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Marriott Corporation, 1980 Annual Report
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Marriott International, Inc.. Marriott Corporation, 1980 Annual Report - Image 21. 1980. Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston. University of Houston Digital Library. Web. October 29, 2020. https://digital.lib.uh.edu/collection/hiltonar/item/1134/show/1110.

Disclaimer: This is a general citation for reference purposes. Please consult the most recent edition of your style manual for the proper formatting of the type of source you are citing. If the date given in the citation does not match the date on the digital item, use the more accurate date below the digital item.

Marriott International, Inc.. (1980). Marriott Corporation, 1980 Annual Report - Image 21. Annual Reports from the Hospitality Industry Archives. Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston. Retrieved from https://digital.lib.uh.edu/collection/hiltonar/item/1134/show/1110

Disclaimer: This is a general citation for reference purposes. Please consult the most recent edition of your style manual for the proper formatting of the type of source you are citing. If the date given in the citation does not match the date on the digital item, use the more accurate date below the digital item.

Marriott International, Inc., Marriott Corporation, 1980 Annual Report - Image 21, 1980, Annual Reports from the Hospitality Industry Archives, Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston, accessed October 29, 2020, https://digital.lib.uh.edu/collection/hiltonar/item/1134/show/1110.

Disclaimer: This is a general citation for reference purposes. Please consult the most recent edition of your style manual for the proper formatting of the type of source you are citing. If the date given in the citation does not match the date on the digital item, use the more accurate date below the digital item.

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Compound Item Description
Title Marriott Corporation, 1980 Annual Report
Creator (LCNAF)
  • Marriott International, Inc.
Publisher Marriott International, Inc.
Date 1980
Description Marriott Corporation Annual Report for calendar year 1980.
Subject.Topical (LCSH)
  • Hospitality industry
  • Hotel management
  • Corporation reports
Subject.Name (LCNAF)
  • Marriott International, Inc.
Genre (AAT)
  • annual reports
  • business records
Language English
Type (DCMI)
  • Text
  • Image
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
Item Description
Title Image 21
Format (IMT)
  • image/jpeg
File Name hiltonar_201609_052_021.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 33% 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 fell 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 40% 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 discretionary 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 accounting depreciation). For Marriott these required expenditures have averaged only about 50% of accounting depreciation since 1970. Capital Productivity Improves ROE increased to 23.8%, exceeding the 20% goal scheduled for 1983. This performance places Marriott in the top 20% of the S&P 500 firms. The dramatic increase from 9.5% in 1975 reflects the company's aggressive program to improve capital efficiency, and the stock repurchase program. Return on total capital has doubled to 18% since 1975. Marriott plans to perform at about 2 5% ROE through the mid- 1980s. Management can maintain high capital productivity for several fundamental reasons. □ Marriott's real estate asset base produces profits that increase directly with inflation. The Current Value of Marriott's 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 76 77 78 79 80 ■ Marriott mm S&P 500 •Projected 17