BETHESDA, Md., Nov. 6, 2020 /PRNewswire/ --

  • Third quarter 2020 comparable systemwide constant dollar RevPAR declined 65.9 percent worldwide, 65.4 percent in North America and 67.4 percent outside North America, compared to the 2019 third quarter;
  • Third quarter reported diluted EPS totaled $0.31, compared to reported diluted EPS of $1.16 in the year-ago quarter. Third quarter adjusted diluted EPS totaled $0.06, compared to third quarter 2019 adjusted diluted EPS of $1.47. Third quarter 2020 impairment charges related to COVID-19 impacted reported and adjusted diluted EPS by $0.07;
  • Third quarter reported net income totaled $100 million, compared to reported net income of $387 million in the year-ago quarter. Third quarter adjusted net income totaled $20 million, compared to third quarter 2019 adjusted net income of $488 million. Third quarter 2020 impairment charges related to COVID-19 impacted reported and adjusted net income by $24 million after-tax;
  • Adjusted EBITDA totaled $327 million in the 2020 third quarter, compared to third quarter 2019 adjusted EBITDA of $901 million;
  • The company added more than 19,000 rooms globally during the third quarter, including roughly 1,400 rooms converted from competitor brands and approximately 7,600 rooms in international markets. Net rooms grew 3.8 percent from the year-ago quarter;
  • At quarter-end, Marriott's worldwide development pipeline totaled nearly 2,900 hotels and more than 496,000 rooms, including roughly 25,000 rooms approved, but not yet subject to signed contracts. Approximately 228,000 rooms in the pipeline were under construction as of the end of the third quarter;
  • As of the end of the third quarter, the company's net liquidity totaled approximately $5.1 billion, representing roughly $1.5 billion in available cash balances, and $3.6 billion of unused borrowing capacity under its revolving credit facility, less $30 million of commercial paper outstanding.

Marriott International, Inc. (NASDAQ: MAR) today reported third quarter 2020 results, which were dramatically impacted by the COVID-19 global pandemic and efforts to contain it (COVID-19).

Arne M. Sorenson, president and chief executive officer of Marriott International, said, "While COVID-19 is still significantly impacting our business, our results for the third quarter showed continued improvement in demand trends around the world.  Worldwide RevPAR1 declined 66 percent in the quarter, a nearly 19-percentage point improvement from the decline in the second quarter.  Greater China continues to lead the recovery and demonstrates the resiliency of travel demand, with third quarter occupancy of 61 percent and RevPAR recovering to down 26 percent, a 35-percentage point improvement compared to the decline in the second quarter.  Third quarter occupancy at our hotels in North America reached 37 percent, nearly double occupancy in the second quarter, primarily driven by leisure, drive-to demand, with business and group recovering more slowly.  Globally, 94 percent of our hotels are now open and welcoming guests.

"The Asia Pacific region led deal signings in the third quarter, accounting for more than half of all rooms signed globally, with the vast majority of those rooms in Greater China.  During the third quarter, we added more than 19,000 rooms to our system, nearly 70 percent more than were added in the second quarter, achieving 5 percent gross rooms growth in the last 12 months.  At quarter-end, approximately 228,000 rooms of our more than 496,000-room pipeline were under construction.  Progress on projects under construction largely continues apace around the world, although we have designated a slightly higher number of projects on hold given macroeconomic uncertainty and discussions with our owners.  For full year 2020, we now expect 2.5 to 3 percent net rooms growth, including terminations of 1.5 to 2 percent.  Assuming progress is made in containing COVID-19, we would expect gross room additions in 2021 to accelerate compared to our expectations for 2020.

"Although the timing of a full recovery remains unpredictable, we are pleased with the significant progress we have made in restructuring and repositioning the company to successfully manage through these challenging times.   Financially, we have strengthened our liquidity position, realigned our cost structure, and minimized our cash burn.  We have also remained keenly focused on working with our hotel owners and franchisees to significantly reduce hotel level costs and help preserve cash in this extremely low revenue environment.  Operationally, we have elevated our health and cleanliness standards to establish trust and credibility with travelers and to enhance the safety and wellbeing of our associates and guests.  

"We still have a long road ahead, but this crisis will come to an end, and I believe travel will rebound quickly.  I am confident that the many steps we have taken this year, combined with our unrivaled global portfolio, the strength of our brands, and the power of Marriott Bonvoy position us very well now and for the future."

Third Quarter 2020 Results
Marriott's reported operating income totaled $252 million in the 2020 third quarter, compared to 2019 third quarter reported operating income of $607 million.  Reported net income totaled $100 million in the 2020 third quarter, compared to 2019 third quarter reported net income of $387 million.  Reported diluted earnings per share (EPS) totaled $0.31 in the quarter, compared to reported diluted EPS of $1.16 in the year-ago quarter.  Reported results in the 2020 third quarter included impairment charges of $32 million pretax ($24 million after-tax and $0.07 per share), related to COVID-19.

Adjusted operating income in the 2020 third quarter totaled $147 million, compared to 2019 third quarter adjusted operating income of $734 million.  Adjusted operating income in the 2020 third quarter included impairment charges of $32 million, related to COVID-19.

Third quarter 2020 adjusted net income totaled $20 million, compared to 2019 third quarter adjusted net income of $488 million.  Adjusted diluted EPS in the third quarter totaled $0.06, compared to adjusted diluted EPS of $1.47 in the year-ago quarter.  These 2020 third quarter adjusted results included impairment charges of $24 million after-tax ($0.07 per share), related to COVID-19.  Adjusted results exclude restructuring and merger-related charges, cost reimbursement revenue, and reimbursed expenses.  See page A-3 for the calculation of adjusted results.

Base management and franchise fees totaled $366 million in the 2020 third quarter, compared to base management and franchise fees of $821 million in the year-ago quarter.  The year-over-year decline in these fees is primarily attributable to RevPAR declines related to COVID-19 and a decrease in other non-RevPAR related franchise fees.  Other non-RevPAR related franchise fees in the 2020 third quarter of $119 million were $26 million, or 18 percent, lower than the year-ago quarter, largely due to lower credit card branding fees.

Incentive management fees totaled $31 million in the 2020 third quarter, compared to incentive management fees of $134 million in the year-ago quarter.  The year-over-year decline in these fees is primarily attributable to lower net house profits at many hotels related to COVID-19.  Roughly three-quarters of the incentive management fees recognized in the quarter were earned at hotels in the Asia Pacific region.    

Contract investment amortization for the 2020 third quarter totaled $48 million, compared to $16 million in the year-ago quarter.  The year-over-year change reflects impairments of investments in management and franchise contracts related to COVID-19.

Owned, leased, and other revenue, net of direct expenses, totaled an $18 million loss in the 2020 third quarter, compared to $67 million of profit in the year-ago quarter as a result of RevPAR declines related to COVID-19.

General, administrative, and other expenses for the 2020 third quarter totaled $131 million, compared to $220 million in the year-ago quarter.  Expenses in the 2020 third quarter reflect the company's cost reduction efforts. 

Restructuring and merger-related charges totaled $1 million in the third quarter compared to $9 million in the third quarter of 2019.  Charges in the third quarter of 2020 reflect $40 million of costs related to the company's organizational realignment, largely offset by a $39 million reduction of the non-tax-deductible accrual for the fine imposed by the U.K. Information Commissioner's Office in relation to the data security incident disclosed in November 2018.

Interest expense, net, totaled $107 million in the third quarter compared to $92 million in the year-ago quarter.  The increase is largely due to higher long-term debt balances and higher interest expense associated with new debt issuances.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $327 million in the 2020 third quarter, compared to third quarter 2019 adjusted EBITDA of $901 million.  See page A-11 for the adjusted EBITDA calculation.

Selected Performance Information
The company added 127 new properties (19,064 rooms) to its worldwide lodging portfolio during the 2020 third quarter, including roughly 1,400 rooms converted from competitor brands and approximately 7,600 rooms in international markets.  Thirty-one properties (6,066 rooms) exited the system during the quarter.  At quarter-end, Marriott's global lodging system totaled roughly 7,600 properties and timeshare resorts, with nearly 1,414,000 rooms.

At quarter-end, the company's worldwide development pipeline totaled 2,899 properties with more than 496,000 rooms, including 1,201 properties with approximately 228,000 rooms under construction and 160 properties with roughly 25,000 rooms approved for development, but not yet subject to signed contracts.

In the 2020 third quarter, worldwide RevPAR declined 65.9 percent (a 65.9 percent decline using actual dollars).  North American RevPAR declined 65.4 percent (a 65.4 percent decline using actual dollars), and international RevPAR declined 67.4 percent (a 67.3 percent decline using actual dollars).

Balance Sheet and Liquidity
At quarter-end, Marriott's net debt was $9.4 billion, representing total debt of $11.0 billion less cash and cash equivalents of $1.6 billion.  At year-end 2019, the company's net debt was $10.7 billion, representing total debt of $10.9 billion less cash and cash equivalents of $0.2 billion.

In the third quarter, the company issued $1.0 billion of Series GG Senior Notes due in 2032 with a 3.5 percent interest rate coupon.

The company's net liquidity was approximately $5.1 billion as of the end of the third quarter, representing roughly $1.5 billion in available cash balances, and $3.6 billion of unused borrowing capacity under its revolving credit facility, less $30 million of commercial paper outstanding. 

The company halted share repurchases in February of this year and suspended its quarterly dividend beginning in the second quarter.

COVID-19
Due to the numerous uncertainties associated with COVID-19, Marriott cannot presently estimate the financial impact of this unprecedented situation, which is highly dependent on the severity and duration of the pandemic and its impacts, but expects that COVID-19 will continue to be material to the company's results. 

The company expects to provide additional information about the current impact of COVID-19 on its business on its call later this morning.

Marriott International, Inc. (NASDAQ: MAR) will conduct its quarterly earnings review for the investment community and news media on Friday, November 6, 2020 at 8:30 a.m. Eastern Time (ET).  The conference call will be webcast simultaneously via Marriott's investor relations website at http://www.marriott.com/investor, click on "Events & Presentations" and click on the quarterly conference call link.  A replay will be available at that same website until November 6, 2021.

The telephone dial-in number for the conference call is 706-679-3455 and the conference ID is 5783987.  A telephone replay of the conference call will be available from 2:00 p.m. ET, Friday, November 6, 2020 until 8:00 p.m. ET, Friday, November 13, 2020.  To access the replay, call 404-537-3406.  The conference ID for the recording is 5783987.

Note on forward-looking statements:  All statements in this press release and the accompanying schedules are made as of November 6, 2020. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events or otherwise. This press release and the accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including statements related to the expected effects on our business of the COVID-19 pandemic and efforts to contain it (COVID-19); future performance of the company's hotels; RevPAR, occupancy and demand estimates and trends; our development pipeline, room additions, terminations and net rooms growth; our liquidity expectations; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including those we identify below and other risk factors that we identify in our Securities and Exchange Commission filings, including our most recent Quarterly Report on Form 10-Q. Risks that could affect forward-looking statements in this press release include the duration and scope of COVID-19, including the location and extent of resurgences of the virus and the availability of effective treatments or vaccines; its short and longer-term impact on the demand for travel, transient and group business, and levels of consumer confidence; actions governments, businesses and individuals have taken or may take in response to the pandemic, including limiting or banning travel and/or in-person gatherings or imposing occupancy or other restrictions on lodging or other facilities; the impact of the pandemic and actions taken in response to the pandemic on global and regional economies, travel, and economic activity, including the duration and magnitude of its impact on unemployment rates and consumer discretionary spending; the ability of our owners and franchisees to successfully navigate the impacts of COVID-19; the pace of recovery when the pandemic subsides or effective treatments or vaccines become available; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the effects of steps we and our property owners and franchisees take to reduce operating costs and/or enhance certain health and cleanliness protocols at our hotels; the impacts of our employee furloughs and reduced work week schedules implemented during portions of 2020, our voluntary transition program and our other restructuring activities; competitive conditions in the lodging industry; relationships with clients and property owners; the availability of capital to finance hotel growth and refurbishment; the extent to which we experience adverse effects from data security incidents; and changes in tax laws in countries in which we earn significant income. Any of these factors could cause actual results to differ materially from the expectations we express or imply in this press release.

Marriott International, Inc. (NASDAQ: MAR) is based in Bethesda, Maryland, USA, and encompasses a portfolio of more than 7,500 properties under 30 leading brands spanning 132 countries and territories. Marriott operates and franchises hotels and licenses vacation ownership resorts all around the world. The company offers Marriott Bonvoy™, its highly-awarded travel program.  For more information, please visit our website at www.marriott.com, and for the latest company news, visit www.marriottnewscenter.com.  In addition, connect with us on Facebook and @MarriottIntl on Twitter and Instagram.

Marriott may post updates about COVID-19 and other matters on its investor relations website at www.marriott.com/investor or Marriott's news center website at www.marriottnewscenter.com. Marriott encourages investors, the media, and others interested in the company to review and subscribe to the information Marriott posts on these websites, which may be material. The contents of these websites are not incorporated by reference into this press release or any report or document Marriott files with the SEC, and any references to the websites are intended to be inactive textual references only.

1 All occupancy and RevPAR statistics are comparable systemwide constant dollar and include hotels that have been temporarily closed due to COVID-19.  Unless otherwise stated, all changes refer to year-over-year changes for the comparable period. 

IRPR#1
Tables follow

 

MARRIOTT INTERNATIONAL, INC.

PRESS RELEASE SCHEDULES

TABLE OF CONTENTS

QUARTER 3, 2020

































































Consolidated Statements of Income - As Reported









A-1

















Non-GAAP Financial Measures












A-3

















Total Lodging Products














A-4

















Key Lodging Statistics














A-7

















Adjusted EBITDA














A-11

















Explanation of Non-GAAP Financial and Performance Measures






A-12

 


MARRIOTT INTERNATIONAL, INC.



CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED



THIRD QUARTER 2020 AND 2019



(in millions except per share amounts, unaudited)























As Reported


As Reported


Percent





Three Months Ended


Three Months Ended


Better/(Worse)





September 30, 2020


September 30, 2019


Reported 2020 vs. 2019



REVENUES









Base management fees


$                                             87


$                                           291


(70)



Franchise fees 1


279


530


(47)



Incentive management fees


31


134


(77)



Gross Fee Revenues


397


955


(58)



Contract investment amortization 2


(48)


(16)


(200)



Net Fee Revenues


349


939


(63)



Owned, leased, and other revenue 3


116


393


(70)



Cost reimbursement revenue 4


1,789


3,952


(55)



  Total Revenues


2,254


5,284


(57)












OPERATING COSTS AND EXPENSES









Owned, leased, and other - direct 5


134


326


59



Depreciation, amortization, and other 6


53


52


(2)



General, administrative, and other 7


131


220


40



Restructuring and merger-related charges 


1


9


89



Reimbursed expenses 4


1,683


4,070


59



  Total Expenses


2,002


4,677


57












OPERATING INCOME


252


607


(58)












Gains and other income, net 8


2


10


(80)



Interest expense


(113)


(100)


(13)



Interest income 


6


8


(25)



Equity in (losses) earnings 9


(20)


2


(1,100)












INCOME BEFORE INCOME TAXES


127


527


(76)












Provision for income taxes


(27)


(140)


81












NET INCOME


$                                           100


$                                           387


(74)












EARNINGS PER SHARE









  Earnings per share - basic


$                                          0.31


$                                          1.17


(74)



  Earnings per share - diluted


$                                          0.31


$                                          1.16


(73)












Basic Shares


325.9


329.9





Diluted Shares


326.8


332.5













1

Franchise fees include fees from our franchise agreements, application and relicensing fees, licensing fees from our timeshare, credit card programs, and 



residential branding fees.








2

Contract investment amortization includes amortization of capitalized costs to obtain contracts with our owner and franchisee customers, and any related



impairments, accelerations, or write-offs.








3

Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, and other revenue.




4

Cost reimbursement revenue includes reimbursements from properties for property-level and centralized programs and services that we operate for the benefit of 



our hotel owners. Reimbursed expenses include costs incurred by Marriott for certain property-level operating expenses and centralized programs and services.


5

Owned, leased, and other - direct expenses include operating expenses related to our owned or leased hotels, including lease payments and pre-opening expenses.

6

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.






7

General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses.


8

Gains and other income, net includes gains and losses on the sale of real estate, the sale of joint venture interests and other investments, and adjustments from 



other equity investments.








9

Equity in (loss) earnings include our equity in earnings or losses of unconsolidated equity method investments.




 


MARRIOTT INTERNATIONAL, INC.



CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED



THIRD QUARTER 2020 AND 2019



(in millions except per share amounts, unaudited)























As Reported


As Reported


Percent





Nine Months Ended


Nine Months Ended


Better/(Worse)





September 30, 2020


September 30, 2019


Reported 2020 vs. 2019



REVENUES









Base management fees


$                                           341


$                                           882


(61)



Franchise fees 1


876


1,505


(42)



Incentive management fees


43


462


(91)



Gross Fee Revenues


1,260


2,849


(56)



Contract investment amortization 2


(94)


(45)


(109)



Net Fee Revenues


1,166


2,804


(58)



Owned, leased, and other revenue 3


445


1,186


(62)



Cost reimbursement revenue 4


6,788


11,611


(42)



  Total Revenues


8,399


15,601


(46)












OPERATING COSTS AND EXPENSES









Owned, leased, and other - direct 5


527


982


46



Depreciation, amortization, and other 6


275


162


(70)



General, administrative, and other 7


579


671


14



Restructuring and merger-related charges 


5


191


97



Reimbursed expenses 4


6,801


12,069


44



  Total Expenses


8,187


14,075


42












OPERATING INCOME


212


1,526


(86)












Gains and other income, net 8


3


16


(81)



Interest expense


(333)


(299)


(11)



Interest income 


20


20


-



Equity in (losses) earnings 9


(54)


10


(640)












(LOSS) INCOME BEFORE INCOME TAXES


(152)


1,273


(112)












Benefit (provision) for income taxes


49


(279)


118












NET (LOSS) INCOME


$                                          (103)


$                                           994


(110)












(LOSS) EARNINGS PER SHARE









  (Loss) Earnings per share - basic


$                                         (0.32)


$                                          2.97


(111)



  (Loss) Earnings per share - diluted


$                                         (0.32)


$                                          2.95


(111)












Basic Shares


325.7


334.4





Diluted Shares 10


325.7


337.2













1

Franchise fees include fees from our franchise agreements, application and relicensing fees, licensing fees from our timeshare, credit card programs, and 



residential branding fees.








2

Contract investment amortization includes amortization of capitalized costs to obtain contracts with our owner and franchisee customers, and any related



impairments, accelerations, or write-offs.








3

Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, and other revenue.




4

Cost reimbursement revenue includes reimbursements from properties for property-level and centralized programs and services that we operate for the benefit of 



our hotel owners. Reimbursed expenses include costs incurred by Marriott for certain property-level operating expenses and centralized programs and services.


5

Owned, leased, and other - direct expenses include operating expenses related to our owned or leased hotels, including lease payments and pre-opening expenses.

6

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.






7

General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses.


8

Gains and other income, net includes gains and losses on the sale of real estate, the sale of joint venture interests and other investments, and adjustments from 



other equity investments.








9

Equity in (loss) earnings include our equity in earnings or losses of unconsolidated equity method investments.




10

Basic and fully diluted weighted average shares outstanding used to calculate (loss) earnings per share for the period in which we had a loss are the same because 


inclusion of additional equivalents would be anti-dilutive.







MARRIOTT INTERNATIONAL, INC.



NON-GAAP FINANCIAL MEASURES



($ in millions except per share amounts)

















The following table presents our reconciliations of Adjusted operating income, Adjusted operating income margin, Adjusted net income (loss), and Adjusted



diluted earnings (loss) per share, to the most directly comparable GAAP measure. Adjusted total revenues is used in the determination of Adjusted operating



income margin.





























Three Months Ended 


Nine Months Ended








Percent






Percent




September 30,


September 30,


Better/


September 30,


September 30,


Better/




2020


2019


(Worse)


2020


2019


(Worse)



Total revenues, as reported

$          2,254


$          5,284




$          8,399


$         15,601





Less: Cost reimbursement revenue

(1,789)


(3,952)




(6,788)


(11,611)





Adjusted total revenues**

465


1,332




1,611


3,990



















Operating income, as reported

252


607




212


1,526





Less: Cost reimbursement revenue

(1,789)


(3,952)




(6,788)


(11,611)





Add: Reimbursed expenses

1,683


4,070




6,801


12,069





Add: Restructuring and merger-related charges

1


9




5


191





Adjusted operating income **

147


734


-80%


230


2,175


-89%

















Operating income margin

11%


11%




3%


10%





Adjusted operating income margin **

32%


55%




14%


55%



















Net income (loss), as reported

100


387




(103)


994





Less: Cost reimbursement revenue

(1,789)


(3,952)




(6,788)


(11,611)





Add: Reimbursed expenses

1,683


4,070




6,801


12,069





Add: Restructuring and merger-related charges

1


9




5


191





Income tax effect of above adjustments 

25


(26)




(20)


(148)





Adjusted net income (loss)**

$               20


$             488


-96%


$            (105)


$          1,495


-107%

















Diluted earnings (loss) per share, as reported

$            0.31


$            1.16




$           (0.32)


$            2.95





Adjusted diluted earnings (loss) per share**

$            0.06


$            1.47


-96%


$           (0.32)


$            4.43


-107%
















**

Denotes non-GAAP financial measures. Please see pages A-12 and A-13 for information about our reasons for providing these alternative financial measures and


the limitations on their use.













 

MARRIOTT INTERNATIONAL, INC.

TOTAL LODGING PRODUCTS

As of September 30, 2020









North America

Total International

Total Worldwide


Units

Rooms

Units

Rooms

Units

Rooms

 Managed 

752

237,107

1,255

324,089

2,007

561,196

 Marriott Hotels 

115

62,210

176

51,626

291

113,836

 Marriott Hotels Serviced Apartments 

-

-

1

154

1

154

 Sheraton 

28

23,609

191

64,360

219

87,969

 Courtyard 

232

36,900

105

22,878

337

59,778

 Westin 

41

22,349

71

21,720

112

44,069

 JW Marriott 

20

12,192

61

22,692

81

34,884

 Renaissance 

25

11,051

58

18,109

83

29,160

 The Ritz-Carlton 

38

11,404

62

16,008

100

27,412

 The Ritz-Carlton Serviced Apartments 

-

-

5

713

5

713

 Le Méridien 

2

160

74

20,856

76

21,016

 Four Points 

1

134

76

20,041

77

20,175

 Residence Inn 

107

16,199

6

701

113

16,900

 W Hotels 

24

6,911

31

8,148

55

15,059

 The Luxury Collection 

5

2,236

51

9,242

56

11,478

 Gaylord Hotels 

6

9,918

-

-

6

9,918

 St. Regis 

10

1,968

34

7,819

44

9,787

 St. Regis Serviced Apartments 

-

-

1

70

1

70

 Aloft 

1

330

40

9,047

41

9,377

 AC Hotels by Marriott 

5

901

68

8,323

73

9,224

 Delta Hotels 

25

6,770

1

360

26

7,130

 Fairfield by Marriott 

7

1,539

34

5,478

41

7,017

 SpringHill Suites 

30

4,896

-

-

30

4,896

 Marriott Executive Apartments 

-

-

33

4,814

33

4,814

 Autograph Collection 

8

2,094

14

2,200

22

4,294

 Protea Hotels 

-

-

33

4,043

33

4,043

 EDITION 

4

1,209

7

1,488

11

2,697

 TownePlace Suites 

17

1,947

-

-

17

1,947

 Element 

1

180

7

1,421

8

1,601

 Moxy 

-

-

5

887

5

887

 Tribute Portfolio 

-

-

5

453

5

453

 Bulgari 

-

-

5

438

5

438

 Franchised 

4,663

670,374

657

134,448

5,320

804,822

 Courtyard 

816

108,706

88

16,264

904

124,970

 Fairfield by Marriott 

1,041

96,991

26

4,523

1,067

101,514

 Residence Inn 

737

87,980

12

1,474

749

89,454

 Marriott Hotels 

222

70,148

59

16,928

281

87,076

 Sheraton 

158

47,465

65

18,676

223

66,141

 SpringHill Suites 

449

51,708

-

-

449

51,708

 TownePlace Suites 

431

43,526

-

-

431

43,526

 Westin 

89

29,964

23

7,171

112

37,135

 Autograph Collection 

111

22,074

62

12,258

173

34,332

 Four Points 

159

24,027

55

8,722

214

32,749

 Renaissance 

62

17,823

28

7,691

90

25,514

 Aloft 

129

18,775

19

3,100

148

21,875

 AC Hotels by Marriott 

66

11,102

35

6,269

101

17,371

 Moxy 

21

4,149

45

9,002

66

13,151

 Delta Hotels 

48

10,612

7

1,706

55

12,318

 The Luxury Collection 

11

2,794

47

8,702

58

11,496

 Le Méridien 

19

4,320

16

4,225

35

8,545

 JW Marriott 

13

5,947

6

1,624

19

7,571

 Element 

52

6,954

2

293

54

7,247

 Tribute Portfolio 

23

4,027

17

1,947

40

5,974

 Protea Hotels 

-

-

37

2,961

37

2,961

 Design Hotels 

5

853

6

761

11

1,614

 The Ritz-Carlton 

1

429

-

-

1

429

 Bulgari 

-

-

1

85

1

85

 Marriott Executive Apartments 

-

-

1

66

1

66


MARRIOTT INTERNATIONAL, INC.

TOTAL LODGING PRODUCTS

As of September 30, 2020









North America

Total International

Total Worldwide


Units

Rooms

Units

Rooms

Units

Rooms

 Owned/Leased 

26

6,483

40

9,161

66

15,644

Courtyard

19

2,814

4

894

23

3,708

Marriott Hotels

2

1,308

5

1,631

7

2,939

Sheraton

-

-

4

1,830

4

1,830

W Hotels

2

779

2

665

4

1,444

Protea Hotels

-

-

7

1,168

7

1,168

Westin

1

1,073

-

-

1

1,073

Renaissance

1

317

2

505

3

822

Autograph Collection1

-

-

7

705

7

705

The Ritz-Carlton

-

-

2

550

2

550

JW Marriott

-

-

1

496

1

496

The Luxury Collection2

-

-

4

417

4

417

Residence Inn

1

192

1

140

2

332

St. Regis

-

-

1

160

1

160

 Residences 

60

6,318

35

2,919

95

9,237

The Ritz-Carlton Residences

35

4,064

11

938

46

5,002

W Residences

10

1,089

5

519

15

1,608

St. Regis Residences

8

703

7

598

15

1,301

Bulgari Residences

-

-

5

514

5

514

Westin Residences

3

266

-

-

3

266

The Luxury Collection Residences

2

151

3

115

5

266

Marriott Hotels Residences

-

-

1

108

1

108

Autograph Collection Residences

-

-

1

62

1

62

Sheraton Residences

-

-

1

50

1

50

EDITION Residences

2

45

-

-

2

45

Le Méridien Residences

-

-

1

15

1

15

 Timeshare* 

72

18,905

19

3,850

91

22,755

Grand Total

5,573

939,187

2,006

474,467

7,579

1,413,654









*Timeshare property and room counts are included on this table in their geographical locations.  For external reporting purposes, these counts are captured in the Corporate segment.

1Includes five properties acquired when we purchased Elegant Hotels Group in December 2019 which we currently intend to re-brand under the Autograph Collection brand following the completion of planned renovations.

2 Includes two properties acquired when we purchased Elegant Hotels Group in December 2019 which we currently intend to re-brand under The Luxury Collection brand following the completion of planned renovations.

 

MARRIOTT INTERNATIONAL, INC.

TOTAL LODGING PRODUCTS

As of September 30, 2020









North America

Total International

Total Worldwide

Total Systemwide

Units

Rooms

Units

Rooms

Units

Rooms

 Luxury 

185

51,921

352

82,001

537

133,922

JW Marriott

33

18,139

68

24,812

101

42,951

The Ritz-Carlton

39

11,833

64

16,558

103

28,391

The Ritz-Carlton Residences

35

4,064

11

938

46

5,002

The Ritz-Carlton Serviced Apartments

-

-

5

713

5

713

The Luxury Collection1

16

5,030

102

18,361

118

23,391

The Luxury Collection Residences

2

151

3

115

5

266

W Hotels

26

7,690

33

8,813

59

16,503

W Residences

10

1,089

5

519

15

1,608

St. Regis

10

1,968

35

7,979

45

9,947

St. Regis Residences

8

703

7

598

15

1,301

St. Regis Serviced Apartments

-

-

1

70

1

70

EDITION

4

1,209

7

1,488

11

2,697

EDITION Residences

2

45

-

-

2

45

Bulgari

-

-

6

523

6

523

Bulgari Residences

-

-

5

514

5

514

 Full-Service 

994

348,411

930

260,987

1,924

609,398

Marriott Hotels

339

133,666

240

70,185

579

203,851

Marriott Hotels Residences

-

-

1

108

1

108

Marriott Hotels Serviced Apartments

-

-

1

154

1

154

Sheraton

186

71,074

260

84,866

446

155,940

Sheraton Residences

-

-

1

50

1

50

Westin

131

53,386

94

28,891

225

82,277

Westin Residences

3

266

-

-

3

266

Renaissance

88

29,191

88

26,305

176

55,496

Autograph Collection2

119

24,168

83

15,163

202

39,331

Autograph Collection Residences

-

-

1

62

1

62

Le Méridien

21

4,480

90

25,081

111

29,561

Le Méridien Residences

-

-

1

15

1

15

Delta Hotels

73

17,382

8

2,066

81

19,448

Gaylord Hotels

6

9,918

-

-

6

9,918

Tribute Portfolio

23

4,027

22

2,400

45

6,427

Marriott Executive Apartments

-

-

34

4,880

34

4,880

Design Hotels

5

853

6

761

11

1,614

 Limited-Service 

4,322

519,950

705

127,629

5,027

647,579

Courtyard

1,067

148,420

197

40,036

1,264

188,456

Fairfield by Marriott

1,048

98,530

60

10,001

1,108

108,531

Residence Inn

845

104,371

19

2,315

864

106,686

SpringHill Suites

479

56,604

-

-

479

56,604

Four Points

160

24,161

131

28,763

291

52,924

TownePlace Suites

448

45,473

-

-

448

45,473

Aloft

130

19,105

59

12,147

189

31,252

AC Hotels by Marriott

71

12,003

103

14,592

174

26,595

Moxy

21

4,149

50

9,889

71

14,038

Element

53

7,134

9

1,714

62

8,848

Protea Hotels

-

-

77

8,172

77

8,172

 Timeshare* 

72

18,905

19

3,850

91

22,755

 Grand Total 

5,573

939,187

2,006

474,467

7,579

1,413,654









*Timeshare property and room counts are included on this table in their geographical locations.  For external reporting purposes, these counts are captured in the Corporate segment.

1 Includes two properties acquired when we purchased Elegant Hotels Group in December 2019 which we currently intend to re-brand under The Luxury Collection brand following the completion of planned renovations.

2Includes five properties acquired when we purchased Elegant Hotels Group in December 2019 which we currently intend to re-brand under the Autograph Collection brand following the completion of planned renovations.

 

MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

In Constant $












Comparable Company-Operated North American Properties














Three Months Ended September 30, 2020 and September 30, 2019



REVPAR


Occupancy


Average Daily Rate

Brand


2020

 vs. 2019


2020

 vs. 2019


2020

 vs. 2019

JW Marriott


$49.27

-75.0%


20.6%

-59.1%

pts.


$239.49

-3.3%

The Ritz-Carlton


$101.50

-63.0%


27.2%

-44.4%

pts.


$373.43

-2.6%

W Hotels


$39.79

-81.5%


20.1%

-60.1%

pts.


$198.47

-26.0%

Composite North American Luxury1


$68.69

-72.0%


22.4%

-54.4%

pts.


$306.91

-3.9%

Marriott Hotels


$22.30

-85.4%


16.7%

-62.1%

pts.


$133.66

-31.0%

Sheraton


$18.36

-88.9%


13.8%

-68.2%

pts.


$132.85

-34.3%

Westin


$29.51

-83.2%


19.6%

-61.0%

pts.


$150.59

-30.9%

Composite North American Premium2


$23.57

-84.9%


16.6%

-62.6%

pts.


$141.69

-27.9%

North American Full-Service3 


$32.60

-81.2%


17.8%

-61.0%

pts.


$183.28

-16.9%

Courtyard


$27.30

-73.8%


28.0%

-46.2%

pts.


$97.48

-30.6%

Residence Inn


$61.60

-53.8%


48.6%

-33.5%

pts.


$126.85

-21.9%

Composite North American Limited-Service4

$36.23

-67.7%


33.4%

-43.5%

pts.


$108.45

-25.5%

North American - All5


$33.78

-78.0%


22.9%

-55.3%

pts.


$147.65

-24.9%























Comparable Systemwide North American Properties














Three Months Ended September 30, 2020 and September 30, 2019



REVPAR


Occupancy


Average Daily Rate

Brand


2020

 vs. 2019


2020

 vs. 2019


2020

 vs. 2019

JW Marriott


$48.78

-74.6%


22.3%

-56.9%

pts.


$219.09

-9.8%

The Ritz-Carlton


$98.97

-64.2%


26.8%

-45.7%

pts.


$369.90

-3.1%

W Hotels


$39.79

-81.5%


20.1%

-60.1%

pts.


$198.47

-26.0%

Composite North American Luxury1


$64.56

-72.7%


22.9%

-54.6%

pts.


$281.82

-7.6%

Marriott Hotels


$29.56

-77.8%


22.7%

-52.8%

pts.


$130.01

-26.3%

Sheraton


$25.44

-79.2%


23.2%

-53.5%

pts.


$109.64

-31.2%

Westin


$32.88

-78.9%


23.4%

-55.4%

pts.


$140.77

-28.8%

Composite North American Premium2


$31.61

-77.0%


23.5%

-53.0%

pts.


$134.44

-25.3%

North American Full-Service3 


$35.29

-76.3%


23.4%

-53.2%

pts.


$150.54

-22.4%

Courtyard


$38.42

-64.2%


37.3%

-38.3%

pts.


$102.99

-27.5%

Residence Inn


$69.28

-45.0%


58.9%

-23.7%

pts.


$117.62

-22.9%

Fairfield by Marriott


$43.63

-51.5%


46.8%

-29.3%

pts.


$93.22

-21.2%

Composite North American Limited-Service4

$48.02

-55.0%


46.3%

-31.5%

pts.


$103.80

-24.3%

North American - All5


$42.85

-65.4%


37.0%

-40.3%

pts.


$115.82

-27.6%












1 Includes JW Marriott, The Ritz-Carlton, W Hotels, The Luxury Collection, St. Regis, and EDITION.





2 Includes Marriott Hotels, Sheraton, Westin, Renaissance, Autograph Collection, Delta Hotels, Gaylord Hotels,



  and Le Méridien.  Systemwide also includes Tribute Portfolio.









3 Includes Composite North American Luxury and Composite North American Premium.






4 Includes Courtyard, Residence Inn, Fairfield by Marriott, SpringHill Suites, TownePlace Suites, Four Points, Aloft, Element, 

  and AC Hotels by Marriott.  Systemwide also includes Moxy.









5 Includes North American Full-Service and Composite North American Limited-Service.






 

MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

In Constant $












Comparable Company-Operated International Properties














Three Months Ended September 30, 2020 and September 30, 2019



REVPAR


Occupancy


Average Daily Rate

Region


2020

 vs. 2019


2020

 vs. 2019


2020

 vs. 2019

Greater China


$64.48

-24.5%


62.6%

-9.6%

pts.


$103.05

-12.9%

Rest of Asia Pacific


$26.73

-76.9%


24.3%

-51.2%

pts.


$110.24

-27.9%

Asia Pacific


$47.18

-52.4%


45.0%

-28.7%

pts.


$104.83

-22.1%












Caribbean & Latin America


$22.15

-78.2%


16.7%

-44.8%

pts.


$132.54

-19.9%

Europe


$33.34

-81.9%


18.0%

-62.5%

pts.


$185.36

-19.1%

Middle East & Africa


$34.17

-61.6%


25.8%

-40.0%

pts.


$132.30

-2.0%












International - All1


$39.97

-65.7%


33.6%

-39.3%

pts.


$118.96

-25.5%












Worldwide2


$37.09

-72.2%


28.6%

-46.7%

pts.


$129.61

-26.9%























Comparable Systemwide International Properties














Three Months Ended September 30, 2020 and September 30, 2019



REVPAR


Occupancy


Average Daily Rate

Region


2020

 vs. 2019


2020

 vs. 2019


2020

 vs. 2019

Greater China


$63.05

-25.6%


61.4%

-10.0%

pts.


$102.73

-13.4%

Rest of Asia Pacific


$31.45

-73.1%


25.4%

-49.8%

pts.


$123.86

-20.5%

Asia Pacific


$46.80

-53.8%


42.9%

-30.5%

pts.


$109.17

-21.0%












Caribbean & Latin America


$15.61

-82.0%


14.7%

-45.0%

pts.


$106.24

-26.8%

Europe


$34.36

-78.6%


20.8%

-58.7%

pts.


$165.11

-18.0%

Middle East & Africa


$31.93

-62.4%


25.3%

-40.7%

pts.


$126.03

-2.1%












International - All1


$37.42

-67.4%


30.7%

-41.9%

pts.


$122.06

-22.8%












Worldwide2


$41.24

-65.9%


35.1%

-40.8%

pts.


$117.44

-26.4%












1 Includes Asia Pacific, Caribbean & Latin America, Europe, and Middle East & Africa.






2 Includes North American - All and International - All.









 

MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

In Constant $












Comparable Company-Operated North American Properties














Nine Months Ended September 30, 2020 and September 30, 2019



REVPAR


Occupancy


Average Daily Rate

Brand


2020

 vs. 2019


2020

 vs. 2019


2020

 vs. 2019

JW Marriott


$78.89

-64.2%


28.6%

-51.0%

pts.


$275.88

-0.3%

The Ritz-Carlton


$134.18

-56.6%


31.6%

-43.1%

pts.


$424.45

2.6%

W Hotels


$65.14

-68.6%


27.3%

-49.0%

pts.


$238.44

-12.3%

Composite North American Luxury1


$104.13

-61.0%


29.4%

-47.5%

pts.


$354.32

1.9%

Marriott Hotels


$48.95

-68.6%


26.9%

-50.7%

pts.


$181.88

-9.5%

Sheraton


$45.01

-71.7%


25.5%

-53.0%

pts.


$176.84

-12.8%

Westin


$52.49

-69.0%


27.7%

-50.3%

pts.


$189.19

-13.0%

Composite North American Premium2


$48.24

-69.1%


26.5%

-51.0%

pts.


$181.95

-9.5%

North American Full-Service3 


$59.46

-66.6%


27.1%

-50.3%

pts.


$219.51

-4.7%

Courtyard


$37.53

-63.7%


30.9%

-41.6%

pts.


$121.62

-14.9%

Residence Inn


$67.13

-48.5%


47.4%

-32.8%

pts.


$141.63

-13.0%

Composite North American Limited-Service4

$45.59

-58.9%


35.5%

-39.6%

pts.


$128.43

-13.1%

North American - All5


$54.93

-64.8%


29.8%

-46.8%

pts.


$184.08

-9.7%























Comparable Systemwide North American Properties














Nine Months Ended September 30, 2020 and September 30, 2019



REVPAR


Occupancy


Average Daily Rate

Brand


2020

 vs. 2019


2020

 vs. 2019


2020

 vs. 2019

JW Marriott


$76.36

-63.2%


28.5%

-49.6%

pts.


$267.95

0.8%

The Ritz-Carlton


$130.37

-57.5%


31.0%

-43.9%

pts.


$419.97

2.5%

W Hotels


$65.14

-68.6%


27.3%

-49.0%

pts.


$238.44

-12.3%

Composite North American Luxury1


$96.77

-61.6%


29.2%

-47.6%

pts.


$331.36

1.0%

Marriott Hotels


$46.98

-64.8%


29.2%

-45.1%

pts.


$160.88

-10.6%

Sheraton


$39.79

-66.0%


29.7%

-43.7%

pts.


$134.01

-15.9%

Westin


$52.98

-65.5%


30.0%

-46.5%

pts.


$176.87

-12.0%

Composite North American Premium2


$48.27

-64.6%


29.7%

-44.9%

pts.


$162.76

-11.0%

North American Full-Service3 


$53.70

-64.0%


29.6%

-45.2%

pts.


$181.40

-9.1%

Courtyard


$43.15

-58.4%


36.6%

-36.5%

pts.


$117.85

-16.9%

Residence Inn


$68.90

-42.7%


54.6%

-25.1%

pts.


$126.21

-16.2%

Fairfield by Marriott


$41.45

-50.8%


42.0%

-30.3%

pts.


$98.76

-15.3%

Composite North American Limited-Service4

$49.43

-51.5%


43.4%

-31.5%

pts.


$113.93

-16.3%

North American - All5


$51.16

-57.7%


37.8%

-37.0%

pts.


$135.36

-16.3%












1 Includes JW Marriott, The Ritz-Carlton, W Hotels, The Luxury Collection, St. Regis, and EDITION.





2 Includes Marriott Hotels, Sheraton, Westin, Renaissance, Autograph Collection, Delta Hotels, Gaylord Hotels,



  and Le Méridien.  Systemwide also includes Tribute Portfolio.









3 Includes Composite North American Luxury and Composite North American Premium.






4 Includes Courtyard, Residence Inn, Fairfield by Marriott, SpringHill Suites, TownePlace Suites, Four Points, Aloft, Element, 

  and AC Hotels by Marriott.  Systemwide also includes Moxy.









5 Includes North American Full-Service and Composite North American Limited-Service.






 

MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

In Constant $












Comparable Company-Operated International Properties














Nine Months Ended September 30, 2020 and September 30, 2019



REVPAR


Occupancy


Average Daily Rate

Region


2020

 vs. 2019


2020

 vs. 2019


2020

 vs. 2019

Greater China


$42.51

-49.2%


41.2%

-27.1%

pts.


$103.11

-15.9%

Rest of Asia Pacific


$42.06

-63.3%


30.6%

-42.5%

pts.


$137.40

-12.4%

Asia Pacific


$42.30

-56.8%


36.4%

-34.1%

pts.


$116.34

-16.2%












Caribbean & Latin America


$53.66

-57.8%


25.7%

-38.0%

pts.


$208.81

4.4%

Europe


$39.95

-73.9%


22.9%

-51.7%

pts.


$174.44

-15.1%

Middle East & Africa


$48.31

-50.5%


34.2%

-32.0%

pts.


$141.20

-4.2%












International - All1


$43.71

-61.0%


32.2%

-37.9%

pts.


$135.63

-15.2%












Worldwide2


$48.91

-63.1%


31.1%

-42.0%

pts.


$157.20

-13.3%























Comparable Systemwide International Properties














Nine Months Ended September 30, 2020 and September 30, 2019



REVPAR


Occupancy


Average Daily Rate

Region


2020

 vs. 2019


2020

 vs. 2019


2020

 vs. 2019

Greater China


$41.76

-49.8%


40.6%

-27.2%

pts.


$102.95

-16.1%

Rest of Asia Pacific


$43.40

-62.1%


31.0%

-41.8%

pts.


$139.82

-11.0%

Asia Pacific


$42.60

-57.1%


35.7%

-34.7%

pts.


$119.45

-15.3%












Caribbean & Latin America


$41.44

-60.9%


24.2%

-37.7%

pts.


$171.10

0.0%

Europe


$37.10

-72.0%


23.9%

-49.3%

pts.


$155.31

-14.2%

Middle East & Africa


$45.63

-51.0%


33.6%

-32.4%

pts.


$135.90

-3.6%












International - All1


$41.27

-62.1%


30.6%

-39.0%

pts.


$134.98

-13.8%












Worldwide2


$48.23

-59.0%


35.7%

-37.6%

pts.


$135.27

-15.6%












1 Includes Asia Pacific, Caribbean & Latin America, Europe, and Middle East & Africa.






2 Includes North American - All and International - All.









 


MARRIOTT INTERNATIONAL, INC.


NON-GAAP FINANCIAL MEASURES


ADJUSTED EBITDA


($ in millions)














Fiscal Year 2020





First
Quarter


Second
Quarter


Third
Quarter


Total




Net income (loss), as reported

$                   31


$            (234)


$             100


$            (103)




Cost reimbursement revenue

(3,797)


(1,202)


(1,789)


(6,788)




Reimbursed expenses

3,877


1,241


1,683


6,801




Interest expense

93


127


113


333




Interest expense from unconsolidated joint ventures 

3


1


12


16




(Benefit) provision for income taxes

(12)


(64)


27


(49)




Depreciation and amortization

150


72


53


275




Contract investment amortization

25


21


48


94




Depreciation classified in reimbursed expenses

26


27


27


80




Depreciation and amortization from unconsolidated joint ventures 

7


16


3


26




Share-based compensation

41


50


49


140




Restructuring and merger-related (recoveries) charges

(2)


6


1


5




Adjusted EBITDA **

$                 442


$               61


$             327


$             830















Change from 2019 Adjusted EBITDA **

-46%


-94%


-64%


-69%
















Fiscal Year 2019 



First
Quarter


Second
Quarter


Third
Quarter


Fourth
Quarter


Total


Net income, as reported

$                 375


$             232


$             387


$             279


$           1,273


Cost reimbursement revenue

(3,756)


(3,903)


(3,952)


(3,988)


(15,599)


Reimbursed expenses

3,892


4,107


4,070


4,370


16,439


Interest expense

97


102


100


95


394


Interest expense from unconsolidated joint ventures

2


1


3


2


8


Provision for income taxes

57


82


140


47


326


Depreciation and amortization

54


56


52


179


341


Contract investment amortization

14


15


16


17


62


Depreciation classified in reimbursed expenses

30


29


33


29


121


Depreciation and amortization from unconsolidated joint ventures

7


8


5


9


29


Share-based compensation

40


50


47


49


186


Gain on asset dispositions

-


-


(9)


(134)


(143)


Restructuring and merger-related (recoveries) charges

9


173


9


(53)


138


Adjusted EBITDA **

$                 821


$             952


$             901


$             901


$           3,575























**

Denotes non-GAAP financial measures. Please see pages A-12 and A-13 for information about our reasons for providing these alternative financial measures and


the limitations on their use.










 

MARRIOTT INTERNATIONAL, INC.
EXPLANATION OF NON-GAAP FINANCIAL AND PERFORMANCE MEASURES

In our press release and schedules, and on the related conference call, we report certain financial measures that are not required by, or presented in accordance with, United States generally accepted accounting principles ("GAAP"). We discuss management's reasons for reporting these non-GAAP measures below, and the press release schedules reconcile the most directly comparable GAAP measure to each non-GAAP measure that we refer to. Although management evaluates and presents these non-GAAP measures for the reasons described below, please be aware that these non-GAAP measures have limitations and should not be considered in isolation or as a substitute for revenue, operating income, net income/loss, earnings/loss per share or any other comparable operating measure prescribed by GAAP. In addition, we may calculate and/or present these non-GAAP financial measures differently than measures with the same or similar names that other companies report, and as a result, the non-GAAP measures we report may not be comparable to those reported by others.
 
Adjusted Operating Income and Adjusted Operating Income Margin.  Adjusted operating income and Adjusted operating income margin exclude cost reimbursement revenue, reimbursed expenses, and restructuring and merger-related (recoveries) charges. Adjusted operating income margin reflects Adjusted operating income divided by Adjusted total revenues. We believe that these are meaningful metrics because they allow for period-over-period comparisons of our ongoing operations before these items and for the reasons further described below.
 
Adjusted Net Income/Loss and Adjusted Diluted Earnings/Loss Per Share. Adjusted net income/loss and Adjusted diluted EPS reflect our net income/loss and diluted earnings/loss per share excluding the impact of cost reimbursement revenue, reimbursed expenses, restructuring and merger-related (recoveries) charges, and the income tax effect of these adjustments. We calculate the income tax effect of the adjustments using an estimated tax rate applicable to each adjustment. We believe that these measures are meaningful indicators of our performance because they allow for period-over-period comparisons of our ongoing operations before these items and for the reasons further described below.
 
Adjusted Earnings Before Interest Expense, Taxes, Depreciation and Amortization ("Adjusted EBITDA"). Adjusted EBITDA reflects net income/loss excluding the impact of the following items: cost reimbursement revenue and reimbursed expenses, interest expense, depreciation (including depreciation classified in "Reimbursed expenses," as discussed below), amortization, and benefit (provision) for income taxes, restructuring and merger-related (recoveries) charges, and share-based compensation expense for all periods presented. When applicable, Adjusted EBITDA also excludes gains and losses on asset dispositions made by us or by our joint venture investees.
 
In our presentations of Adjusted operating income and Adjusted operating income margin, Adjusted net income/loss, Adjusted diluted EPS and Adjusted EBITDA, we exclude charges incurred under our restructuring plans that we initiated beginning in the 2020 second quarter to achieve cost savings in response to the decline in lodging demand caused by COVID-19 and transition costs associated with the Starwood merger, which we record in the "Restructuring and merger-related charges" caption of our Income Statements, to allow for period-over period comparisons of our ongoing operations before the impact of these items. We exclude cost reimbursement revenue and reimbursed expenses, which relate to property-level and centralized programs and services that we operate for the benefit of our hotel owners. We do not operate these programs and services to generate a profit over the contract term, and accordingly, when we recover the costs that we incur for these programs and services from our hotel owners, we do not seek a mark-up. For property-level services, our owners typically reimburse us at the same time that we incur expenses. However, for centralized programs and services, our owners may reimburse us before or after we incur expenses, causing timing differences between the costs we incur and the related reimbursement from hotel owners in our operating and net income. Over the long term, these programs and services are not designed to impact our economics, either positively or negatively. Because we do not retain any such profits or losses over time, we exclude the net impact when evaluating period-over-period changes in our operating results.
 
We believe that Adjusted EBITDA is a meaningful indicator of our operating performance because it permits period-over-period comparisons of our ongoing operations before these items and facilitates our comparison of results before these items with results from other lodging companies. We use Adjusted EBITDA to evaluate companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company's capital structure, debt levels, and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provisions for income taxes can vary considerably among companies. Our Adjusted EBITDA also excludes depreciation and amortization expense which we report under "Depreciation, amortization, and other" as well as depreciation classified in "Reimbursed expenses" and "Contract investment amortization" in our Consolidated Statements of Income (our "Income Statements"), because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. Depreciation classified in "Reimbursed expenses" reflects depreciation of Marriott-owned assets, for which we receive cash from owners to reimburse the company for its investments made for the benefit of the system. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We exclude share-based compensation expense in all periods presented to address the considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted.

MARRIOTT INTERNATIONAL, INC.
EXPLANATION OF NON-GAAP FINANCIAL AND PERFORMANCE MEASURES

RevPAR. In addition to the foregoing non-GAAP financial measures, we present Revenue per Available Room ("RevPAR") as a performance measure. We believe RevPAR is a meaningful indicator of our performance because it measures the period-over-period change in room revenues for comparable properties. RevPAR relates to property level revenue and may not be comparable to similarly titled measures, such as revenues, and should not be viewed as necessarily correlating with our fee revenue. We calculate RevPAR by dividing room sales (recorded in local currency) for comparable properties by room nights available for the period. We do not consider interruptions related to COVID-19 when determining which properties to classify as comparable. We present growth in comparative RevPAR on a constant dollar basis, which we calculate by applying exchange rates for the current period to each period presented. We believe constant dollar analysis provides valuable information regarding our properties' performance as it removes currency fluctuations from the presentation of such results.

 

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SOURCE Marriott International, Inc.

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