8-K
Marriott International Inc /Md/ (MAR)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________
FORM 8-K
_______________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 10, 2023
_______________________________________
MARRIOTT INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
_______________________________________
| Delaware | 1-13881 | 52-2055918 | ||
|---|---|---|---|---|
| (State or other jurisdiction<br>of incorporation) | (Commission<br>File Number) | (IRS Employer<br>Identification No.) | ||
| 7750 Wisconsin Avenue | Bethesda | Maryland | 20814 | |
| (Address of principal executive offices) | (Zip Code) |
Registrantâs telephone number, including area code: (301)Â 380-3000
_______________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| â | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | | --- | --- || â | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | | --- | --- || â | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | | --- | --- || â | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | | --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
|---|---|---|---|---|
| Class A Common Stock, $0.01 par value | MAR | Nasdaq Global Select Market | Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter) | |
| --- | Emerging growth company | â | ||
| --- | --- | --- | ||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | â | |||
| Item 2.02. | Results of Operations and Financial Condition. | |||
| --- | --- |
Financial Results for the Quarter and Year Ended December 31, 2022
Marriott International, Inc. (âMarriottâ) issued a press release reporting financial results for the quarter and year ended December 31, 2022.
A copy of Marriottâs press release is attached as Exhibit 99 and incorporated by reference.
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
|---|
On February 10, 2023, Craig S. Smith, Group President, International of Marriott informed Marriott that he has decided to retire effective February 24, 2023.
| Item 9.01. | Financial Statements and Exhibits. | |||
|---|---|---|---|---|
| (d) Exhibits. The following exhibits are furnished with this report: | 99 | Press release dated February 14, 2023, reporting financial results for the quarter and year ended December 31, 2022. | ||
| --- | --- | |||
| 104 | The cover page to this Current Report on Form 8-K, formatted in inline XBRL. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MARRIOTT INTERNATIONAL, INC. | ||
|---|---|---|
| Date: February 14, 2023 | By: | /s/ Felitia Lee |
| Felitia Lee | ||
| Controller and Chief Accounting Officer |
3
Document
Exhibit 99
    
NEWS
MARRIOTT INTERNATIONAL REPORTS FOURTH QUARTER AND FULL YEAR 2022 RESULTS
âąFourth quarter 2022 comparable systemwide constant dollar RevPAR increased 28.8 percent worldwide, 23.6 percent in the U.S. & Canada, and 45.1 percent in international markets, compared to the 2021 fourth quarter;
âąFourth quarter 2022 comparable systemwide constant dollar RevPAR increased 4.6 percent worldwide, 5.2 percent in the U.S. & Canada, and 3.4 percent in international markets, compared to the 2019 fourth quarter;
âąFourth quarter reported diluted EPS totaled $2.12, compared to reported diluted EPS of $1.42 in the year-ago quarter. Fourth quarter adjusted diluted EPS totaled $1.96, compared to fourth quarter 2021 adjusted diluted EPS of $1.30;
âąFourth quarter reported net income totaled $673 million, compared to reported net income of $468 million in the year-ago quarter. Fourth quarter adjusted net income totaled $622 million, compared to fourth quarter 2021 adjusted net income of $430 million;
âąAdjusted EBITDA totaled $1,090 million in the 2022 fourth quarter, compared to fourth quarter 2021 adjusted EBITDA of $741 million;
âąThe company added more than 65,000 rooms globally during 2022, including approximately 40,000 rooms in international markets and nearly 17,500 conversion rooms. Net rooms grew 3.1 percent from year-end 2022;
âąAt the end of the year, Marriottâs worldwide development pipeline totaled over 3,000 properties and more than 496,000 rooms, including roughly 22,300 rooms approved, but not yet subject to signed contracts. Approximately 199,000 rooms in the pipeline were under construction as of the end of 2022;
âąFor full year 2022, Marriott repurchased 16.8 million shares of common stock for $2.6 billion, including 8.7 million shares for $1.4 billion in the fourth quarter. The company returned $2.9 billion to shareholders in 2022.
BETHESDA, MD â February 14, 2023 - Marriott International, Inc. (NASDAQ: MAR) today reported fourth quarter and full year 2022 results.
Anthony Capuano, Chief Executive Officer, said, âOur performance in 2022 was terrific. Just two years after experiencing the sharpest downturn in our companyâs history, we reported record financial results. Our fee-driven, asset-light business model generated significant cash during the year, allowing us to both invest in the growth of our business and return $2.9 billion to shareholders.
âFor the fourth quarter, worldwide RevPAR1 grew 5 percent compared to 2019, driven by a 13 percent increase in ADR. With the exception of Greater China, RevPAR in all regions more than fully recovered and continued to show meaningful advances in occupancy and ADR. Our international business posted RevPAR 3 percent above 2019 levels in the fourth quarter.
âIn our largest region, the U.S. & Canada, RevPAR increased 5 percent over the 2019 quarter, driven by further improvement in occupancy and an 11 percent increase in ADR. Leisure demand remained robust and group demand more than fully recovered, leading to fourth quarter group revenues 10 percent above pre-pandemic levels. Business transient demand was at nearly 90 percent recovery in the quarter, while ADR was 3 percent above 2019. Our successful negotiation of high single-digit special corporate rate increases for 2023 bodes well for continued price strength.
âOwners and franchisees continue to show a strong preference for our brands. Our development team had an excellent year, signing nearly 108,000 rooms globally. We were pleased to see nearly 40 percent of those rooms in high value luxury and premium brands. With nearly 50 percent of rooms signed during the year in international markets, we look forward to further expanding our distribution and adding more options for our over 177 million Marriott Bonvoy members.
âAs we look ahead, while concerns about the macroeconomic environment persist around the world, booking trends to date remain robust and we have significant momentum in our business. With our industry-leading brand portfolio, powerful loyalty program, the largest global rooms distribution, and our incredibly dedicated associates, Marriott is well-positioned for strong growth over the coming years as people around the world further embrace their love for travel.â
Fourth Quarter 2022 Results
Marriottâs reported operating income totaled $996 million in the 2022 fourth quarter, compared to 2021 fourth quarter reported operating income of $635 million. Reported net income totaled $673 million in the 2022 fourth quarter, compared to 2021 fourth quarter reported net income of $468 million. Reported diluted earnings per share (EPS) totaled $2.12 in the quarter, compared to reported diluted EPS of $1.42 in the year-ago quarter.
Adjusted operating income in the 2022 fourth quarter totaled $926 million, compared to 2021 fourth quarter adjusted operating income of $578 million. Fourth quarter 2022 adjusted net income totaled $622 million, compared to 2021 fourth quarter adjusted net income of $430 million. Adjusted diluted
1 All occupancy, Average Daily Rate (ADR) and RevPAR statistics and estimates are 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. Occupancy, ADR and RevPAR comparisons between 2022 and 2021 reflect properties that are comparable in both years. Occupancy, ADR and RevPAR comparisons between 2022 and 2019 reflect properties that are defined as comparable as of December 31, 2022, even if they were not open and operating for the full year 2019 or they did not meet all the other criteria for comparable in 2019. Unless otherwise stated, all comparisons to pre-pandemic or 2019 are comparing to the same time period each year.
EPS in the 2022 fourth quarter totaled $1.96, compared to adjusted diluted EPS of $1.30 in the year-ago quarter.
Adjusted results excluded cost reimbursement revenue, reimbursed expenses and restructuring, merger-related charges, and other expenses. See pages A-3 and A-12 for the calculation of adjusted results and the manner in which the adjusted measures are determined in this press release.
Base management and franchise fees totaled $945 million in the 2022 fourth quarter, compared to base management and franchise fees of $737 million in the year-ago quarter. The year-over-year increase in these fees is primarily attributable to RevPAR increases due to the continued recovery in lodging demand, as well as unit growth, partially offset by $16 million of unfavorable foreign exchange. Other non-RevPAR related franchise fees in the 2022 fourth quarter totaled $215 million, compared to $186 million in the year-ago quarter, largely driven by higher credit card branding fees.
Incentive management fees totaled $186 million in the 2022 fourth quarter, compared to $94 million in the 2021 fourth quarter. Fees in the quarter surpassed 2019 levels, with 60 percent earned in International markets.
Owned, leased, and other revenue, net of direct expenses, totaled $101 million in the 2022 fourth quarter, compared to $33 million in the year-ago quarter. The year-over-year increase in revenue net of expenses largely reflects the continued recovery in lodging demand and $21 million of higher termination fees.
General, administrative, and other expenses for the 2022 fourth quarter totaled $236 million, compared to $213 million in the year-ago quarter. The year-over-year change included an $18 million favorable litigation settlement in the 2021 fourth quarter.
Interest expense, net, totaled $107 million in the 2022 fourth quarter compared to $91 million in the year-ago quarter. The increase was largely due to higher interest expense associated with higher debt balances.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $1,090 million in the 2022 fourth quarter, compared to fourth quarter 2021 adjusted EBITDA of $741 million. See page A-12 for the adjusted EBITDA calculation.
Selected Performance Information
The company added 145 properties (22,589 rooms) to its worldwide lodging portfolio during the 2022 fourth quarter, including nearly 6,900 rooms converted from competitor brands and approximately
16,700 rooms in international markets. Eighteen properties (4,484 rooms) exited the system during the quarter. At the end of the year, Marriottâs global lodging system totaled nearly 8,300 properties, with over 1,525,000 rooms.
At the end of the year, the companyâs worldwide development pipeline totaled 3,028 properties with more than 496,000 rooms, including 1,009 properties with approximately 199,000 rooms under construction, or 40 percent of the pipeline, and 133 properties with roughly 22,300 rooms approved for development, but not yet subject to signed contracts.
In the 2022 fourth quarter, worldwide RevPAR increased 28.8 percent (a 25.6 percent increase using actual dollars) compared to the 2021 fourth quarter. RevPAR in the U.S. & Canada increased 23.6 percent (a 23.3 percent increase using actual dollars), and RevPAR in international markets increased 45.1 percent (a 32.2 percent increase using actual dollars).
Balance Sheet & Common Stock
At year-end 2022, Marriottâs total debt was $10.1 billion and cash and equivalents totaled $0.5 billion, compared to $10.1 billion in debt and $1.4 billion of cash and equivalents at year-end 2021.
The company repurchased 8.7 million shares of common stock in the 2022 fourth quarter for $1.4 billion. For full year 2022, Marriott repurchased 16.8 million shares for $2.6 billion. Year to date through February 10, the company has repurchased 2.5 million shares for $400 million.
Company Outlook1
Results in the first quarter are expected to benefit significantly from the easier comparison to the 2022 quarter when the emergence of Omicron depressed lodging demand. Roughly halfway through the quarter, global booking trends remain robust. In January, worldwide RevPAR was up 51.6 percent year over year.
Given short-term booking windows and a high level of macroeconomic uncertainty, there is less visibility in forecasting the companyâs financial performance for full year 2023. As a result, the company is providing a broad range of potential full year RevPAR and other key metrics in the following tables. The high end of the range reflects relatively steady global economic conditions throughout 2023, with continued resilience of travel demand across customer segments and markets. The low end of the range reflects a meaningful softening of the global economy beginning in the second quarter with worldwide RevPAR roughly flat compared to 2022 in the second half of the year.
| Full Year 2023<br><br>vs Full Year 2022 | |
|---|---|
| Comparable systemwide constant RevPAR growth | |
| Worldwide | 6% to 11% |
| U.S. & Canada | 5% to 9% |
| International | 12% to 18% |
All values are in US Dollars.
| Year-End 2023<br><br>vs Year-End 2022 | ||
|---|---|---|
| Gross Rooms Growth | Approx. 5.5% | |
| Deletions | 1% to 1.5% | |
| Net rooms growth | 4% to 4.5% | |
| ($ in millions, except EPS) | First Quarter 2023 | Full Year 2023 |
| --- | --- | --- |
| Gross fee revenues | $1,045 to $1,065 | $4,325 to $4,555 |
| Owned, leased, and other revenue, net of direct expenses | Approx. $60 | $265 to $285 |
| General, administrative, and other expenses | $205 to $200 | $935 to $915 |
| Adjusted EBITDA2,3 | $980 to $1,005 | $4,030 to $4,300 |
| Adjusted EPS â diluted3 | $1.82 to $1.88 | $7.23 to $7.91 |
1This outlook assumes that the $100 million City Express transaction closes in the first half of 2023.
2See pages A-13 & A-14 for the adjusted EBITDA calculations.
3Adjusted EBITDA and Adjusted EPS â diluted for first quarter and full year 2023 do not include cost reimbursement revenue, reimbursed expenses, restructuring, merger-related charges, and other expenses, or any asset sales that may occur during the year, each of which the company cannot forecast with sufficient accuracy, and which may be significant.
Additional Company Information
Marriott also announced that Craig S. Smith, Group President, International, has announcedâŻhis decision to retire February 24, 2023, after a 35-year career with the company.
Marriott International, Inc. (NASDAQ: MAR) will conduct its quarterly earnings review for the investment community and news media on Tuesday, February 14, 2023, at 8:30 a.m. Eastern Time (ET). The conference call will be webcast simultaneously via Marriottâs investor relations website at http://www.marriott.com/investor, click on âEvents & Presentationsâ and click on the quarterly conference call link. A replay will be available at that same website until February 13, 2024.
The telephone dial-in number for the conference call is US Toll Free: 800-274-8461, or Global: +1 203-518-9814. The conference ID is MAR4Q22. A telephone replay of the conference call will be available from 1:00 p.m. ET, Tuesday, February 14, 2023, until 8:00 p.m. ET, Tuesday, February 21, 2023. To access the replay, call US Toll Free: 800-839-9562 or Global: +1 402-220-6090.
Note on forward-looking statements: All statements in this press release and the accompanying schedules are made as of February 14, 2023. 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 our RevPAR, rooms growth and other financial metric estimates, outlook and assumptions; our growth prospects; the effect of changes in global macroeconomic conditions; travel and lodging demand trends and expectations; booking, occupancy, ADR and RevPAR trends and expectations; our development pipeline, signings, deletions, and growth expectations; our expectations regarding the addition of the City Express brand portfolio to our system; the companyâs expectations related to distribution and product offerings; 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 the risk factors that we identify in our Securities and Exchange Commission filings, including our most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q. 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 nearly 8,300 properties under 30 leading brands spanning 138 countries and territories. Marriott operates and franchises hotels and licenses vacation ownership resorts all around the world. The company offers Marriott BonvoyÂź, 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 encourages investors, the media, and others interested in the company to review and subscribe to the information Marriott posts on its investor relations website at www.marriott.com/investor or Marriott's news center website at www.marriottnewscenter.com, 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.
| CONTACTS: | Melissa Froehlich Flood |
|---|---|
| Corporate Relations | |
| (301) 380-4839 | |
| newsroom@marriott.com | |
| Jackie Burka McConagha | |
| Investor Relations | |
| (301) 380-5126 | |
| jackie.mcconagha@marriott.com | |
| Betsy Dahm | |
| Investor Relations | |
| (301) 380-3372 | |
| betsy.dahm@marriott.com |
IRPR#1
Tables follow
| MARRIOTT INTERNATIONAL, INC. | |
|---|---|
| PRESS RELEASE SCHEDULES | |
| TABLE OF CONTENTS | |
| QUARTER 4, 2022 | |
| 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-12 |
| Adjusted EBITDA Forecast - First Quarter 2023 | A-13 |
| Adjusted EBITDA Forecast - Full Year 2023 | A-14 |
| Explanation of Non-GAAP Financial and Performance Measures | A-15 |
MARRIOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED
FOURTH QUARTER 2022 AND 2021
(in millions except per share amounts, unaudited)
| As Reported | As Reported | Percent | |||
|---|---|---|---|---|---|
| Three Months Ended | Three Months Ended | Better/(Worse) | |||
| December 31, 2022 | December 31, 2021 | Reported 2022 vs. 2021 | |||
| REVENUES | |||||
| Base management fees | $ | 287 | $ | 217 | 32 |
| Franchise fees 1 | 658 | 520 | 27 | ||
| Incentive management fees | 186 | 94 | 98 | ||
| Gross Fee Revenues | 1,131 | 831 | 36 | ||
| Contract investment amortization 2 | (24) | (19) | (26) | ||
| Net Fee Revenues | 1,107 | 812 | 36 | ||
| Owned, leased, and other revenue 3 | 396 | 260 | 52 | ||
| Cost reimbursement revenue 4 | 4,420 | 3,374 | 31 | ||
| Total Revenues | 5,923 | 4,446 | 33 | ||
| OPERATING COSTS AND EXPENSES | |||||
| Owned, leased, and other - direct 5 | 295 | 227 | (30) | ||
| Depreciation, amortization, and other 6 | 46 | 54 | 15 | ||
| General, administrative, and other 7 | 236 | 213 | (11) | ||
| Restructuring, merger-related charges, and other | 1 | â | * | ||
| Reimbursed expenses 4 | 4,349 | 3,317 | (31) | ||
| Total Expenses | 4,927 | 3,811 | (29) | ||
| OPERATING INCOME | 996 | 635 | 57 | ||
| Gains and other income, net 8 | 2 | 4 | (50) | ||
| Interest expense | (115) | (97) | (19) | ||
| Interest income | 8 | 6 | 33 | ||
| Equity in earnings (losses) 9 | â | â | â | ||
| INCOME BEFORE INCOME TAXES | 891 | 548 | 63 | ||
| Provision for income taxes | (218) | (80) | (173) | ||
| NET INCOME | $ | 673 | $ | 468 | 44 |
| EARNINGS PER SHARE | |||||
| Earnings per share - basic | $ | 2.13 | $ | 1.43 | 49 |
| Earnings per share - diluted | $ | 2.12 | $ | 1.42 | 49 |
| 0 | |||||
| Basic Shares | 316.5 | 327.6 | |||
| Diluted Shares | 317.9 | 329.8 |
*Calculated percentage is not meaningful.
1Franchise fees include fees from our franchise agreements, application and relicensing fees, timeshare and yacht fees, co-branded credit card fees, and residential branding fees.
2Contract investment amortization includes amortization of capitalized costs to obtain contracts with our owner and franchisee customers, and any related impairments, accelerations, or write-offs.
3Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, and other revenue.
4Cost 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.
5Owned, leased, and other - direct expenses include operating expenses related to our owned or leased hotels, including lease payments and pre-opening expenses.
6Depreciation, 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.
7General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses.
8Gains 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.
9Equity in earnings (losses) include our equity in earnings or losses of unconsolidated equity method investments.
A-1
MARRIOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED
FOURTH QUARTER YEAR-TO-DATE 2022 AND 2021
(in millions except per share amounts, unaudited)
| As Reported | As Reported | Percent | |||
|---|---|---|---|---|---|
| Twelve Months Ended | Twelve Months Ended | Better/(Worse) | |||
| December 31, 2022 | December 31, 2021 | Reported 2022 vs. 2021 | |||
| REVENUES | |||||
| Base management fees | $ | 1,044 | $ | 669 | 56 |
| Franchise fees 1 | 2,505 | 1,790 | 40 | ||
| Incentive management fees | 529 | 235 | 125 | ||
| Gross Fee Revenues | 4,078 | 2,694 | 51 | ||
| Contract investment amortization 2 | (89) | (75) | (19) | ||
| Net Fee Revenues | 3,989 | 2,619 | 52 | ||
| Owned, leased, and other revenue 3 | 1,367 | 796 | 72 | ||
| Cost reimbursement revenue 4 | 15,417 | 10,442 | 48 | ||
| Total Revenues | 20,773 | 13,857 | 50 | ||
| OPERATING COSTS AND EXPENSES | |||||
| Owned, leased, and other - direct 5 | 1,074 | 734 | (46) | ||
| Depreciation, amortization, and other 6 | 193 | 220 | 12 | ||
| General, administrative, and other 7 | 891 | 823 | (8) | ||
| Restructuring, merger-related charges, and other | 12 | 8 | (50) | ||
| Reimbursed expenses 4 | 15,141 | 10,322 | (47) | ||
| Total Expenses | 17,311 | 12,107 | (43) | ||
| OPERATING INCOME | 3,462 | 1,750 | 98 | ||
| Gains and other income, net 8 | 11 | 10 | 10 | ||
| Loss on extinguishment of debt | â | (164) | 100 | ||
| Interest expense | (403) | (420) | 4 | ||
| Interest income | 26 | 28 | (7) | ||
| Equity in earnings (losses) 9 | 18 | (24) | 175 | ||
| INCOME BEFORE INCOME TAXES | 3,114 | 1,180 | 164 | ||
| Provision for income taxes | (756) | (81) | (833) | ||
| NET INCOME | $ | 2,358 | $ | 1,099 | 115 |
| EARNINGS PER SHARE | |||||
| Earnings per share - basic | $ | 7.27 | $ | 3.36 | 116 |
| Earnings per share - diluted | $ | 7.24 | $ | 3.34 | 117 |
| Basic Shares | 324.4 | 327.2 | |||
| Diluted Shares | 325.8 | 329.3 |
1Franchise fees include fees from our franchise agreements, application and relicensing fees, timeshare and yacht fees, co-branded credit card fees, and residential branding fees.
2Contract investment amortization includes amortization of capitalized costs to obtain contracts with our owner and franchisee customers, and any related impairments, accelerations, or write-offs.
3Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, and other revenue.
4Cost 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.
5Owned, leased, and other - direct expenses include operating expenses related to our owned or leased hotels, including lease payments and pre-opening expenses.
6Depreciation, 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.
7General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses.
8Gains 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.
9Equity in earnings (losses) include our equity in earnings or losses of unconsolidated equity method investments.
A-2
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, and Adjusted diluted earnings 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 | Twelve Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2022 | December 31, 2021 | Percent Better/(Worse) | December 31, 2022 | December 31, 2021 | Percent Better/(Worse) | |||||||||
| Total revenues, as reported | $ | 5,923 | $ | 4,446 | $ | 20,773 | $ | 13,857 | ||||||
| Less: Cost reimbursement revenue | (4,420) | (3,374) | (15,417) | (10,442) | ||||||||||
| Add: Impairments 1 | â | â | 5 | â | ||||||||||
| Adjusted total revenues ** | 1,503 | 1,072 | 5,361 | 3,415 | ||||||||||
| Operating income, as reported | 996 | 635 | 3,462 | 1,750 | ||||||||||
| Less: Cost reimbursement revenue | (4,420) | (3,374) | (15,417) | (10,442) | ||||||||||
| Add: Reimbursed expenses | 4,349 | 3,317 | 15,141 | 10,322 | ||||||||||
| Add: Restructuring, merger-related charges, and other | 1 | â | 12 | 8 | ||||||||||
| Add: Impairments 2 | â | â | 5 | 11 | ||||||||||
| Adjusted operating income ** | 926 | 578 | 60% | 3,203 | 1,649 | 94% | ||||||||
| Operating income margin | 17 | % | 14 | % | 17 | % | 13 | % | ||||||
| Adjusted operating income margin ** | 62 | % | 54 | % | 60 | % | 48 | % | ||||||
| Net income, as reported | 673 | 468 | 2,358 | 1,099 | ||||||||||
| Less: Cost reimbursement revenue | (4,420) | (3,374) | (15,417) | (10,442) | ||||||||||
| Add: Reimbursed expenses | 4,349 | 3,317 | 15,141 | 10,322 | ||||||||||
| Add: Restructuring, merger-related charges, and other | 1 | â | 12 | 8 | ||||||||||
| Add: Impairments 3 | â | â | 11 | 15 | ||||||||||
| Add: Loss on extinguishment of debt | â | â | â | 164 | ||||||||||
| Less: Gains on investeesâ property sales 4 | â | â | (23) | â | ||||||||||
| Less: Gain on asset dispositions 5 | â | â | (2) | â | ||||||||||
| Income tax effect of above adjustments | 19 | 19 | 69 | (17) | ||||||||||
| Less: Income tax special items | â | â | 30 | (98) | ||||||||||
| Adjusted net income ** | $ | 622 | $ | 430 | 45% | $ | 2,179 | $ | 1,051 | 107% | ||||
| Diluted earnings per share, as reported | $ | 2.12 | $ | 1.42 | $ | 7.24 | $ | 3.34 | ||||||
| Adjusted diluted earnings per share** | $ | 1.96 | $ | 1.30 | 51% | $ | 6.69 | $ | 3.19 | 110% |
**Denotes non-GAAP financial measures. Please see pages A-15 and A-16 for information about our reasons for providing these alternative financial measures and the limitations on their use.
1 Twelve months ended December 31, 2022 includes impairment charges reported in Contract investment amortization of $5 million.
2 Twelve months ended December 31, 2022 includes impairment charges reported in Contract investment amortization of $5 million. Twelve months ended December 31, 2021 includes impairment charges reported in Depreciation, amortization, and other of $11 million.
3 Twelve months ended December 31, 2022 includes impairment charges reported in Contract investment amortization of $5 million and Equity in earnings (losses) of $6 million. Twelve months ended December 31, 2021 includes impairment charges reported in Depreciation, amortization, and other of $11 million and Equity in earnings (losses) of $4 million.
4 Gains on investees' property sales reported in Equity in earnings (losses).
5 Gain on asset dispositions reported in Gains and other income, net.
A-3
MARRIOTT INTERNATIONAL, INC.
TOTAL LODGING PRODUCTS
As of December 31, 2022
| US & Canada | Total International | Total Worldwide | ||||
|---|---|---|---|---|---|---|
| Properties | Rooms | Properties | Rooms | Properties | Rooms | |
| Managed | 632 | 215,331 | 1,357 | 345,220 | 1,989 | 560,551 |
| Marriott Hotels | 104 | 57,534 | 169 | 52,624 | 273 | 110,158 |
| Sheraton | 25 | 20,383 | 183 | 61,815 | 208 | 82,198 |
| Courtyard | 168 | 27,063 | 112 | 24,007 | 280 | 51,070 |
| Westin | 40 | 21,865 | 76 | 23,545 | 116 | 45,410 |
| JW Marriott | 21 | 12,724 | 68 | 24,729 | 89 | 37,453 |
| The Ritz-Carlton | 40 | 12,079 | 67 | 16,611 | 107 | 28,690 |
| The Ritz-Carlton Serviced Apartments | â | â | 5 | 715 | 5 | 715 |
| Renaissance | 24 | 10,607 | 54 | 17,327 | 78 | 27,934 |
| Four Points | 1 | 134 | 84 | 23,267 | 85 | 23,401 |
| Le MĂ©ridien | 1 | 100 | 72 | 20,119 | 73 | 20,219 |
| W Hotels | 23 | 6,516 | 38 | 10,246 | 61 | 16,762 |
| W Hotels Serviced Apartments | â | â | 1 | 160 | 1 | 160 |
| Residence Inn | 76 | 12,199 | 9 | 1,116 | 85 | 13,315 |
| Delta Hotels by Marriott | 25 | 6,770 | 27 | 4,956 | 52 | 11,726 |
| St. Regis | 10 | 1,977 | 41 | 9,586 | 51 | 11,563 |
| St. Regis Serviced Apartments | â | â | 1 | 70 | 1 | 70 |
| The Luxury Collection | 6 | 2,296 | 47 | 8,268 | 53 | 10,564 |
| Fairfield by Marriott | 6 | 1,431 | 67 | 8,954 | 73 | 10,385 |
| Aloft | 2 | 505 | 44 | 9,727 | 46 | 10,232 |
| Gaylord Hotels | 6 | 10,220 | â | â | 6 | 10,220 |
| AC Hotels by Marriott | 7 | 1,165 | 68 | 8,466 | 75 | 9,631 |
| Autograph Collection | 8 | 2,508 | 22 | 3,356 | 30 | 5,864 |
| Autograph Collection Serviced Apartments | â | â | 1 | 158 | 1 | 158 |
| Marriott Executive Apartments | â | â | 34 | 4,866 | 34 | 4,866 |
| SpringHill Suites | 25 | 4,241 | â | â | 25 | 4,241 |
| EDITION | 5 | 1,379 | 10 | 2,216 | 15 | 3,595 |
| Element | 3 | 810 | 13 | 2,551 | 16 | 3,361 |
| Protea Hotels | â | â | 25 | 3,081 | 25 | 3,081 |
| Tribute Portfolio | â | â | 8 | 1,150 | 8 | 1,150 |
| Moxy | â | â | 6 | 1,092 | 6 | 1,092 |
| TownePlace Suites | 6 | 825 | â | â | 6 | 825 |
| Bulgari | â | â | 5 | 442 | 5 | 442 |
| Franchised | 5,121 | 735,470 | 907 | 179,319 | 6,028 | 914,789 |
| Courtyard | 863 | 115,148 | 114 | 21,251 | 977 | 136,399 |
| Fairfield by Marriott | 1,135 | 106,907 | 45 | 7,551 | 1,180 | 114,458 |
| Residence Inn | 772 | 92,072 | 26 | 3,482 | 798 | 95,554 |
| Marriott Hotels | 233 | 74,118 | 61 | 17,795 | 294 | 91,913 |
| Sheraton | 147 | 46,238 | 71 | 20,680 | 218 | 66,918 |
| SpringHill Suites | 507 | 58,773 | â | â | 507 | 58,773 |
| Autograph Collection | 138 | 27,170 | 108 | 23,564 | 246 | 50,734 |
| TownePlace Suites | 480 | 48,894 | â | â | 480 | 48,894 |
| Westin | 91 | 30,818 | 27 | 7,858 | 118 | 38,676 |
| Four Points | 158 | 23,924 | 63 | 10,602 | 221 | 34,526 |
| Aloft | 154 | 22,077 | 22 | 3,607 | 176 | 25,684 |
| Renaissance | 64 | 18,074 | 29 | 7,487 | 93 | 25,561 |
| AC Hotels by Marriott | 100 | 16,601 | 47 | 8,385 | 147 | 24,986 |
| Moxy | 28 | 5,316 | 88 | 16,700 | 116 | 22,016 |
| Delta Hotels by Marriott | 62 | 14,123 | 11 | 2,557 | 73 | 16,680 |
| The Luxury Collection | 12 | 3,188 | 56 | 10,268 | 68 | 13,456 |
| Tribute Portfolio | 51 | 7,952 | 28 | 3,185 | 79 | 11,137 |
| Element | 79 | 10,586 | 2 | 269 | 81 | 10,855 |
| Le MĂ©ridien | 24 | 5,605 | 18 | 4,640 | 42 | 10,245 |
| JW Marriott | 12 | 6,072 | 11 | 2,714 | 23 | 8,786 |
| Design Hotels | 10 | 1,385 | 40 | 3,469 | 50 | 4,854 |
| Protea Hotels | â | â | 35 | 2,706 | 35 | 2,706 |
| The Ritz-Carlton | 1 | 429 | â | â | 1 | 429 |
| W Hotels | â | â | 1 | 246 | 1 | 246 |
| Bulgari | â | â | 2 | 161 | 2 | 161 |
| Marriott Executive Apartments | â | â | 2 | 142 | 2 | 142 |
A-4
MARRIOTT INTERNATIONAL, INC.
TOTAL LODGING PRODUCTS
As of December 31, 2022
| US & Canada | Total International | Total Worldwide | ||||||
|---|---|---|---|---|---|---|---|---|
| Properties | Rooms | Properties | Rooms | Properties | Rooms | |||
| Owned/Leased | 26 | 6,483 | 38 | 9,209 | 64 | 15,692 | ||
| Courtyard | 19 | 2,814 | 4 | 894 | 23 | 3,708 | ||
| Marriott Hotels | 2 | 1,308 | 6 | 2,064 | 8 | 3,372 | ||
| Sheraton | â | â | 4 | 1,830 | 4 | 1,830 | ||
| W Hotels | 2 | 779 | 2 | 665 | 4 | 1,444 | ||
| Westin | 1 | 1,073 | â | â | 1 | 1,073 | ||
| Protea Hotels | â | â | 5 | 912 | 5 | 912 | ||
| Renaissance | 1 | 317 | 2 | 505 | 3 | 822 | ||
| The Ritz-Carlton | â | â | 2 | 550 | 2 | 550 | ||
| JW Marriott | â | â | 1 | 496 | 1 | 496 | ||
| The Luxury Collection1 | â | â | 3 | 383 | 3 | 383 | ||
| Autograph Collection2 | â | â | 5 | 361 | 5 | 361 | ||
| Residence Inn | 1 | 192 | 1 | 140 | 2 | 332 | ||
| Tribute Portfolio3 | â | â | 2 | 249 | 2 | 249 | ||
| St. Regis | â | â | 1 | 160 | 1 | 160 | ||
| Residences | 67 | 7,128 | 46 | 4,353 | 113 | 11,481 | ||
| The Ritz-Carlton Residences | 40 | 4,396 | 14 | 1,135 | 54 | 5,531 | ||
| St. Regis Residences | 10 | 1,196 | 11 | 1,490 | 21 | 2,686 | ||
| W Residences | 10 | 1,089 | 7 | 547 | 17 | 1,636 | ||
| Bulgari Residences | â | â | 5 | 514 | 5 | 514 | ||
| Sheraton Residences | â | â | 2 | 282 | 2 | 282 | ||
| Westin Residences | 3 | 266 | 1 | 9 | 4 | 275 | ||
| Marriott Hotels Residences | â | â | 2 | 246 | 2 | 246 | ||
| The Luxury Collection Residences | 1 | 91 | 3 | 115 | 4 | 206 | ||
| EDITION Residences | 3 | 90 | â | â | 3 | 90 | ||
| Le MĂ©ridien Residences | â | â | 1 | 15 | 1 | 15 | ||
| Timeshare* | 72 | 18,839 | 21 | 3,906 | 93 | 22,745 | ||
| Yacht* | â | â | 1 | 149 | 1 | 149 | ||
| Grand Total | 5,918 | 983,251 | 2,370 | 542,156 | 8,288 | 1,525,407 | *Timeshare and Yacht counts are included in this table by geographical location. For external reporting purposes, these offerings are captured within âUnallocated corporate and other.â | |
| --- | ||||||||
| 1Â Includes one property 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. | ||||||||
| 2 Includes four 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. | ||||||||
| 3Â Includes two properties acquired when we purchased Elegant Hotels Group in December 2019 which we currently intend to re-brand under the Tribute Portfolio brand following the completion of planned renovations. |
A-5
MARRIOTT INTERNATIONAL, INC.
TOTAL LODGING PRODUCTS
As of December 31, 2022
| US & Canada | Total International | Total Worldwide | ||||
|---|---|---|---|---|---|---|
| Total Systemwide | Properties | Rooms | Properties | Rooms | Properties | Rooms |
| Luxury | 196 | 54,301 | 402 | 92,487 | 598 | 146,788 |
| JW Marriott | 33 | 18,796 | 80 | 27,939 | 113 | 46,735 |
| The Ritz-Carlton | 41 | 12,508 | 69 | 17,161 | 110 | 29,669 |
| The Ritz-Carlton Residences | 40 | 4,396 | 14 | 1,135 | 54 | 5,531 |
| The Ritz-Carlton Serviced Apartments | â | â | 5 | 715 | 5 | 715 |
| The Luxury Collection1 | 18 | 5,484 | 106 | 18,919 | 124 | 24,403 |
| The Luxury Collection Residences | 1 | 91 | 3 | 115 | 4 | 206 |
| W Hotels | 25 | 7,295 | 41 | 11,157 | 66 | 18,452 |
| W Residences | 10 | 1,089 | 7 | 547 | 17 | 1,636 |
| W Hotels Serviced Apartments | â | â | 1 | 160 | 1 | 160 |
| St. Regis | 10 | 1,977 | 42 | 9,746 | 52 | 11,723 |
| St. Regis Residences | 10 | 1,196 | 11 | 1,490 | 21 | 2,686 |
| St. Regis Serviced Apartments | â | â | 1 | 70 | 1 | 70 |
| EDITION | 5 | 1,379 | 10 | 2,216 | 15 | 3,595 |
| EDITION Residences | 3 | 90 | â | â | 3 | 90 |
| Bulgari | â | â | 7 | 603 | 7 | 603 |
| Bulgari Residences | â | â | 5 | 514 | 5 | 514 |
| Full-Service | 1,060 | 358,434 | 1,066 | 286,854 | 2,126 | 645,288 |
| Marriott Hotels | 339 | 132,960 | 236 | 72,483 | 575 | 205,443 |
| Marriott Hotels Residences | â | â | 2 | 246 | 2 | 246 |
| Sheraton | 172 | 66,621 | 258 | 84,325 | 430 | 150,946 |
| Sheraton Residences | â | â | 2 | 282 | 2 | 282 |
| Westin | 132 | 53,756 | 103 | 31,403 | 235 | 85,159 |
| Westin Residences | 3 | 266 | 1 | 9 | 4 | 275 |
| Autograph Collection2 | 146 | 29,678 | 135 | 27,281 | 281 | 56,959 |
| Autograph Collection Serviced Apartments | â | â | 1 | 158 | 1 | 158 |
| Renaissance | 89 | 28,998 | 85 | 25,319 | 174 | 54,317 |
| Le MĂ©ridien | 25 | 5,705 | 90 | 24,759 | 115 | 30,464 |
| Le MĂ©ridien Residences | â | â | 1 | 15 | 1 | 15 |
| Delta Hotels by Marriott | 87 | 20,893 | 38 | 7,513 | 125 | 28,406 |
| Tribute Portfolio3 | 51 | 7,952 | 38 | 4,584 | 89 | 12,536 |
| Gaylord Hotels | 6 | 10,220 | â | â | 6 | 10,220 |
| Marriott Executive Apartments | â | â | 36 | 5,008 | 36 | 5,008 |
| Design Hotels | 10 | 1,385 | 40 | 3,469 | 50 | 4,854 |
| Limited-Service | 4,590 | 551,677 | 880 | 158,760 | 5,470 | 710,437 |
| Courtyard | 1,050 | 145,025 | 230 | 46,152 | 1,280 | 191,177 |
| Fairfield by Marriott | 1,141 | 108,338 | 112 | 16,505 | 1,253 | 124,843 |
| Residence Inn | 849 | 104,463 | 36 | 4,738 | 885 | 109,201 |
| SpringHill Suites | 532 | 63,014 | â | â | 532 | 63,014 |
| Four Points | 159 | 24,058 | 147 | 33,869 | 306 | 57,927 |
| TownePlace Suites | 486 | 49,719 | â | â | 486 | 49,719 |
| Aloft | 156 | 22,582 | 66 | 13,334 | 222 | 35,916 |
| AC Hotels by Marriott | 107 | 17,766 | 115 | 16,851 | 222 | 34,617 |
| Moxy | 28 | 5,316 | 94 | 17,792 | 122 | 23,108 |
| Element | 82 | 11,396 | 15 | 2,820 | 97 | 14,216 |
| Protea Hotels | â | â | 65 | 6,699 | 65 | 6,699 |
| Timeshare* | 72 | 18,839 | 21 | 3,906 | 93 | 22,745 |
| Yacht* | â | â | 1 | 149 | 1 | 149 |
| Grand Total | 5,918 | 983,251 | 2,370 | 542,156 | 8,288 | 1,525,407 |
| *Timeshare and Yacht counts are included in this table by geographical location. For external reporting purposes, these offerings are captured within âUnallocated corporate and other.â | ||||||
| --- | ||||||
| 1Â Includes one property 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. | ||||||
| 2 Includes four 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. | ||||||
| 3Â Includes two properties acquired when we purchased Elegant Hotels Group in December 2019 which we currently intend to re-brand under the Tribute Portfolio brand following the completion of planned renovations. |
A-6
MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
In Constant $
| Comparable Company-Operated US & Canada Properties | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended December 31, 2022 and December 31, 2021 | |||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | |||||||||||||
| Brand | 2022 | vs. 2021 | 2022 | vs. 2021 | 2022 | vs. 2021 | |||||||||
| JW Marriott | $ | 206.19 | 25.6 | % | 66.9 | % | 8.3 | % | pts. | $ | 308.03 | 10.1 | % | ||
| The Ritz-Carlton | $ | 329.80 | 11.5 | % | 63.8 | % | 4.3 | % | pts. | $ | 516.85 | 3.9 | % | ||
| W Hotels | $ | 231.42 | 15.3 | % | 62.0 | % | 5.2 | % | pts. | $ | 373.37 | 5.6 | % | ||
| Composite US & Canada Luxury1 | $ | 283.73 | 17.4 | % | 65.8 | % | 6.2 | % | pts. | $ | 431.29 | 6.3 | % | ||
| Marriott Hotels | $ | 150.23 | 43.6 | % | 64.6 | % | 9.9 | % | pts. | $ | 232.56 | 21.4 | % | ||
| Sheraton | $ | 139.41 | 38.8 | % | 60.2 | % | 9.3 | % | pts. | $ | 231.66 | 17.3 | % | ||
| Westin | $ | 165.10 | 33.1 | % | 65.8 | % | 8.1 | % | pts. | $ | 250.91 | 16.7 | % | ||
| Composite US & Canada Premium2 | $ | 151.55 | 40.4 | % | 64.7 | % | 10.6 | % | pts. | $ | 234.22 | 17.5 | % | ||
| US & Canada Full-Service3 | $ | 180.03 | 31.7 | % | 64.9 | % | 9.6 | % | pts. | $ | 277.24 | 12.1 | % | ||
| Courtyard | $ | 98.40 | 27.3 | % | 62.6 | % | 4.5 | % | pts. | $ | 157.20 | 18.3 | % | ||
| Residence Inn | $ | 134.97 | 17.5 | % | 74.0 | % | 2.4 | % | pts. | $ | 182.39 | 13.7 | % | ||
| Composite US & Canada Limited-Service4 | $ | 110.64 | 24.5 | % | 66.7 | % | 4.1 | % | pts. | $ | 165.86 | 16.9 | % | ||
| US & Canada - All5 | $ | 163.60 | 30.5 | % | 65.4 | % | 8.3 | % | pts. | $ | 250.31 | 13.9 | % | ||
| Comparable Systemwide US & Canada Properties | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| Three Months Ended December 31, 2022 and December 31, 2021 | |||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | |||||||||||||
| Brand | 2022 | vs. 2021 | 2022 | vs. 2021 | 2022 | vs. 2021 | |||||||||
| JW Marriott | $ | 201.05 | 22.0 | % | 67.6 | % | 6.8 | % | pts. | $ | 297.40 | 9.6 | % | ||
| The Ritz-Carlton | $ | 327.38 | 12.0 | % | 64.0 | % | 4.4 | % | pts. | $ | 511.53 | 4.2 | % | ||
| W Hotels | $ | 231.42 | 15.3 | % | 62.0 | % | 5.2 | % | pts. | $ | 373.37 | 5.6 | % | ||
| Composite US & Canada Luxury1 | $ | 267.65 | 17.3 | % | 66.2 | % | 6.0 | % | pts. | $ | 404.02 | 6.6 | % | ||
| Marriott Hotels | $ | 122.75 | 35.0 | % | 62.1 | % | 9.0 | % | pts. | $ | 197.73 | 15.5 | % | ||
| Sheraton | $ | 106.63 | 37.5 | % | 59.9 | % | 10.0 | % | pts. | $ | 178.16 | 14.6 | % | ||
| Westin | $ | 148.46 | 31.0 | % | 65.0 | % | 9.0 | % | pts. | $ | 228.49 | 12.8 | % | ||
| Composite US & Canada Premium2 | $ | 130.00 | 32.6 | % | 63.1 | % | 9.4 | % | pts. | $ | 205.99 | 12.8 | % | ||
| US & Canada Full-Service3 | $ | 146.07 | 29.0 | % | 63.5 | % | 9.0 | % | pts. | $ | 230.13 | 10.7 | % | ||
| Courtyard | $ | 98.88 | 21.7 | % | 64.6 | % | 4.1 | % | pts. | $ | 153.00 | 13.9 | % | ||
| Residence Inn | $ | 115.21 | 13.9 | % | 72.3 | % | 0.8 | % | pts. | $ | 159.32 | 12.7 | % | ||
| Fairfield by Marriott | $ | 82.66 | 14.7 | % | 65.6 | % | 2.8 | % | pts. | $ | 125.98 | 9.8 | % | ||
| Composite US & Canada Limited-Service4 | $ | 98.45 | 18.2 | % | 67.3 | % | 3.0 | % | pts. | $ | 146.32 | 13.0 | % | ||
| US & Canada - All5 | $ | 118.48 | 23.6 | % | 65.7 | % | 5.5 | % | pts. | $ | 180.39 | 13.2 | % | 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 by Marriott, and Gaylord Hotels.<br><br>Systemwide also includes Le MĂ©ridien and Tribute Portfolio. | |||||||||||||||
| 3 Includes Composite US & Canada Luxury and Composite US & Canada Premium. | |||||||||||||||
| 4 Includes Courtyard, Residence Inn, Fairfield by Marriott, SpringHill Suites, TownePlace Suites, Four Points, Aloft, Element,<br><br>and AC Hotels by Marriott. Systemwide also includes Moxy. | |||||||||||||||
| 5 Includes US & Canada Full-Service and Composite US & Canada Limited-Service. |
A-7
MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
In Constant $
| Comparable Company-Operated International Properties | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended December 31, 2022 and December 31, 2021 | |||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | |||||||||||||
| Region | 2022 | vs. 2021 | 2022 | vs. 2021 | 2022 | vs. 2021 | |||||||||
| Greater China | $ | 47.80 | -21.3 | % | 46.2 | % | -8.9 | % | pts. | $ | 103.47 | -6.1 | % | ||
| Asia Pacific excluding China | $ | 111.53 | 110.1 | % | 70.3 | % | 22.0 | % | pts. | $ | 158.74 | 44.4 | % | ||
| Caribbean & Latin America | $ | 142.69 | 35.3 | % | 64.0 | % | 9.1 | % | pts. | $ | 222.93 | 16.0 | % | ||
| Europe | $ | 151.51 | 67.0 | % | 67.8 | % | 18.0 | % | pts. | $ | 223.55 | 22.6 | % | ||
| Middle East & Africa | $ | 165.28 | 31.1 | % | 70.9 | % | 4.4 | % | pts. | $ | 233.09 | 22.9 | % | ||
| International - All1 | $ | 107.64 | 38.9 | % | 61.5 | % | 7.1 | % | pts. | $ | 175.15 | 22.8 | % | ||
| Worldwide2 | $ | 132.56 | 34.1 | % | 63.2 | % | 7.7 | % | pts. | $ | 209.78 | 17.9 | % | ||
| Comparable Systemwide International Properties | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| Three Months Ended December 31, 2022 and December 31, 2021 | |||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | |||||||||||||
| Region | 2022 | vs. 2021 | 2022 | vs. 2021 | 2022 | vs. 2021 | |||||||||
| Greater China | $ | 47.39 | -18.2 | % | 46.5 | % | -7.7 | % | pts. | $ | 101.96 | -4.6 | % | ||
| Asia Pacific excluding China | $ | 109.93 | 102.1 | % | 70.1 | % | 21.0 | % | pts. | $ | 156.91 | 41.6 | % | ||
| Caribbean & Latin America | $ | 118.21 | 40.4 | % | 61.2 | % | 9.6 | % | pts. | $ | 193.11 | 18.3 | % | ||
| Europe | $ | 121.30 | 70.3 | % | 65.5 | % | 19.6 | % | pts. | $ | 185.10 | 19.5 | % | ||
| Middle East & Africa | $ | 152.97 | 32.6 | % | 69.9 | % | 4.2 | % | pts. | $ | 218.85 | 24.7 | % | ||
| International - All1 | $ | 103.00 | 45.1 | % | 61.8 | % | 9.5 | % | pts. | $ | 166.75 | 22.7 | % | ||
| Worldwide2 | $ | 113.83 | 28.8 | % | 64.5 | % | 6.7 | % | pts. | $ | 176.46 | 15.4 | % | 1 Includes Greater China, Asia Pacific excluding China, Caribbean & Latin America, Europe, and Middle East & Africa. | |
| --- | |||||||||||||||
| 2 Includes US & Canada - All and International - All. |
A-8
MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
In Constant $
| Comparable Company-Operated US & Canada Properties | ||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Twelve Months Ended December 31, 2022 and December 31, 2021 | ||||||||||||||||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | ||||||||||||||||||||||||||
| Brand | 2022 | vs. 2021 | 2022 | vs. 2021 | 2022 | vs. 2021 | ||||||||||||||||||||||
| JW Marriott | $ | 201.97 | 59.0 | % | 65.2 | % | 17.5 | % | pts. | $ | 309.81 | 16.3 | % | |||||||||||||||
| The Ritz-Carlton | $ | 328.27 | 41.0 | % | 64.0 | % | 14.6 | % | pts. | $ | 512.71 | 8.9 | % | |||||||||||||||
| W Hotels | $ | 228.43 | 56.0 | % | 62.3 | % | 16.9 | % | pts. | $ | 366.45 | 13.7 | % | |||||||||||||||
| Composite US & Canada Luxury1 | $ | 275.30 | 51.4 | % | 65.0 | % | 16.9 | % | pts. | $ | 423.51 | 12.0 | % | |||||||||||||||
| Marriott Hotels | $ | 145.18 | 88.9 | % | 64.8 | % | 21.4 | % | pts. | $ | 224.18 | 26.6 | % | |||||||||||||||
| Sheraton | $ | 137.74 | 84.6 | % | 61.5 | % | 21.0 | % | pts. | $ | 224.03 | 21.5 | % | |||||||||||||||
| Westin | $ | 163.93 | 76.7 | % | 66.2 | % | 21.0 | % | pts. | $ | 247.81 | 20.5 | % | |||||||||||||||
| Composite US & Canada Premium2 | $ | 146.02 | 85.1 | % | 64.3 | % | 21.7 | % | pts. | $ | 227.26 | 22.6 | % | |||||||||||||||
| US & Canada Full-Service3 | $ | 173.86 | 72.0 | % | 64.4 | % | 20.7 | % | pts. | $ | 269.92 | 16.9 | % | |||||||||||||||
| Courtyard | $ | 98.87 | 49.8 | % | 64.0 | % | 8.8 | % | pts. | $ | 154.51 | 29.1 | % | |||||||||||||||
| Residence Inn | $ | 138.90 | 33.5 | % | 76.1 | % | 6.4 | % | pts. | $ | 182.65 | 22.3 | % | |||||||||||||||
| Composite US & Canada Limited-Service4 | $ | 111.38 | 45.7 | % | 68.0 | % | 9.0 | % | pts. | $ | 163.82 | 26.5 | % | |||||||||||||||
| US & Canada - All5 | $ | 159.06 | 67.0 | % | 65.3 | % | 17.9 | % | pts. | $ | 243.73 | 21.3 | % | Comparable Systemwide US & Canada Properties | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||||||
| Twelve Months Ended December 31, 2022 and December 31, 2021 | ||||||||||||||||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | ||||||||||||||||||||||||||
| Brand | 2022 | vs. 2021 | 2022 | vs. 2021 | 2022 | vs. 2021 | ||||||||||||||||||||||
| JW Marriott | $ | 200.06 | 57.0 | % | 66.7 | % | 17.1 | % | pts. | $ | 299.82 | 16.8 | % | |||||||||||||||
| The Ritz-Carlton | $ | 324.64 | 41.8 | % | 64.0 | % | 14.9 | % | pts. | $ | 506.92 | 8.8 | % | |||||||||||||||
| W Hotels | $ | 228.43 | 56.0 | % | 62.3 | % | 16.9 | % | pts. | $ | 366.45 | 13.7 | % | |||||||||||||||
| Composite US & Canada Luxury1 | $ | 260.62 | 51.8 | % | 65.6 | % | 16.9 | % | pts. | $ | 397.00 | 12.8 | % | |||||||||||||||
| Marriott Hotels | $ | 122.91 | 69.2 | % | 62.7 | % | 17.7 | % | pts. | $ | 195.91 | 21.4 | % | |||||||||||||||
| Sheraton | $ | 106.46 | 70.8 | % | 60.2 | % | 17.2 | % | pts. | $ | 176.84 | 22.0 | % | |||||||||||||||
| Westin | $ | 146.55 | 70.7 | % | 65.2 | % | 19.3 | % | pts. | $ | 224.76 | 20.1 | % | |||||||||||||||
| Composite US & Canada Premium2 | $ | 128.10 | 66.4 | % | 63.1 | % | 17.9 | % | pts. | $ | 203.01 | 19.3 | % | |||||||||||||||
| US & Canada Full-Service3 | $ | 143.57 | 63.1 | % | 63.4 | % | 17.8 | % | pts. | $ | 226.47 | 17.4 | % | |||||||||||||||
| Courtyard | $ | 101.08 | 39.8 | % | 66.7 | % | 8.9 | % | pts. | $ | 151.62 | 21.1 | % | |||||||||||||||
| Residence Inn | $ | 119.52 | 25.4 | % | 75.5 | % | 4.3 | % | pts. | $ | 158.24 | 18.2 | % | |||||||||||||||
| Fairfield by Marriott | $ | 85.87 | 27.3 | % | 68.1 | % | 6.7 | % | pts. | $ | 126.03 | 14.8 | % | |||||||||||||||
| Composite US & Canada Limited-Service4 | $ | 101.13 | 32.6 | % | 69.7 | % | 7.2 | % | pts. | $ | 145.14 | 18.9 | % | |||||||||||||||
| US & Canada - All5 | $ | 118.97 | 46.5 | % | 67.0 | % | 11.6 | % | pts. | $ | 177.47 | 21.1 | % | 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 by Marriott, and Gaylord Hotels.<br><br>Systemwide also includes Le MĂ©ridien and Tribute Portfolio. | ||||||||||||||||||||||||||||
| 3 Includes Composite US & Canada Luxury and Composite US & Canada Premium. | ||||||||||||||||||||||||||||
| 4 Includes Courtyard, Residence Inn, Fairfield by Marriott, SpringHill Suites, TownePlace Suites, Four Points, Aloft, Element,<br><br>and AC Hotels by Marriott. Systemwide also includes Moxy. | ||||||||||||||||||||||||||||
| 5 Includes US & Canada Full-Service and Composite US & Canada Limited-Service. |
A-9
MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
In Constant $
| Comparable Company-Operated International Properties | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Twelve Months Ended December 31, 2022 and December 31, 2021 | |||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | |||||||||||||
| Region | 2022 | vs. 2021 | 2022 | vs. 2021 | 2022 | vs. 2021 | |||||||||
| Greater China | $ | 53.22 | -18.5 | % | 47.5 | % | -8.0 | % | pts. | $ | 112.14 | -4.8 | % | ||
| Asia Pacific excluding China | $ | 84.41 | 122.5 | % | 59.2 | % | 23.1 | % | pts. | $ | 142.60 | 35.8 | % | ||
| Caribbean & Latin America | $ | 126.55 | 67.0 | % | 60.8 | % | 17.7 | % | pts. | $ | 208.17 | 18.4 | % | ||
| Europe | $ | 153.51 | 148.3 | % | 63.5 | % | 30.3 | % | pts. | $ | 241.65 | 29.9 | % | ||
| Middle East & Africa | $ | 124.63 | 52.8 | % | 64.7 | % | 13.1 | % | pts. | $ | 192.54 | 22.0 | % | ||
| International - All1 | $ | 94.64 | 55.5 | % | 57.0 | % | 11.7 | % | pts. | $ | 166.06 | 23.4 | % | ||
| Worldwide2 | $ | 123.30 | 61.9 | % | 60.7 | % | 14.5 | % | pts. | $ | 203.23 | 23.3 | % | ||
| Comparable Systemwide International Properties | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| Twelve Months Ended December 31, 2022 and December 31, 2021 | |||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | |||||||||||||
| Region | 2022 | vs. 2021 | 2022 | vs. 2021 | 2022 | vs. 2021 | |||||||||
| Greater China | $ | 51.38 | -16.6 | % | 46.8 | % | -7.2 | % | pts. | $ | 109.71 | -3.9 | % | ||
| Asia Pacific excluding China | $ | 83.87 | 111.8 | % | 59.3 | % | 22.2 | % | pts. | $ | 141.47 | 32.5 | % | ||
| Caribbean & Latin America | $ | 105.26 | 72.3 | % | 58.0 | % | 17.1 | % | pts. | $ | 181.42 | 21.6 | % | ||
| Europe | $ | 121.38 | 146.2 | % | 61.1 | % | 29.8 | % | pts. | $ | 198.67 | 25.9 | % | ||
| Middle East & Africa | $ | 116.91 | 55.8 | % | 64.2 | % | 13.3 | % | pts. | $ | 182.07 | 23.5 | % | ||
| International - All1 | $ | 91.30 | 66.2 | % | 57.0 | % | 14.6 | % | pts. | $ | 160.21 | 23.7 | % | ||
| Worldwide2 | $ | 110.64 | 51.0 | % | 64.0 | % | 12.5 | % | pts. | $ | 172.85 | 21.5 | % | 1 Includes Greater China, Asia Pacific excluding China, Caribbean & Latin America, Europe, and Middle East & Africa. | |
| --- | |||||||||||||||
| 2 Includes US & Canada - All and International - All. |
A-10
MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS - 2022 vs 2019
In Constant $
| Comparable Systemwide Properties1 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended December 31, 2022 and December 31, 2019 | |||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | |||||||||||||
| Region | 2022 | vs. 2019 | 2022 | vs. 2019 | 2022 | vs. 2019 | |||||||||
| Greater China | $ | 47.39 | -42.3 | % | 46.5 | % | -22.4 | % | pts. | $ | 101.96 | -14.5 | % | ||
| Asia Pacific excluding China | $ | 109.93 | 5.5 | % | 70.1 | % | -4.8 | % | pts. | $ | 156.91 | 12.8 | % | ||
| Caribbean & Latin America | $ | 118.21 | 27.6 | % | 61.2 | % | 2.1 | % | pts. | $ | 193.11 | 23.2 | % | ||
| Europe | $ | 121.30 | 7.4 | % | 65.5 | % | -4.9 | % | pts. | $ | 185.10 | 15.6 | % | ||
| Middle East & Africa | $ | 152.97 | 43.8 | % | 69.9 | % | -2.1 | % | pts. | $ | 218.85 | 48.1 | % | ||
| International - All2 | $ | 103.00 | 3.4 | % | 61.8 | % | -8.3 | % | pts. | $ | 166.75 | 17.3 | % | ||
| US & Canada - All | $ | 118.48 | 5.2 | % | 65.7 | % | -3.7 | % | pts. | $ | 180.39 | 11.1 | % | ||
| Worldwide3 | $ | 113.83 | 4.6 | % | 64.5 | % | -5.1 | % | pts. | $ | 176.46 | 12.8 | % | ||
| Comparable Systemwide Properties1 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| Twelve Months Ended December 31, 2022 and December 31, 2019 | |||||||||||||||
| REVPAR | Occupancy | Average Daily Rate | |||||||||||||
| Region | 2022 | vs. 2019 | 2022 | vs. 2019 | 2022 | vs. 2019 | |||||||||
| Greater China | $ | 51.38 | -40.8 | % | 46.8 | % | -20.7 | % | pts. | $ | 109.71 | -14.6 | % | ||
| Asia Pacific excluding China | $ | 83.87 | -20.2 | % | 59.3 | % | -13.3 | % | pts. | $ | 141.47 | -2.3 | % | ||
| Caribbean & Latin America | $ | 105.26 | 9.7 | % | 58.0 | % | -3.0 | % | pts. | $ | 181.42 | 15.4 | % | ||
| Europe | $ | 121.38 | -5.8 | % | 61.1 | % | -11.1 | % | pts. | $ | 198.67 | 11.3 | % | ||
| Middle East & Africa | $ | 116.91 | 23.4 | % | 64.2 | % | -3.2 | % | pts. | $ | 182.07 | 29.6 | % | ||
| International - All2 | $ | 91.30 | -11.9 | % | 57.0 | % | -12.2 | % | pts. | $ | 160.21 | 7.0 | % | ||
| US & Canada - All | $ | 118.97 | -0.8 | % | 67.0 | % | -6.0 | % | pts. | $ | 177.47 | 8.1 | % | ||
| Worldwide3 | $ | 110.64 | -4.0 | % | 64.0 | % | -7.9 | % | pts. | $ | 172.85 | 7.9 | % | 1 The comparisons between 2022 and 2019 reflect properties that are defined as comparable as of December 31, 2022, even if in 2019 they were not open and operating for the full year or did not meet all the criteria for comparable in 2019. | |
| --- | |||||||||||||||
| 2 Includes Greater China, Asia Pacific excluding China, Caribbean & Latin America, Europe, and Middle East & Africa. | |||||||||||||||
| 3 Includes US & Canada - All and International - All. |
A-11
MARRIOTT INTERNATIONAL, INC.
NON-GAAP FINANCIAL MEASURES
ADJUSTED EBITDA
($ in millions)
| Fiscal Year 2022 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| First <br>Quarter | Second <br>Quarter | Third<br>Quarter | Fourth <br>Quarter | Total | |||||||||||
| Net income, as reported | $ | 377 | $ | 678 | $ | 630 | $ | 673 | $ | 2,358 | |||||
| Cost reimbursement revenue | (3,146) | (3,920) | (3,931) | (4,420) | (15,417) | ||||||||||
| Reimbursed expenses | 3,179 | 3,827 | 3,786 | 4,349 | 15,141 | ||||||||||
| Interest expense | 93 | 95 | 100 | 115 | 403 | ||||||||||
| Interest expense from unconsolidated joint ventures | 1 | 2 | 2 | 1 | 6 | ||||||||||
| Provision for income taxes | 99 | 200 | 239 | 218 | 756 | ||||||||||
| Depreciation and amortization | 48 | 49 | 50 | 46 | 193 | ||||||||||
| Contract investment amortization | 24 | 19 | 22 | 24 | 89 | ||||||||||
| Depreciation and amortization classified in reimbursed expenses | 26 | 29 | 32 | 31 | 118 | ||||||||||
| Depreciation, amortization, and impairments from unconsolidated joint ventures | 13 | 3 | 7 | 4 | 27 | ||||||||||
| Stock-based compensation | 44 | 52 | 48 | 48 | 192 | ||||||||||
| Restructuring, merger-related charges, and other | 9 | â | 2 | 1 | 12 | ||||||||||
| Gains on investeesâ property sales | (8) | (13) | (2) | â | (23) | ||||||||||
| Gain on asset dispositions | â | (2) | â | â | (2) | ||||||||||
| Adjusted EBITDA ** | $ | 759 | $ | 1,019 | $ | 985 | $ | 1,090 | $ | 3,853 | |||||
| Change from 2021 Adjusted EBITDA ** | 156 | % | 83 | % | 44 | % | 47 | % | 69 | % | |||||
| Fiscal Year 2021 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| First <br>Quarter | Second <br>Quarter | Third<br>Quarter | Fourth <br>Quarter | Total | |||||||||||
| Net (loss) income, as reported | $ | (11) | $ | 422 | $ | 220 | $ | 468 | $ | 1,099 | |||||
| Cost reimbursement revenue | (1,780) | (2,338) | (2,950) | (3,374) | (10,442) | ||||||||||
| Reimbursed expenses | 1,833 | 2,255 | 2,917 | 3,317 | 10,322 | ||||||||||
| Loss on extinguishment of debt | â | â | 164 | â | 164 | ||||||||||
| Interest expense | 107 | 109 | 107 | 97 | 420 | ||||||||||
| Interest expense from unconsolidated joint ventures | 2 | 1 | 2 | 2 | 7 | ||||||||||
| (Benefit) provision for income taxes | (16) | (41) | 58 | 80 | 81 | ||||||||||
| Depreciation and amortization | 52 | 50 | 64 | 54 | 220 | ||||||||||
| Contract investment amortization | 17 | 18 | 21 | 19 | 75 | ||||||||||
| Depreciation and amortization classified in reimbursed expenses | 28 | 27 | 28 | 28 | 111 | ||||||||||
| Depreciation, amortization, and impairments from unconsolidated joint ventures | 10 | 9 | 5 | 7 | 31 | ||||||||||
| Stock-based compensation | 53 | 43 | 43 | 43 | 182 | ||||||||||
| Restructuring, merger-related charges, and other | 1 | 3 | 4 | â | 8 | ||||||||||
| Adjusted EBITDA ** | $ | 296 | $ | 558 | $ | 683 | $ | 741 | $ | 2,278 |
** Denotes non-GAAP financial measures. Please see pages A-15 and A-16 for information about our reasons for providing these alternative financial measures and the limitations on their use.
A-12
MARRIOTT INTERNATIONAL, INC.
NON-GAAP FINANCIAL MEASURES
ADJUSTED EBITDA FORECAST
FIRST QUARTER 2023
($ in millions)
| Range | ||||||||
|---|---|---|---|---|---|---|---|---|
| Estimated<br>First Quarter 2023 | First Quarter 2022 ** | |||||||
| Net income excluding certain items 1 | $ | 563 | $ | 582 | ||||
| Interest expense | 122 | 122 | ||||||
| Interest expense from unconsolidated joint ventures | 1 | 1 | ||||||
| Provision for income taxes | 154 | 160 | ||||||
| Depreciation and amortization | 45 | 45 | ||||||
| Contract investment amortization | 22 | 22 | ||||||
| Depreciation and amortization classified in reimbursed expenses | 28 | 28 | ||||||
| Depreciation, amortization, and impairments from unconsolidated joint ventures | 5 | 5 | ||||||
| Stock-based compensation | 40 | 40 | ||||||
| Adjusted EBITDA ** | $ | 980 | $ | 1,005 | $ | 759 | ||
| Increase over 2022 Adjusted EBITDA ** | 29 | % | 32 | % |
** Denotes non-GAAP financial measures. See pages A-15 and A-16 for information about our reasons for providing these alternative financial measures and the limitations on their use.
1Guidance excludes cost reimbursement revenue, reimbursed expenses, and restructuring, merger-related charges, and other expenses, each of which the company cannot forecast with sufficient accuracy and which may be significant, except for depreciation and amortization classified in reimbursed expenses, which is included in the caption âDepreciation and amortization classified in reimbursed expensesâ above. Guidance does not reflect any asset sales that may occur during the year, which the company cannot forecast with sufficient accuracy and which may be significant.
A-13
MARRIOTT INTERNATIONAL, INC.
NON-GAAP FINANCIAL MEASURES
ADJUSTED EBITDA FORECAST
FULL YEAR 2023
($ in millions)
| Range | ||||||||
|---|---|---|---|---|---|---|---|---|
| Estimated<br>Full Year 2023 | Full Year 2022** | |||||||
| Net income excluding certain items 1 | $ | 2,214 | $ | 2,409 | ||||
| Interest expense | 518 | 533 | ||||||
| Interest expense from unconsolidated joint ventures | 6 | 6 | ||||||
| Provision for income taxes | 686 | 746 | ||||||
| Depreciation and amortization | 196 | 196 | ||||||
| Contract investment amortization | 89 | 89 | ||||||
| Depreciation and amortization classified in reimbursed expenses | 109 | 109 | ||||||
| Depreciation, amortization, and impairments from unconsolidated joint ventures | 18 | 18 | ||||||
| Stock-based compensation | 194 | 194 | ||||||
| Adjusted EBITDA ** | $ | 4,030 | $ | 4,300 | $ | 3,853 | ||
| Increase over 2022 Adjusted EBITDA ** | 5 | % | 12 | % |
** Denotes non-GAAP financial measures. See pages A-15 and A-16 for information about our reasons for providing these alternative financial measures and the limitations on their use.
1Guidance excludes cost reimbursement revenue, reimbursed expenses, and restructuring, merger-related charges, and other expenses, each of which the company cannot forecast with sufficient accuracy and which may be significant, except for depreciation and amortization classified in reimbursed expenses, which is included in the caption âDepreciation and amortization classified in reimbursed expensesâ above. Guidance does not reflect any asset sales that may occur during the year, which the company cannot forecast with sufficient accuracy and which may be significant.
A-14
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 (âGAAPâ). We discuss the manner in which the non-GAAP measures reported in this press release and schedules are determined and managementâs 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, earnings 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, restructuring, merger-related charges, and other expenses, and certain non-cash impairment 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 and Adjusted Diluted Earnings Per Share. Adjusted net income and Adjusted diluted earnings per share reflect our net income and diluted earnings per share excluding the impact of cost reimbursement revenue, reimbursed expenses, restructuring, merger-related charges, and other expenses, certain non-cash impairment charges, loss on extinguishment of debt (when applicable), gains and losses on asset dispositions made by us or by our joint venture investees (when applicable), the income tax effect of these adjustments, and income tax special items. The income tax special items primarily related to the resolution of tax audits. 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 (âAdjusted EBITDAâ). Adjusted EBITDA reflects net income/loss excluding the impact of the following items: cost reimbursement revenue and reimbursed expenses, interest expense, depreciation and amortization (including depreciation and amortization classified in âReimbursed expenses,â as discussed below), certain non-cash impairment charges related to equity investments, benefit (provision) for income taxes, restructuring, merger-related charges, and other expenses, and stock-based compensation expense for all periods presented. When applicable, Adjusted EBITDA also excludes loss on extinguishment of debt and 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 and Adjusted diluted earnings per share, and Adjusted EBITDA, we exclude a one-time cost in the 2022 first quarter related to certain property-level adjustments related to compensation, 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 âRestructuring, merger-related charges, and otherâ caption of our Consolidated Statements of Income (our âIncome Statementsâ), as well as the loss related to the debt extinguishment in the 2021 third quarter, which we recorded in the âLoss on extinguishment of debtâ caption of our prior period Income Statements, to allow for period-over period comparisons of our ongoing operations before the impact of these items. We also exclude non-cash impairment charges (if above a specified threshold) related to our management and franchise contracts (if the impairment is non-routine), leases, equity investments, and other capitalized assets, which we record in the âContract investment amortization,â âDepreciation, amortization, and other,â and âEquity in earnings (losses)â captions 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 long 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.
A-15
MARRIOTT INTERNATIONAL, INC.
EXPLANATION OF NON-GAAP FINANCIAL AND PERFORMANCE MEASURES
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. Our use of Adjusted EBITDA also facilitates comparison with results from other lodging 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 companyâs 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 âDepreciation, amortization, and otherâ as well as depreciation and amortization classified in âContract investment amortization,â âReimbursed expenses,â and âEquity in earnings (losses)â of our Income Statements, because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. Depreciation and amortization classified in âReimbursed expensesâ reflects depreciation and amortization of Marriott-owned assets and software, 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 stock-based compensation expense in all periods presented to address the considerable variability among companies in recording compensation expense because companies use stock-based payment awards differently, both in the type and quantity of awards granted.
RevPAR. In addition to the foregoing non-GAAP financial measures, we present Revenue per Available Room (âRevPARâ) 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. The comparisons between 2022 and 2019 reflect properties that are defined as comparable as of December 31, 2022, even if in 2019 they were not open and operating for the full year or did not meet all the other criteria for comparable in 2019. 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 propertiesâ performance as it removes currency fluctuations from the presentation of such results.
A-16