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| Title | Marriott Corporation, 1980 Annual Report |
| Creator (LCNAF) |
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| Publisher | Marriott International, Inc. |
| Date | 1980 |
| Description | Marriott Corporation Annual Report for calendar year 1980. |
| Subject.Topical (LCSH) |
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| Subject.Name (LCNAF) |
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| Genre (AAT) |
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| Language | English |
| Type (DCMI) |
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| 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 26 |
| Format (IMT) |
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| File Name | hiltonar_201609_052_026.jpg |
| Transcript | 2. Income tax expense as reported exceeds Marriott's annual cash tax payments, because Marriott defers a substantial amount of its taxes through accelerated depreciation. Therefore, current year after-tax cash flow is greater than reported net income. Further, the profit and loss statement does not reflect the annual appreciation of Marriott's real estate. Yet interest expense to carry the assets is charged annually to reported earnings. The appreciation of Marriott's real estate is reflected in its large residual value, which is an important component of the anticipated earnings stream from Marriott's assets. Hotel Rooms Growth* (in thousands) 76 77 78 79 80 ■i Managed /leased rooms ■I Owned rooms •Company-operated hotels only Future Cash Growth The magnitude and certainty of anticipated discretionary cash flow growth are important determinants of common stock value as they affect the size and risk of the future earnings stream. Marriott's businesses exhibit relatively certain prospects for growth over the intermediate future. The hotel business provides the largest and most visible growth prospects. Since the average hotel project takes approximately four years to develop, most of the 20% to 2 5% annual room growth planned through the mid-1980s already is in some stage of development The company currently has over 50,000 hotel rooms, comprising nearly 100 hotel properties, in its development pipeline. Nineteen new company-operated properties and additions to existing hotels will add 9,500 rooms during 1981, while 5,400 rooms are already under construction for 1982-83 opening. The present size and quality of the pipeline indicates the achievability of the company's hotel expansion objectives. The Contract Food Service and Theme Park groups will generate substantial discretionary cash flow in the early 1980s. The operating assets for both these groups are largely developed. Contract Food Services has been a net cash generator over the last decade and its In-Flite Division, with 65 flight kitchens, will add individual kitchens only on a selective basis. Theme Parks will reverse its position from capital consumer in the 1970s (largely for initial construction) to a major capital generator (over $100 million through 1985). No additional company-owned theme parks are anticipated. The Restaurant Group was a major cash consumer in the 1970s with the simultaneous expansion of Farrell's, Big Boys and Roy Rogers. With growth now limited largely to Roy Rogers, this group will move to a basically cash-balanced position in the 1980s. Outlook Marriott again should develop substantial excess debt capacity in the mid-1980s. It will then face the same four choices—accelerate growth in existing businesses, diversify, pay larger dividends or repurchase stock. 22 |