Marriott International Inc. (NASDAQ:MAR)

The financial data reveals several notable trends in intangible assets and related items over the period analyzed.

Costs incurred to obtain contracts with customers

This metric was reported only for the years ending 2018 and 2019, showing an increase from 1,347 million USD to 1,588 million USD, suggesting a growing investment in customer contract acquisition.

Contracts acquired in business combinations and other

Values for 2018 and 2019 remained relatively stable, with a slight decline from 1,983 million USD to 1,972 million USD, indicating consistent levels of contract acquisitions through business combinations.

Contract acquisition costs and other (legacy)

Reported only from 2015 to 2017, this item increased from 1,702 million USD to 3,530 million USD, more than doubling within the three-year span, which may reflect prior periods of significant contract acquisition activity before shifting reporting classification or strategy.

Definite-lived intangible assets, gross

There was a steady increase from 1,702 million USD in 2015 to 3,530 million USD in 2017, followed by a slight decrease to 3,330 million USD in 2018, then rising again to 3,560 million USD in 2019. This pattern indicates some fluctuations but an overall growth in the gross value of these assets.

Accumulated amortization

Accumulated amortization steadily increased in absolute value (negative balance) from -380 million USD in 2015 to -808 million USD in 2019, reflecting ongoing amortization expense and the aging of definite-lived intangible assets.

Definite-lived intangible assets, net

The net balance after amortization grew markedly from 1,322 million USD in 2015 to a peak of 2,951 million USD in 2017, then declined to 2,656 million USD in 2018 before a slight recovery to 2,752 million USD in 2019. This shows an overall positive trend with some volatility due to amortization effects and asset additions or disposals.

Indefinite-lived intangible brand assets

There was a substantial increase from 129 million USD in 2015 to 6,441 million USD in 2016, followed by a gradual decline to 5,724 million USD in 2018 and a mild recovery to 5,889 million USD in 2019. This suggests a major revaluation or impairment event in 2016 with subsequent adjustments.

Intangible assets

Total intangible assets surged from 1,451 million USD in 2015 to 9,270 million USD in 2016, then declined steadily to 8,380 million USD in 2018 before a small increase to 8,641 million USD in 2019. The sharp rise and subsequent decrease mirror the pattern observed in the indefinite-lived intangible brand assets, likely influenced by acquisition activity and valuation changes.

Goodwill

Goodwill rose significantly from 943 million USD in 2015 to 9,207 million USD in 2017, then slightly decreased to 9,039 million USD in 2018 and stabilized at 9,048 million USD in 2019. This reflects substantial acquisition activity early on, followed by maintenance of goodwill levels with minor impairments or adjustments.

Intangible assets and goodwill combined

The combined total increased sharply from 2,394 million USD in 2015 to a peak of 18,012 million USD in 2017, followed by a decrease to 17,419 million USD in 2018 and a modest rise to 17,689 million USD in 2019. The pattern indicates substantial growth primarily driven by acquisitions and related intangible asset recognition, with stabilization in the most recent years.

Overall, the data reflects significant expansion in intangible assets and goodwill, largely attributable to acquisition activities in the earlier years. Subsequent years show more stability with some fluctuations, consistent with amortization, asset revaluations, and potential impairments. Investment in contract acquisition costs demonstrates ongoing efforts to secure customer relationships, complementing the strength in brand-related intangible assets noted in the indefinite-lived category.

The analysis of the data reveals distinctive trends in both the reported and goodwill-adjusted financial metrics over the five-year period.

Total Assets

Reported total assets experienced a significant increase from 2015 to 2016, rising from approximately 6.1 billion to 24.1 billion US dollars. Following this sharp growth, total assets remained relatively stable, fluctuating slightly around 23.7 to 25.1 billion through 2017 to 2019.

In contrast, the adjusted total assets, which account for goodwill adjustments, showed a different pattern. Starting at about 5.1 billion in 2015, adjusted total assets increased markedly to 16.5 billion in 2016, then decreased gradually over the next three years, ending at 16.0 billion in 2019. This downward trend post-2016 implies the reduction of asset value after adjustment.

Shareholders’ Equity (Deficit)

Reported shareholders’ equity exhibited a strong improvement from a negative 3.6 billion in 2015 to a positive 5.4 billion in 2016. However, from 2016 onwards, it declined steadily to 0.7 billion by 2019, indicating a deterioration in reported equity over that period.

On the other hand, adjusted shareholders’ equity consistently showed deficits throughout the entire period, beginning with a negative 4.5 billion in 2015 and worsening each year to reach negative 8.3 billion by 2019. This persistent negative trend suggests considerable goodwill impairments or other adjustments materially affecting net equity, causing a more unfavorable equity position when adjusted.

Overall, the disparity between reported and adjusted figures highlights the impact of goodwill on the financial statements. The marked increase in reported assets and equity in 2016 is notably absent in the adjusted data, which presents a more conservative and declining trend. The continuous negative adjusted equity underscores challenges in asset valuation or profitability after accounting for non-tangible assets. The stabilization of reported assets alongside declining adjusted assets and equity suggests that the company's financial health might be less robust than the reported figures alone would imply.

The data reveals several noteworthy trends in the financial performance and efficiency ratios over the analyzed period. Both reported and adjusted total asset turnover ratios exhibit a declining trajectory, indicating a decrease in how effectively the company utilizes its total assets to generate revenue. The reported total asset turnover sharply drops from 2.38 in 2015 to 0.71 in 2016, followed by a minor recover and then a gradual decrease to 0.84 in 2019. Adjusted total asset turnover follows a similar pattern with values higher than reported figures, peaking at 1.55 in 2017 before declining to 1.31 in 2019.

Reported financial leverage ratios show a substantial increasing trend, starting from 4.51 in 2016 and escalating dramatically to 35.63 by 2019. This indicates a rising reliance on debt or other financial obligations relative to equity, which can imply increased financial risk. Data for adjusted financial leverage is not provided, limiting comprehensive comparison on this front.

Return on Equity (ROE) displays a pronounced upward trend, starting at 14.56% in 2016 and soaring to an exceptional 181.08% by 2019. This significant increase parallels the rise in financial leverage, suggesting that higher leverage might be amplifying returns to equity holders, albeit potentially increasing risk. Adjusted ROE data is unavailable, preventing further contrast.

Return on Assets (ROA) and adjusted ROA both indicate fluctuating yet generally positive returns on assets over the years. Reported ROA decreases sharply from 14.12% in 2015 to 3.23% in 2016, then rises to peak at 8.05% in 2018 before declining again to 5.08% in 2019. Adjusted ROA follows a more favorable pattern, starting at 16.72% in 2015, peaking at 13.01% in 2018, and then falling off to 7.95% in 2019. The adjusted figures consistently remain above the reported ones, reflecting the impact of goodwill adjustments that enhance asset efficiency measurement.

In summary, the company’s asset turnover and ROA exhibit weakening efficiency in utilizing assets for revenue and returns in recent years, despite adjustments for goodwill. Contrarily, financial leverage and ROE demonstrate significant growth, indicating that increased leverage is a driving factor behind equity returns, albeit accompanied by heightened financial risk. The absence of adjusted financial leverage and ROE limits a more nuanced understanding of the long-term sustainable performance. Overall, the financial trends suggest a reliance on leverage to bolster equity returns amid asset efficiency challenges.

Total Assets

There is a significant increase in reported total assets from 6,082 million US dollars in 2015 to 24,140 million US dollars in 2016. Following this spike, reported assets remain relatively stable, with slight fluctuations around the 23,000 to 25,000 million dollar range through 2019.

Adjusted total assets, which exclude goodwill, also show a sharp rise from 5,139 million dollars in 2015 to 16,542 million dollars in 2016, followed by a consistent decline to 14,741 million in 2017 and stability through 2018. There is a modest increase again to 16,003 million dollars by 2019.

Total Asset Turnover

Reported total asset turnover declines sharply from 2.38 in 2015 to 0.71 in 2016, indicating a decrease in efficiency in generating revenue from assets during that period. Turnover partially recovers over the subsequent years but remains below 1.0, ending at 0.84 in 2019.

Adjusted asset turnover shows a similar declining trend from 2.82 in 2015 to 1.03 in 2016, but recovers more noticeably to 1.55 in 2017. Thereafter, it gradually decreases each year to 1.31 by 2019, maintaining higher turnover ratios compared to reported figures throughout the time frame.

Insights

The dramatic asset increases between 2015 and 2016 suggest significant acquisitions or revaluations affecting reported figures, which impact total asset measures. Goodwill adjustments mitigate these effects, revealing lower adjusted asset bases.

The fall in total asset turnover ratios in both reported and adjusted terms indicates decreased efficiency in asset utilization starting in 2016, possibly reflecting integration challenges or changes in capital structure after asset growth. Adjusted turnover consistently exceeds reported turnover, implying that goodwill inflation may dilute efficiency metrics.

Overall, the trends suggest a period of rapid asset expansion followed by stabilization, with asset efficiency recovering somewhat but remaining below earlier levels, especially in reported figures inclusive of goodwill.

The data reveals considerable fluctuations in the financial position over the five-year period. Reported total assets experienced a sharp increase from 6,082 million US dollars in 2015 to 24,140 million in 2016, remaining relatively stable thereafter and reaching 25,051 million in 2019. In contrast, adjusted total assets show a different pattern, rising substantially in 2016 but subsequently declining and then modestly increasing to 16,003 million by 2019, indicating significant adjustments primarily related to goodwill or other intangible assets.

Examining shareholders’ equity, there is a notable divergence between reported and adjusted figures. Reported shareholders’ equity shifted from a deficit of 3,590 million in 2015 to a surplus of 5,357 million in 2016, followed by a gradual decline to 703 million by 2019. This suggests some improvement in equity position initially, but a trend of erosion over the last years. In contrast, adjusted shareholders’ equity consistently remained negative throughout the period, worsening from a deficit of 4,533 million in 2015 to 8,345 million in 2019, which underscores concerns regarding underlying net asset values once goodwill adjustments are considered.

Financial leverage based on reported data is available from 2016 onward, showing an increasing trend from 4.51 times in 2016 to a notably high 35.63 times by 2019. This upward trajectory in leverage points to a growing reliance on debt or liabilities relative to equity, reflecting increased financial risk. Adjusted financial leverage ratios are not provided, limiting the ability to assess the leverage position with adjustments factored in.

Overall, the company's reported asset base expanded strongly in 2016 and remained stable, but adjusted figures suggest that underlying asset values excluding goodwill did not fully keep pace and even declined. The disparity between reported and adjusted shareholders’ equity highlights a weakening net asset position when goodwill is excluded. Increasing financial leverage based on reported figures also suggests rising financial risk, emphasizing the need to monitor debt levels and capital structure carefully.

The financial data reveals several notable trends in the company's shareholders' equity and return on equity (ROE) over the five-year period ending December 31, 2019.

Reported Shareholders’ Equity

The reported shareholders’ equity demonstrated significant improvement from a deficit of $3,590 million in 2015 to a positive $5,357 million in 2016. However, following this peak, the equity decreased consistently each year, falling to $3,731 million in 2017, $2,225 million in 2018, and further down to $703 million in 2019. Despite the initial recovery, the downward trajectory after 2016 suggests challenges in maintaining equity levels.

Adjusted Shareholders’ Equity

In contrast to the reported figures, adjusted shareholders’ equity remained in deficit throughout the period and showed a worsening trend. The deficit increased from $4,533 million in 2015 to $8,345 million in 2019. This persistent and growing negative adjusted equity position indicates underlying issues not captured in the reported equity data, possibly due to goodwill adjustments or write-downs.

Reported Return on Equity (ROE)

The reported ROE exhibited a strong upward trend starting from 2016, rising sharply from 14.56% to 36.77% in 2017, then to 85.71% in 2018, and culminating at an exceptionally high 181.08% in 2019. This dramatic increase suggests that the company’s net income relative to reported equity surged significantly, potentially reflecting either improved profitability or the impact of the declining equity base.

Adjusted Return on Equity (ROE)

No data was provided for adjusted ROE, limiting the ability to assess profitability based on the adjusted equity figures.

Overall, there is a divergence between reported and adjusted equity figures, with reported equity improving initially but declining thereafter, while adjusted equity consistently worsens. The rapidly increasing reported ROE appears largely influenced by shrinking reported equity, highlighting the importance of evaluating both reported and adjusted figures for a comprehensive understanding of financial health.

Total Assets

The reported total assets showed a significant increase from 2015 to 2016, rising from approximately 6,082 million USD to 24,140 million USD. This level then stabilized over the following years, fluctuating slightly but remaining around 23,700 to 25,000 million USD by 2019. In contrast, the goodwill adjusted total assets demonstrated a more moderate increase from 5,139 million USD in 2015 to 16,542 million USD in 2016, followed by a gradual decline through 2018 and a modest rise in 2019, ending at 16,003 million USD. This suggests that a substantial portion of the reported asset increase in 2016 may be attributed to goodwill or intangible assets.

Return on Assets (ROA)

Both reported and adjusted ROA percentages show a declining trend from 2015 to 2016, with reported ROA decreasing sharply from 14.12% to 3.23%, and adjusted ROA falling from 16.72% to 4.72%. After 2016, ROA values recovered differentially. The adjusted ROA exhibited a more robust recovery, rising to a peak of 13.01% in 2018 before declining to 7.95% in 2019. The reported ROA also improved but to a lesser extent, reaching 8.05% in 2018 and falling to 5.08% in 2019. The divergence between reported and adjusted ROA levels indicates the impact of goodwill adjustments on profitability measurements, with adjusted figures presenting consistently higher returns.

Overall Trends and Insights

The analysis indicates that the company experienced a significant acquisition or revaluation event around 2016, as evidenced by the large jump in reported total assets coupled with a smaller increase in goodwill adjusted assets. Profitability, as measured by ROA, was substantially affected in 2016 but showed recovery in the following years, more pronounced in adjusted terms. The decline in ROA in 2019 signals potential challenges in asset utilization or earnings generation during that period. The adjusted metrics provide a clearer view of operational efficiency by excluding intangible asset considerations, revealing stronger performance trends than those suggested by reported figures alone.