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Marriott Corporation, 1979 Annual Report
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Marriott International, Inc.. Marriott Corporation, 1979 Annual Report - Image 20. 1979. Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston. University of Houston Digital Library. Web. January 27, 2020. https://digital.lib.uh.edu/collection/hiltonar/item/637/show/618.

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.. (1979). Marriott Corporation, 1979 Annual Report - Image 20. 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/637/show/618

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, 1979 Annual Report - Image 20, 1979, Annual Reports from the Hospitality Industry Archives, Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston, accessed January 27, 2020, https://digital.lib.uh.edu/collection/hiltonar/item/637/show/618.

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, 1979 Annual Report
Creator (LCNAF)
  • Marriott International, Inc.
Publisher Marriott International, Inc.
Date 1979
Description Marriott Corporation Annual Report for calendar year 1979.
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 20
Format (IMT)
  • image/jpeg
File Name hiltonar_201609_051_020.jpg
Transcript Capital Expenditures & Acquisitions tm$ Minions) Interest Coverage 160 130 100 70 40' 10" CAPITAL EXPENDITURES & ACQUISITIONS REQUIRED RENEWALS & REPLACEMENTS • • •— 75 76 78 79 3.0 70 71 72 73 74 75 76 77 78 79 Interest Coverage: The ratio of earnings before net interest, taxes and non-cash charges, less required capital replacements, divided by net interest expense. programs and for convertible subordinated debt. Repurchase of the shares at an average cost of $15.16 represented a good investment of company funds. Further, without the share repurchase, Marriott's coverage and the resulting excess debt capacity would have risen to even higher levels. The company continued to possess substantial excess debt capacity and utilized a portion of it to make a cash tender offer, early in 1980, for shares of its common stock. As of February 28, approximately 7.5 million shares were purchased at $23.50 per share. This recapitalization of the company improves earnings per share and ROE and is expected to benefit shareholders long term. years—attesting to the stability of these inflows. Marriott's cash flow is highly predictable because non-cash charges comprise about half the annual cash flow from operations. And these charges, primarily depreciation and deferred taxes, are unrelated to operating performance. Expansion Outlays Higher Capital expenditures and acquisitions increased 14% to $159 million in 1979. These investments are highly discretionary. Less than 20% of Marriott's annual capital expenditures is required to maintain existing facilities. Expenditures to add new operating units—and expand the productive asset base—comprise the remainder of capital investment. This substantial and highly predictable cash inflow combined with limited requirements for cash expenditures yield Marriott a large, free cash flow for discretionary investment. Interest Coverage Rises In establishing debt policy, management determined that free cash flow should cover net interest five times—providing prudent protection given the stability of cash inflows and the discretionary nature of cash outflows. In 1979, due to the extraordinary rise in capital productivity, coverage rose to seven times, indicating that Marriott presently has substantial unutilized debt capacity. Shares Repurchased The company repurchased five million shares of stock for $75 million during 1979 to prevent dilution from issuance of shares under various employee stock option and benefit Dividend Increases In November, 1979 the Board of Directors declared an increase in the cash dividend to 20<C annually. The company will continue to seek profitable investment opportunities capable of sustaining earnings growth at the 20% level on average for at least the next five years. However, the Board also intends to increase cash dividends at least at the rate of planned earnings growth. Yearly Comparisons Reviewed Earnings per share increased in 1979 at a faster rate than net income as a result of the stock repurchase. Net interest expense increased for 1979 as a result of the stock (continued on page 20) 18