Marriott International Inc. (NASDAQ:MAR)

Current Income Tax Expense

The current income tax expense fluctuated considerably over the analyzed period. It increased from 257 million USD in 2015 to a peak of 1,583 million USD in 2017, representing a significant rise. However, after 2017, it decreased markedly to 547 million USD in 2018 and further to 490 million USD in 2019. This pattern suggests a temporary surge in current tax payments during 2017 followed by a substantial reduction in subsequent years.

Deferred Income Tax Expense

The deferred income tax expense exhibited a contrasting trend. It declined from 139 million USD in 2015 to 104 million USD in 2016, then turned negative starting in 2017, reaching -119 million USD. This negative deferred tax expense continued to deepen, with values of -109 million USD in 2018 and -164 million USD in 2019. The negative amounts indicate deferred tax benefits or reversals of previously recognized deferred tax liabilities during these years.

Provision for Income Taxes

The overall provision for income taxes followed a pattern similar to the current tax expense. It rose sharply from 396 million USD in 2015 to a high of 1,464 million USD in 2017, then declined substantially to 438 million USD in 2018 and further to 326 million USD in 2019. This demonstrates that the total tax burden reached a peak in 2017 and was reduced significantly in the following years, influenced by both current and deferred tax movements.

Summary Insight

Over the five-year period, there was a notable surge in tax expenses in 2017, driven primarily by the current income tax component. Subsequently, both current and total provisions for income taxes decreased sharply, while deferred tax expenses shifted from positive to significant negative values, indicating a change in deferred tax positions, possibly linked to tax planning strategies or changes in tax legislation. The trends suggest dynamic tax expense management and timing effects impacting the company's tax liabilities.

The analysis of the annual financial data reveals several notable trends in the tax rates and related components over the five-year period ending December 31, 2019.

U.S. statutory tax rate

The U.S. statutory tax rate remained stable at 35% from 2015 through 2017, before a significant reduction to 21% in 2018 and maintained at 21% in 2019. This change aligns with legislative tax reforms introduced in the United States.

U.S. state income taxes, net of U.S. federal tax benefit

State income tax rates decreased slightly over the years, starting at 2.9% in 2015 and declining gradually to 1.6% by the end of 2019, indicating possible reductions in state tax burdens or changes in state tax regulations affecting the company.

Non-U.S. income

The non-U.S. income tax impact fluctuated with a negative effect throughout the period, starting at -5.2% in 2015 and reaching a low of -7.8% in 2017, before improving to -1.0% in 2018 and declining again to -3.3% in 2019. This pattern reflects variability in international tax exposures or earnings composition abroad.

Change in valuation allowance

There is a consistent upward trend in changes to the valuation allowance, rising from 1.2% in 2015 to 3.4% in 2019. The increasing allowance change suggests growing reservations against deferred tax assets or increased anticipated non-realization of certain tax benefits.

Change in uncertain tax positions

Changes linked to uncertain tax positions increased from a minor 0.4% in 2015 to 2.3% in 2017, dipped to 1.0% in 2018, and rose again to 1.9% in 2019. This reflects ongoing adjustments in tax contingencies or provisions for disputed tax matters.

Tax on asset dispositions

This item was recorded only in 2017 and 2018 with negative values (-2.9% and -0.7%, respectively), indicating recognized tax benefits or deductions associated with asset sales or disposals during these years.

Excess tax benefits related to equity awards

Negative values from 2017 to 2019 (-2.5%, -1.8%, and -3.2% respectively) indicate the recognition of tax benefits exceeding the expense related to equity-based compensation, contributing to the overall tax rate reduction in these periods.

Other, net

Miscellaneous tax effects showed variability, moving from -2.8% in 2015 to positive values of 1.2% and 1.1% in 2016 and 2017, respectively, then turning negative at -1.1% in 2018 and not recorded in 2019, implying inconsistent miscellaneous tax adjustments.

Effective income tax rate, before Tax Cuts and Jobs Act of 2017

Before considering the Tax Cuts and Jobs Act (TCJA), the effective tax rate hovered around 31.5% to 34.1% from 2015 to 2017, then showed a marked decline to approximately 20.3-20.7% in 2018 and 2019, reflecting the impact of U.S. tax reform.

Change in U.S. tax rate

The specific recorded changes in U.S. tax rates were -5.6% in 2017 and -1.7% in 2018, consistent with the lowering of the statutory tax rate and related adjustments following the TCJA implementation.

Transition Tax on foreign earnings

This tax appeared as a large positive adjustment (23.9%) in 2017 coinciding with newly imposed transition taxes on accumulated foreign earnings under the TCJA, then returned near zero in subsequent years, indicating the one-time nature of this tax.

Effective income tax rate

The overall effective income tax rate matched the pre-TCJA pattern through 2016 at approximately 31.5%-34.1%, spiked sharply to 51.6% in 2017 due largely to the transition tax on foreign earnings, and then decreased dramatically to 18.7% in 2018 and slightly rose to 20.4% in 2019, mirroring changes in statutory rates and transitional tax impacts.

Overall, the data highlights significant tax rate reductions starting in 2018 following major U.S. tax reforms, one-time impacts from transition taxes on foreign earnings in 2017, and continuous adjustments related to valuation allowances, uncertain tax positions, and equity-based tax benefits. These elements collectively shaped the effective tax rates and underscore the influence of both domestic legislative changes and international tax considerations on the company's tax expense profile.

Employee Benefits

Employee benefits fluctuated over the analyzed period, peaking at 430 million US dollars in 2016, then declining significantly to 274 million in 2017, and remaining relatively stable around 260 million through 2019.

Net Operating Loss Carry-Forwards

There was a steady increase in net operating loss carry-forwards, rising from 205 million in 2015 to 680 million in 2019, indicating an accumulation of tax loss benefits that may provide future tax relief.

Accrued Expenses and Other Reserves

The accrued expenses and other reserves saw considerable fluctuation, initially rising sharply from 63 million in 2015 to 204 million in 2016, then declining and stabilizing around 160 million in the following years.

Receivables, Net

Net receivables exhibited volatility with no clear trend, peaking at 134 million in 2016 but falling back to low levels near 11-29 million in other years, suggesting inconsistent collection or billing patterns.

Tax Credits

Tax credits demonstrated a declining trend from 111 million in 2015 to a low of 24 million in 2018, then rebounding modestly to 41 million in 2019, indicating fluctuating utilization or recognition of tax credit assets.

Loyalty Program

The loyalty program asset showed a notable upward trend, with values growing from 68 million in 2015 to 249 million in 2019. This sharp increase reflects significant investment or recognition of customer loyalty-related intangible assets.

Deferred Income

Deferred income remained relatively low and stable in the early years, around 20 million, before increasing to 56 million in 2018 and 70 million in 2019, indicating growth in unearned revenues or advance payments.

Lease Liabilities

Lease liabilities appeared only in 2019 at 261 million, likely reflecting changes in accounting standards requiring recognition of lease obligations on the balance sheet.

Self-Insurance

Self-insurance liabilities decreased from 21 million in 2015 to 12 million in 2017, and data is missing thereafter. Additionally, negative entries were recorded in 2018 and 2019, suggesting possible reclassifications or settlements impacting this balance.

Other Items

The category labeled "Other" fluctuated, with figures around 30-34 million in early years, a gap in 2017, a drop to 13 million in 2018, and a slight increase to 15 million in 2019, indicating minor and irregular miscellaneous balances.

Deferred Tax Assets

Deferred tax assets showed a generally increasing trend from 882 million in 2015 to 1756 million in 2019, illustrating growing future tax benefit expectations. However, the valuation allowance also increased negatively from -163 million to -616 million, which partly offsets these assets.

Deferred Tax Assets after Valuation Allowance

When adjusting for valuation allowance, net deferred tax assets increased from 719 million in 2015 to 1140 million in 2019, albeit with some fluctuations, reflecting cautious recognition of deferred tax benefits.

Joint Venture Interests

Joint venture interests remained negative throughout the period, fluctuating between -8 million and -59 million, indicating consistent losses or negative equity in joint ventures held by the entity.

Property and Equipment

Property and equipment values were consistently negative, varying from -3 million to -199 million, pointing to asset disposals, impairments, or depreciation exceeding additions.

Intangibles

Intangible assets showed a significant negative balance, sharply declining to -1724 million in 2016, then partially recovering but remaining large negative through 2019, suggesting impairments or amortization of intangible assets.

Right-of-Use Assets

Right-of-use assets, first appearing in 2019 at -229 million, likely correspond to capitalization of leases under new accounting standards, recorded as negative here possibly due to presentation format.

Deferred Tax Liabilities

Deferred tax liabilities demonstrated a rising negative trend, escalating from -63 million in 2015 to -1276 million in 2019, which may correlate with the growth in intangible assets and lease accounting adjustments.

Net Deferred Taxes

Net deferred taxes shifted from a positive 656 million in 2015 to a negative -136 million in 2019, indicating a reversal of net deferred tax asset position over time, possibly due to increases in deferred tax liabilities outpacing deferred tax assets.

Deferred Tax Assets

The deferred tax assets exhibit a declining trend from 2015 to 2017, dropping significantly from 672 million USD in 2015 to 93 million USD in 2017. Following this low point, the deferred tax assets increased notably in 2018 to 171 million USD, before experiencing a slight decline to 154 million USD in 2019. Overall, the pattern indicates initial erosion of deferred tax assets, followed by a partial recovery.

Deferred Tax Liabilities

Deferred tax liabilities increased dramatically from 16 million USD in 2015 to a peak of 1020 million USD in 2016. Subsequently, there was a continual decrease over the next three years, falling from 1020 million USD in 2016 to 290 million USD by 2019. This suggests that the company took steps after 2016 to reduce its deferred tax liabilities substantially.

Overall Insights

The financial data reveals a volatile situation regarding deferred taxes between 2015 and 2019. The sharp rise in deferred tax liabilities in 2016, alongside the steep reduction in deferred tax assets, may indicate the occurrence of significant tax-related events or changes in accounting estimations during that year. The subsequent gradual reduction of deferred tax liabilities coupled with some recovery of deferred tax assets points toward stabilization and possibly strategic tax planning efforts in the later years.

The financial data reveals several notable trends over the five-year period ending December 31, 2019. Total assets, both reported and adjusted, exhibited a significant increase from 2015 to 2016, followed by relative stability with slight fluctuations through 2019. Specifically, reported total assets rose sharply from $6,082 million in 2015 to $24,140 million in 2016 and then remained in the range of approximately $23,700 million to $25,000 million thereafter. Adjusted total assets mirrored this pattern closely, reflecting a substantial restatement or revaluation adjustment in 2016 and steady values followed by minor declines and recoveries in subsequent years.

Total liabilities also underwent considerable changes. Reported total liabilities decreased between 2015 and 2016 from $9,672 million to $18,783 million, then steadily increased each subsequent year, reaching $24,348 million in 2019. Adjusted total liabilities followed a similar trajectory but consistently showed lower values than the reported liabilities for every year, suggesting adjustments possibly related to deferred taxes or other liabilities. The gradual upward trend in liabilities after 2016 indicates increasing financial obligations over time.

Shareholders' equity (deficit) presents an insightful perspective on the company's financial posture. Initially, in 2015, the company experienced a substantial reported deficit of $3,590 million, which turned positive in 2016 at $5,357 million. Thereafter, shareholders’ equity gradually declined, with reported values decreasing from $5,357 million in 2016 to $703 million in 2019, implying a reduction in net worth available to shareholders. Adjusted shareholders’ equity showed a similar pattern, starting with a larger deficit in 2015 and maintaining higher positive values than reported figures until 2019, when it also reduced to $839 million. The general decline post-2016 suggests pressures on equity possibly due to net income variation, dividends, share repurchases, or other adjustments.

Net income experienced variability through the years. Reported net income slightly declined from $859 million in 2015 to $780 million in 2016, then increased significantly to a peak of $1,907 million in 2018 before dropping to $1,273 million in 2019. Adjusted net income followed a comparable trend with somewhat higher figures than reported in earlier years but aligning more closely in the latter periods, peaking at $1,798 million in 2018 before decreasing to $1,109 million in 2019. The rise to peak profitability in 2018 followed by a decline in 2019 may have influenced the reductions seen in shareholders’ equity.

In summary, the financial data depicts a company that underwent a significant asset and liability restatement or revaluation in 2016, followed by relatively stable total assets and increasing liabilities. Shareholders’ equity, while recovering into positive territory after 2015, exhibited a declining trend from 2016 to 2019. Net income peaked in 2018, reflecting strong profitability before tapering off in 2019, potentially contributing to the reductions in equity. The adjustments between reported and adjusted figures suggest the presence of deferred tax impacts or other accounting reclassifications influencing the financial statement presentation over this period.

Net Profit Margin Trends

The reported net profit margin exhibited fluctuations over the five-year period, starting at 5.93% in 2015, declining to 4.57% in 2016, then rising to a peak of 9.19% in 2018 before dropping again to 6.07% in 2019. The adjusted net profit margin followed a somewhat similar trajectory, beginning higher than the reported margin at 6.89% in 2015, decreasing steadily to 5.18% in 2016 and 5.47% in 2017, then rising sharply to 8.66% in 2018, and finally falling to 5.29% in 2019. This pattern indicates variable profitability with a notable improvement in 2018 that was not sustained into 2019.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios started high in 2015 at 2.38 and 2.68 respectively but decreased significantly in 2016 to 0.71, and remained relatively stable and below 1.00 through 2019. This indicates a decline in asset efficiency after 2015, with the company generating less revenue per unit of asset over the subsequent years.

Financial Leverage

Financial leverage showed a marked increasing trend beginning in 2016. The reported ratio increased from 4.51 in 2016 to an exceptionally high 35.63 in 2019. The adjusted leverage ratio followed a similar pattern, rising from 3.84 in 2016 to 29.67 in 2019. This substantial increase in leverage suggests an increasing reliance on debt financing which may heighten financial risk.

Return on Equity (ROE)

ROE experienced a pronounced upward trend. The reported ROE escalated from 14.56% in 2016 to an extraordinary 181.08% in 2019. Adjusted ROE rose from 14.12% in 2016 to 132.18% in 2019. These sharp increases imply that shareholders' returns grew extensively during this period, likely influenced by the increased financial leverage.

Return on Assets (ROA)

Reported ROA declined substantially from 14.12% in 2015 to 3.23% in 2016, then gradually increased to peak at 8.05% in 2018 before falling back to 5.08% in 2019. Adjusted ROA followed a similar pattern starting at 18.45% in 2015, declining to 3.68% in 2016, increasing to 7.64% in 2018, then decreasing to 4.45% in 2019. This suggests fluctuations in underlying asset profitability, with a notable dip post-2015 and some recovery in 2018.

Summary Insights

Overall, profitability metrics demonstrate variability with an improvement around 2018 followed by some decline in 2019. Efficiency of asset use, as shown by total asset turnover, dropped sharply after 2015 and stabilized at a lower level. Financial leverage increased dramatically from 2016 onward, indicating heightened debt usage, which correlates with the sharp rises in ROE, suggesting that leverage significantly amplified shareholder returns despite mixed trends in actual asset profitability. The adjusted figures generally track the reported metrics, showing consistency in performance patterns after accounting for deferred income tax adjustments.

The financial data reveals notable fluctuations in both reported and adjusted net income of the company over the five-year period. Reported net income initially decreased from 859 million US dollars in 2015 to 780 million in 2016, followed by a substantial increase reaching a peak of 1,907 million in 2018. However, in 2019, there was a decline to 1,273 million. Adjusted net income similarly shows a decrease from 998 million in 2015 to 884 million in 2016, climbs to 1,253 million by 2017, peaks at 1,798 million in 2018, and then falls to 1,109 million in 2019.

Concerning profitability, both reported and adjusted net profit margins reflect parallel trends. The reported net profit margin steadily decreased from 5.93% in 2015 to 4.57% in 2016, before rising sharply to 9.19% in 2018, and then retreating to 6.07% in 2019. Adjusted net profit margin follows a similar pattern, declining from 6.89% in 2015 to 5.18% in 2016, then increasing to 8.66% in 2018, followed by a reduction to 5.29% in 2019.

Income Trends

The initial decline in income during 2016 was followed by a period of strong growth peaking in 2018, with both reported and adjusted measures exhibiting this pattern. The decrease in 2019 suggests potential challenges impacting profitability or operational efficiency.

Profit Margin Analysis

The profit margins mirror income trends, with significant improvement culminating in 2018, which may indicate operational leverage or favorable market conditions during that year. The subsequent decline in 2019 could point to increased costs or revenue pressures reducing profitability.

Reported vs. Adjusted Measures

The adjusted figures consistently exceed reported results across all years, suggesting that adjustments for deferred income taxes positively impacted net income. The close alignment of trends between the two sets underscores the consistency of underlying business performance despite tax-related adjustments.

The financial data reveals significant movements in both reported and adjusted total assets over the five-year period. From 2015 to 2016, there is a substantial increase in total assets, with reported assets rising from 6,082 million USD to 24,140 million USD and adjusted assets increasing similarly from 5,410 million USD to 24,024 million USD. Following this sharp rise, total assets remain relatively stable with only slight fluctuations, showing a marginal decline up to 2018, then a moderate increase again by the end of 2019.

In contrast to the asset values, the total asset turnover ratios exhibit a different trend. For both reported and adjusted figures, the turnover ratio experiences a marked decline from 2015 to 2016, dropping from approximately 2.38-2.68 down to around 0.71. This suggests a significant drop in the efficiency of using assets to generate revenue in 2016. From 2017 through 2019, the turnover ratios demonstrate minor fluctuations but maintain a generally lower range, between 0.84 and 0.96, compared to the 2015 figure.

Total Assets

The sharp escalation of total assets between 2015 and 2016 indicates a notable acquisition, investment, or revaluation event. After this jump, asset levels stabilized with minor adjustments, reflecting a period of steady asset base maintenance.

Total Asset Turnover

The significant drop in turnover ratios from 2015 to 2016 implies that asset utilization efficiency decreased considerably, potentially due to the rapid asset base growth not immediately translating into proportional revenue increases. The relatively stable but lower turnover ratios from 2017 to 2019 suggest a new operational scale with consistent but less efficient asset use compared to 2015.

Adjusted vs. Reported Figures

Adjusted total assets are consistently slightly lower than reported figures, indicating that adjustments, possibly for deferred tax or accounting considerations, reduce the asset base marginally. However, both reported and adjusted values follow parallel trends throughout the period, with corresponding total asset turnover ratios being identical or very close.

The analysis of the financial data over the examined periods reveals several notable trends in the company's asset base, equity position, and financial leverage. The data spans five consecutive years, allowing for an observation of changes and patterns in the company's financial structure.

Total Assets

Reported total assets show a significant increase from 2015 to 2016, rising sharply from approximately $6.1 billion to $24.1 billion. Following this jump, the reported assets remain relatively stable, with slight fluctuations but no significant upward or downward trends, ending at about $25.1 billion in 2019. The adjusted total assets mirror this pattern closely, with a substantial increase in 2016 and relative stability thereafter, indicating consistency between reported and adjusted figures.

Shareholders’ Equity (Deficit)

The reported shareholders' equity shows a negative value in 2015 at approximately -$3.6 billion, which turns positive in 2016 to around $5.4 billion. However, from 2016 onward, there is a declining trend, with equity decreasing each year, reaching a low of $703 million in 2019. The adjusted shareholders' equity follows a similar trajectory, starting with a greater deficit in 2015 and rising to a higher positive value in 2016 compared to reported figures, but then declining steadily to $839 million by 2019. This decline may indicate increasing liabilities or reductions in retained earnings or other equity components over the later years.

Financial Leverage

Financial leverage ratios, available from 2016 onwards, show a rising trend, indicating increasing use of debt relative to equity over the period. Reported financial leverage grows from 4.51 in 2016 to an exceptionally high 35.63 by 2019. Adjusted financial leverage also increases but remains consistently lower than the reported figures, climbing from 3.84 in 2016 to 29.67 in 2019. The growing leverage ratio suggests a shift towards greater financial risk and reliance on debt financing.

Overall, the data portrays a company that underwent a significant expansion of assets between 2015 and 2016, followed by a period of relative stability in asset levels. Concurrently, equity values strengthened sharply in 2016 but then progressively weakened, suggesting potential pressures on the company’s net worth. The increasing financial leverage ratios corroborate this, reflecting a growing dependence on debt, which may have implications for the company’s financial risk and cost of capital going forward.

The analysis of the annual financial data reveals several notable trends and shifts over the five-year period examined.

Net Income

Reported net income shows an overall upward trend from 2015 to 2018, increasing from 859 million US dollars in 2015 to a peak of 1,907 million US dollars in 2018. However, there is a significant decline in 2019, dropping to 1,273 million US dollars. Adjusted net income follows a similar pattern, rising from 998 million US dollars in 2015 to 1,798 million US dollars in 2018, then decreasing to 1,109 million US dollars in 2019. This suggests that while the company experienced growth in profitability through 2018, adjustments and the reported figures both indicate a downturn in the latest year.

Shareholders’ Equity

Reported shareholders' equity begins with a considerable deficit of -3,590 million US dollars in 2015, but it turns positive in 2016 at 5,357 million US dollars, indicating a substantial recovery. Afterward, there is a gradual decrease in reported equity, falling to 703 million US dollars by 2019. Adjusted shareholders’ equity displays a similar pattern, starting with a larger negative figure of -4,246 million US dollars in 2015, turning positive in 2016 at 6,261 million US dollars, and then declining steadily down to 839 million US dollars in 2019. This pattern reflects strong equity rebuilding efforts early in the period, followed by erosion of equity value in subsequent years.

Return on Equity (ROE)

Data for ROE starts from 2016. Reported ROE climbs significantly from 14.56% in 2016 to a dramatic 181.08% in 2019. Adjusted ROE follows a similar upward trajectory, increasing from 14.12% in 2016 to 132.18% in 2019. The sharp increase, particularly in 2018 and 2019, suggests that the company’s profitability relative to equity has greatly improved. However, the simultaneous decline in absolute equity levels suggests that the increase in ROE may partly be due to a reduction in equity base rather than solely improved net income performance.

In summary, the company's profitability increased until 2018, with both reported and adjusted net incomes peaking that year before declining in 2019. Shareholders’ equity recovered sharply post-2015 deficit but steadily eroded after peaking in 2016. The return on equity experienced a marked rise through the period, especially in later years, indicating enhanced efficiency or profitability relative to equity, although driven in part by decreasing equity values. The trends suggest careful attention to the company's equity structure and income sustainability is warranted in interpreting overall financial health.

Reported and Adjusted Net Income Trends

The reported net income shows an initial decline from 859 million US dollars in 2015 to 780 million in 2016, followed by a significant increase peaking at 1,907 million in 2018 before a notable decrease to 1,273 million in 2019. Adjusted net income follows a somewhat similar pattern, starting higher than reported at 998 million in 2015, decreasing to 884 million in 2016, rising to 1,798 million in 2018, and then falling to 1,109 million in 2019. The adjustment seems to moderate some of the fluctuations observed in the reported figures, but both sets indicate variability with a peak in 2018.

Reported and Adjusted Total Assets Trends

Reported total assets exhibit a substantial jump from 6,082 million US dollars in 2015 to 24,140 million in 2016, and remain relatively stable with minor fluctuations around 24,000 to 25,000 million through 2019. Adjusted total assets mirror this trend closely but show slightly lower values than reported assets each year, with a similar sharp increase in 2016, and remaining steady near 24,000 to 25,000 million thereafter. The sharp increase from 2015 to 2016 suggests a significant acquisition, asset revaluation, or other substantial change in asset base during this period.

Reported and Adjusted Return on Assets (ROA) Trends

Reported ROA sharply declines from 14.12% in 2015 to 3.23% in 2016, then gradually recovers up to 8.05% in 2018 before dropping again to 5.08% in 2019. Adjusted ROA, while generally higher than reported ROA, follows a similar trajectory with 18.45% in 2015, a drop to 3.68% in 2016, recovery to 7.64% in 2018, and a decline to 4.45% in 2019. The sharp decline in 2016 corresponds with the large increase in total assets, which dilutes the ROA. Subsequent recovery and decline indicate fluctuating profitability and/or asset efficiency over the analyzed periods.

Overall Insights

The financial data suggests a pivotal event or change around 2016 that significantly increased total assets and influenced profitability metrics. Both reported and adjusted figures demonstrate that income and ROA peaked in 2018 before declining in 2019, indicating potential challenges in sustaining profit levels relative to assets. Adjusted figures generally show smoother trends and reduced volatility compared to reported data, highlighting the impact of deferred income tax adjustments on financial performance indicators.