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Marriott Corporation, 1969 Annual Report
Image 26
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Marriott International, Inc.. Marriott Corporation, 1969 Annual Report - Image 26. 1969. Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston. University of Houston Digital Library. Web. March 2, 2021. https://digital.lib.uh.edu/collection/hiltonar/item/1729/show/1722.

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.. (1969). Marriott Corporation, 1969 Annual Report - Image 26. 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/1729/show/1722

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, 1969 Annual Report - Image 26, 1969, Annual Reports from the Hospitality Industry Archives, Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston, accessed March 2, 2021, https://digital.lib.uh.edu/collection/hiltonar/item/1729/show/1722.

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, 1969 Annual Report
Creator (LCNAF)
  • Marriott International, Inc.
Publisher Marriott International, Inc.
Date 1969
Description Marriott Corporation Annual Report for the 52 weeks ending on July 27, 1969.
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 26
Format (IMT)
  • image/jpeg
File Name hiltonar_201609_040_026.jpg
Transcript Notes to Consolidated Financial Statements (1) Principles of Consolidation and Acquisitions: The accompanying consolidated financial statements include accounts of all subsidiaries, (after eliminating all material intercompany transactions) except Marriott Financial Services, Inc. which investment is carried at cost plus equity in undistributed earnings (see Note 2). The accounts of foreign subsidiaries are included in the consolidated financial statements after translation to U.S. dollars. During 1969, the Company acquired several foreign and domestic businesses in exchange for cash and stock. All of these acquisitions were accounted for as purchases except Chef-Aire Shirley, S. A. de C. V., which was acquired in exchange for 45,642 shares of common stock and was accounted for as a pooling of interests. The consolidated financial statements for 1968 and prior years were not restated, as the amounts relating to the transaction were not material. The cost in excess of net assets of acquired businesses is shown in the accompanying balance sheet under Other Assets and has a continuing value which is not being amortized. In connection with the acquisition of Roy Rogers Western Foods, Inc. in 1968, the Company may be required to issue additional shares of common stock in 1970. Such additional shares, if any, will be based on 1970 sales from areas initially franchised by the sellers, and, therefore, cannot be determined at this time. (2) Unconsolidated Finance Subsidiary: During 1969, the Company formed a subsidiary, Marriott Financial Services, Inc. (MFS) to provide financing for the Company's franchisees and has negotiated 25 such financing agreements to provide $6,350,000 of financing. In addition, MFS is providing construction financing of $20,000,000 ($2,300,000 advanced as of July 27, 1969) to the landlord of the New Orleans Hotel against a permanent loan commitment and has provided $25,000,000 for temporary financing (three years) to the landlord of the Essex House in New York City. Including options, the Company will lease the New Orleans Hotel for 55 years and is leasing the Essex House for 43 years. The Company acquired a 25% equity in the landlord of the New Orleans Hotel and has an option to acquire an additional 24% during the three years following the hotel opening by converting debentures it now owns into $1,000,000 of class B stock of the landlord. Also, the Company has a three year option to purchase 50% of the Essex House at the landlord's cost and a second option running three years later to purchase the remainder at the then appraised value but at not less than $16,500,000. Until this subsidiary establishes its own credit lines, the Company will guarantee MFS's borrowings. The Company has guaranteed the $27,000,000 of commercial paper issued as of July 27, 1969, and loan commitments of an additional $20,000,000 described above. M FS's condensed balance sheet as of July 27,1969 is as follows: Assets (in thousands) Real estate leased to Marriott franchisees Construction advances—New Orleans Hotel First mortgage trust on Essex House Second mortgage trust on Essex House Rental contracts and other assets $ 900 2,300 22,000 3,000 800 29,000 Less Liabilities Short term commercial paper guaranteed by Marriott Corporation Other liabilities 27,000 200 Net worth and advances from parent 27,200 1,800 (3) Depreciation and Changes in Lives of Properties: Depreciation and amortization are calculated on the straight-line method for financial statement purposes and, where permitted, on accelerated methods for tax purposes. Deferred taxes are recorded where appropriate. Based on a reevaluation in 1969, the useful lives of high-rise hotels and the food processing plant were extended from 33 years to 40 and 45 years, respectively. If this change had not been made, income before extraordinary items and net income for 1969 would have been $150,000 less. (4) Federal Income Taxes: The Company and its subsidiaries file separate income tax returns. Federal income tax returns for fiscal years prior to 1964 have been examined and settled. The Federal income tax returns for the fiscal years 1964 through 1967 are currently being reviewed by the Internal Revenue Service. In the opinion of management, any adjustments for such years will not have, in the aggregate, a material adverse effect on the Company's consolidated financial statements. The provision for income taxes has been increased by the federal surtax provision in the amount of $655,000 and $329,000 for 1969 and 1968, respectively, and has been decreased by investment credits in the amount of $988,000 and $827,000 for 1969 and 1968, respectively. The provision also includes deferred income taxes of $2,818,000 and $1,495,000 for fiscal years 1969 and 1968, respectively, relating to differences between book and tax accounting for depreciation, interest during construction, pre-opening expense, non-competition payments, and deferred stock compensation. U. S. taxes have not been accrued on undistributed profits of foreign subsidiaries because management considers such profits to be permanently invested. Any such taxes, after foreign tax credits, would not be material. (5) Long-Term Obligations: Maturities of long-term obligations, excluding the convertible subordinated notes, are as follows: Fiscal Year Interest rates 1971 1972 1973 to 1994 Total Mortgages and Notes 4J4—9*ie% $ 6,188,800 3,163,511 1,403,718 19,279,856 $30,035,885 Lease-Purchase Obligations 5—7%% $ 2,655,014 2,747,640 2,425,806 37,628,242 $45,456,702 Lease-purchase obligations are in substance installment purchases and are recorded as leasehold interest at the discounted amount of future rentals. These leases are made with corporations owned by the Marriott Foundation and provide for the recovery of principal and interest and a nominal profit. In addition to the foregoing leases, the Company has other leases which are not installment purchases and which have an average remaining term of 16 years as of July 27, 1969. Minimum annual rentals amount to approximately $5,800,000 as of July 27, 1969. Most of these leases have renewal privileges and require additional rentals under percentage clauses relating to sales- Loan commitments of $18,725,000 for construction which will be completed during the next twelve months have been obtained as of July 27, 1969. In addition, the Company has obtained temporary construction financing of $9,720,000 at July 27, 1969, which will be replaced by permanent financing upon completion of the various projects. (6) Stock Compensation and Stock Purchase Plan: Deferred stock bonus awards and contracts have been made with 197 employees. The shares contingently vest pro rata until retirement, after which they are distributed in ten annual installments. Adjusted for forfeitures, stock dividends and splits, a total of 280,547 shares has been awarded, of which 100,890 shares had contingently vested on July 27, 1969. Compensation for deferred stock bonus awards is recorded in the year in which the bonus is earned, and for deferred stock contracts is recorded for the shares contingently vested in each fiscal year based on the fair market value when the awards are made (see Note 9 for change in pricing method of contract awards). The future income tax benefit to the Company when shares are issued to retired employees is included as a reduction of deferred taxes. During fiscal 1969, 11,250 shares of common stock were sold to a 24