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.

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).

The financial data exhibits several notable trends over the five-year period.

Fee Revenues

Base management fees show a steady increase from 698 million USD in 2015 to 1180 million USD in 2019, indicating consistent growth in management-related income. Franchise fees experience a more pronounced growth trend, nearly doubling from 853 million USD in 2015 to 2006 million USD in 2019, which suggests an expansion in franchising activities or improved fee structures.

Incentive management fees rise significantly from 319 million USD in 2015 to a peak of 649 million USD in 2018 but slightly decline to 637 million USD in 2019, indicating some variability likely tied to performance-based agreements.

Gross fee revenues collectively increase markedly from 1870 million USD in 2015 to 3823 million USD in 2019. After accounting for contract investment amortization starting in 2018 (negative adjustments of 58 million and 62 million USD), net fee revenues still show robust growth, from 1870 million USD in 2015 to 3761 million USD in 2019.

Revenue Composition and Cost of Revenues

Owned, leased, and other revenue grow from 986 million USD in 2015 to a peak of 1802 million USD in 2017, but then decline to 1612 million USD in 2019. This could reflect strategic changes in asset ownership or operational shifts.

Cost reimbursement revenues experience strong growth until 2017, rising from 11630 million USD in 2015 to 17765 million USD in 2017, then decreasing and stabilizing around 15600 million USD in 2018 and 2019. This pattern may indicate increased operational activity followed by a streamlining or reduction in reimbursable expenses.

Total revenues increase substantially from 14486 million USD in 2015 to a peak of 22894 million USD in 2017, followed by a decline to approximately 20972 million USD by 2019, suggesting variability in overall business volume or pricing.

Cost of revenues rise in line with revenue increases, from -12363 million USD in 2015 to -19192 million USD in 2017, before decreasing to about -17755 million USD in 2019. This trend aligns with revenue fluctuations and indicates efforts to manage operating costs.

Profitability

Gross profit increases steadily from 2123 million USD in 2015, peaking at 3702 million USD in 2017, but declines to 3217 million USD in 2019, reflecting the influence of revenue changes and cost management success.

Operating income shows a similar pattern with growth from 1350 million USD in 2015 to 2366 million USD in 2018, before falling to 1800 million USD in 2019. The dip in 2019 might be related to elevated costs or reduced revenue in owned and leased operations.

General, administrative, and other expenses steadily increase, from -634 million USD in 2015 to -938 million USD in 2019, reflecting rising overhead costs. Merger-related costs are notable in 2016 to 2019 but diminish over time, indicating decreasing acquisition-related expenses.

Depreciation, amortization, and other expenses fluctuate but peak in 2019 at -341 million USD, suggesting increased capital-related costs.

Other Income and Expenses

Gains and other income fluctuate with a significant spike in 2017 at 688 million USD, likely from one-time gains or asset sales, then decrease in subsequent years.

Interest expense steadily increases from -167 million USD in 2015 to -394 million USD in 2019, indicating higher financing costs possibly due to increased debt levels. Interest income remains relatively stable but low in comparison.

Equity in earnings peaks notably in 2018 at 103 million USD but drops sharply in 2019 to 13 million USD, suggesting variable performance from associated investments.

Income Taxes and Net Income

Income before income taxes grows from 1255 million USD in 2015 to a peak of 2836 million USD in 2017, then decreases to 1599 million USD in 2019. This downward trend in recent years may be due to reduced operating income and fluctuating non-operational items.

Provision for income taxes shows volatility, with a sharp increase in 2017 (-1464 million USD), likely due to nonrecurring tax items or changes in tax rates, followed by reductions to -326 million USD in 2019.

Net income follows a generally positive trend from 859 million USD in 2015, peaking at 1907 million USD in 2018, before declining to 1273 million USD in 2019. The decline in 2019 highlights the impact of reduced profitability and potentially higher expenses.

Download chart

Marriott International Inc. (NASDAQ:MAR)

Income Statement