Name: Marriott International Inc. (NASDAQ:MAR) | Income Statement
Creator: Stock Analysis on Net

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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Marriott International Inc., consolidated income statement

US$ in millions

12 months ended:	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Base management fees	1,180)	1,140)	1,102)	806)	698)
Franchise fees	2,006)	1,849)	1,618)	988)	853)
Incentive management fees	637)	649)	607)	425)	319)
Gross fee revenues	3,823)	3,638)	3,327)	2,219)	1,870)
Contract investment amortization	(62)	(58)	—)	—)	—)
Net fee revenues	3,761)	3,580)	3,327)	2,219)	1,870)
Owned, leased, and other revenue	1,612)	1,635)	1,802)	1,307)	986)
Cost reimbursement revenue	15,599)	15,543)	17,765)	13,546)	11,630)
Revenues	20,972)	20,758)	22,894)	17,072)	14,486)
Owned, leased, and other-direct	(1,316)	(1,306)	(1,427)	(900)	(733)
Reimbursed expenses	(16,439)	(15,778)	(17,765)	(13,546)	(11,630)
Cost of revenues	(17,755)	(17,084)	(19,192)	(14,446)	(12,363)
Gross profit	3,217)	3,674)	3,702)	2,626)	2,123)
Depreciation, amortization, and other	(341)	(226)	(290)	(168)	(139)
General, administrative, and other	(938)	(927)	(894)	(704)	(634)
Merger-related costs and charges	(138)	(155)	(159)	(386)	—)
Operating income	1,800)	2,366)	2,359)	1,368)	1,350)
Gains and other income, net	154)	194)	688)	5)	27)
Interest expense	(394)	(340)	(288)	(234)	(167)
Interest income	26)	22)	38)	35)	29)
Equity in earnings	13)	103)	39)	10)	16)
Income before income taxes	1,599)	2,345)	2,836)	1,184)	1,255)
Provision for income taxes	(326)	(438)	(1,464)	(404)	(396)
Net income	1,273)	1,907)	1,372)	780)	859)

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

Revenue growth demonstrates a significant upward trajectory between 2015 and 2017, peaking at 22,894 million US dollars before experiencing a slight contraction and stabilization through 2019. This overall trend is heavily influenced by a strategic shift toward high-margin fee-based income, while cost reimbursement revenue remains the largest component of total revenue but fluctuates based on operational volume.

Fee Revenue Performance: A consistent and aggressive growth pattern is observed in fee-based streams. Franchise fees grew from 853 million US dollars in 2015 to 2,006 million US dollars in 2019, representing the most substantial increase among all revenue categories. Similarly, base management fees rose from 698 million US dollars to 1,180 million US dollars over the same period. Gross fee revenues consequently expanded from 1,870 million US dollars to 3,823 million US dollars, indicating a successful transition toward an asset-light business model.
Operating Expenses and Cost Management: General, administrative, and other expenses show a steady climb, increasing from 634 million US dollars in 2015 to 938 million US dollars in 2019. Merger-related costs emerged in 2016 at 386 million US dollars and gradually declined to 138 million US dollars by 2019, suggesting the wind-down of integration activities from a major corporate action. Cost of revenues remained closely tied to reimbursed expenses, maintaining a narrow margin over the five-year period.
Profitability and Net Income Trends: Gross profit peaked in 2017 at 3,702 million US dollars before declining to 3,217 million US dollars by 2019. Operating income followed a similar trajectory, reaching a peak of 2,366 million US dollars in 2018. Net income exhibited volatility, notably peaking in 2018 at 1,907 million US dollars. The discrepancy between peak operating income and peak net income is partially explained by a significant spike in the provision for income taxes in 2017, which reached 1,464 million US dollars, suppressing the net result for that year.
Financial Obligations and Other Income: Interest expense increased monotonically every year, rising from 167 million US dollars in 2015 to 394 million US dollars in 2019, suggesting an increase in debt obligations. Conversely, gains and other income showed a significant one-time spike in 2017 to 688 million US dollars, providing a temporary boost to income before income before taxes normalized in subsequent years.

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