Common-Size Income Statement
Quarterly Data
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Marriott International Inc. pages available for free this week:
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Operating Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Total Asset Turnover since 2005
- Analysis of Revenues
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Marriott International Inc., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
- Fee Revenue Trends
- The base management fees as a percentage of revenues showed a gradual increase from around 4.7% in early 2015 to a peak exceeding 5.8% mid-2019, before sharply declining to 4.57% by March 2020. Franchise fees followed an upward trajectory throughout most of the period, rising from 5.81% to over 10% by late 2019, then decreasing to approximately 8.9% in early 2020. Incentive management fees fluctuated moderately but generally increased from roughly 2.5% to a high of about 3.26% by late 2019. Consequently, gross fee revenues grew steadily from around 13% to approximately 18% of revenues by late 2019, with a notable decrease to 13.44% in early 2020 after contract investment amortization edged slightly negative starting in 2017, reducing net fee revenues marginally.
- Revenue Composition and Cost Structure
- Owned, leased, and other revenues remained relatively stable between 6.3% and 9.8% of total revenues, with occasional increases observed in late 2016. Cost reimbursement revenue consistently accounted for close to 75-80% of revenues throughout the period, peaking slightly above 81% in early 2020. The cost of revenues mirrored this, remaining steady around 83-85% for most quarters but increasing significantly to nearly 89% by the first quarter of 2020. Correspondingly, gross profit margins hovered between 14% and 17% through 2015-2017, rising to above 20% in some quarters of 2018, but then declined sharply to below 12% by early 2020.
- Operating Expenses and Profitability
- Depreciation, amortization, and other related expenses were consistently below 1.5% of revenues until a pronounced rise above 3% occurred in early 2020. General, administrative, and other expenses maintained a narrow range around 3.5% to 5.8%, with a slight upward trend toward the end of the period. Merger-related costs appeared sporadically beginning mid-2016, with significant negative impacts on profitability during select quarters but little consistency across time. Operating income as a percent of revenues fluctuated between 8% and 11% for most of the period but showed a notable decline towards 2.44% by March 2020, indicating weakening operating profitability.
- Other Income and Expense Items
- Interest expense generally increased in proportion to revenues over time, moving from near 1% to almost 2% by early 2020, while interest income remained low and stable around 0.1%. Gains and other income demonstrated episodic spikes, including a significant jump exceeding 11% in late 2017, though such instances were isolated. Equity earnings were marginal positive contributors overall, with occasional variability but no sustained trend.
- Income Taxes and Net Income
- The provision for income taxes exhibited volatility, averaging a negative impact of roughly 2-3% of revenues, with an exceptional charge near -16.65% in late 2017 and some quarters showing minor benefits. Net income as a percentage of revenues correspondingly varied widely, ranging from nearly 6% down to less than 1% by the first quarter of 2020. The net income trend broadly followed operating income but displayed more pronounced declines toward the end, highlighting increased pressure on bottom-line profitability.
- Summary Insights
- Overall, the financial data demonstrates steady revenue growth and improved fee income ratios through most of the 2015-2019 period, contributing to increased gross profit margins and operating income stability. However, starting in late 2019 and early 2020, there is observable deterioration across key profitability measures including base and franchise fees, gross profit, operating income, and net income percentages of revenues. Rising costs, particularly in cost of revenues and interest expenses, alongside increased depreciation and administrative costs, contributed to margin compression. This suggests emerging challenges affecting financial performance in the early months of 2020, potentially linked to external shocks or operational difficulties.