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Marriott Corporation, 1978 Annual Report
Image 33
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Marriott International, Inc.. Marriott Corporation, 1978 Annual Report - Image 33. 1978. Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston. University of Houston Digital Library. Web. September 20, 2019. https://digital.lib.uh.edu/collection/hiltonar/item/828/show/820.

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.. (1978). Marriott Corporation, 1978 Annual Report - Image 33. 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/828/show/820

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, 1978 Annual Report - Image 33, 1978, Annual Reports from the Hospitality Industry Archives, Hospitality Industry Archives, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston, accessed September 20, 2019, https://digital.lib.uh.edu/collection/hiltonar/item/828/show/820.

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, 1978 Annual Report
Creator (LCNAF)
  • Marriott International, Inc.
Publisher Marriott International, Inc.
Date 1978
Description Marriott Corporation Annual Report for the year ending on July 31, 1978.
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 33
Format (IMT)
  • image/jpeg
File Name hiltonar_201609_049_033.jpg
Transcript $57,389,000 including a mortgage of $53,948,000, secured only by the property. The Company has a 45% equity interest in Sun Line Greece Special Shipping Company, Inc., the owner of the cruise ship M.S. Stella Solaris. At its fiscal year-end (December 31,1977), Sun Line Greece had total assets of $22,377,000 and total liabilities of $15,126,000 including $9,061,000 of debt. The Company has guaranteed 45% of this debt. The Company sold an idle ship in October, 1976 at its book value to a joint venture in which the Company has a 19% interest. The venture is converting the ship to a hotel which will be managed by the Company. At June 30,1978, the joint venture had total assets of $20,168,000 and total liabilities of $13,721,000 including $12,627,000 advanced by the partners, of which $2,399,000 was the Company's share. The excess of the Company's investment over the underlying net assets of minority-owned affiliates is $2,754,000 and is being amortized over periods of up to 40 years. INCOME TAXES A comparative summary of the provision for income taxes follows: 1978 Current- U.S. and state $23,439,000 -Foreign 3,302,000 Deferred 11,976,000 Investment tax credit (5,060.000) 1977 $17,786,000 2,486,000 8,462,000 (4,100,000) $33,657,000 $24,634,000 The deferred tax provision is primarily attributable to excess tax over book depreciation which amounted to $11,042,000 and $8,140,000 in 1978 and 1977, respectively. The Company established a Salaried Employee Stock Ownership Plan in 1978 and as a result recorded an additional 1% investment tax credit. This additional credit of $460,000 in 1978 offsets a corresponding charge to operating expenses. Reconciliation of the United States statutory tax rate of 48% and the Company's consolidated income tax rate follows: 1978 1977 United States income tax rate State income taxes, net of U.S. tax benefit Foreign earnings and losses subject to aggregate tax rate less than 48% Tax benefit on dispositions of businesses Other items, net Effective gross income tax rate Investment tax credit Effective net income tax rate 48.0% 48.0% 3.4 3.7 (2.6) (0.3) 48.5 (6.3) 42.2% 41.0% (2.6) (2.1) 0.8 47.8 (6.8) Maturities of debt at July 28,1978 are: 12 Months Ended July, 1980 $ 15,555,000 1981 20,049,000 1982 24,078,000 1983 28,697,000 to 2005 221,504,000 $309,883,000 London Euro-dollar interbank rate. Interest rates on debt range from 4.25% to 10.25%. The Company's loan agreements require the Company to meet certain requirements including, among other things, maintaining minimum working capital, net worth, and asset-to-debt and debt-to- equity ratios. The loan agreements also have restrictions on cash dividends, other payments and the pledging of certain assets. At July 28,1978, retained earnings of $67,592,000 are unrestricted and $285,211,000 of property and equipment, at net book value, is pledged or mortgaged. Private Debt Placement: On December 20,1977, the Company issued 8%% Unsecured Senior Notes for $40,000,000 to a group of lenders, primarily insurance companies. These notes are for 20 years with equal principal payments beginning in 1983. Revolving Loan Agreements: The Company uses revolving loan commitments, short term loans and commercial paper for interim financing. Such financing is classified as noncurrent indebtedness to the extent that the Company has funds available under its revolving loan agreements maturing beyond one year. The above maturity table reflects the maturities of such financing on the basis of the maturity schedule of the revolving credit agreements discussed below plus management's estimation of prepayments. As of July 28,1978, the Company has commitments of $90,000,000 under revolving credit agreements which mature through fiscal 1988. These agreements bear interest based on the prime rate or the London Euro-dollar interbank rate. At July 28, 1978, an aggregate of $44,000,000 in the form of short term debt has been borrowed against these revolving credit agreements and is included in unsecured notes payable (including $39,000,000 of commercial paper). The average effective interest rate on these borrowings was 9.0% at July 28,1978. In addition, the Company has unused bank credit lines aggregating $37,500,000. Borrowings against all revolving loan agreements averaged $53,200,000 during 1978 and $71,400,000 during 1977 (at weighted average interest rates of 8.1% in 1978 and 7.2% in 1977) with a maximum balance of $76,800,000 in 1978 and $77,900,000 in 1977. A commitment fee of up to a maximum of one-half of one percent is payable on the unused portion. Compensating Balances: All compensating balance agreements are informal and do not legally restrict withdrawal of funds. Under certain bank agreements the Company maintains average compensating balances of $5,100,000 after adjustment for an estimated bank float of $3,200,000. The balances maintained are equal to a percentage (10%-20%) of the amounts available or borrowed. LEASES In 1978, the Company retroactively changed its method of accounting for leases in accordance with Statement of Financial The Company has debt of $47,000,000 as of July 28,1978 at interest rates which vary based on the prime lending rate or 31