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Marriott International Inc. (MAR)

Enterprise Value to FCFF (EV/FCFF)

Intermediate level

Free Cash Flow to The Firm (FCFF)

Marriott International Inc., FCFF calculation

US$ in millions

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12 months ended Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Net income 1,907  1,372  780  859  753 
Net noncash charges 526  983  979  697  591 
Working capital changes (76) 81  (177) (126) (120)
Net cash provided by operating activities 2,357  2,436  1,582  1,430  1,224 
Cash paid for interest, net of amounts capitalized, net of tax1 231  156  109  78  55 
Capital expenditures (556) (240) (199) (305) (411)
Contract acquisition costs —  (189) (80) (121) (65)
Free cash flow to the firm (FCFF) 2,032  2,163  1,412  1,082  803 

Based on: 10-K (filing date: 2019-03-01), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-18), 10-K (filing date: 2015-02-19).

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Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the Marriott International Inc.’s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. Marriott International Inc.’s FCFF increased from 2016 to 2017 but then slightly decreased from 2017 to 2018.

Interest Paid, Net of Tax

Marriott International Inc., interest paid, net of tax calculation

US$ in millions

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12 months ended Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Effective Income Tax Rate (EITR)
EITR1 20.30% 33.30% 34.10% 31.50% 30.80%
Interest Paid, Net of Tax
Cash paid for interest, net of amounts capitalized, before tax 290  234  165  114  79 
Less: Cash paid for interest, net of amounts capitalized, tax2 59  78  56  36  24 
Cash paid for interest, net of amounts capitalized, net of tax 231  156  109  78  55 

Based on: 10-K (filing date: 2019-03-01), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-18), 10-K (filing date: 2015-02-19).

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2 2018 Calculation
Cash paid for interest, net of amounts capitalized, tax = Cash paid for interest, net of amounts capitalized × EITR
= 290 × 20.30% = 59

Enterprise Value to FCFF Ratio, Current

Marriott International Inc., current EV/FCFF calculation, comparison to benchmarks

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Selected Financial Data (US$ in millions)
Enterprise value (EV) 55,861 
Free cash flow to the firm (FCFF) 2,032 
Valuation Ratio
EV/FCFF 27.49
Benchmarks
EV/FCFF, Competitors1
Booking Holdings Inc. 16.37
Delta Air Lines Inc. 14.12
McDonald’s Corp. 38.82
Starbucks Corp. 31.87
EV/FCFF, Sector
Travel & Leisure 19.84
EV/FCFF, Industry
Consumer Services 30.49

Based on: 10-K (filing date: 2019-03-01).

1 Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

Enterprise Value to FCFF Ratio, Historical

Marriott International Inc., historical EV/FCFF calculation, comparison to benchmarks

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 51,303  58,357  41,398  20,472  26,658 
Free cash flow to the firm (FCFF)2 2,032  2,163  1,412  1,082  803 
Valuation Ratio
EV/FCFF3 25.25 26.98 29.32 18.92 33.21
Benchmarks
EV/FCFF, Competitors4
Booking Holdings Inc. 17.37 20.89 22.12 21.80 22.48
Delta Air Lines Inc. 21.04 35.82 10.34 7.58 —
McDonald’s Corp. 34.31 35.93 26.95 23.80 23.02
Starbucks Corp. 8.45 30.24 25.91 36.65 —
EV/FCFF, Sector
Travel & Leisure 18.10 29.51 22.04 20.05 —
EV/FCFF, Industry
Consumer Services 24.61 26.91 23.84 23.81 —

Based on: 10-K (filing date: 2019-03-01), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-18), 10-K (filing date: 2015-02-19).

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2 See details »

3 2018 Calculation
EV/FCFF = EV ÷ FCFF
= 51,303 ÷ 2,032 = 25.25

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/FCFF Enterprise value to free cash flow to the firm is whole company valuation indicator. Marriott International Inc.’s EV/FCFF ratio decreased from 2016 to 2017 and from 2017 to 2018.