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Marriott Corporation, 1982 Annual Report
Image 27
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Marriott International, Inc.. Marriott Corporation, 1982 Annual Report - Image 27. 1982. Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston. University of Houston Digital Library. Web. October 27, 2020. https://digital.lib.uh.edu/collection/hiltonar/item/1296/show/1270.

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.. (1982). Marriott Corporation, 1982 Annual Report - Image 27. 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/1296/show/1270

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, 1982 Annual Report - Image 27, 1982, Annual Reports from the Hospitality Industry Archives, Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston, accessed October 27, 2020, https://digital.lib.uh.edu/collection/hiltonar/item/1296/show/1270.

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, 1982 Annual Report
Creator (LCNAF)
  • Marriott International, Inc.
Publisher Marriott International, Inc.
Date 1982
Description Marriott Corporation Annual Report for calendar year 1982.
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 27
Format (IMT)
  • image/jpeg
File Name hiltonar_201609_054_027.jpg
Transcript FINANCIAL REVIEW Marriott Corporation achieved record earnings and continued its high capital productivity despite the impact of the recession and the continuing problems of the airline industry: □ Earnings Per Share (EPS) increased to $3.44. □ Discretionary Cash Flow increased 20% to $7.00 per share. □ Return on Shareholders' Equity (ROE) was 20%. Earnings and ROE performance maintain Marriott among the top 20% of Standard & Poor's 500 firms. Comparisons of Marriott's performance to the S & P indices are shown in the charts at right. Profit Growth Continues Sales and operating income increased 27% and 15%, respectively, primarily as a result of sales gains from unit growth and inflation. Hotel sales rose 27%, driven by an additional 9,000 rooms and room rate increases that kept pace with inflation. Operating income increased a disproportionate 13%, principally because most new hotels are managed and occupancy rates decreased by 2% from 1981. Marriott reports total sales of managed hotels yet earns only management fees. The owner's share of operating income, which must cover capital cost, is recorded as an operating expense. Thus an increasing element of ownership capital cost is present in Marriott's operating expenses. Capital cost for owned hotels is reflected as "interest expense," not operating expense. The top chart on page 26 shows that if Marriott reported only its management fees as sales, hotel profit margins would increase to 37% for 1982. Contract Food Services sales increased 37%, reflecting units gained in the Host acquisition. Operating income increased 12% as the contribution from Host units, together with improved profits in existing terminal operations and food service management, were offset by a decline in domestic and international airline catering profits. Airline catering profits were lower because of the impact of the depressed economy on the airline industry and the nonrecurring loss resulting from the Braniff International bankruptcy. Restaurant sales and operating income increased 23% and 26%, respectively, fueled by 103 new Roy Rogers units and the 50 specialty restaurants acquired from Host. Operating income was particularly strong in Roy Rogers and Big Boy. Overall, customer counts and costs stabilized in 1982. Theme Park sales and profits from operations were off substantially because of a 20% drop in park attendance. However, total theme park operating income increased 13% due to the sale of excess land contiguous to the Santa Clara park. Net income increased 10%, primarily because of improved operating income, offset somewhat by higher interest costs on debt incurred to finance the company's acquisition and development programs. Discretionary Cash Flow pershare increased 20% to $7.00, as reflected in the Current Value Statement. Discretionary Cash Flow represents the company's economic profit. It reports Funds from Operations less actual capital expenditures (rather than accounting depreciation) required to maintain the competitive position of existing fixed assets. The table below shows that Discretionary Cash Flow has averaged over 80% higher than accounting earnings since 1978. Discretionary Cash Flow vs. Net Income ($ in millions) Cash Net Year Flow Income 1982 $192 $94 1981 157 86 1980 125 72 1979 118 71 1978 100 54 Capital Productivity Remains High Return on Shareholders' Equity (ROE) was 20%, and return on total capital was 15%. Since 1975, ROE has more than doubled in response to Marriott's aggressive program to improve capital efficiency. Marriott plans to continue performing at these levels through the 1980s by carefully managing the balance sheet and continuing to expand hotels—primarily under management agreements. Several major transactions in 1982 boosted this program: □ Potomac Hotel Limited Partnership (PHLP) was publicly syndicated, eliminating Marriott's capital investment in 11 hotels with a total EPS Growth Marriott vs. Standard & Poor's 500 40% I Marriott warn S&P 500 'Projected Return on Equity Marriott vs. Standard & Poor's 500 25% 78 79 80 81 82 ■ Marriott ■■ S&P 500 'Projected 25