MARRIOTT LODGING reported a 19 percent decrease in operating profit and sales
were flat in the 2001 third quarter. Results generally reflected lower REVPAR
for comparable units, somewhat offset by new unit additions worldwide and growth
in the timeshare business.
Across all of Marriott's lodging brands, REVPAR for comparable company-operated
U.S. properties decreased 10 percent in the 2001 third quarter, largely
reflecting the slower economy. Among the company's full-service lodging brands
(Marriott, Renaissance, and Ritz-Carlton), domestic REVPAR declined 11.6
percent. Full-service occupancy decreased nearly six percentage points to 73.4
percent, while average room rates for these hotels declined 4.7 percent. REVPAR
for limited service properties decreased 6.9 percent, primarily resulting from a
5.3 percentage point occupancy decline.
(more)
Page 3
Marriott Vacation Club International's (MVCI) contract sales increased 57
percent in the third quarter, largely resulting from sales arising from the
purchase of the Grand Summit interval ownership resort in Lake Tahoe,
California. MVCI continued to experience strong demand, particularly at
Marriott Vacation Club resorts in Hawaii and California. Profits from MVCI
increased 15 percent to $38 million in the third quarter as a result of higher
gains on the sale of notes receivable.
The company added 343 hotels and timeshare resorts (55,000 rooms) to its
worldwide lodging portfolio over the past 12 months, while 11 properties (2,600
rooms) exited the system. A net total of 114 hotels and timeshare resorts
(13,900 rooms) were added in the 2001 third quarter, of which 59 hotels (6,100
rooms) were Ramada International conversions. At quarter-end, the Marriott
lodging group encompassed 2,342 hotels and timeshare resorts (425,900 rooms),
and approximately 7,200 furnished corporate apartments managed by the company
under its ExecuStay by Marriott brand.
During the quarter, Marriott completed asset sales of approximately $140
million. Year-to-date, the company has sold 15 hotels, one senior living service
community and other properties for an aggregate sales price of approximately
$610 million.
MARRIOTT SENIOR LIVING SERVICES posted 8 percent sales growth in the 2001 third
quarter, reflecting the continued ramp-up of communities opened in the last
three years. The division posted stronger operating profits of $3 million
versus a loss of $5 million a year ago, largely as a result of communities
maturing and lower development-related costs. Occupancy for comparable
communities increased to 85.8 percent in the quarter.
MARRIOTT DISTRIBUTION SERVICES reported an 8 percent increase in sales in the
2001 third quarter and $1 million of operating profit, a decrease of $4 million
from the prior year. This was largely a result of the loss of a portion of the
Sodexho business and inefficiencies associated with several new accounts.
(more)
Page 4
CORPORATE EXPENSES decreased 55 percent in the 2001 third quarter to $13
million, primarily due to a $4 million gain on sale of tax-related investments
and the impact of cost containment actions.
Interest expense was $26 million in the 2001 third quarter, up 18 percent from
$22 million a year ago, as a result of higher debt levels. Interest income for
the 2001 third quarter was $23 million, up $14 million from a year ago, as a
result of the Courtyard joint venture loan and other mezzanine loan investments.
The company's effective income tax rate was 37.5 percent in the third quarter of
2001, compared to 37 percent in the 2000 third quarter, largely as a result of
modifications related to the company's deferred compensation plan, offset by a
higher proportion of non-U.S. income.
Marriott International acquired 2 million shares of its common stock during the
2001 third quarter and is authorized to repurchase an additional 15.7 million
shares. Long-term debt at the end of the quarter, net of excess cash reserves,
was approximately $1.8 billion.
For the remainder of 2001, the company expects its business environment to
remain unusually challenging. For internal planning purposes, the company is
assuming that REVPAR for its fourth quarter will decline 25 to 35 percent from
last year's fourth quarter. Although the company cannot predict its fourth
quarter earnings with confidence, based on these assumptions, fourth quarter
earnings could be $0.20 to $0.30 per share.
Similarly, while the level of uncertainty is substantially higher for 2002 than
would normally be expected at this time, the company is basing its internal
estimates on three to five percent lower REVPAR than 2001, or roughly 15 percent
lower REVPAR than 2000 levels. Based on these assumptions, after taking into
account $0.12 per share of incremental earnings from the new accounting rules
relating to goodwill, Marriott's 2002 earnings per share could be roughly flat
with 2001 levels, with quarterly earnings and REVPAR comparisons improving over
the course of 2002.
(more)
Page 5
Investment spending for the full year 2001 is expected to be roughly the same as
earlier forecasts, totaling $1.3 to $1.4 billion. Investment spending levels in
2002 are expected to decline at least one-third compared to 2001.
As a result of current industry conditions, the company anticipates that
fundings under its guarantees and other charges related to its loan portfolio
and employee severance could occur in the fourth quarter. The company is not
yet able to estimate the extent of any such fundings or charges.
Individual Investors and News Media are invited to listen to the third quarter
earnings conference call today at 10:00 a.m. ET by telephone at 913-981-5571 or
on the Internet at http://www.marriott.com/investor and click on "recent
--------------------------------
investor news". Analysts are invited to listen to the call at 913-981-5508. We
recommend that participants call 15 minutes ahead of the scheduled start time to
ensure proper connection. A recording of the call will also be available by
telephone until Thursday, October 11, 2001 by calling 719- 457-0820, reservation
number 446247.
Note: This press release contains "forward-looking statements" within the
meaning of federal securities law, including statements concerning the number of
lodging properties expected to be added in future years; REVPAR, house profit
and earning trends; business strategies and their intended results, and similar
statements concerning anticipated future events and expectations that are not
historical facts. The forward-looking statements in this press release are
subject to numerous risks and uncertainties including the duration and severity
of the current economic slowdown and the impact of the September 11, 2001
terrorist attacks on demand for travel; supply and demand changes for hotel
rooms, vacation ownership intervals, corporate housing and senior living
accommodations; competitive conditions in the lodging, senior living and food
service distribution industries; relationships with clients and property owners;
the impact of government regulations; and the availability of capital to finance
growth, which could cause actual results to differ materially from those
expressed in or implied by the statements herein.
MARRIOTT INTERNATIONAL, INC. (NYSE:MAR) is a leading worldwide hospitality
company with nearly 2,400 operating units in the United States and 63 other
countries and territories. Marriott International operates and franchises
hotels under the Marriott, JW Marriott, The Ritz-Carlton, Renaissance, Residence
Inn, Courtyard, TownePlace Suites, Fairfield Inn, SpringHill Suites and Ramada
International brand names; develops and operates vacation ownership resorts
under the Marriott Vacation Club, Horizons, The Ritz-Carlton Club and Marriott
Grand Residence Club brands; operates Marriott Executive Apartments; provides
furnished corporate housing through its ExecuStay by Marriott division; and
operates conference centers. Other Marriott businesses include senior living
communities and services, and wholesale food distribution. The company is
headquartered in Washington, D.C., and has approximately 154,000 employees. In
fiscal year 2000, Marriott International reported systemwide sales of $19.8
billion. For more information or reservations, please visit our web site at
www.marriott.com.
----------------
IRPR#1
tables follow
Marriott International, Inc. 2001
Financial Highlights
12 Weeks Ended September 7, 2001 September 8, 2000
-------------- -------------------------------------------- ---------------------------------------------
(in millions, except per share amounts)
Senior Senior
Living Distribution Living Distribution Total
Sales Lodging Services Services Total Lodging Services Services Total Change
Management and
franchise fees $ 179 $ 8 $ - $ 187 $ 207 $ 8 $ - $ 215
Other 429 74 385 888 409 64 356 829
------ ---- ------ ------ ------ ---- ------ ------
608 82 385 1,075 616 72 356 1,044
Other revenues from
managed properties 1,187 83 - 1,270 1,178 81 - 1,259
------ ---- ------ ------ ------ ---- ------ ------
1,795 165 385 2,345 1,794 153 356 2,303 2%
------ ---- ------ ------ ------ ---- ------ ------
Operating costs
and expenses
Operating costs 434 79 384 897 400 77 351 828
Other costs from
managed properties 1,187 83 - 1,270 1,178 81 - 1,259
------ ---- ------ ------ ------ ---- ------ ------
1,621 162 384 2,167 1,578 158 351 2,087 4%
------ ---- ------ ------ ------ ---- ------ ------
Operating profit before
corporate expenses
and interest $ 174 $ 3 $ 1 $ 178 $ 216 $ (5) $ 5 $ 216 -18%
Corporate expenses (13) (29)
Interest expense (26) (22)
Interest income 23 9
------ ------
Income before
income taxes 162 174 -7%
Provision for
income taxes 61 64
------ ------
Net income $ 101 $ 110 -8%
====== =======
Basic Earnings
Per Share $ 0.41 $ 0.46 -11%
====== =======
Diluted Earnings
Per Share $ 0.39 $ 0.43 -9%
====== =======
Diluted Shares 264.8 254.2
Marriott International, Inc. 2001
Financial Highlights
36 Weeks Ended September 7, 2001 September 8, 2000
-------------- -------------------------------------------- ---------------------------------------------
(in millions, except per share amounts)
Senior Senior
Living Distribution Living Distribution Total
Sales Lodging Services Services Total Lodging Services Services Total Change
Management and
franchise fees $ 594 $ 24 $ - $ 618 $ 612 $ 21 $ - $ 633
Other 1,253 225 1,143 2,621 1,164 206 1,044 2,414
------ ---- ------ ------ ----- ---- ----- -----
1,847 249 1,143 3,239 1,776 227 1,044 3,047
Other revenues from
managed properties 3,735 245 - 3,980 3,589 225 - 3,814
------ ---- ------ ------ ----- ---- ----- -----
5,582 494 1,143 7,219 5,365 452 1,044 6,861 5%
------ ---- ------ ------ ----- ---- ----- -----
Operating costs and
expenses
Operating costs 1,219 240 1,137 2,596 1,113 233 1,045 2,391
Other costs from
managed properties 3,735 245 - 3,980 3,589 225 - 3,814
------ ---- ------ ------ ----- ---- ----- -----
4,954 485 1,137 6,576 4,702 458 1,045 6,205 6%
------ ---- ------ ------ ----- ---- ----- -----
Operating profit
before corporate
expenses and interest $ 628 $ 9 $ 6 $ 643 $ 663 $ (6) $ (1) $ 656 -2%
Corporate expenses (72) (80)
Interest expense (75) (72)
Interest income 59 19
------ -----
Income before
income taxes 555 523 6%
Provision for
income taxes 203 193
------ -----
Net income $ 352 $ 330 7%
====== =====
Basic Earnings Per Share $ 1.44 $ 1.37 5%
====== =====
Diluted Earnings Per Share $ 1.36 $ 1.30 5%
====== =====
Diluted Shares 261.1 254.1
Marriott International, Inc.
Business Segment Results
Twelve weeks ended Thirty-six weeks ended
---------------------------- --------------------------
September 7, September 8, September 7, September 8,
2001 2000 2001 2000
------------ ------------ ------------ ------------
($ in millions)
Sales
Full Service $1,163 $1,216 $3,761 $3,745
Select Service 207 214 641 619
Timeshare 268 191 723 547
Extended Stay 157 173 457 454
------------ ------------ ------------ ------------
Total Lodging 1,795 1,794 5,582 5,365
Senior Living Services 165 153 494 452
Distribution Services 385 356 1,143 1,044
------------ ------------ ------------ ------------
$2,345 $2,303 $7,219 $6,861
============ ============ ============ ============
Operating profit (loss)
before corporate expenses
and interest
Full Service $ 70 $ 104 $ 314 $ 354
Select Service 45 47 133 139
Timeshare 38 33 120 103
Extended Stay 21 32 61 67
------------ ------------ ------------ ------------
Total Lodging 174 216 628 663
Senior Living Services 3 (5) 9 (6)
Distribution Services 1 5 6 (1)
------------ ------------ ------------ ------------
$ 178 $ 216 $ 643 $ 656
============ ============ ============ ============
MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
----------------------------------------------------------------------------------------------------------------
Third Quarter
-------------------------------------------------------------
2001 Occupancy Average Daily Rate
Brand REVPAR -------------------- --------------------
vs. 2000 2001 vs. 2000 2001 vs. 2000
----------------------------------------------------------------------------------------------------------------
Marriott Hotels, Resorts and Suites - 11.6% 74.8% - 5.2% pts. $133.05 - 5.4%
----------------------------------------------------------------------------------------------------------------
Ritz-Carlton - 9.7% 70.0% - 8.5% pts. $220.24 + 1.2%
----------------------------------------------------------------------------------------------------------------
Renaissance Hotels, Resorts and Suites - 13.3% 68.2% - 7.1% pts. $125.01 - 4.2%
----------------------------------------------------------------------------------------------------------------
Residence Inn - 7.1% 81.7% - 4.6% pts. $105.77 - 1.8%
----------------------------------------------------------------------------------------------------------------
Courtyard - 7.0% 75.5% - 6.0% pts. $ 97.81 + 0.4%
----------------------------------------------------------------------------------------------------------------
Fairfield Inn - 3.2% 72.9% - 3.4% pts. $ 65.07 + 1.3%
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Third Quarter Year-to-Date
-------------------------------------------------------------
2001 Occupancy Average Daily Rate
Brand REVPAR -------------------- --------------------
vs. 2000 2001 vs. 2000 2001 vs. 2000
----------------------------------------------------------------------------------------------------------------
Marriott Hotels, Resorts and Suites - 5.3% 74.6% - 4.5% pts. $146.55 + 0.5%
----------------------------------------------------------------------------------------------------------------
Ritz-Carlton - 3.0% 72.1% - 7.6% pts. $260.60 + 7.2%
----------------------------------------------------------------------------------------------------------------
Renaissance Hotels, Resorts and Suites - 6.0% 70.4% - 4.7% pts. $140.12 + 0.2%
----------------------------------------------------------------------------------------------------------------
Residence Inn - 2.7% 80.4% - 3.7% pts. $108.47 + 1.8%
----------------------------------------------------------------------------------------------------------------
Courtyard - 1.6% 75.2% - 4.1% pts. $101.29 + 3.8%
----------------------------------------------------------------------------------------------------------------
Fairfield Inn - 1.5% 68.3% - 3.2% pts. $ 63.94 + 3.2%
----------------------------------------------------------------------------------------------------------------
Note: Statistics for above tables are based on comparable company-operated
U.S. properties, except for Fairfield Inn, which data also include
franchised units.
----------------------------------------------------------------------------------------------------------------
Number of Properties Number of Rooms/Suites
----------------------------------------------------------------
vs. vs.
Brand September September September September
2001 2000 2001 2000
----------------------------------------------------------------------------------------------------------------
Marriott Hotels, Resorts and Suites 422 + 37 157,800 + 12,200
---------------------------------------------------------------------------------------------------------------
Ritz-Carlton 43 + 6 14,100 + 1,700
---------------------------------------------------------------------------------------------------------------
Renaissance Hotels, Resorts and Suites 118 + 17 42,600 + 3,900
---------------------------------------------------------------------------------------------------------------
Ramada International 129 + 103 18,500 + 13,100
---------------------------------------------------------------------------------------------------------------
Residence Inn 380 + 36 44,600 + 4,300
---------------------------------------------------------------------------------------------------------------
Courtyard 543 + 40 76,900 + 5,800
---------------------------------------------------------------------------------------------------------------
Fairfield Inn 471 + 41 44,900 + 4,500
---------------------------------------------------------------------------------------------------------------
TownePlace Suites 96 + 19 9,900 + 2,200
---------------------------------------------------------------------------------------------------------------
SpringHill Suites 77 + 24 8,500 + 3,200
---------------------------------------------------------------------------------------------------------------
Marriott Vacation Club International* 53 + 8 6,300 + 1,400
---------------------------------------------------------------------------------------------------------------
Other** 10 + 1 1,800 + 100
---------------------------------------------------------------------------------------------------------------
Total 2,342 + 332 425,900 + 52,400
---------------------------------------------------------------------------------------------------------------
* Includes The Ritz-Carlton Club, Horizons and Grand Residences by Marriott
Vacation Club International.
** Includes Marriott Executive Apartments. Excludes ExecuStay by Marriott.
# # #