Marriott Corporation (A) Harvard Business School Case 9-394-085 Courseware 9-307-703

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Marriott Corporation Based on No Spin-out of Marriott International Financial Projections

Change the highlighted numbers only Annual growth of $ sales through existing units (assuming general inflation of 3% per year) 1982-1989 Average 7.6% Available for sale at Dec. 1991 $ 1,524 $ $

5.4% Forecast 1992 5.0% 1993 5.5% 1994 5.8% 1995 6.0%

EBIT % Sales

Assets Sales ($ millions) Common Dividend Per Share

1992 100 $ 0.28 $

1993 120 $ 0.28 $

1994 150 $ 0.28 $

1995 180 0.28

Sales EBIT Interest (net) Pre-tax profits Tax @ 41% Net income Preferred dividend Net income, common Shares outstanding (millions) Earnings per share Times Interest earned Statement of Cash Flows: Cash Flow from Operating Activities Net income Depreciation Change in net working capital Total from Operating Activities Cash Flow from Investing Activities Capital expenditures Sale of assets Total from Investing Activities Cash Flow from Financing Activities Preferred dividend Common dividend Total Cash Available for Debt Repayment Cumulative Debt Repayment

1991 8,331 $ 367 222 145 63 82 6 76 94.5 0.80 $ 1.7

1992 8,781 $ 439 206 233 95 137 17 120 93.6 1.28 $ 2.1 1992

1993 9,255 $ 509 197 312 128 184 17 167 93.6 1.78 $ 2.6 1993 184 $ 270 0 454 (350) 120 (230) (17) (26) (43) 181 295

1994 9,755 $ 566 183 383 157 226 17 209 93.6 2.23 $ 3.1 1994 226 $ 270 0 496 (350) 150 (200) (17) (26) (43) 253 547

1995 10,282 617 163 454 186 268 17 251 93.6 2.68 3.8 1995 268 270 0 538 (350) 180 (170) (17) (26) (43) 325 872

137 $ 270 0 407 (350) 100 (250) (17) (26) (43) 114 114

Partial Balance Sheet Interest bearing debt Owner's equity Total Capital Debt as % capital

$ $

12/31/1991 3,031 $ 679 3,710 $ 82%

1992 2,917 $ 773 3,690 $ 79%

1993 2,736 $ 914 3,650 $ 75%

1994 2,484 $ 1,096 3,580 $ 69%

1995 2,159 1,321 3,480 62%