PR Newswire | Aug 3, 2021 07:02AM EDT

08/03 06:00 CDT

Marriott International Reports Second Quarter 2021 Results BETHESDA, Md., Aug. 3, 2021

BETHESDA, Md., Aug. 3, 2021 /PRNewswire/ --

* Second quarter 2021 comparable systemwide constant dollar RevPAR increased 262.6 percent worldwide, 274.6 percent in the U.S. & Canada, and 223.2 percent in international markets, compared to the 2020 second quarter; * Second quarter 2021 comparable systemwide constant dollar RevPAR declined 43.8 percent worldwide, 39.5 percent in the U.S. & Canada, and 55.6 percent in international markets, compared to the 2019 second quarter; * Second quarter reported diluted EPS totaled $1.28, compared to reported diluted loss per share of $0.72 in the year-ago quarter. Second quarter adjusted diluted EPS totaled $0.79, compared to second quarter 2020 adjusted diluted loss per share of $0.57; * Second quarter reported net income totaled $422 million, compared to reported net loss of $234 million in the year-ago quarter. Second quarter adjusted net income totaled $260 million, compared to second quarter 2020 adjusted net loss of $184 million; * Adjusted EBITDA totaled $558 million in the 2021 second quarter, compared to second quarter 2020 adjusted EBITDA of $61 million; * The company added nearly 25,000 rooms globally during the second quarter, including roughly 13,000 rooms in international markets and a total of approximately 5,300 conversion rooms. Gross rooms growth was 6.1 percent for the twelve months ended June 30, 2021; * At quarter end, Marriott's worldwide development pipeline totaled 2,750 properties and nearly 478,000 rooms, including roughly 19,000 rooms approved, but not yet subject to signed contracts. More than 212,000 rooms in the pipeline were under construction as of the end of the 2021 second quarter.

Marriott International, Inc. (NASDAQ: MAR) today reported second quarter 2021 results.

Anthony Capuano, Chief Executive Officer, said, "The rate of global lodging recovery accelerated during the second quarter and momentum has continued into July. We are particularly pleased with the resilience of RevPAR1 in markets where consumers feel safe traveling. Worldwide occupancy continued to build, reaching 51 percent for the quarter. We also saw strong improvement in global average daily rate in the second quarter, which was down only 17 percent compared to the second quarter of 2019.

"The swift resurgence of lodging demand once the virus has been largely contained and restrictions have eased has been most evident in Mainland China. Second quarter RevPAR in Mainland China was on par with the second quarter of 2019, and in April, for the first time since the pandemic began, leisure, business transient and group room nights were all ahead of 2019 levels.

"In our largest region, the U.S. & Canada, demand stepped up significantly during the quarter, particularly at our resorts. Leisure demand once again led the way, although business transient and group demand also continued to grow. We are seeing more blending of trip purposes, a trend we expect will continue.

"Owners continue to seek out our brands. Year to date through June, rooms signed were 36 percent ahead of the same period in 2020 and more than 30 percent of rooms signed in the first half of this year are conversions. We have also seen strong openings, with approximately 49,000 rooms added to our system in the first six months of the year. For the full year 2021, we continue to expect gross rooms growth will accelerate to approximately 6 percent, with net rooms growth now expected to be towards the top end of the 3 to 3.5 percent range.

"Marriott Bonvoy hit 153 million members by quarter's end. We continue to focus on engaging with our loyal customers through multiple offerings beyond hotel stays. Second quarter co-brand credit card fees surpassed 2019 second quarter fees, thanks to strong cardholder spend and robust global cardholder acquisitions. Our recent international credit card launches in South Korea and Mexico have seen strong initial success as has our new Uber collaboration in the U.S. Last week, we began offering U.S. customers booking through our digital channels the opportunity to purchase Allianz travel insurance products, providing peace of mind to our customers throughout the travel journey.

"While we are keeping a close eye on the Delta and other variant strains, we are optimistic that the upward trajectory of the global recovery will continue. We anticipate that more workers returning to their offices on a hybrid basis will serve as a catalyst for a meaningful increase in business transient and group demand in the fall. Many of our associates are starting to get back on the road, and our largest corporate clients tell us they are beginning to do the same. Our recovery to date has shown us that there is tremendous pent-up demand for the travel experiences we consistently provide. Timelines are hard to predict and will continue to vary by region, but I believe that we are on our way to a full global recovery."

Second Quarter 2021 Results

Marriott's reported operating income totaled $486 million in the 2021 second quarter, compared to 2020 second quarter reported operating loss of $154 million. Reported net income totaled $422 million in the 2021 second quarter, compared to 2020 second quarter reported net loss of $234 million. Reported diluted earnings per share (EPS) totaled $1.28 in the quarter, compared to reported diluted loss per share of $0.72 in the year-ago quarter.

Adjusted operating income in the 2021 second quarter totaled $406 million, compared to 2020 second quarter adjusted operating loss of $85 million. Adjusted operating loss in the 2020 second quarter excluded impairment charges of $24 million.

Second quarter 2021 adjusted net income totaled $260 million, compared to 2020 second quarter adjusted net loss of $184 million. Adjusted diluted EPS in the 2021 second quarter totaled $0.79, compared to adjusted diluted loss per share of $0.57 in the year-ago quarter. These adjusted results excluded special tax items of $98 million ($0.30 per share) in the 2021 second quarter and impairment charges of $25 million after-tax ($0.08 per share) in the 2020 second quarter.

Adjusted results also excluded restructuring and merger-related charges, cost reimbursement revenue, and reimbursed expenses. See pages A-3 and A-12 for the calculation of adjusted results and the manner in which the adjusted measures are determined in this press release.

Base management and franchise fees totaled $587 million in the 2021 second quarter, compared to base management and franchise fees of $222 million in the year-ago quarter. The year-over-year increase in these fees is primarily attributable to RevPAR increases due to the ongoing recovery in lodging demand from the impacts of COVID-19. Other non-RevPAR related franchise fees in the 2021 second quarter totaled $160 million, compared to $107 million in the year-ago quarter, aided by a $43 million increase in credit card branding fees.

Incentive management fees totaled $55 million in the 2021 second quarter, compared to $12 million in the 2020 second quarter. Hotels in international markets earned $40 million of the fees in the quarter, with particular strength in Greater China.

Owned, leased, and other revenue, net of direct expenses, totaled a profit of $19 million in the 2021 second quarter, compared to a $72 million loss in the year-ago quarter. The $91 million increase in revenue net of expenses year over year largely reflects the ongoing recovery in lodging demand from the impacts of COVID-19 as well as $18 million of subsidies received from German government COVID-19 assistance programs.

Depreciation, amortization, and other expenses for the 2021 second quarter totaled $50 million, compared to $72 million in the year-ago quarter. The year-over-year change is primarily due to a $15 million impairment charge recorded in the 2020 second quarter.

General, administrative, and other expenses for the 2021 second quarter totaled $187 million, compared to $178 million in the year-ago quarter. The year-over-year increase primarily reflects lower compensation costs in 2020 as a result of reductions in executive pay, shortened work weeks and furloughs, partially offset by lower bad debt expense in the 2021 quarter.

Interest expense, net, totaled $102 million in the second quarter compared to $119 million in the year-ago quarter. The year-over-year decrease is largely due to lower debt balances.

Equity in losses for the second quarter totaled $8 million, compared to a $30 million loss in the year-ago quarter. The decrease in losses largely reflects improved results at joint venture properties due to the ongoing recovery in lodging demand from the impacts of COVID-19 and an $8 million impairment charge recorded in the 2020 second quarter.

In the 2021 second quarter, the provision for income taxes totaled a $41 million benefit, compared to a $64 million benefit in the 2020 second quarter. The change in benefit largely reflects higher income before taxes, partially offset by a $118 million reversal of reserves in the 2021 second quarter related to the closure of pre-acquisition Starwood audits.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $558 million in the 2021 second quarter, compared to second quarter 2020 adjusted EBITDA of $61 million. See page A-12 for the adjusted EBITDA calculation.

Selected Performance Information

The company added 149 properties (24,909 rooms) to its worldwide lodging portfolio during the 2021 second quarter, including approximately 5,300 conversion rooms and roughly 13,000 rooms in international markets. Additions in the 2021 second quarter included eight all-inclusive conversion properties (2,943 rooms) in the company's Caribbean and Latin America region, part of the nearly 7,000-room deal signed in the first quarter of 2021. Fourteen properties (2,486 rooms) exited the system during the quarter. At quarter end, Marriott's global lodging system totaled 7,797 properties, with over 1,451,000 rooms.

At quarter end, the company's worldwide development pipeline totaled 2,750 properties with nearly 478,000 rooms, including 1,069 properties with more than 212,000 rooms under construction and 114 properties with roughly 19,000 rooms approved for development, but not yet subject to signed contracts.

In the 2021 second quarter, worldwide RevPAR increased 262.6 percent (a 268.7 percent increase using actual dollars) compared to the 2020 second quarter. RevPAR in the U.S. & Canada increased 274.6 percent (a 275.8 percent increase using actual dollars), and RevPAR in international markets increased 223.2 percent (a 244.1 percent increase using actual dollars).

Balance Sheet and Liquidity

At quarter end, Marriott's net debt was $9.5 billion, representing total debt of $10.2 billion less cash and cash equivalents of $0.7 billion. At year-end 2020, the company's net debt was $9.5 billion, representing total debt of $10.4 billion less cash and cash equivalents of $0.9 billion.

The company's net liquidity was approximately $4.7 billion at the end of the second quarter, representing $0.6 billion in available cash balances and $4.1 billion of unused borrowing capacity under its revolving credit facility.

On July 23, 2021, Marriott announced that on August 9, 2021 it will redeem all $400 million aggregate principal amount of its outstanding 3.125% Series N Notes Due October 15, 2021.

Investment Spending

Marriott now anticipates that full year 2021 investment spending will total $575 million to $625 million. Total investment spending includes capital and technology expenditures, loan advances, contract acquisition costs, and other investing activities.

COVID-19

Due to the numerous uncertainties associated with COVID-19, Marriott cannot presently estimate the impact of this unprecedented situation on its future results, which is highly dependent on the severity and duration of the pandemic and its impacts, but expects that COVID-19 will continue to be material to the company's results.

Marriott International, Inc. (NASDAQ: MAR) will conduct its quarterly earnings review for the investment community and news media on Tuesday, August 3, 2021 at 8:30 a.m. Eastern Time (ET). The conference call will be webcast simultaneously via Marriott's investor relations website at http://www.marriott.com/investor, click on "Events & Presentations" and click on the quarterly conference call link. A replay will be available at that same website until August 2, 2022.

The telephone dial-in number for the conference call is 1-706-679-3455 and the conference ID is 2952228. A telephone replay of the conference call will be available from 1:00 p.m. ET, Tuesday, August 3, 2021 until 8:00 p.m. ET, Monday, August 10, 2021. To access the replay, call 1-404-537-3406. The conference ID for the recording is 2952228.

Note on forward-looking statements: All statements in this press release and the accompanying schedules are made as of August 3, 2021. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events or otherwise. This press release and the accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including statements related to the possible effects on our business of the COVID-19 pandemic and efforts to contain it (COVID-19); recovery in lodging demand; travel and lodging demand and trends; future performance of the company's hotels; our development pipeline, signings, rooms growth and conversions; the expected timing and completion of certain transactions; our investment spending expectations; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including those we identify below and other risk factors that we identify in our Securities and Exchange Commission filings, including our most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K. Risks that could affect forward-looking statements in this press release include the duration and scope of COVID-19, including the availability and distribution of effective vaccines or treatments; the pandemic's short and longer-term impact on the demand for travel, transient and group business, and levels of consumer confidence; actions governments, businesses and individuals have taken or may take in response to the pandemic, including limiting, banning, or cautioning against travel and/or in-person gatherings or imposing occupancy or other restrictions on lodging or other facilities; the impact of the pandemic and actions taken in response to the pandemic on global and regional economies, travel, and economic activity, including the duration and magnitude of the pandemic's impact on unemployment rates and consumer discretionary spending; the ability of our owners and franchisees to successfully navigate the impacts of COVID-19; the pace of recovery when the pandemic subsides and any dislocations in recovery as a result of resurgences of the pandemic; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the effects of steps we and our property owners and franchisees have taken and may continue to take to reduce operating costs and/or enhance certain health and cleanliness protocols at our hotels; the impacts of our employee furloughs and reduced work week schedules, our voluntary transition program and our other restructuring activities; competitive conditions in the lodging industry and in the labor market; relationships with customers and property owners; the availability of capital to finance hotel growth and refurbishment; the extent to which we experience adverse effects from data security incidents; and changes in tax laws in countries in which we earn significant income. Any of these factors could cause actual results to differ materially from the expectations we express or imply in this press release.

Marriott International, Inc. (NASDAQ: MAR) is based in Bethesda, Maryland, USA, and encompasses a portfolio of roughly 7,800 properties under 30 leading brands spanning 138 countries and territories. Marriott operates and franchises hotels and licenses vacation ownership resorts all around the world. The company offers Marriott Bonvoy(tm), its highly-awarded travel program. For more information, please visit our website at www.marriott.com, and for the latest company news, visit www.marriottnewscenter.com. In addition, connect with us on Facebook and @MarriottIntl on Twitter and Instagram.

Marriott may post updates about COVID-19 and other matters on its investor relations website at www.marriott.com/investor or Marriott's news center website at www.marriottnewscenter.com. Marriott encourages investors, the media, and others interested in the company to review and subscribe to the information Marriott posts on these websites, which may be material. The contents of these websites are not incorporated by reference into this press release or any report or document Marriott files with the SEC, and any references to the websites are intended to be inactive textual references only.

1 All occupancy, ADR and RevPAR statistics are systemwide constant dollar and include hotels that have been temporarily closed due to COVID-19. Unless otherwise stated, all changes refer to year-over-year changes for the comparable period. RevPAR comparisons between 2021 and 2020 reflect properties that are comparable in both years. ADR and RevPAR comparisons between 2021 and 2019 reflect properties that are defined as comparable as of June 30, 2021, even if they were not open and operating for the full year 2019 or they did not meet all the other criteria for comparable in 2019.

IRPR#1

Tables follow

MARRIOTT INTERNATIONAL, INC.

PRESS RELEASE SCHEDULES

TABLE OF CONTENTS

QUARTER 2, 2021

Consolidated Statements of Income - As Reported A-1

Non-GAAP Financial Measures A-3

Total Lodging Products A-4

Key Lodging Statistics A-7

Adjusted EBITDA A-12

Explanation of Non-GAAP Financial and Performance Measures A-13

MARRIOTT INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED

SECOND QUARTER 2021 AND 2020

(in millions except per share amounts, unaudited)

As Reported As Reported Percent

Three Months Ended Three Months Ended Better/(Worse)

June 30, 2021 June 30, 2020 Reported 2021 vs. 2020

REVENUES

Base management fees $ 156 $ 40 290

Franchise fees ^1 431 182 137

Incentive management fees 55 12 358

Gross Fee Revenues 642 234 174

Contract investment amortization ^2 (18) (21) 14

Net Fee Revenues 624 213 193

Owned, leased, and other revenue ^3 187 49 282

Cost reimbursement revenue ^4 2,338 1,202 95

Total Revenues 3,149 1,464 115

OPERATING COSTS AND EXPENSES

Owned, leased, and other - direct ^5 168 121 (39)

Depreciation, amortization, and other ^6 50 72 31

General, administrative, and other ^7 187 178 (5)

Restructuring and merger-related charges 3 6 50

Reimbursed expenses ^4 2,255 1,241 (82)

Total Expenses 2,663 1,618 (65)

OPERATING INCOME (LOSS) 486 (154) 416

Gains and other income, net ^8 5 5 -

Interest expense (109) (127) 14

Interest income 7 8 (13)

Equity in losses ^9 (8) (30) 73

INCOME (LOSS) BEFORE INCOME TAXES 381 (298) 228

Benefit for income taxes 41 64 (36)

NET INCOME (LOSS) $ 422 $ (234) 280

EARNINGS (LOSS) PER SHARE

Earnings (Loss) per share - basic $ 1.29 $ (0.72) 279

Earnings (Loss) per share - diluted $ 1.28 $ (0.72) 278

Basic Shares 327.1 325.6

Diluted Shares ^10 329.1 325.6

^1 Franchise fees include fees from our franchise agreements, application and relicensing fees, licensing fees from our timeshare, credit card programs, and

residential branding fees.

^2 Contract investment amortization includes amortization of capitalized costs to obtain contracts with our owner and franchisee customers, and any related

impairments, accelerations, or write-offs.

^3 Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, and other revenue.

Cost reimbursement revenue includes reimbursements from properties for^4 property-level and centralized programs and services that we operate for the benefit of

our hotel owners. Reimbursed expensesinclude costs incurred by Marriott for certain property-level operating expenses and centralized programs and services.

Owned, leased, and other - direct expenses include operating expenses related^5 to our owned or leased hotels, including lease payments and pre-opening expenses.

Depreciation, amortization, and other expenses include depreciation for fixed^6 assets, amortization of capitalized costs incurred to acquire management, franchise,

and license agreements, and any related impairments, accelerations, or write-offs.

^7 General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses.

Gains and other income, net includes gains and losses on the sale of real^8 estate, the sale of joint venture interests and other investments, and adjustments from

other equity investments.

^9 Equity in losses include our equity in losses of unconsolidated equity method investments.

Basic and fully diluted weighted average shares outstanding used to calculate^10 earnings (loss) per share for the period in which we had a loss are the same because

inclusion of additional equivalents would be anti-dilutive.

MARRIOTT INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED

SECOND QUARTER YEAR-TO-DATE 2021 AND 2020

(in millions except per share amounts, unaudited)

As Reported As Reported Percent

Six Months Ended Six Months Ended Better/(Worse)

June 30, 2021 June 30, 2020 Reported 2021 vs. 2020

REVENUES

Base management fees $ 262 $ 254 3

Franchise fees ^1 737 597 23

Incentive management fees 88 12 633

Gross Fee Revenues 1,087 863 26

Contract investment amortization ^2 (35) (46) 24

Net Fee Revenues 1,052 817 29

Owned, leased, and other revenue ^3 295 329 (10)

Cost reimbursement revenue ^4 4,118 4,999 (18)

Total Revenues 5,465 6,145 (11)

OPERATING COSTS AND EXPENSES

Owned, leased, and other - direct ^5 303 393 23

Depreciation, amortization, and other ^6 102 222 54

General, administrative, and other ^7 398 448 11

Restructuring and merger-related charges 4 4 -

Reimbursed expenses ^4 4,088 5,118 20

Total Expenses 4,895 6,185 21

OPERATING INCOME (LOSS) 570 (40) 1,525

Gains and other income, net ^8 6 1 500

Interest expense (216) (220) 2

Interest income 14 14 -

Equity in losses ^9 (20) (34) 41

INCOME (LOSS) BEFORE INCOME TAXES 354 (279) 227

Benefit for income taxes 57 76 (25)

NET INCOME (LOSS) $ 411 $ (203) 302

EARNINGS (LOSS) PER SHARE

Earnings (Loss) per share - basic $ 1.26 $ (0.63) 300

Earnings (Loss) per share - diluted $ 1.25 $ (0.63) 298

Basic Shares 326.9 325.5

Diluted Shares ^10 329.0 325.5

^1 Franchise fees include fees from our franchise agreements, application and relicensing fees, licensing fees from our timeshare, credit card programs, and

residential branding fees.

^2 Contract investment amortization includes amortization of capitalized costs to obtain contracts with our owner and franchisee customers, and any related

impairments, accelerations, or write-offs.

^3 Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, and other revenue.

Cost reimbursement revenue includes reimbursements from properties for^4 property-level and centralized programs and services that we operate for the benefit of

our hotel owners. Reimbursed expensesinclude costs incurred by Marriott for certain property-level operating expenses and centralized programs and services.

Owned, leased, and other - direct expenses include operating expenses related^5 to our owned or leased hotels, including lease payments and pre-opening expenses.

Depreciation, amortization, and other expenses include depreciation for fixed^6 assets, amortization of capitalized costs incurred to acquire management, franchise,

and license agreements, and any related impairments, accelerations, or write-offs.

^7 General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses.

Gains and other income, net includes gains and losses on the sale of real^8 estate, the sale of joint venture interests and other investments, and adjustments from

other equity investments.

^9 Equity in losses include our equity in losses of unconsolidated equity method investments.

Basic and fully diluted weighted average shares outstanding used to calculate^10 earnings (loss) per share for the period in which we had a loss are the same because

inclusion of additional equivalents would be anti-dilutive.

MARRIOTT INTERNATIONAL, INC.

NON-GAAP FINANCIAL MEASURES

($ in millions except per share amounts)

The following table presents our reconciliations of Adjusted operating income (loss), Adjusted operating income (loss) margin, Adjusted net income (loss), and Adjusted diluted

earnings (loss) per share, to the most directly comparable GAAP measure. Adjusted total revenues is used in the determination of Adjusted operating income (loss) margin.

Three Months Ended Six Months Ended

Percent Percent

June 30, June 30, Better/ June 30, June 30, Better/

2021 2020 (Worse) 2021 2020 (Worse)

Total revenues, as reported $ 3,149 $ 1,464 $ 5,465 $ 6,145

Less: Cost reimbursement revenue (2,338) (1,202) (4,118) (4,999)

Add: Impairments ^1 - 3 - 10

Adjusted total revenues ** 811 265 1,347 1,156

Operating income (loss), as reported 486 (154) 570 (40)

Less: Cost reimbursement revenue (2,338) (1,202) (4,118) (4,999)

Add: Reimbursed expenses 2,255 1,241 4,088 5,118

Add: Restructuring and merger-related charges 3 6 4 4

Add: Impairments^2 - 24 - 125

Adjusted operating income (loss) ** 406 (85) * 544 208 162%

Operating income (loss) margin 15% -11% 10% -1%

Adjusted operating income (loss) margin ** 50% -32% 40% 18%

Net income (loss), as reported 422 (234) 411 (203)

Less: Cost reimbursement revenue (2,338) (1,202) (4,118) (4,999)

Add: Reimbursed expenses 2,255 1,241 4,088 5,118

Add: Restructuring and merger-related charges 3 6 4 4

Add: Impairments^3 - 32 4 133

Income tax effect of above adjustments 16 (27) 3 (77)

Less: Income tax special items (98) - (98) -

Adjusted net income (loss) ** $ 260 $ (184) * $ 294 $ (24) *

Diluted earnings (loss) per share, as reported $ 1.28 $ (0.72) $ 1.25 $ (0.63)

Adjusted diluted earnings (loss) per share** $ 0.79 $ (0.57) * $ 0.89 $ (0.07) *

* Calculated percentage is not meaningful.

Denotes non-GAAP financial measures. Please see pages A-13 and A-14 for ** information about our reasons for providing these alternative financial measures and the

limitations on their use.

Includes impairment charges reported in Contract investment amortization of $3^1 million and $10 million in the 2020 second quarter and 2020 second quarter year-to-date,

respectively.

Includes impairment charges reported in Contract investment amortization of $3^2 million and $10 million; and Depreciation, amortization, and other of $21 million and $115

million in the 2020 second quarter and 2020 second quarter year-to-date, respectively.

Includes impairment charges reported in Equity in losses of $4 million in the^3 2021 second quarter year-to-date. Includes impairment charges reported in Contract

investment amortization of $3 million and $10 million; Depreciation, amortization, and other of $21 million and $115 million; Equity in losses of $8 million in both the

2020 second quarter and 2020 second quarter year-to-date, respectively.

MARRIOTT INTERNATIONAL, INC.

TOTAL LODGING PRODUCTS

As of June 30, 2021

US & Canada Total International Total Worldwide

Units Rooms Units Rooms Units Rooms

Managed 643 221,660 1,282 329,998 1,925 551,658

Marriott Hotels 114 61,587 182 53,148 296 114,735

Marriott Hotels Serviced Apartments - - 1 154 1 154

Sheraton 28 23,609 188 63,313 216 86,922

Courtyard 169 27,265 103 22,405 272 49,670

Westin 40 21,847 74 22,341 114 44,188

JW Marriott 21 12,712 62 23,099 83 35,811

Renaissance 24 10,607 58 18,284 82 28,891

The Ritz-Carlton 38 11,406 65 16,410 103 27,816

The Ritz-Carlton Serviced Apartments - - 5 715 5 715

Four Points 1 134 79 21,755 80 21,889

Le M?ridien 1 100 70 20,031 71 20,131

W Hotels 22 6,403 33 8,984 55 15,387

W Hotels Serviced Apartments - - 1 160 1 160

Residence Inn 76 12,199 8 982 84 13,181

The Luxury Collection 6 2,296 48 8,741 54 11,037

Gaylord Hotels 6 10,220 - - 6 10,220

St. Regis 10 1,968 37 8,662 47 10,630

St. Regis Serviced Apartments - - 1 70 1 70

Aloft 1 330 41 9,452 42 9,782

AC Hotels by Marriott 7 1,165 68 8,264 75 9,429

Fairfield by Marriott 7 1,539 47 6,467 54 8,006

Delta Hotels 25 6,770 1 360 26 7,130

Marriott Executive Apartments - - 35 5,238 35 5,238

Autograph Collection 8 2,335 16 2,441 24 4,776

SpringHill Suites 27 4,496 - - 27 4,496

Protea Hotels - - 28 3,466 28 3,466

EDITION 4 1,207 7 1,488 11 2,695

Element 2 640 9 1,786 11 2,426

Moxy - - 5 887 5 887

TownePlace Suites 6 825 - - 6 825

Tribute Portfolio - - 5 453 5 453

Bulgari - - 5 442 5 442

Franchised 4,868 697,256 747 154,400 5,615 851,656

Courtyard 840 112,096 99 18,582 939 130,678

Fairfield by Marriott 1,082 101,273 33 5,707 1,115 106,980

Residence Inn 759 90,335 17 2,369 776 92,704

Marriott Hotels 224 70,954 61 18,412 285 89,366

Sheraton 154 46,451 67 18,679 221 65,130

SpringHill Suites 479 55,182 - - 479 55,182

TownePlace Suites 455 46,167 - - 455 46,167

Autograph Collection 120 23,959 87 19,309 207 43,268

Westin 89 30,194 23 7,163 112 37,357

Four Points 159 23,864 60 10,028 219 33,892

Renaissance 60 17,425 29 7,781 89 25,206

Aloft 139 20,072 22 3,561 161 23,633

AC Hotels by Marriott 78 13,004 37 6,614 115 19,618

Moxy 26 4,913 61 11,748 87 16,661

Delta Hotels 55 12,165 8 1,887 63 14,052

The Luxury Collection 10 2,644 51 9,465 61 12,109

Le M?ridien 22 5,096 16 4,212 38 9,308

Element 64 8,544 2 293 66 8,837

Tribute Portfolio 34 5,689 20 2,497 54 8,186

JW Marriott 13 5,947 8 2,131 21 8,078

Protea Hotels - - 36 2,949 36 2,949

Design Hotels 5 853 8 862 13 1,715

The Ritz-Carlton 1 429 - - 1 429

Bulgari - - 1 85 1 85

Marriott Executive Apartments - - 1 66 1 66

MARRIOTT INTERNATIONAL, INC.

TOTAL LODGING PRODUCTS

As of June 30, 2021

US & Canada Total International Total Worldwide

Units Rooms Units Rooms Units Rooms

Owned/Leased 26 6,483 39 9,288 65 15,771

Courtyard 19 2,814 4 894 23 3,708

Marriott Hotels 2 1,308 6 2,064 8 3,372

Sheraton - - 4 1,830 4 1,830

W Hotels 2 779 2 665 4 1,444

Westin 1 1,073 - - 1 1,073

Protea Hotels - - 6 991 6 991

Renaissance 1 317 2 505 3 822

Autograph Collection^1 - - 6 576 6 576

The Ritz-Carlton - - 2 550 2 550

JW Marriott - - 1 496 1 496

The Luxury Collection^2 - - 4 417 4 417

Residence Inn 1 192 1 140 2 332

St. Regis - - 1 160 1 160

Residences 63 6,773 37 2,993 100 9,766

The Ritz-Carlton Residences 37 4,177 13 1,034 50 5,211

St. Regis Residences 10 1,105 7 598 17 1,703

W Residences 10 1,089 4 359 14 1,448

Bulgari Residences - - 5 514 5 514

Westin Residences 3 266 - - 3 266

Marriott Hotels Residences - - 2 246 2 246

The Luxury Collection Residences 1 91 3 115 4 206

Autograph Collection Residences - - 1 62 1 62

Sheraton Residences - - 1 50 1 50

EDITION Residences 2 45 - - 2 45

Le M?ridien Residences - - 1 15 1 15

Timeshare* 72 18,896 20 3,862 92 22,758

Grand Total 5,672 951,068 2,125 500,541 7,797 1,451,609

*Timeshare property and room counts are included on this table in theirgeographical locations. For external reporting purposes, these counts arecaptured in the Corporate segment.

^1Includes five properties acquired when we purchased Elegant Hotels Group inDecember 2019 which we currently intend to re-brand under the AutographCollection brand following the completion of planned renovations.

^2 Includes two properties acquired when we purchased Elegant Hotels Group inDecember 2019 which we currently intend to re-brand under The Luxury Collectionbrand following the completion of planned renovations.

MARRIOTT INTERNATIONAL, INC.

TOTAL LODGING PRODUCTS

As of June 30, 2021

US & Canada Total International Total Worldwide

Total Systemwide Units Rooms Units Rooms Units Rooms

Luxury 187 52,298 366 85,360 553 137,658

JW Marriott 34 18,659 71 25,726 105 44,385

The Ritz-Carlton 39 11,835 67 16,960 106 28,795

The Ritz-Carlton Residences 37 4,177 13 1,034 50 5,211

The Ritz-Carlton Serviced Apartments - - 5 715 5 715

The Luxury Collection^1 16 4,940 103 18,623 119 23,563

The Luxury Collection Residences 1 91 3 115 4 206

W Hotels 24 7,182 35 9,649 59 16,831

W Residences 10 1,089 4 359 14 1,448

W Hotels Serviced Apartments - - 1 160 1 160

St. Regis 10 1,968 38 8,822 48 10,790

St. Regis Residences 10 1,105 7 598 17 1,703

St. Regis Serviced Apartments - - 1 70 1 70

EDITION 4 1,207 7 1,488 11 2,695

EDITION Residences 2 45 - - 2 45

Bulgari - - 6 527 6 527

Bulgari Residences - - 5 514 5 514

Full-Service 1,016 352,825 973 271,979 1,989 624,804

Marriott Hotels 340 133,849 249 73,624 589 207,473

Marriott Hotels Residences - - 2 246 2 246

Marriott Hotels Serviced Apartments - - 1 154 1 154

Sheraton 182 70,060 259 83,822 441 153,882

Sheraton Residences - - 1 50 1 50

Westin 130 53,114 97 29,504 227 82,618

Westin Residences 3 266 - - 3 266

Renaissance 85 28,349 89 26,570 174 54,919

Autograph Collection^2 128 26,294 109 22,326 237 48,620

Autograph Collection Residences - - 1 62 1 62

Le M?ridien 23 5,196 86 24,243 109 29,439

Le M?ridien Residences - - 1 15 1 15

Delta Hotels 80 18,935 9 2,247 89 21,182

Gaylord Hotels 6 10,220 - - 6 10,220

Tribute Portfolio 34 5,689 25 2,950 59 8,639

Marriott Executive Apartments - - 36 5,304 36 5,304

Design Hotels 5 853 8 862 13 1,715

Limited-Service 4,397 527,049 766 139,340 5,163 666,389

Courtyard 1,028 142,175 206 41,881 1,234 184,056

Fairfield by Marriott 1,089 102,812 80 12,174 1,169 114,986

Residence Inn 836 102,726 26 3,491 862 106,217

SpringHill Suites 506 59,678 - - 506 59,678

Four Points 160 23,998 139 31,783 299 55,781

TownePlace Suites 461 46,992 - - 461 46,992

Aloft 140 20,402 63 13,013 203 33,415

AC Hotels by Marriott 85 14,169 105 14,878 190 29,047

Moxy 26 4,913 66 12,635 92 17,548

Element 66 9,184 11 2,079 77 11,263

Protea Hotels - - 70 7,406 70 7,406

Timeshare* 72 18,896 20 3,862 92 22,758

Grand Total 5,672 951,068 2,125 500,541 7,797 1,451,609

*Timeshare property and room counts are included on this table in theirgeographical locations. For external reporting purposes, these counts arecaptured in the Corporate segment.

^1 Includes two properties acquired when we purchased Elegant Hotels Group inDecember 2019 which we currently intend to re-brand under The Luxury Collectionbrand following the completion of planned renovations.

^2Includes five properties acquired when we purchased Elegant Hotels Group inDecember 2019 which we currently intend to re-brand under the AutographCollection brand following the completion of planned renovations.

MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

In Constant $

Comparable Company-Operated US & Canada Properties

Three Months Ended June 30, 2021 and June 30, 2020

REVPAR Occupancy Average Daily Rate

Brand 2021 vs. 2020 2021 vs. 2020 2021 vs. 2020

JW Marriott $128.58 909.5% 48.5% 42.5% pts. $265.07 25.8%

The Ritz-Carlton $236.30 582.3% 49.6% 40.2% pts. $476.74 29.2%

W Hotels $127.76 910.8% 42.9% 37.2% pts. $297.92 33.4%

Composite US & Canada Luxury^1 $173.52 805.1% 46.9% 40.3% pts. $369.88 26.8%

Marriott Hotels $67.46 526.5% 41.4% 34.4% pts. $163.00 6.2%

Sheraton $59.63 581.2% 34.1% 27.1% pts. $174.92 38.8%

Westin $79.07 648.1% 40.6% 34.1% pts. $194.62 20.0%

Composite US & Canada Premium^2 $66.74 618.3% 38.7% 32.5% pts. $172.26 14.8%

US & Canada Full-Service^3 $88.51 682.7% 40.4% 34.1% pts. $219.04 21.4%

Courtyard $65.34 429.1% 57.9% 45.8% pts. $112.88 10.8%

Residence Inn $102.17 166.3% 71.3% 41.7% pts. $143.36 10.5%

Composite US & Canada Limited-Service^4 $74.56 294.1% 60.9% 44.4% pts. $122.36 7.1%

US & Canada - All^5 $85.36 554.9% 45.0% 36.4% pts. $189.49 25.1%

Comparable Systemwide US & Canada Properties

Three Months Ended June 30, 2021 and June 30, 2020

REVPAR Occupancy Average Daily Rate

Brand 2021 vs. 2020 2021 vs. 2020 2021 vs. 2020

JW Marriott $128.54 987.7% 49.9% 44.9% pts. $257.72 8.9%

The Ritz-Carlton $231.29 595.1% 49.1% 40.1% pts. $471.31 27.7%

W Hotels $127.76 910.8% 42.9% 37.2% pts. $297.92 33.4%

Composite US & Canada Luxury^1 $163.97 823.0% 47.6% 41.4% pts. $344.32 20.5%

Marriott Hotels $67.99 425.5% 44.1% 34.5% pts. $154.02 14.6%

Sheraton $56.11 338.4% 40.7% 28.4% pts. $137.95 32.1%

Westin $75.82 493.1% 43.0% 33.8% pts. $176.13 27.6%

Composite US & Canada Premium^2 $70.08 446.4% 43.3% 33.4% pts. $161.89 25.1%

US & Canada Full-Service^3 $81.05 504.7% 43.8% 34.3% pts. $185.07 30.9%

Courtyard $72.99 288.8% 60.3% 41.3% pts. $121.12 22.2%

Residence Inn $95.46 110.2% 73.8% 33.4% pts. $129.40 15.0%

Fairfield by Marriott $69.43 209.7% 65.0% 39.7% pts. $106.78 20.8%

Composite US & Canada Limited-Service^4 $77.16 187.7% 65.3% 38.5% pts. $118.10 18.0%

US & Canada - All^5 $78.83 274.6% 56.1% 36.7% pts. $140.63 29.3%

^1 Includes JW Marriott, The Ritz-Carlton, W Hotels, The Luxury Collection, St.Regis, and EDITION.

^2 Includes Marriott Hotels, Sheraton, Westin, Renaissance, AutographCollection, Delta Hotels, and Gaylord Hotels.

Systemwide also includes Le M?ridien and Tribute Portfolio.

^3 Includes Composite US & Canada Luxury and Composite US & Canada Premium.

^4 Includes Courtyard, Residence Inn, Fairfield by Marriott, SpringHill Suites,TownePlace Suites, Four Points, Aloft, Element,

and AC Hotels by Marriott. Systemwide also includes Moxy.

^5 Includes US & Canada Full-Service and Composite US & Canada Limited-Service.

MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

In Constant $

Comparable Company-Operated International Properties

Three Months Ended June 30, 2021 and June 30, 2020

REVPAR Occupancy Average Daily Rate

Region 2021 vs. 2020 2021 vs. 2020 2021 vs. 2020

Greater China $78.73 117.0% 63.9% 28.6% pts. $123.20 19.9%

Asia Pacific excluding China $32.64 164.1% 29.6% 16.6% pts. $110.13 15.9%

Caribbean & Latin America $74.09 1105.4% 41.7% 35.4% pts. $177.58 83.1%

Europe $39.27 1030.5% 23.8% 20.8% pts. $165.29 40.9%

Middle East & Africa $66.28 211.1% 45.1% 28.0% pts. $146.92 18.3%

International - All^1 $56.09 203.1% 41.8% 24.3% pts. $134.07 27.3%

Worldwide^2 $69.73 336.9% 43.3% 29.9% pts. $160.92 35.1%

Comparable Systemwide International Properties

Three Months Ended June 30, 2021 and June 30, 2020

REVPAR Occupancy Average Daily Rate

Region 2021 vs. 2020 2021 vs. 2020 2021 vs. 2020

Greater China $75.03 114.3% 62.4% 27.5% pts. $120.14 20.1%

Asia Pacific excluding China $33.57 147.6% 30.3% 16.4% pts. $110.98 13.7%

Caribbean & Latin America $60.45 1068.5% 39.7% 33.5% pts. $152.35 80.6%

Europe $34.30 732.1% 23.2% 19.7% pts. $147.73 25.7%

Middle East & Africa $60.89 219.1% 43.7% 27.5% pts. $139.21 18.7%

International - All^1 $49.94 223.2% 38.4% 23.3% pts. $130.09 26.7%

Worldwide^2 $70.29 262.6% 50.8% 32.8% pts. $138.28 28.9%

^1 Includes Greater China, Asia Pacific excluding China, Caribbean & LatinAmerica, Europe, and Middle East & Africa.

^2 Includes US & Canada - All and International - All.

MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

In Constant $

Comparable Company-Operated US & Canada Properties

Six Months Ended June 30, 2021 and June 30, 2020

REVPAR Occupancy Average Daily Rate

Brand 2021 vs. 2020 2021 vs. 2020 2021 vs. 2020

JW Marriott $109.31 24.0% 40.4% 8.3% pts. $270.24 -1.5%

The Ritz-Carlton $210.02 47.4% 42.5% 9.5% pts. $494.06 14.3%

W Hotels $108.78 13.2% 35.3% 3.9% pts. $307.74 0.7%

Composite US & Canada Luxury^1 $153.10 29.9% 39.4% 7.1% pts. $388.29 6.5%

Marriott Hotels $51.29 -20.0% 32.8% 0.9% pts. $156.44 -22.1%

Sheraton $42.84 -28.1% 25.8% -5.0% pts. $166.08 -14.1%

Westin $59.92 -7.6% 32.3% 1.4% pts. $185.50 -11.5%

Composite US & Canada Premium^2 $50.36 -18.6% 30.5% -0.7% pts. $164.95 -16.8%

US & Canada Full-Service^3 $71.32 -2.7% 32.3% 0.9% pts. $220.48 -5.5%

Courtyard $51.38 17.2% 49.4% 16.8% pts. $104.09 -22.7%

Residence Inn $89.43 18.3% 66.2% 18.3% pts. $135.12 -14.4%

Composite US & Canada Limited-Service^4 $60.98 15.8% 53.2% 16.4% pts. $114.61 -19.8%

US & Canada - All^5 $68.98 0.5% 37.1% 4.4% pts. $186.13 -11.4%

Comparable Systemwide US & Canada Properties

Six Months Ended June 30, 2021 and June 30, 2020

REVPAR Occupancy Average Daily Rate

Brand 2021 vs. 2020 2021 vs. 2020 2021 vs. 2020

JW Marriott $107.06 22.6% 42.1% 10.6% pts. $254.25 -8.2%

The Ritz-Carlton $203.99 46.9% 41.7% 9.2% pts. $489.57 14.3%

W Hotels $108.78 13.2% 35.3% 3.9% pts. $307.74 0.7%

Composite US & Canada Luxury^1 $142.01 27.9% 40.0% 7.9% pts. $354.97 2.7%

Marriott Hotels $52.41 -7.4% 35.8% 3.6% pts. $146.38 -16.7%

Sheraton $43.03 -12.8% 33.4% 0.6% pts. $128.84 -14.3%

Westin $58.59 -7.6% 35.0% 1.9% pts. $167.41 -12.7%

Composite US & Canada Premium^2 $54.19 -5.2% 35.3% 2.8% pts. $153.45 -12.8%

US & Canada Full-Service^3 $64.46 1.6% 35.9% 3.4% pts. $179.71 -8.1%

Courtyard $58.01 25.5% 51.9% 15.2% pts. $111.82 -11.3%

Residence Inn $83.14 20.7% 68.0% 15.6% pts. $122.27 -7.0%

Fairfield by Marriott $55.51 38.1% 56.0% 16.7% pts. $99.10 -3.2%

Composite US & Canada Limited-Service^4 $63.41 26.2% 57.6% 15.7% pts. $110.16 -8.2%

US & Canada - All^5 $63.86 14.2% 48.2% 10.4% pts. $132.44 -10.5%

^1 Includes JW Marriott, The Ritz-Carlton, W Hotels, The Luxury Collection, St.Regis, and EDITION.

^2 Includes Marriott Hotels, Sheraton, Westin, Renaissance, AutographCollection, Delta Hotels, and Gaylord Hotels.

Systemwide also includes Le M?ridien and Tribute Portfolio.

^3 Includes Composite US & Canada Luxury and Composite US & Canada Premium.

^4 Includes Courtyard, Residence Inn, Fairfield by Marriott, SpringHill Suites,TownePlace Suites, Four Points, Aloft, Element,

and AC Hotels by Marriott. Systemwide also includes Moxy.

^5 Includes US & Canada Full-Service and Composite US & Canada Limited-Service.

MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS

In Constant $

Comparable Company-Operated International Properties

Six Months Ended June 30, 2021 and June 30, 2020

REVPAR Occupancy Average Daily Rate

Region 2021 vs. 2020 2021 vs. 2020 2021 vs. 2020

Greater China $67.09 100.5% 56.0% 26.1% pts. $119.81 6.9%

Asia Pacific excluding China $34.84 -28.5% 31.6% -1.5% pts. $110.14 -25.2%

Caribbean & Latin America $63.16 1.6% 36.6% 5.4% pts. $172.56 -13.5%

Europe $28.41 -37.4% 18.6% -6.3% pts. $152.83 -16.0%

Middle East & Africa $65.27 15.7% 43.4% 5.6% pts. $150.33 0.9%

International - All^1 $50.15 9.2% 38.4% 7.2% pts. $130.64 -11.3%

Worldwide^2 $58.93 4.3% 37.8% 5.9% pts. $156.04 -12.0%

Comparable Systemwide International Properties

Six Months Ended June 30, 2021 and June 30, 2020

REVPAR Occupancy Average Daily Rate

Region 2021 vs. 2020 2021 vs. 2020 2021 vs. 2020

Greater China $64.34 97.1% 55.0% 25.4% pts. $116.89 6.2%

Asia Pacific excluding China $35.99 -25.8% 32.5% -0.8% pts. $110.75 -24.1%

Caribbean & Latin America $49.66 -1.1% 34.2% 4.9% pts. $145.19 -15.3%

Europe $24.86 -38.4% 18.2% -6.6% pts. $136.64 -16.0%

Middle East & Africa $59.81 15.9% 42.2% 5.3% pts. $141.76 1.5%

International - All^1 $44.17 1.8% 35.1% 4.9% pts. $125.93 -12.4%

Worldwide^2 $58.05 11.1% 44.3% 8.8% pts. $130.92 -10.9%

^1 Includes Greater China, Asia Pacific excluding China, Caribbean & LatinAmerica, Europe, and Middle East & Africa.

^2 Includes US & Canada - All and International - All.

MARRIOTT INTERNATIONAL, INC.

KEY LODGING STATISTICS - 2021 vs 2019

In Constant $

Comparable Systemwide Properties^1

Three Months Ended June 30, 2021 and June 30, 2019

REVPAR Occupancy Average Daily Rate

Region 2021 vs. 2019 2021 vs. 2019 2021 vs. 2019

Greater China $75.03 -16.9% 62.4% -5.3% pts. $120.14 -9.9%

Asia Pacific excluding China $33.57 -69.0% 30.3% -39.9% pts. $110.98 -28.2%

Caribbean & Latin America $60.45 -38.7% 39.7% -22.0% pts. $152.35 -4.7%

Europe $34.30 -77.4% 23.2% -52.7% pts. $147.73 -26.1%

Middle East & Africa $60.89 -31.0% 43.7% -19.4% pts. $139.21 -0.3%

International - All^2 $49.94 -55.6% 38.4% -30.8% pts. $130.09 -20.0%

US & Canada - All $78.83 -39.5% 56.1% -21.2% pts. $140.63 -16.6%

Worldwide^3 $70.29 -43.8% 50.8% -24.1% pts. $138.28 -17.2%

Comparable Systemwide Properties^1

Six Months Ended June 30, 2021 and June 30, 2019

REVPAR Occupancy Average Daily Rate

Region 2021 vs. 2019 2021 vs. 2019 2021 vs. 2019

Greater China $64.34 -27.1% 55.0% -10.3% pts. $116.89 -13.6%

Asia Pacific excluding China $35.99 -68.6% 32.5% -38.5% pts. $110.75 -31.5%

Caribbean & Latin America $49.66 -54.9% 34.2% -29.1% pts. $145.19 -16.7%

Europe $24.86 -80.9% 18.2% -51.2% pts. $136.64 -27.0%

Middle East & Africa $59.81 -38.2% 42.2% -24.0% pts. $141.76 -3.0%

International - All^2 $44.17 -59.9% 35.1% -32.6% pts. $125.93 -22.5%

US & Canada - All $63.86 -47.7% 48.2% -25.0% pts. $132.44 -20.6%

Worldwide^3 $58.05 -51.0% 44.3% -27.2% pts. $130.92 -21.0%

^1 The comparisons between 2021 and 2019 reflect properties that are defined ascomparable as of June 30, 2021, even if in 2019 they were not open andoperating for the full year or did not meet all the criteria for comparable in2019.

^2 Includes Greater China, Asia Pacific excluding China, Caribbean & LatinAmerica, Europe, and Middle East & Africa.

^3 Includes US & Canada - All and International - All.

MARRIOTT INTERNATIONAL, INC.

NON-GAAP FINANCIAL MEASURES

ADJUSTED EBITDA

($ in millions)

Fiscal Year 2021

First Second Total Quarter Quarter

Net (loss) income, as reported $ (11) $ 422 $ 411

Cost reimbursement revenue (1,780) (2,338) (4,118)

Reimbursed expenses 1,833 2,255 4,088

Interest expense 107 109 216

Interest expense from unconsolidated joint ventures^ 2 1 3

Benefit for income taxes (16) (41) (57)

Depreciation and amortization 52 50 102

Contract investment amortization 17 18 35

Depreciation and amortization classified in reimbursed expenses 28 27 55

Depreciation, amortization and impairments from unconsolidated joint ventures 10 9 19

Stock-based compensation 53 43 96

Restructuring and merger-related charges 1 3 4

Adjusted EBITDA ** $ 296 $ 558 $ 854

Change from 2020 Adjusted EBITDA ** -33% 815% 70%

Fiscal Year 2020

First Second Third Fourth Total Quarter Quarter Quarter Quarter

Net income (loss), as reported $ 31 $ (234) $ 100 $ (164) $ (267)

Cost reimbursement revenue (3,797) (1,202) (1,789) (1,664) (8,452)

Reimbursed expenses 3,877 1,241 1,683 1,634 8,435

Interest expense 93 127 113 112 445

Interest expense from unconsolidated joint ventures 3 1 12 8 24

(Benefit) provision for income taxes (12) (64) 27 (150) (199)

Depreciation and amortization 150 72 53 71 346

Contract investment amortization 25 21 48 38 132

Depreciation classified in reimbursed expenses 26 27 27 29 109

Depreciation, amortization and impairments from unconsolidated joint ventures 7 16 3 78 104

Stock-based compensation 41 50 49 57 197

Restructuring and merger-related (recoveries) charges (2) 6 1 262 267

Loss on asset dispositions - - - 6 6

Adjusted EBITDA ** $ 442 $ 61 $ 327 $ 317 $ 1,147

** Denotes non-GAAP financial measures. Please see pages A-13 and A-14 forinformation about our reasons for providing these alternative financialmeasures and the limitations on their use.

MARRIOTT INTERNATIONAL, INC.

EXPLANATION OF NON-GAAP FINANCIAL AND PERFORMANCE MEASURES

In our press release and schedules, and on the related conference call, wereport certain financial measures that are not required by, or presented inaccordance with, United States generally accepted accounting principles ("GAAP"). We discuss the manner in which the non-GAAP measures reported in this pressrelease and schedules are determined and management's reasons for reportingthese non-GAAP measures below, and the press release schedules reconcile themost directly comparable GAAP measure to each non-GAAP measure that we referto. Although management evaluates and presents these non-GAAP measures for thereasons described below, please be aware that these non-GAAP measures havelimitations and should not be considered in isolation or as a substitute forrevenue, operating income/loss, net income/loss, earnings/loss per share or anyother comparable operating measure prescribed by GAAP. In addition, we maycalculate and/or present these non-GAAP financial measures differently thanmeasures with the same or similar names that other companies report, and as aresult, the non-GAAP measures we report may not be comparable to those reportedby others.



Adjusted Operating Income (Loss) and Adjusted Operating Income (Loss) Margin. Adjusted operating income (loss) and Adjusted operating income (loss) marginexclude cost reimbursement revenue, reimbursed expenses, restructuring andmerger-related charges, and non-cash impairment charges. Adjusted operatingincome (loss) margin reflects Adjusted operating income (loss) divided byAdjusted total revenues. We believe that these are meaningful metrics becausethey allow for period-over-period comparisons of our ongoing operations beforethese items and for the reasons further described below.



Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share. Adjusted net income (loss) and Adjusted diluted earnings (loss) per sharereflect our net income/loss and diluted earnings/loss per share excluding theimpact of cost reimbursement revenue, reimbursed expenses, restructuring andmerger-related charges, non-cash impairment charges, losses and gains on assetdispositions (when applicable), income tax special items, and the income taxeffect of these adjustments. The income tax special items primarily related tothe income tax benefit arising from the favorable resolution of pre-acquisitionStarwood tax audits in the 2021 second quarter. We calculate the income taxeffect of the adjustments using an estimated tax rate applicable to eachadjustment. We believe that these measures are meaningful indicators of ourperformance because they allow for period-over-period comparisons of ourongoing operations before these items and for the reasons further describedbelow.



Adjusted Earnings Before Interest Expense, Taxes, Depreciation and Amortization("Adjusted EBITDA"). Adjusted EBITDA reflects net income/loss excluding theimpact of the following items: cost reimbursement revenue and reimbursedexpenses, interest expense, depreciation and amortization (includingdepreciation and amortization classified in "Reimbursed expenses," as discussedbelow), non-cash impairment charges, benefit (provision) for income taxes,restructuring and merger-related charges (recoveries), and stock-basedcompensation expense for all periods presented. When applicable, AdjustedEBITDA also excludes gains and losses on asset dispositions made by us or byour joint venture investees.



In our presentations of Adjusted operating income (loss) and Adjusted operatingincome (loss) margin, Adjusted net income (loss), Adjusted diluted earnings(loss) per share and Adjusted EBITDA, we exclude charges incurred under ourrestructuring plans that we initiated beginning in the 2020 second quarter toachieve cost savings in response to the decline in lodging demand caused byCOVID-19 and transition costs associated with the Starwood merger, which werecord in the "Restructuring and merger-related charges" caption of ourCondensed Consolidated Statements of Income (Loss) (our "Income Statements"),to allow for period-over period comparisons of our ongoing operations beforethe impact of these items. We also exclude non-cash impairment charges relatedto our management and franchise contracts, leases, and equity investments,which we record in the "Contract investment amortization," "Depreciation,amortization, and other," and "Equity in losses" captions of our IncomeStatements to allow for period-over period comparisons of our ongoingoperations before the impact of these items. We exclude cost reimbursementrevenue and reimbursed expenses, which relate to property-level and centralizedprograms and services that we operate for the benefit of our hotel owners. Wedo not operate these programs and services to generate a profit over the longterm, and accordingly, when we recover the costs that we incur for theseprograms and services from our hotel owners, we do not seek a mark-up. Forproperty-level services, our owners typically reimburse us at the same timethat we incur expenses. However, for centralized programs and services, ourowners may reimburse us before or after we incur expenses, causing timingdifferences between the costs we incur and the related reimbursement from hotelowners in our operating and net income. Over the long term, these programs andservices are not designed to impact our economics, either positively ornegatively. Because we do not retain any such profits or losses over time, weexclude the net impact when evaluating period-over-period changes in ouroperating results.



We believe that Adjusted EBITDA is a meaningful indicator of our operatingperformance because it permits period-over-period comparisons of our ongoingoperations before these items and facilitates our comparison of results beforethese items with results from other lodging companies. We use Adjusted EBITDAto evaluate companies because it excludes certain items that can vary widelyacross different industries or among companies within the same industry. Forexample, interest expense can be dependent on a company's capital structure,debt levels, and credit ratings. Accordingly, the impact of interest expense onearnings can vary significantly among companies. The tax positions of companiescan also vary because of their differing abilities to take advantage of taxbenefits and because of the tax policies of the jurisdictions in which theyoperate. As a result, effective tax rates and provisions for income taxes canvary considerably among companies. Our Adjusted EBITDA also excludesdepreciation and amortization expense, which we report under "Depreciation,amortization, and other" as well as depreciation and amortization classified in"Contract investment amortization," "Reimbursed expenses," and "Equity inlosses" of our Income Statements, because companies utilize productive assetsof different ages and use different methods of both acquiring and depreciatingproductive assets. Depreciation and amortization classified in "Reimbursedexpenses" reflects depreciation and amortization of Marriott-owned assets andsoftware, for which we receive cash from owners to reimburse the company forits investments made for the benefit of the system. These differences canresult in considerable variability in the relative costs of productive assetsand the depreciation and amortization expense among companies. We excludestock-based compensation expense in all periods presented to address theconsiderable variability among companies in recording compensation expensebecause companies use stock-based payment awards differently, both in the typeand quantity of awards granted.

MARRIOTT INTERNATIONAL, INC.

EXPLANATION OF NON-GAAP FINANCIAL AND PERFORMANCE MEASURES

RevPAR. In addition to the foregoing non-GAAP financial measures, we presentRevenue per Available Room ("RevPAR") as a performance measure. We believeRevPAR is a meaningful indicator of our performance because it measures theperiod-over-period change in room revenues for comparable properties. RevPARrelates to property level revenue and may not be comparable to similarly titledmeasures, such as revenues, and should not be viewed as necessarily correlatingwith our fee revenue. We calculate RevPAR by dividing room sales (recorded inlocal currency) for comparable properties by room nights available for theperiod. We do not consider interruptions related to COVID-19 when determiningwhich properties to classify as comparable. The comparisons between 2021 and2019 reflect properties that are defined as comparable as of June 30, 2021,even if in 2019 they were not open and operating for the full year or did notmeet all the other criteria for comparable in 2019. We present growth incomparative RevPAR on a constant dollar basis, which we calculate by applyingexchange rates for the current period to each period presented. We believeconstant dollar analysis provides valuable information regarding ourproperties' performance as it removes currency fluctuations from thepresentation of such results.

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SOURCE Marriott International, Inc.