University of Houston, 4333 University Drive, Houston TX 77204-2000, (713) 743-1050.
© 2013 University of Houston. All rights reserved.
| Title | Marriott Corporation, 1980 Annual Report |
| Creator (LCNAF) |
|
| Publisher | Marriott International, Inc. |
| Date | 1980 |
| Description | Marriott Corporation Annual Report for calendar year 1980. |
| Subject.Topical (LCSH) |
|
| Subject.Name (LCNAF) |
|
| Genre (AAT) |
|
| Language | English |
| Type (DCMI) |
|
| Original Item Location | Marriott Hotels Collection |
| Digital Collection | Annual Reports from the Hospitality Industry Archives |
| Digital Collection URL | http://digital.lib.uh.edu/collection/hiltonar |
| Repository | Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston |
| Repository URL | http://www.uh.edu/hilton-college/About/hospitality-industry-archives |
| Use and Reproduction | No Copyright - United States |
| File Name | index.cpd |
| Title | Image 19 |
| Format (IMT) |
|
| File Name | hiltonar_201609_052_019.jpg |
| Transcript | Financial Review Despite recession, inflation and volatile financial markets in 1980, Marriott Corporation continued to meet its principal financial goals of improving capital productivity and maintaining 20% average annual earnings per share (EPS) growth. □ EPS grew 3 3% to $2.60, increasing the five-year average annual growth rate to 30%. □ Return on shareholders' equity (ROE) increased to 23.8%-well above the company's 20% goal. Both EPS and ROE compare favorably with the Standard & Poor's 500 as shown below and at right Earnings Growth Continues Sales and operating earnings increased 14%, fueled by unit expansion and inflation. Consolidated profit margins were maintained. Hotel sales and operating profit rose 21 % and 17%, respectively, driven by a 13% increase in rooms and the pricing flexibility to cover inflationary cost increases and maintain profit margins. The higher proportion of managed and leased hotels caused Hotel Group margins to fall slightly in 1980. Contract Food Services' sales increased 10%, reflecting modest unit expansion and inflation—while op- Annual Earnings Per Share Increase Marriott vs Standard & Poor's 500 Harriott Hotels, Directory erating profit grew 27%. Improved margins resulted mainly from managements aggressive productivity improvement program. Current economic conditions restrained growth of sales and profits in restaurants and theme parks, which are more dependent on consumer discretionaiy income. Restaurant sales increased 12% and operating profit (before losses on closed units) increased 14% as unit expansion and inflation more than offset a small customer count decline. Theme park operating profit decreased 5% due to a 7% attendance decline. EPS increased from $ 1.95 to $2.60, reflecting strong operating performance and the impact of repurchasing 7.9 million shares in 1980 which added 23C to EPS. Net income increased only slightly over 1979, primarily because of the 68% increase in interest expense required to finance the $185 million stock repurchase. Discretionary Cash Flow per share increased 39% to $4.50, as reflected in the Current Value Statement Discretionary Cash Flow represents the company's economic profit It reports Funds from Operations less actual capital expenditures required to maintain the competitive position of existing fixed assets (rather than ac- The Marriott Hotels 1981 Directory contains complete information about each of our hotels. If you would like to receive this directory, please complete and mail this postage-paid card. (Please print] high capital productivity for several fundamental reasons. D Marriott's real estate asset base produces profits that increase directly with inflation. The Current Value of Marriotts assets is $2.2 billion compared to $ 1.2 billion based on historical cost Since over half of these assets are financed with debt a larger proportion of inflation-driven profits accrues to the firm's equity owners. □ Profits from hotel management and lease agreements should continue to grow with inflation and additional hotels. Hotel management agreements—averaging 70 years in length—produced $45 million of operating profit in 1980 with minimal Marriott investment □ Management plans to achieve a 25% ROE on future capital expenditures. Marriott's 1981 capital budget, which exceeds $300 million, will be financed by internal cash flow and sales of hotels with the company retaining management agreements. Return on Equity Marriott vs Standard & Poor's 500 25% 20 10 1 1 SI ■ n Name_ Street_ 76 77 78 79 MM Marriott ■RIS&P500 'Projected 80 City_ State, Zip_ MC80AR 17 |