Current Value Increases
Shareholders' equity per share, expressed on a Current Value basis, increased to $70.66 in 1983 from $62.15
in 1982. This compares favorably with the historical cost
book value of $23.37 per share.
Historical cost accounting understates both the value
of Marriott's real estate-based assets and its investment
capacity. The company's Current Value balance sheet restates historical cost assets and liabilities to reflect 1983
year-end valuations as well as the value of hotel management agreements. Current Value is based on the company's
productive capacity and does not include anticipated
growth. Therefore, it does not reflect the intrinsic value of
Marriott. As shown, Current Value shareholders' equity
increased 15% during 1983, primarily from strong discretionary cash flow and new hotel management agreements.
The $1.3 billion increase in restated shareholders'
equity, from $628 million at historical cost to $1.9 billion
at Current Value, results from a consistent policy of owning and managing real estate assets prudently financed
Changes in Current Value Shareholders' Equity
Current Value at December 31,1982
Discretionary Cash Flow
New Hotel Management Agreements
Deferred Taxes and Other
Current Value at December 30,1983
Condensed Consolidated Current Value Balance Sheet
as of December 30,1983
Property and Equipment, net
Hotel Management and Lease
Investments in and Advances to
$ 401,370 $ 401,370
Debt and Capital Lease
Other Long-Term Liabilities
Deferred Income Taxes
Percentage of Debt and Capital
Lease Obligations to Total
Basis of Valuations
Property and equipment, hotel management agreements and investments in affiliates are valued on the basis of the present worth of estimated future cash flows after certain deductions, primarily anticipated
asset maintenance requirements. Goodwill and deferred costs are assigned no value. Debt and capital lease obligations are discounted to
present value. Discount rates reflect current market rates.
Deferred income taxes are provided to reflect the present value of
projected income tax payments arising from the difference between
assets' current value and net tax value.