Marriott Reports 56 Percent Drop in Quarterly Income

Marriott International, Inc. reported second-quarter 2009 adjusted income from continuing operations of $84 million, a 56 percent decline over the year-ago quarter, and adjusted diluted earnings per share from continuing operations attributable to Marriott shareholders of $0.23, down 55 percent.

The company’s EPS guidance for the 2009 second quarter, disclosed on April 23, 2009, totaled $0.20 to $0.23. The reported income from continuing operations attributable to Marriott was $37 million in the second quarter of 2009 compared to reported income from continuing operations attributable to Marriott of $153 million in the year-ago quarter.

Reported diluted EPS from continuing operations attributable to Marriott shareholders was $0.10 in the second quarter of 2009 compared to diluted EPS from continuing operations attributable to Marriott shareholders of $0.41 in the second quarter of 2008.

Adjusted results for the 2009 second quarter exclude $57 million pretax ($30 million after-tax and $0.08 per diluted share) of restructuring costs and other charges resulting from the continued soft lodging and timeshare demand environment. Restructuring costs totaled $33 million pretax and primarily included severance costs and timeshare facilities exit costs.

Other charges totaled $24 million pretax primarily reflecting revaluation of residual interests from prior timeshare note sales, reserves for loan losses and guarantees and other charges. Of the total restructuring costs and other charges, cash payments are expected to be $31 million.

Adjusted results for the 2009 second quarter also exclude $17 million of non-cash charges ($0.05 per diluted share) in the provision for income taxes primarily related to the treatment of funds received from certain foreign subsidiaries that is in ongoing discussions with the Internal Revenue Service.

Adjusted results for the 2008 second quarter exclude the $36 million ($0.10 per diluted share) impact of non-cash items included in the tax provision. These prior year items included a $24 million tax reserve related to the treatment of funds received from certain foreign subsidiaries with the remaining $12 million expense due primarily to prior years’ tax adjustments, including a settlement with the IRS associated with a 1995 leasing transaction.