Marriott Reports Strong Third-Quarter Results

Marriott International, Inc. reported third quarter 2007 adjusted net income of $122 million and adjusted diluted earnings per share (EPS) of $0.31. In the third quarter of 2006, adjusted net income totaled $144 million and adjusted EPS was $0.34.

Adjusted results for both years exclude the impact of the company’s synthetic fuel business. Strong revenue per available room (REVPAR) and unit expansion in the quarter led to a 15 percent increase in combined fees but was offset by a decline in timeshare profits and a higher effective tax rate.

While the timeshare business reported results in the third quarter that exceeded the guidance the company provided on July 12, 2007, the year-over-year comparison was impacted by the 2006 reversal of a $15 million pretax contingency reserve related to marketing incentives.

Reported net income was $131 million in the third quarter of 2007 compared to $141 million in the year ago quarter. Reported EPS was $0.33 in both the third quarters of 2007 and 2006. Worldwide comparable REVPAR increased 7.7 percent. Transient REVPAR for Marriott branded hotels was up 10 percent.

In the third quarter, worldwide company-operated house profit per available room increased 12.2 percent and house profit margins expanded 180 basis points. North American REVPAR for the company’s comparable company-operated properties increased 7.2 percent.

Third quarter international company-operated comparable REVPAR increased 12.9 percent (7.5 percent using constant dollars), including a 10.8 percent increase in average daily rate (5.5 percent using constant dollars) and a 1.4 percentage point improvement in occupancy to 76.8 percent.