Marriott International has reported first quarter 2006 adjusted net income of $167
million, an increase of 31 percent, and adjusted diluted earnings per
share of $0.76, an increase of 43 percent. Adjusted results
exclude the impact of the one-time charge related to the change in
timeshare accounting rules and the results of the company’s synthetic
fuel business. The company’s EPS guidance for the first quarter,
disclosed on February 9, 2006, totaled $0.67 to $0.73 and similarly
excluded the one-time impact of the timeshare accounting rule change and
the results of the company’s synthetic fuel business.
Reported net income was $65 million and diluted earnings per share was
$0.29. Results reflected a $105 million after-tax one-time charge ($0.48
per share) resulting from Marriott’s adoption of new accounting rules
for the timeshare industry. The company’s synthetic fuel business
contributed approximately $3 million after-tax ($0.01 per share) to
first quarter 2006 earnings and $18 million after-tax ($0.08 per share)
to first quarter 2005 earnings.
J.W. Marriott, Jr., Marriott International’s chairman and chief
executive officer, said, “We are delighted to report excellent results
this quarter as we continue to benefit from a strong preference for our
brands and favorable economic and industry trends.
“North American business and leisure transient demand remained strong
during the quarter, driving REVPAR and house profit margins higher.
Company- operated hotel REVPAR grew 15 to 20 percent in major markets
such as Atlanta, Dallas, Chicago and San Diego.
“While hotel industry supply in North America is still growing only
modestly, particularly in the full-service segment, we are taking a
greater share of new hotels being developed around the world, reflecting
owners’ and franchisees’ confidence in our brands, innovative plans and
“We acquired the largest conference hotel in Paris, the 782-room Paris
Rive Gauche Hotel & Conference Center, with approximately 50,000 square
feet of meeting space in the first quarter, and after extensive
refurbishment, it will be re-branded as a Marriott Hotel. We currently
operate the leading portfolio of large group hotels in the United
States; we are becoming a top destination for major conferences in
“Our luxurious new bedding package—the largest rollout in the
industry—is now available at 90 percent of our North American
properties and 85 percent of our hotels worldwide. Customers love the
look and feel of fresh, crisp white linens and guest satisfaction scores
are way up. We are continuing to renovate and reinvent our brands and
results show our success.
“With North American comparable company-operated REVPAR up 9.6 percent
in the first quarter, we look forward to a highly successful year, and
we continue to believe REVPAR for North American company-operated
properties will grow between 8 and 10 percent in 2006. With the
combination of strong room rate improvement and a proactive focus on
productivity, we believe house profit margins can improve 150 to 200
basis points. We expect to open 25,000 new rooms this year, and we have
a robust pipeline of more than 75,000 rooms.”