Welcome!

Video Authors: Elizabeth White, Yakov Fain, Liz McMillan, Dan Ristic, Jnan Dash

News Feed Item

Marriott International Reports Fourth Quarter Results

BETHESDA, Md., Feb. 11 /PRNewswire-FirstCall/ -- Marriott International, Inc. (NYSE: MAR) today reported fourth quarter and full year 2009 results.

(Logo: http://www.newscom.com/cgi-bin/prnh/20090217/MARRIOTTINTLLOGO )

FOURTH QUARTER 2009 RESULTS

Fourth quarter 2009 adjusted income from continuing operations attributable to Marriott totaled $118 million, a 2 percent decline over the year-ago quarter, and adjusted diluted earnings per share ("EPS") from continuing operations attributable to Marriott shareholders totaled $0.32, down 3 percent. On October 8, 2009, the company forecasted fourth quarter adjusted diluted EPS of $0.20 to $0.23.

Reported income from continuing operations attributable to Marriott was $106 million in the fourth quarter of 2009 compared to a reported loss from continuing operations attributable to Marriott of $10 million in the year-ago quarter. Reported diluted EPS from continuing operations attributable to Marriott shareholders was $0.28 in the fourth quarter of 2009 compared to reported diluted losses per share from continuing operations attributable to Marriott shareholders of $0.03 in the fourth quarter of 2008.

Adjusted results for the 2009 fourth quarter exclude $19 million pretax ($12 million after-tax and $0.03 per diluted share) of restructuring costs and other charges. Restructuring charges totaled $7 million pretax and included severance and facilities exit costs. Other charges totaled $12 million pretax and primarily included $11 million of charges against lodging assets and $3 million of reserves for Timeshare contract cancellations, offset by the $2 million favorable impact of the revaluation of Timeshare note residuals. Of the total restructuring costs and other charges in the fourth quarter, cash payments are expected to be $6 million. See the table on page A-15 of the accompanying schedules for the detail of these charges and their placement on the Consolidated Statements of Income.

Adjusted results for the 2008 fourth quarter exclude $192 million pretax ($124 million after-tax and $0.35 per diluted share) of restructuring costs and other charges, $152 million of which were non-cash, as well as $7 million of charges ($0.02 per diluted share) in the provision for income taxes.

J.W. Marriott, Jr., chairman and chief executive officer of Marriott International, said, "While the global business climate remained difficult, fourth quarter results exceeded our expectations. We grew our system, reduced total debt, and continued to improve efficiencies worldwide.

"In the fourth quarter, leisure travelers responded to aggressive marketing campaigns and special offers and, even adjusting for easier year-over-year comparisons, business travel showed signs of improvement, particularly in international markets. With solid cost controls, we translated the stronger-than-expected occupancy to better-than-expected incentive fee revenue. Demand for timeshare intervals improved modestly from third quarter levels which, combined with a successful note sale and reductions in investment spending, allowed the timeshare business to generate over $150 million of cash flow after investing activities for full year 2009.

"We are pleased that we remain an investment grade company. For the full year, we reduced investment spending by two-thirds and we were able to lower total debt by nearly $800 million.

"We opened over 38,000 rooms during 2009 and we're thrilled to have two new exciting brands, EDITION and the Autograph Collection, opening their first hotels in 2010 with more expected to come. Our global development pipeline totals nearly 100,000 rooms. Our efforts have positioned us quite well for future earnings growth."

Revenue per available room (REVPAR) for the company's worldwide comparable company-operated properties declined 12.2 percent (12.4 percent using constant dollars) in the 2009 fourth quarter and REVPAR for the company's worldwide comparable systemwide properties declined 12.3 percent (12.5 percent using constant dollars).

Outside North America, the fourth quarter included the months from September to December in both years. International comparable company-operated REVPAR declined 11.1 percent (11.7 percent using constant dollars), including an 11.6 percent decline in average daily rate (12.2 percent using constant dollars) in the fourth quarter of 2009.

In North America, comparable company-operated REVPAR declined 13.1 percent in the fourth quarter of 2009. REVPAR at the company's comparable company-operated North American full-service and luxury hotels (including Marriott Hotels & Resorts, The Ritz-Carlton and Renaissance Hotels & Resorts) was down 11.8 percent with an 11.0 percent decline in average daily rate.

Marriott's 2009 fiscal year ended on January 1, 2010 and included 52 weeks compared to 53 weeks in fiscal 2008. Similarly, the fourth quarter ended on January 1, 2010 and included 16 weeks compared to 17 weeks in the 2008 fiscal quarter. Key lodging statistics are included in the schedules accompanying the press release beginning on page A-7. While fiscal fourth quarter REVPAR statistics for North America are included, they are not comparable due to differences in the length and seasonality of the reporting periods. As a result, the company has also provided North American and worldwide REVPAR statistics adjusted for the shift in the fiscal calendar.

On a calendar quarter basis, which includes the months of October, November and December, North American comparable company-operated REVPAR declined 10.7 percent while worldwide comparable company-operated REVPAR declined 10.1 percent (10.8 percent using constant dollars).

Marriott added 65 new properties (10,626 rooms) to its worldwide lodging portfolio in the 2009 fourth quarter, including 45 limited-service hotels in North America. Seven properties (1,635 rooms) exited the system during the quarter. Rooms converted from competitor hotels accounted for nearly 18 percent of gross room additions during the quarter. At year-end, the company's lodging group encompassed 3,420 properties and timeshare resorts for a total of over 595,000 rooms.

The company's worldwide pipeline of hotels under construction, awaiting conversion or approved for development totaled nearly 100,000 rooms at year-end. Nearly 35 percent of these development pipeline rooms are Marriott, Ritz-Carlton, Renaissance, EDITION or Autograph rooms, of which nearly 75 percent are located outside North America.

Reported results for the 2009 fourth quarter, the adjusted results and the associated reconciliations are shown on pages A-1, A-13, A-15, and A-19 of the accompanying schedules. The following paragraphs reflect adjusted results where indicated.

MARRIOTT REVENUES totaled approximately $3.4 billion in the 2009 fourth quarter compared to $3.8 billion for the fourth quarter of 2008. Base management and franchise fees declined 12 percent to $282 million reflecting lower REVPAR, offset in part by fees from new hotels. Fourth quarter incentive management fees declined 28 percent to $59 million. The percentage of company-managed hotels earning incentive management fees decreased to 22 percent in the 2009 fourth quarter compared to 39 percent in the year-ago quarter. Approximately 70 percent of incentive management fees came from hotels outside North America in the 2009 quarter compared to 55 percent in the 2008 quarter.

Worldwide comparable company-operated house profit margins declined 260 basis points in the fourth quarter reflecting the weak REVPAR environment, offset in part by significant cost reductions from productivity improvements, lower management wages and procurement savings through volume discounts and compliance. House profit margins for comparable company-operated properties outside North America declined 100 basis points and North American comparable company-operated house profit margins declined 360 basis points from the year-ago quarter.

Owned, leased, corporate housing and other revenue, net of direct expenses, declined $23 million in the 2009 fourth quarter, to $22 million, primarily reflecting the impact of lower operating results in owned and leased hotels and lower termination fees and other income, partially offset by an increase in branding fee revenue.

Fourth quarter adjusted Timeshare segment contract sales declined 7 percent to $203 million excluding a $28 million allowance for fractional and residential contract cancellations recorded in the quarter. In the prior year's quarter, adjusted Timeshare segment contract sales totaled $218 million excluding a $115 million allowance for contract cancellations.

In the fourth quarter, adjusted timeshare sales and services revenue declined 3 percent to $375 million and, net of expenses, totaled $72 million for the quarter, a $62 million increase from the 2008 adjusted fourth quarter. Development revenue, net of expense, benefited from higher closing efficiency and cost savings. Financing revenue, net of expense, increased largely as a result of a $38 million note sale gain recorded in the fourth quarter of 2009, compared to the absence of a note sale in the fourth quarter of 2008, and cost savings, partially offset by lower interest income.

Adjusted Timeshare segment results, which includes Timeshare sales and services revenue, net of direct expenses, as well as base management fees, equity earnings, gains and other income, noncontrolling interest and general, administrative and other expenses associated with the timeshare business, totaled $62 million in the 2009 fourth quarter compared to a loss of $2 million in the prior year quarter.

ADJUSTED GENERAL, ADMINISTRATIVE and OTHER expenses for the 2009 fourth quarter declined 13 percent to $207 million, compared to $238 million in the year-ago quarter. The 2009 fourth quarter benefited from cost savings throughout the organization, as well as $3 million in foreign exchange gains and the $3 million reversal of a loan loss reserve partially offset by $12 million of accruals and reserves related to the performance of 12 hotels and $8 million of lower capitalized development costs. The 2009 quarter also included a $21 million unfavorable impact associated with deferred compensation compared to the 2008 quarter (offset by a similar decrease in the provision for taxes). Excluding the impact of deferred compensation, adjusted general administrative and other expenses declined 20 percent in the fourth quarter, as shown on page A-19 of the accompanying schedules.

GAINS AND OTHER INCOME totaled $4 million and included a $3 million gain on the sale of investments and $1 million of net gains on the sale of real estate. The prior year's fourth quarter adjusted gains and other income totaled $28 million and included a $28 million gain on the extinguishment of debt and $7 million of gains on the sale of real estate offset by a $4 million loss on the sale of an investment and $3 million unfavorable impact of preferred returns from joint venture investments and other income.

INTEREST EXPENSE decreased $16 million in the fourth quarter primarily due to lower interest rates and lower debt balances.

ADJUSTED EQUITY IN (LOSSES) EARNINGS totaled a $10 million loss in the quarter compared to $5 million in earnings in the year-ago quarter. The $15 million decline reflected lower operating results in two joint ventures.

ADJUSTED INCOME TAXES

The adjusted provision for taxes in the fourth quarter of 2009 reflected a $21 million favorable impact associated with deferred compensation (offset by a similar unfavorable impact in general, administrative and other expenses) compared with the 2008 fourth quarter.

FULL YEAR 2009 RESULTS

For the full year 2009, adjusted income from continuing operations attributable to Marriott totaled $342 million, a decline of 38 percent, and adjusted diluted EPS from continuing operations attributable to Marriott shareholders was $0.93, a decline of 38 percent.

The reported loss from continuing operations attributable to Marriott was $346 million for full year 2009 compared to reported income from continuing operations attributable to Marriott of $359 million a year ago. Reported diluted losses per share from continuing operations attributable to Marriott was $0.97 for 2009 compared to reported diluted EPS from continuing operations attributable to Marriott of $0.97 for 2008.

Adjusted income from continuing operations attributable to Marriott and adjusted diluted EPS from continuing operations attributable to Marriott shareholders for 2009 exclude the $213 million pretax ($130 million after-tax and $0.37 per diluted share) restructuring costs and other charges, $182 million of which were non-cash, as well as $752 million pretax ($502 million after-tax and $1.41 per diluted share) of primarily non-cash Timeshare impairment charges. See the table on pages A-15 and A-16 of the accompanying schedules for the detail of these charges and their placement on the Consolidated Statements of Income. Adjusted results for full year 2009 also exclude the $56 million ($0.16 per diluted share) impact of non-cash charges in the provision for income taxes.

Adjusted income from continuing operations attributable to Marriott and adjusted diluted EPS from continuing operations attributable to Marriott shareholders for 2008 exclude the $192 million pretax ($124 million after-tax and $0.33 per diluted share) restructuring costs and other charges. Adjusted results for full year 2008 also exclude the $72 million ($0.19 per diluted share) impact of charges, $67 million of which were non-cash, included in the tax provision.

REVPAR for the company's worldwide comparable company-operated properties declined 20.0 percent (18.3 percent using constant dollars) in 2009. REVPAR for the company's worldwide comparable systemwide properties declined 18.4 percent (17.3 percent using constant dollars) in 2009.

International comparable company-operated REVPAR for 2009 declined 23.5 percent (18.0 percent using constant dollars), including a 17.8 percent decline in average daily rate (11.9 percent using constant dollars).

In North America, comparable company-operated REVPAR declined 18.5 percent in 2009. REVPAR at the company's comparable company-operated North American full-service and luxury hotels (including Marriott Hotels & Resorts, The Ritz-Carlton and Renaissance Hotels & Resorts) was down 17.8 percent with an average daily rate decline of 12.2 percent.

Reported results for full year 2009, the adjusted results and the associated reconciliations are shown on pages A-2, A-14, A-15, A-16, and A-19 of the accompanying schedules. The following paragraphs reflect adjusted results where indicated.

MARRIOTT REVENUES totaled $10.9 billion in 2009 compared to $12.9 billion in 2008. Total fees in 2009 were $1,084 million, a decrease of 22 percent from the prior year. Base management and franchise fees declined $156 million in 2009, reflecting the decline in worldwide REVPAR offset in part by unit growth across the system. Incentive management fees declined 50 percent reflecting lower property-level margins due to worldwide REVPAR declines, partially offset by strong cost controls. For full year 2009, 25 percent of company-operated hotels earned incentive management fees compared to 56 percent in the prior year. Approximately two-thirds of incentive management fees came from hotels outside North America in 2009 compared to 49 percent in 2008.

Owned, leased, corporate housing and other revenue, net of direct expenses, totaled $68 million in 2009 compared to $137 million in 2008. Results were primarily impacted by lower operating results at owned and leased properties, the conversion of some owned properties to management agreements, and lower termination fees, partially offset by higher branding fees and a transaction cancellation fee.

Reflecting weak demand, adjusted Timeshare segment contract sales in 2009 declined 37 percent to $748 million, excluding allowances for anticipated contract cancellations of $83 million in 2009 and $115 million in 2008.

Adjusted Timeshare sales and services revenue declined 23 percent to $1,147 million in 2009 and adjusted Timeshare sales and services revenue, net of direct expenses, totaled $106 million in 2009, a decrease of 28 percent. Development revenue, net of expense, declined in 2009 reflecting soft demand, partially offset by favorable reportability and reduced marketing and sales costs. Services revenue, net of expense, also declined largely reflecting lower rental revenues and higher carry costs on unsold units. Financing revenue, net of expense, increased in 2009 reflecting a $9 million increase in note sale gains and cost savings, partially offset by lower interest income. Timeshare direct expenses in 2008 included a $22 million impairment charge at a fractional and residential joint venture project referred to below.

Adjusted Timeshare segment results, which includes timeshare sales and services revenue, net of direct expenses, as well as base management fees, equity earnings, gains and other income, noncontrolling interest and general, administrative and other expenses associated with the timeshare business, totaled $87 million in 2009 compared to $121 million in the prior year. The segment results for 2008 reflected a net $10 million pretax impairment charge for a fractional and residential consolidated joint venture project, adjusting the carrying value of the real estate to its estimated fair market value. The $10 million charge in 2008 included a $22 million negative adjustment in timeshare direct expenses partially offset by a $12 million pretax ($8 million after-tax) benefit associated with the joint venture partner's share, which is reflected in net losses attributable to noncontrolling interest, net of tax.

The Timeshare segment also generated over $150 million of pretax cash flow in 2009.

ADJUSTED GENERAL, ADMINISTRATIVE and OTHER expenses decreased $127 million to $622 million in 2009 reflecting cost savings and lower incentive compensation, partially offset by the $43 million unfavorable impact associated with deferred compensation compared to 2008 (offset by a similar decrease in the provision for taxes) and $12 million of accruals and reserves related to the performance of 12 hotels. Excluding the impact of deferred compensation, adjusted general, administrative and other expenses declined 22 percent in 2009, as shown on page A-19 of the accompanying schedules.

GAINS AND OTHER INCOME totaled $31 million in 2009 and included a $21 million gain on the extinguishment of debt, net gains of $10 million from the sale of real estate, a $3 million gain on the sale of investments and $2 million of preferred returns from joint venture investments, partially offset by a $5 million impairment charge on an investment. Adjusted gains and other income of $47 million in 2008 included gains of $14 million from the sale of real estate, a $28 million gain on the extinguishment of debt, $6 million of preferred returns from several joint venture investments and other income and $3 million of gains on the sale of the company's interests in two joint ventures, partially offset by a $4 million loss on the sale of an investment.

INTEREST EXPENSE declined 28 percent in 2009 partially due to lower interest rates, repayment of debt and the repurchase of Senior Notes.

ADJUSTED EQUITY IN (LOSSES) EARNINGS totaled a $27 million loss in 2009 compared to $31 million of earnings in 2008. Losses in 2009 primarily reflected losses in five joint ventures and the impairment of one investment. Earnings in 2008 primarily reflected a $15 million gain on the sale of a joint venture's assets, insurance proceeds of $5 million received through a joint venture and $11 million of earnings from joint ventures.

ADJUSTED INCOME TAXES

The adjusted provision for taxes reflected a $43 million favorable impact associated with deferred compensation (offset by a similar unfavorable impact in general, administrative and other expenses) compared to 2008.

NET LOSSES ATTRIBUTABLE TO NONCONTROLLING INTERESTS, NET OF TAX decreased $8 million in 2009 to $7 million. The decrease largely reflected the adjustment of the carrying value of a fractional and residential project in 2008. Since the project is a consolidated joint venture, the partner's share of the adjustment was an $8 million after-tax benefit to noncontrolling interests in 2008.

ADJUSTED EBITDA

Adjusted EBITDA totaled $898 million in 2009, a 31 percent decline from 2008 adjusted EBITDA of $1,298 million.

BALANCE SHEET

At year-end 2009, total debt was $2,298 million and cash balances totaled $115 million, compared to $3,095 million in debt and $134 million of cash at year-end 2008. The company repurchased $119 million of its Senior Notes in 2009. At year-end 2009, Marriott had borrowings of $425 million under its $2.4 billion bank revolver.

COMMON STOCK

Weighted average fully diluted shares outstanding used to calculate adjusted diluted earnings per share amounts totaled 372.2 million in the 2009 fourth quarter compared to 363.1 million in the year-ago quarter.

On November 5, 2009, the Board of Directors declared a stock dividend payable on December 3, 2009, to shareholders of record on November 19, 2009. For periods prior to the stock dividend, all share and per share data in our financial statements have been retroactively adjusted to reflect the stock dividend.

On February 4, 2010, the Board of Directors declared the issuance of a $0.04 per share cash dividend payable on April 9, 2010 to shareholders of record on February 19, 2010.

The remaining share repurchase authorization, as of January 1, 2010, totaled 21.3 million shares. No share repurchases are planned for 2010.

IMPACT OF ACCOUNTING CHANGES

The company adopted ASU Nos. 2009-16 and 2009-17 (formerly referred to as FAS 166 and 167) at the beginning of 2010, which requires consolidating previously sold Timeshare notes and will impact the ongoing accounting for those notes. With the consolidation of the existing portfolio of sold loans on the first day of 2010, the company expects assets to increase by approximately $1,010 million, liabilities to increase by approximately $1,115 million, and shareholders' equity to decline by approximately $105 million. No change in cash flow from the business is anticipated as a result of the accounting changes. Adjusted pretax earnings for fiscal 2009 would have been $1 million lower had the accounting change occurred at the beginning of 2009. See the tables on page A-22, A-23, A-24, A-25 and A-26 of the accompanying schedules for 2009 quarterly and full year Timeshare segment results adjusted as if the accounting changes had been made on the first day of fiscal 2009.

OUTLOOK

While Marriott typically provides a range of guidance for future performance, the current global economic and financial climate continues to make predictions very difficult. Therefore, the company is unable to give guidance. Instead, the company is providing the following assumptions for the 2010 first quarter and full year which it is using for internal planning purposes.

FIRST QUARTER 2010

For the first quarter, the company assumes worldwide comparable systemwide hotel REVPAR declines 5 to 7 percent on a constant dollar basis. For North American comparable systemwide hotels, the company assumes REVPAR declines of 7 to 8 percent and for comparable systemwide hotels outside North America, REVPAR could decline 2 to 3 percent on a constant dollar basis.

Given these REVPAR assumptions, total fee revenue could be $235 million to $245 million. Owned, leased, corporate housing and other revenue, net of direct expenses, could total approximately $5 million.

In the 2010 first quarter, the company assumes Timeshare contract sales total $165 million to $175 million and Timeshare sales and services revenue, net of direct expenses, total approximately $35 million to $45 million including the impact of ASU Nos. 2009-16 and 2009-17. With these assumptions, Timeshare segment results for the first quarter could total $30 million to $40 million.

The company anticipates that general, administrative and other expenses could total about $130 million to $140 million in the first quarter 2010, roughly flat from the adjusted 2009 first quarter amount. The company also assumes net interest expense of approximately $40 million in the quarter, reflecting the impact of ASU Nos. 2009-16 and 2009-17, as well as continued debt reduction.

Based upon the above assumptions and a 36.5 percent tax rate, diluted EPS from continuing operations attributable to Marriott shareholders for the 2010 first quarter could total $0.15 to $0.21.

FULL YEAR 2010

For full year 2010, the company expects hotel occupancies to improve, although the pace of such improvement is difficult to predict. The company continues to expect that both domestic and international comparable systemwide REVPAR comparisons to the prior year will turn positive sometime in 2010. For worldwide comparable systemwide hotels, the company assumes full year 2010 REVPAR will be down 2 percent to up 2 percent on a constant dollar basis with performance strengthening over the year. North American comparable systemwide REVPAR could be flat to down 3 percent in 2010, while REVPAR at comparable systemwide hotels outside North America could be flat to up 5 percent.

The company expects to open 25,000 to 30,000 rooms in 2010 as most hotels expected to open are already under construction or undergoing conversion from other brands. Given these assumptions, full year 2010 fee revenue could total $1,080 million to $1,120 million. The company expects that incentive management fees in 2010 would largely derive from international markets. Owned, leased, corporate housing and other, net of direct expense, could total $65 million to $70 million. The company continues to estimate that, on a full-year basis, one point of worldwide systemwide REVPAR impacts total fees by approximately $10 million to $15 million pretax and owned, leased, corporate housing and other revenue, net of direct expense, by roughly $4 million pretax.

For its timeshare business, the company assumes 2010 timeshare contract sales could be slightly higher than 2009 levels. Including the impact of the accounting changes under this scenario Timeshare sales and services revenue, net of direct expenses, could total $170 million to $180 million. Timeshare segment results for 2010 could total $145 million to $155 million and the segment's net cash flow could total $175 million to $200 million.

The company expects its 2010 general, administrative and other expenses to total $635 million to $645 million reflecting modest salary increases and assumes interest expense to total $165 million to $170 million for the full year.

While the company cannot forecast results with any certainty, based upon the above assumptions, EBITDA could total $910 million to $970 million and diluted EPS from continuing operations for 2010 could total $0.82 to $0.94. Assuming the investment spending levels below, adjusted total debt, net of cash, could decline $400 million to $500 million by year end 2010.

The company expects investment spending in 2010 will total approximately $500 million, including capital expenditures totaling $150 million to $200 million, of which maintenance capital spending could total $50 million. Investment spending will also include new mezzanine financing and mortgage loans, contract acquisition costs, and equity and other investments. The investment in net timeshare development is not included above as the company expects cost of goods sold in the timeshare business will exceed timeshare inventory spending in 2010.

Marriott International, Inc. (NYSE: MAR) will conduct its quarterly earnings review for the investment community and news media on Thursday, February 11, 2010 at 10 a.m. Eastern Time (ET). The conference call will be webcast simultaneously via Marriott's investor relations website at http://www.marriott.com/investor, click the "Recent and Upcoming Events" tab and click on the quarterly conference call link. A replay will be available at that same website until February 11, 2011.

The telephone dial-in number for the conference call is 719-325-2253. A telephone replay of the conference call will be available from 1 p.m. ET, Thursday, February 11, 2010 until 8 p.m. ET, Thursday, February 18, 2010. To access the replay, call 719-457-0820. The reservation number for the recording is 5171492.

Note: This press release and accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including REVPAR, profit margin and earnings trends, estimates and assumptions; statements concerning the number of lodging properties we expect to add in the future; our expected cost savings, investment spending and share repurchases; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including the continuation and pace of the economic recovery; supply and demand changes for hotel rooms, vacation ownership, condominiums, and corporate housing; competitive conditions in the lodging industry; relationships with clients and property owners; the availability of capital to finance hotel growth and refurbishment; and other risk factors identified in our most recent annual or quarterly report on Form 10-K or Form 10-Q; any of which could cause actual results to differ materially from those expressed in or implied by the statements herein. These statements are made as of the date of this press release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

MARRIOTT INTERNATIONAL, INC. (NYSE: MAR) is a leading lodging company with more than 3,400 lodging properties in 68 countries and territories. Marriott International operates and franchises hotels under the Marriott, JW Marriott, The Ritz-Carlton, Renaissance, Residence Inn, Courtyard, TownePlace Suites, Fairfield Inn, SpringHill Suites and Bulgari brand names; develops and operates vacation ownership resorts under the Marriott Vacation Club, The Ritz-Carlton Destination Club, The Ritz-Carlton Residences and Grand Residences by Marriott brands; operates Marriott Executive Apartments; provides furnished corporate housing through its Marriott ExecuStay division; and operates conference centers. The company is headquartered in Bethesda, Maryland, USA and had approximately 137,000 employees at 2009 year-end. It is recognized by FORTUNE® as one of the best companies to work for, and by the U.S. Environmental Protection Agency (EPA) as Partner of the Year since 2004. In fiscal year 2009, Marriott International reported sales from continuing operations of nearly $11 billion. For more information or reservations, please visit our web site at www.marriott.com. For an interactive online version of Marriott's 2008 Annual Report, which includes a short video message from Chairman and CEO J.W. Marriott, Jr., visit www.marriott.com/investor.

IRPR#1

Tables follow

                          MARRIOTT INTERNATIONAL, INC.                     
                       CONSOLIDATED STATEMENTS OF INCOME                   
                    (in millions, except per share amounts)                
                                                                           
                                                 Adjustments 
                                                 -----------             
                                        As                          As
                                     Reported                   Adjusted  
                                     16 Weeks    Restructuring  16 Weeks  
                                       Ended        Costs         Ended   
                                     January 1,    & Other      January 1, 
                                        2010      Charges(6)      2010**   
                                     ---------  --------------  -----------
                                                                           
                                                                           
    REVENUES                                                               
    Base management fees                  $163              $-        $163 
    Franchise fees                         119               -         119 
    Incentive management fees               59               -          59 
    Owned, leased, corporate                                               
     housing and other revenue(1)          335               -         335 
    Timeshare sales and services(2)        377              (2)        375 
    Cost reimbursements(3)               2,327               -       2,327 
                                         -----               -       ----- 
       Total Revenues                    3,380              (2)      3,378 
                                                                           
    OPERATING COSTS AND EXPENSES                                           
    Owned, leased and corporate                                            
     housing - direct(4)                   313               -         313 
    Timeshare - direct                     303               -         303 
    Timeshare strategy - impairment                                        
     charges(5)                              -               -           - 
    Reimbursed costs                     2,327               -       2,327 
    Restructuring costs                      7              (7)          - 
    General, administrative and                                            
     other(7)                              215              (8)        207 
                                           ---              --         --- 
       Total Expenses                    3,165             (15)      3,150 
                                         -----             ---       ----- 
                                                                           
    OPERATING INCOME                       215              13         228 
                                                                           
    Gains and other income(8)                4               -           4 
    Interest expense                       (34)              -         (34)
    Interest income                          5               -           5 
    Equity in (losses) earnings(9)         (16)              6         (10)
    Timeshare strategy - impairment                                        
     charges (non-operating)(10)             -               -           - 
                                           ---             ---         --- 
                                                                           
    INCOME FROM CONTINUING                                                 
     OPERATIONS BEFORE INCOME TAXES        174              19         193 
                                                                           
    Provision for income taxes             (68)             (7)        (75)
                                           ---              --         --- 
                                                                           
    INCOME / (LOSS) FROM CONTINUING                                        
     OPERATIONS                            106              12         118 
                                                                           
    Discontinued operations -                                              
     Synthetic Fuel, net of tax(11)          -               -           - 
                                           ---             ---         --- 
                                                                           
    NET INCOME / (LOSS)                    106              12         118 
                                                                           
    Add: Net losses attributable to                                        
     noncontrolling interests, net                                         
     of tax                                  -               -           - 
                                           ---             ---         --- 
                                                                           
    NET INCOME / (LOSS)                                                    
     ATTRIBUTABLE TO MARRIOTT             $106             $12        $118 
                                          ====             ===        ==== 
                                                                           
    EARNINGS / (LOSSES) PER SHARE - 
     Basic (13)                               
                                                                           
       Earnings / (losses) from                                            
        continuing operations                                              
        attributable to Marriott                                           
        shareholders(12)                 $0.30           $0.03       $0.33 
       Earnings from discontinued                                          
        operations(11)                       -               -           - 
                                           ---             ---         --- 
       Earnings / (losses) per share                                        
        attributable to Marriott                                           
        shareholders(12)                 $0.30           $0.03       $0.33 
                                         =====           =====       ===== 
                                                                           
    EARNINGS / (LOSSES) PER SHARE - 
     Diluted(13)                             
                                                                           
       Earnings / (losses) from                                            
        continuing operations                                              
        attributable to Marriott                                           
        shareholders(12)                 $0.28           $0.03       $0.32 
       Earnings from discontinued                                          
        operations(11)                       -               -           - 
                                           ---             ---         --- 
       Earnings / (losses) per share                                        
        attributable to Marriott                                           
        shareholders(12)                 $0.28           $0.03       $0.32 
                                         =====           =====       ===== 
                                                                           
                                                                           
    Basic Shares(13)                     357.6           357.6       357.6 
    Diluted Shares(13),(14)              372.2           372.2       372.2 
                                                                           
                                                                           
                                                                           
                                                 Adjustments  
                                                 -----------            
                                        As                           
                                      Reported                              
                                      17 Weeks  Restructuring              
                                       Ended       Costs          Certain  
                                     January 2,    & Other          Tax     
                                        2009      Charges(6)       Items   
                                      --------  --------------    -------  
                                                                           
                                                                           
    REVENUES                                                               
    Base management fees                  $183              $-          $- 
    Franchise fees                         137               -           - 
    Incentive management fees               82               -           - 
    Owned, leased, corporate                                               
     housing and other revenue(1)          376               -           - 
    Timeshare sales and services(2)        325              61           - 
    Cost reimbursements(3)               2,681               -           - 
                                         -----             ---         --- 
       Total Revenues                    3,784              61           - 
                                                                           
    OPERATING COSTS AND EXPENSES                                           
    Owned, leased and corporate                                            
     housing - direct(4)                   331               -           - 
    Timeshare - direct                     373               3           - 
    Timeshare strategy - impairment                                        
     charges(5)                              -               -           - 
    Reimbursed costs                     2,681               -           - 
    Restructuring costs                     55             (55)          - 
    General, administrative and                                            
     other(7)                              292             (54)          - 
                                           ---             ---         --- 
       Total Expenses                    3,732            (106)          - 
                                         -----            ----         --- 
                                                                           
    OPERATING INCOME                        52             167           - 
                                                                           
    Gains and other income(8)               19               9           - 
    Interest expense                       (50)              -           - 
    Interest income                         11               -           - 
    Equity in (losses) earnings(9)         (11)             16           - 
    Timeshare strategy - impairment                                        
     charges (non-operating)(10)             -               -           - 
                                           ---             ---         --- 
                                                                           
    INCOME FROM CONTINUING                                                 
     OPERATIONS BEFORE INCOME TAXES         21             192           - 
                                                                           
    Provision for income taxes             (33)            (68)          7 
                                           ---             ---           - 
                                                                           
    INCOME / (LOSS) FROM CONTINUING                                        
     OPERATIONS                            (12)            124           7 
                                                                           
    Discontinued operations -                                              
     Synthetic Fuel, net of tax(11)          -               -           - 
                                           ---             ---         --- 
                                                                           
    NET INCOME / (LOSS)                    (12)            124           7 
                                                                           
    Add: Net losses attributable to                                        
     noncontrolling interests, net                                         
     of tax                                  2               -           - 
                                           ---             ---         --- 
                                                                           
    NET INCOME / (LOSS)                                                    
     ATTRIBUTABLE TO MARRIOTT             $(10)           $124          $7 
                                          ====            ====          == 
                                                                           
    EARNINGS / (LOSSES) PER SHARE - 
     Basic(13)                               
                                                                           
       Earnings / (losses) from                                            
        continuing operations                                              
        attributable to Marriott                                           
        shareholders(12)                $(0.03)          $0.35       $0.02 
       Earnings from discontinued                                          
        operations(11)                       -               -           - 
                                           ---             ---         --- 
       Earnings / (losses) per share                                        
        attributable to Marriott                                           
        shareholders(12)                $(0.03)          $0.35       $0.02 
                                        ======           =====       ===== 
                                                                           
    EARNINGS / (LOSSES) PER SHARE - 
     Diluted(13)                             
                                                                           
       Earnings / (losses) from                                            
        continuing operations                                              
        attributable to Marriott                                           
        shareholders(12)                $(0.03)          $0.35       $0.02 
       Earnings from discontinued                                          
        operations(11)                       -               -           - 
                                           ---             ---         --- 
       Earnings / (losses) per share                                        
        attributable to Marriott                                           
        shareholders(12)                $(0.03)          $0.35       $0.02 
                                        ======           =====       ===== 
                                                                           
                                                                           
    Basic Shares(13)                     353.0           353.0       353.0 
    Diluted Shares (13),(14)             353.0           353.0       353.0 
                                                                           
                                                                           
                                                                           
                                                                           
                                                         Percent  
                                                          Better/  
                                            As           (Worse)   
                                         Adjusted        Adjusted  
                                         17 Weeks         2009    
                                          Ended            vs.    
                                        January 2,       Adjusted  
                                          2009**           2008    
                                        -----------      --------- 
                                                                           
                                                                           
    REVENUES                                                               
    Base management fees                  $183             (11)
    Franchise fees                         137             (13)
    Incentive management fees               82             (28)
    Owned, leased, corporate                                               
     housing and other revenue(1)          376             (11)
    Timeshare sales and services(2)        386              (3)
    Cost reimbursements(3)               2,681             (13)
                                         -----                             
       Total Revenues                    3,845             (12)
                                                                           
    OPERATING COSTS AND EXPENSES                                           
    Owned, leased and corporate                                            
     housing - direct(4)                   331               5 
    Timeshare - direct                     376              19 
    Timeshare strategy - impairment                                        
     charges(5)                              -               - 
    Reimbursed costs                     2,681              13 
    Restructuring costs                      -               - 
    General, administrative and                                            
     other(7)                              238              13 
                                           ---                             
       Total Expenses                    3,626              13 
                                         -----                             
                                                                           
    OPERATING INCOME                       219               4 
                                                                           
    Gains and other income(8)               28             (86)
    Interest expense                       (50)             32 
    Interest income                         11             (55)
    Equity in (losses) earnings(9)           5            (300)
    Timeshare strategy - impairment                                        
     charges (non-operating)(10)             -               - 
                                           ---                             
                                                                           
    INCOME FROM CONTINUING                                                 
     OPERATIONS BEFORE INCOME TAXES        213              (9)
                                                                           
    Provision for income taxes             (94)             20 
                                           ---                             
                                                                           
    INCOME / (LOSS) FROM CONTINUING                                        
     OPERATIONS                            119              (1)
                                                                           
    Discontinued operations -                                              
     Synthetic Fuel, net of tax(11)          -               - 
                                           ---                             
                                                                           
    NET INCOME / (LOSS)                    119              (1)
                                                                           
    Add: Net losses attributable to                                        
     noncontrolling interests, net                                         
     of tax                                  2            (100)
                                           ---                             
                                                                           
    NET INCOME / (LOSS)                                                    
     ATTRIBUTABLE TO MARRIOTT             $121              (2)
                                          ====                             
                                                                           
    EARNINGS / (LOSSES) PER SHARE - 
     Basic(13)                               
                                                                           
       Earnings / (losses) from                                            
        continuing operations                                              
        attributable to Marriott                                           
        shareholders(12)                 $0.34              (3)
       Earnings from discontinued                                          
        operations(11)                       -               - 
                                           ---                             
       Earnings / (losses) per share                                        
        attributable to Marriott                                           
        shareholders(12)                 $0.34              (3)
                                         =====                             
                                                                           
    EARNINGS / (LOSSES) PER SHARE - 
     Diluted(13)                             
                                                                           
       Earnings / (losses) from                                            
        continuing operations                                              
        attributable to Marriott                                           
        shareholders(12)                 $0.33              (3)
       Earnings from discontinued                                          
        operations(11)                       -               - 
                                           ---                             
       Earnings / (losses) per share                                        
        attributable to Marriott                                           
        shareholders(12)                 $0.33              (3)
                                         =====                             
                                                                           
                                                                           
    Basic Shares(13)                     353.0                             
    Diluted Shares(13),(14)              363.1                             
                                                                           
    ** Denotes non-GAAP financial measures.  Please see pages A-27 and 
       A-28 for additional information about our reasons for providing 
       these alternative financial measures and the limitations on their
       use. 

       See page A-3 for footnote references.                          


                                                A-1

                            MARRIOTT INTERNATIONAL, INC.                
                          CONSOLIDATED STATEMENTS OF INCOME                 
                       (in millions, except per share amounts)              
                                                                            
                                        Adjustments 
                               ----------------------------------  
                      As                                              As
                    Reported                                       Adjusted
                      52        Restruc-    Timeshare                 52
                     Weeks       turing     Strategy -               Weeks   
                     Ended       Costs      Impairment    Certain    Ended   
                   January 1,    & Other      Charges       Tax    January 1,
                      2010      Charges(6)    (5),(10)     Items      2010** 
                  -----------   ----------  -----------   -------    --------
                                                                           
                                                                           
    REVENUES                                                               
    Base management                                                        
     fees                $530           $-           $-         $-       $530
    Franchise fees        400            -            -          -        400
    Incentive                                                              
     management fees      154            -            -          -        154
    Owned, leased,                                                           
     corporate                                                               
     housing and                                                             
     other revenue(1)   1,019            -            -          -      1,019
    Timeshare sales                                                          
     and services(2)    1,123           24            -          -      1,147 
    Cost                                                                      
     reimbursements(3)  7,682            -            -          -      7,682 
                        -----          ---          ---        ---      ----- 
       Total                                                                  
        Revenues       10,908           24            -          -     10,932 
                                                                              
    OPERATING COSTS 
     AND EXPENSES                                                
    Owned, leased                                                             
     and corporate                                                            
     housing -                                                                
     direct(4)            951            -            -          -        951 
    Timeshare -                                                               
     direct             1,040            1            -          -      1,041 
    Timeshare                                                                 
     strategy -                                                               
     impairment                                                               
     charges(5)           614            -         (614)         -          - 
    Reimbursed costs    7,682            -            -          -      7,682 
    Restructuring                                                             
     costs                 51          (51)           -          -          - 
    General,                                                                  
     administrative                                                           
     and other(7)         722         (100)           -          -        622 
                          ---         ----          ---        ---        --- 
       Total                                                                  
        Expenses       11,060         (150)        (614)         -     10,296 
                       ------         ----         ----        ---     ------ 
                                                                              
    OPERATING                                                                 
     (LOSS) /                                                                 
     INCOME              (152)         174          614          -        636 
                                                                              
    Gains and other                                                           
     income(8)             31            -            -          -         31 
    Interest expense     (118)           -            -          -       (118)
    Interest income        25            -            -          -         25 
    Equity in                                                                 
     (losses)                                                                 
     earnings(9)          (66)          39            -          -        (27)
    Timeshare                                                                 
     strategy -                                                               
     impairment                                                               
     charges (non-                                                            
     operating)(10)      (138)           -          138          -          - 
                         ----          ---          ---        ---        --- 
                                                                              
    (LOSS) / INCOME                                                           
     FROM CONTINUING                                                          
     OPERATIONS                                                               
     BEFORE INCOME                                                            
     TAXES               (418)         213          752          -        547 
                                                                              
    Benefit /                                                                 
     (Provision) for                                                          
     income taxes          65          (83)        (250)        56       (212)
                           --          ---         ----         --       ---- 
                                                                              
    (LOSS) / INCOME                                                           
     FROM CONTINUING                                                          
     OPERATIONS          (353)         130          502         56        335 
                                                                              
    Discontinued                                                              
     operations -                                                             
     Synthetic Fuel,                                                          
     net of tax(11)         -            -            -          -          - 
                          ---          ---          ---        ---        --- 
                                                                              
    NET (LOSS) /                                                              
     INCOME              (353)         130          502         56        335 
                                                                              
    Add: Net losses                                                           
     attributable to                                                          
     noncontrolling                                                           
     interests, net                                                           
     of tax                 7            -            -          -          7 
                          ---          ---          ---        ---        --- 
                                                                              
    NET (LOSS) /                                                              
     INCOME                                                                   
     ATTRIBUTABLE TO                                                          
     MARRIOTT           $(346)        $130         $502        $56       $342 
                        =====         ====         ====        ===       ==== 
                                                                              
    (LOSSES) / EARNINGS 
     PER SHARE - 
     Basic(13)                                    
                                                                              
       (Losses) /                                                             
        earnings from                                                         
        continuing                                                            
        operations                                                            
        attributable 
        to Marriott                                                           
        shareholders
        (12)           $(0.97)       $0.37        $1.41      $0.16      $0.96 
       Earnings from                                                          
        discontinued                                                          
        operations(11)      -            -            -          -          - 
                          ---          ---          ---        ---        --- 
       (Losses) /                                                             
        earnings per                                                          
        share                                                                 
        attributable 
        to Marriott                                                           
        shareholders
        (12)           $(0.97)       $0.37        $1.41      $0.16      $0.96 
                       ======        =====        =====      =====      ===== 
                                                                              
    (LOSSES) / EARNINGS 
     PER SHARE - 
     Diluted(13)                                  
                                                                              
       (Losses) /                                                             
        earnings from                                                         
        continuing                                                            
        operations                                                           
        attributable to                                                      
        Marriott                                                             
        shareholders
        (12)           $(0.97)       $0.37        $1.41      $0.16      $0.93 
       Earnings from                                                          
        discontinued                                                          
        operations(11)      -            -            -          -          - 
                          ---          ---          ---        ---        --- 
       (Losses) /                                                             
        earnings per                                                          
        share                                                                 
        attributable to                                                       
        Marriott                                                              
        shareholders
        (12)           $(0.97)       $0.37        $1.41      $0.16      $0.93
                       ======        =====        =====      =====      =====
                                                                              
                                                                              
    Basic Shares(13)    356.4        356.4        356.4      356.4      356.4 
    Diluted Shares                                                            
     (13),(14)          356.4        356.4        356.4      356.4      367.4 
                                                                              
                                                                              
                                                                              
                                        Adjustments                           
                                  --------------------                           
                                                              As       Percent
                         As                                 Adjusted   Better/
                      Reported                                53       (Worse)
                         53        Restruc-                  Weeks    Adjusted
                        Weeks      turing                    Ended      2009  
                        Ended       Costs       Certain     January      vs.  
                     January 2,     & Other        Tax          2,    Adjusted
                        2009      Charges(6)     Items       2009**     2008  
                   -----------   ----------    -------     --------  ---------
                                                                              
                                                                              
    REVENUES                                                                  
    Base management                                                           
     fees                $635           $-           $-       $635        (17)
    Franchise fees        451            -            -        451        (11)
    Incentive                                                                 
     management fees      311            -            -        311        (50)
    Owned, leased,                                                            
     corporate                                                                
     housing and                                                              
     other revenue(1)   1,225            -            -      1,225        (17)
    Timeshare sales                                                           
     and services(2)    1,423           61            -      1,484        (23)
    Cost                                                                      
     reimbursements(3)  8,834            -            -      8,834        (13)
                        -----          ---          ---      -----            
       Total                                                                  
        Revenues       12,879           61            -     12,940        (16)
                                                                              
    OPERATING COSTS 
     AND EXPENSES                                                
    Owned, leased                                                             
     and corporate                                                            
     housing -                                                                
     direct(4)          1,088            -            -      1,088         13 
    Timeshare -                                                               
     direct             1,334            3            -      1,337         22 
    Timeshare                                                                 
     strategy -                                                               
     impairment                                                               
     charges(5)             -            -            -          -          - 
    Reimbursed costs    8,834            -            -      8,834         13 
    Restructuring                                                             
     costs                 55          (55)           -          -          - 
    General,                                                                  
     administrative                                                           
     and other(7)         803          (54)           -        749         17 
                          ---          ---            -        ---            
       Total                                                                  
        Expenses       12,114         (106)           -     12,008         14 
                       ------         ----          ---     ------            
                                                                              
    OPERATING                                                                 
     (LOSS) /                                                                 
     INCOME               765          167            -        932        (32)
                                                                              
    Gains and other                                                           
     income(8)             38            9            -         47        (34)
    Interest expense     (163)           -            -       (163)        28 
    Interest income        39            -            -         39        (36)
    Equity in                                                                 
     (losses)                                                                 
     earnings(9)           15           16            -         31       (187)
    Timeshare                                                                 
     strategy -                                                               
     impairment                                                               
     charges (non-                                                            
     operating)(10)         -            -            -          -          - 
                          ---          ---          ---        ---            
                                                                              
    (LOSS) / INCOME                                                           
     FROM CONTINUING                                                          
     OPERATIONS                                                               
     BEFORE INCOME                                                            
     TAXES                694          192            -        886        (38)
                                                                              
    Benefit /                                                                 
     (Provision) for                                                          
     income taxes        (350)         (68)          72       (346)        39 
                         ----          ---           --       ----            
                                                                              
    (LOSS) / INCOME                                                           
     FROM CONTINUING                                                          
     OPERATIONS           344          124           72        540        (38)
                                                                              
    Discontinued                                                              
     operations -                                                             
     Synthetic Fuel,                                                          
     net of tax(11)         3            -            -          3       (100)
                           ---         ---          ---        ---            
                                                                              
    NET (LOSS) /                                                              
     INCOME               347          124           72        543        (38)
                                                                              
    Add: Net losses                                                           
     attributable to                                                          
     noncontrolling                                                           
     interests, net                                                           
     of tax                15            -            -         15        (53)
                          ---          ---          ---        ---            
                                                                              
    NET (LOSS) /                                                              
     INCOME                                                                   
     ATTRIBUTABLE TO                                                          
     MARRIOTT            $362         $124          $72       $558        (39)
                         ====         ====          ===       ====            
                                                                              
    (LOSSES) / EARNINGS 
     PER SHARE - 
     Basic (13)                                    
                                                                              
       (Losses) /                                                             
        earnings from                                                         
        continuing                                                            
        operations                                                           
        attributable to                                                       
        Marriott                                                              
        shareholders                                                          
        (12)            $1.01        $0.35        $0.20      $1.56        (38)
       Earnings from                                                          
        discontinued                                                          
        operations                                                            
        (11)             0.01            -            -       0.01       (100)
                         ----          ---          ---       ----            
       (Losses) /                                                             
        earnings per                                                          
        share                                                                 
        attributable to                                                       
        Marriott                                                              
        shareholders                                                          
        (12)            $1.02        $0.35        $0.20      $1.57        (39)
                        =====        =====        =====      =====            
                                                                              
    (LOSSES) / EARNINGS 
     PER SHARE - 
     Diluted(13)                                  
                                                                              
       (Losses) /                                                             
        earnings from                                                         
        continuing                                                            
        operations                                                            
        attributable to                                                       
        Marriott                                                              
        shareholders                                                          
        (12)            $0.97        $0.33        $0.19      $1.49        (38)
       Earnings from                                                          
        discontinued                                                          
        operations                                                            
        (11)             0.01            -            -       0.01       (100)
                         ----          ---          ---       ----            
       (Losses) /                                                             
        earnings per                                                          
        share                                                                 
        attributable to                                                       
        Marriott                                                              
        shareholders                                                          
        (12)            $0.98        $0.33        $0.19      $1.50        (38)
                        =====        =====        =====      =====            
                                                                              
                                                                              
    Basic Shares(13)    355.6        355.6        355.6      355.6            
    Diluted Shares                                                            
     (13),(14)          370.7        370.7        370.7      370.7            
                                                                              
    ** Denotes non-GAAP financial measures.  Please see pages A-27 and A-28 
       for additional information about our reasons for providing these 
       alternative financial measures and the limitations on their use. 
       
       See page A-3 for footnote references. 


                                                A-2

                           MARRIOTT INTERNATIONAL, INC.                       
                         CONSOLIDATED STATEMENTS OF INCOME                    
                      (in millions, except per share amounts)                 
                                                                              
    Reconciliations of Consolidated Income / (Loss) from Continuing           
     Operations to Income / (Loss) from Continuing Operations Attributable to 
     Marriott                                                                 
                                                                              
                                  Adjustments                                 
                                  -----------                                 
                         As                          As               
                       Reported                   Adjusted            
                         16         Restruc-        16               
                        Weeks       turing         Weeks             
                        Ended        Costs         Ended             
                     January 1,     & Other      January 1,           
                         2010      Charges(6)      2010**             
                     -----------   ----------   -----------          
                                                                              
    CONSOLIDATED                                                              
     INCOME / (LOSS)                                                          
     FROM CONTINUING                                                          
     OPERATIONS             $106          $12       $118                      
    Add: Losses                                                               
     attributable to                                                          
     noncontrolling                                                           
     interests, net                                                           
     of tax                    -            -          -                      
                             ---          ---        ---                      
    INCOME / (LOSS)                                                           
     FROM CONTINUING                                                          
     OPERATIONS                                                               
     ATTRIBUTABLE TO                                                          
     MARRIOTT               $106          $12       $118                      
                            ====          ===       ====                      
                                                                              
                                                                              
                                        Adjustments                           
                                    -------------------                           
                                                             As      Percent  
                         As                               Adjusted   Better/  
                       Reported                              17      (Worse)  
                         17         Restruc-                Weeks   Adjusted  
                        Weeks       turing                  Ended      2009   
                        Ended        Costs      Certain    January     vs.    
                     January 2,     & Other      Tax         2,     Adjusted  
                         2009      Charges(6)    Items     2009**      2008   
                     -----------   ----------   -------   --------  --------- 
                                                                              
    CONSOLIDATED                                                              
     INCOME / (LOSS)                                                          
     FROM CONTINUING                                                          
     OPERATIONS             $(12)        $124         $7       $119        (1)
    Add: Losses                                                               
     attributable to                                                          
     noncontrolling                                                           
     interests, net                                                           
     of tax                    2            -          -          2      (100)
                             ---          ---        ---        ---           
    INCOME / (LOSS)                                                           
     FROM CONTINUING                                                          
     OPERATIONS                                                               
     ATTRIBUTABLE TO                                                          
     MARRIOTT               $(10)        $124         $7       $121        (2)
                            ====         ====         ==       ====           



                                                                              
                                             Adjustments                      
                                   ------------------------------                      
                        As                                              As    
                      Reported                                       Adjusted 
                        52         Restruc-   Timeshare                 52    
                       Weeks       turing    Strategy -               Weeks   
                       Ended        Costs    Impairment    Certain     Ended  
                    January 1,     & Other     Charges      Tax     January 1,
                        2010      Charges(6)   (5),(10)     Items     2010**  
                   -----------   ---------- -----------   -------  -----------
                                                                              
    CONSOLIDATED                                                              
     (LOSS) /                                                                 
     INCOME FROM                                                              
     CONTINUING                                                               
     OPERATIONS           $(353)        $130        $502        $56      $335
    Add: Losses                                                               
     attributable                                                             
     to                                                                       
     noncontrolling                                                           
      interests, net                                                          
     of tax                   7            -           -          -         7
                            ---          ---         ---        ---        ---
    (LOSS) /                                                                  
     INCOME FROM                                                              
     CONTINUING                                                               
     OPERATIONS                                                               
     ATTRIBUTABLE                                                             
     TO MARRIOTT          $(346)        $130        $502        $56       $342
                          =====         ====        ====        ===       ====
                                                                              
                                                                              
                                                                              
                                       Adjustments                            
                                   --------------------                            
                                                             As       Percent 
                        As                                Adjusted    Better/ 
                      Reported                               53      (Worse)  
                        53         Restruc-                 Weeks    Adjusted 
                       Weeks       turing                   Ended      2009   
                       Ended        Costs                  January      vs.   
                    January 2,     & Other     Certain       2,      Adjusted 
                        2009      Charges(6)  Tax Items    2009**      2008   
                   -----------   ----------   ---------   --------   ---------
                                                                             
    CONSOLIDATED                                                             
     (LOSS) /                                                                
     INCOME FROM                                                             
     CONTINUING                                                              
     OPERATIONS           $344         $124         $72       $540        (38)
    Add: Losses                                                               
     attributable                                                             
     to                                                                       
     noncontrolling                                                           
      interests, net                                                          
     of tax                 15            -           -         15        (53)
                           ---          ---         ---        ---            
    (LOSS) /                                                                  
     INCOME FROM                                                              
     CONTINUING                                                               
     OPERATIONS                                                               
     ATTRIBUTABLE                                                             
     TO MARRIOTT          $359         $124         $72       $555        (38)
                          ====         ====         ===       ====            
                                                                              
                                                                              
                                                                              
                                                                              
    ** Denotes non-GAAP financial measures.  Please see pages A-27 and A-28 
       for additional information about our reasons for providing these 
       alternative financial measures and the limitations on their use. 


    (1) -  Owned, leased, corporate housing and other revenue includes 
           revenue from the properties we own or lease, revenue from our
           corporate housing business, termination fees and other revenue.
    (2) -  Timeshare sales and services includes total timeshare revenue 
           except for base management fees, incentive management fees, cost
           reimbursements, real estate gains and joint venture earnings.  
           Timeshare sales and services also includes gains / (losses) on the
           sale of timeshare note receivable securitizations. 
    (3) -  Cost reimbursements include reimbursements from lodging properties
           for Marriott-funded operating expenses. 
    (4) -  Owned, leased and corporate housing - direct expenses include
           operating expenses related to our owned or leased hotels, including
           lease payments, pre-opening expenses and depreciation, plus
           expenses related to our corporate housing business. 
    (5) -  Reflects the following 2009 third quarter impairments: inventory
           $529 million, property and equipment $64 million; and other 
           impairments $21 million, all of which are allocated to the 
           Timeshare segment. See page A-16 for information regarding 
           Timeshare Strategy - Impairment Charges. 
    (6) -  Refer to page A-15 for information regarding Restructuring and 
           Other Charges. 
    (7) -  General, administrative and other expenses include the overhead 
           costs allocated to our segments, and our corporate overhead costs
           and general expenses. 
    (8) -  Gains and other income includes gains and losses on: the sale of
           real estate, note sales or repayments (except timeshare note 
           securitizations), the sale of joint ventures and investments; and
           debt extinguishments, as well as income from cost method joint 
           ventures. 
    (9) -  Equity in (losses) earnings includes our equity in (losses) /
           earnings of unconsolidated equity method joint ventures. 
    (10) - Reflects the 2009 third quarter $71 million joint venture 
           impairment charge which is allocated to the Timeshare segment and
           $67 million loan impairment and funding liability charge which is
           unallocated. See page A-16 for information regarding Timeshare 
           Strategy - Impairment Charges. 
    (11) - Discontinued operations relates to our Synthetic Fuel business
           which was shut down and substantially all the assets liquidated
           at December 28, 2007. 
    (12) - Earnings / (Losses) per share attributable to Marriott 
           shareholders plus adjustment items may not equal earnings per 
           share attributable to Marriott shareholders as adjusted due to 
           rounding. 
    (13) - All share numbers and per share amounts have been retroactively 
           adjusted to reflect the stock dividends with distribution dates 
           of July 30, 2009, September 3, 2009 and December 3, 2009. 
    (14) - Basic and fully diluted weighted average common shares outstanding
           used to calculate earnings per share from continuing operations for
           the periods in which we had a loss are the same because inclusion
           of additional equivalents would be anti-dilutive. 


                                                A-3

                        MARRIOTT INTERNATIONAL, INC.
                             BUSINESS SEGMENTS
                              ($ in millions)


                                               Quarter Ended(3)   
                                             --------------------     Percent
                                             January 1, January 2,    Better/
                                                  2010       2009    (Worse) 
                                               --------  --------    ------- 
                                                                            
    REVENUES                                                                
                                                                            
    North American Full-Service                 $1,466    $1,714        (14)
    North American Limited-Service                 585       663        (12)
    International                                  389       451        (14)
    Luxury                                         442       512        (14)
    Timeshare                                      477       424         13 
                                                   ---       ---            
      Total segment revenues(1)                  3,359     3,764        (11)
    Other unallocated corporate                     21        20          5 
                                                    --        --            
      Total                                     $3,380    $3,784        (11)
                                                ======    ======            
                                                                            
                                                                            
    INCOME / (LOSS) FROM CONTINUING 
     OPERATIONS ATTRIBUTABLE TO MARRIOTT                                   
                                                                            
    North American Full-Service                    $81      $129        (37)
    North American Limited-Service                  83        94        (12)
    International                                   40        67        (40)
    Luxury                                          17        12         42 
    Timeshare(2)                                    54       (95)       157 
                                                    --       ---            
      Total segment financial results(1)           275       207         33 
    Other unallocated corporate                    (72)     (143)        50 
    Interest income and interest expense           (29)      (39)        26 
    Income taxes(2)                                (68)      (35)       (94)
                                                   ---       ---            
      Total                                       $106      $(10)     1,160 
                                                  ====      ====            
                                                                            
                                                                            
                                                                            
    (1) We consider segment revenues and segment financial results to be 
        meaningful indicators of our performance because they measure changes
        in our profitability as a lodging company and enable investors to 
        compare the revenues and results of our lodging operations to those 
        of other lodging companies. 

    (2) We allocate noncontrolling interests of our consolidated subsidiaries
        to our segments.  For the 2008 fourth quarter, we allocated $2 
        million of noncontrolling interests as follows: $4 million to our 
        Timeshare segment and $(2) million to provision for income taxes. 

    (3) There were 16 weeks in the quarter ended January 1, 2010 and 17 weeks
        in the quarter ended January 2, 2009. 


                                                A-4

                             MARRIOTT INTERNATIONAL, INC.
                                  BUSINESS SEGMENTS
                                  ($ in millions)


                                              Year Ended(5)
                                           --------------------      Percent
                                           January 1, January 2,     Better/
                                                2010       2009     (Worse) 
                                             --------  --------     ------- 
                                                                           


    REVENUES                                                               
                                                                           
    North American Full-Service                $4,848    $5,631        (14)
    North American Limited-Service              1,986     2,233        (11)
    International                               1,145     1,544        (26)
    Luxury                                      1,413     1,659        (15)
    Timeshare                                   1,439     1,750        (18)
                                                -----     -----            
      Total segment revenues 1                 10,831    12,817        (15)
    Other unallocated corporate                    77        62         24 
                                                   --        --            
      Total                                   $10,908   $12,879        (15)
                                              =======   =======            
                                                                           
                                                                           
    INCOME / (LOSS) FROM CONTINUING 
     OPERATIONS ATTRIBUTABLE TO MARRIOTT                                   
                                                                           
    North American Full-Service                  $272      $419        (35)
    North American Limited-Service                265       395        (33)
    International 3                               129       246        (48)
    Luxury                                         17        78        (78)
    Timeshare 2,3                                (679)       28      (2525)
                                                 ----        --            
      Total segment financial results 1             4     1,166       (100)
    Other unallocated corporate 4                (318)     (324)         2 
    Interest income and interest expense          (93)     (124)        25 
    Income taxes 3                                 61      (359)       117 
                                                   --      ----            
      Total                                     $(346)     $359       (196)
                                                =====      ====            
                                                                           
                                                                           
                                                                           
    (1) We consider segment revenues and segment financial results to be 
        meaningful indicators of our performance because they measure 
        changes in our profitability as a lodging company and enable 
        investors to compare the revenues and results of our lodging 
        operations to those of other lodging companies. 

    (2) Reflects $685 million of impairment charges recorded in the 2009 
        third quarter. 

    (3) We allocate noncontrolling interests of our consolidated 
        subsidiaries to our segments.  Accordingly, we allocated $7 million 
        of noncontrolling interests of our consolidated subsidiaries in 
        2009 as reflected in our income statement as follows: $11 million 
        to our Timeshare segment and $(4) million to provision for income 
        taxes.  In 2008, we allocated $15 million of noncontrolling 
        interests as follows: $25 million to our Timeshare segment, $(1) 
        million to our International segment, and $(9) million to 
        provision for income taxes. 

    (4) Reflects a $67 million loan impairment and funding liability charge 
        in the 2009 third quarter which is unallocated. See page A-16 for 
        additional information. 

    (5) There were 52 weeks in the year ended January 1, 2010 and 53 weeks 
        in the year ended January 2, 2009. 


                                                A-5

                           MARRIOTT INTERNATIONAL, INC.                       
                             TOTAL LODGING PRODUCTS(1)
                                                                              
                                                                              
                                                                              
                           Number of Properties       Number of Rooms/Suites  
                           --------------------       ----------------------  
                                            vs.                         vs.   
                        January  January  January   January  January  January 
    Brand               1, 2010  2, 2009  2, 2009   1, 2010  2, 2009  2, 2009 
    -----              -------- -------- --------  -------- -------- -------- 
                                                                              
    Domestic Full-Service                                                     
    ---------------------                                                     
        Marriott Hotels &                                                     
         Resorts            353      348        5   140,160  138,613    1,547 
        Renaissance                                                           
         Hotels &                                                             
         Resorts             79       76        3    28,918   27,774    1,144 
    Domestic Limited-Service                                                  
    ------------------------                                                  
        Courtyard           768      728       40   107,640  101,743    5,897 
        Fairfield Inn       620      560       60    55,622   49,678    5,944 
        SpringHill                                                            
         Suites             255      207       48    29,846   24,027    5,819 
        Residence Inn       591      555       36    70,995   66,252    4,743 
        TownePlace                                                            
         Suites             184      163       21    18,451   16,328    2,123 
    International                                                             
    -------------                                                             
        Marriott Hotels &                                                     
         Resorts            192      183        9    58,595   54,617    3,978 
        Renaissance                                                           
         Hotels &                                                             
         Resorts             64       65       (1)   21,664   21,615       49 
        Courtyard            90       80       10    17,566   15,515    2,051 
        Fairfield Inn         9        9        -     1,109    1,109        - 
        SpringHill                                                            
         Suites               1        1        -       124      124        - 
        Residence Inn        17       18       (1)    2,417    2,665     (248)
        Marriott                                                              
         Executive                                                            
         Apartments          23       20        3     3,880    3,217      663 
    Luxury                                                                    
    ------                                                                    
        The Ritz-Carlton -                                                    
          Domestic           40       37        3    12,115   11,629      486 
        The Ritz-Carlton -                                                    
          International      34       33        1    10,171   10,204      (33)
        Bulgari Hotels &                                                      
         Resorts              2        2        -       117      117        - 
        The Ritz-Carlton                                                      
         Residential         26       23        3     2,706    2,269      437 
        The Ritz-Carlton                                                      
         Serviced                                                             
         Apartments           3        3        -       474      478       (4)
    Timeshare 2                                                               
    -----------                                                               
        Marriott Vacation                                                     
         Club 3              52       51        1    11,854   11,797       57 
        The Ritz-Carlton                                                      
         Destination                                                          
         Club                 9       10       (1)      461      456        5 
        The Ritz-Carlton                                                      
         Residences           4        3        1       237      148       89 
        Grand Residences                                                      
         by Marriott -                                                        
         Fractional           2        2        -       248      241        7 
        Grand Residences                                                      
         by Marriott -                                                        
         Residential          2        1        1        91       65       26 
                             --       --       --        --       --       -- 
    Sub Total                                                                 
     Timeshare               69       67        2    12,891   12,707      184 
                             --       --       --    ------   ------      --- 
                                                                              
    Total                 3,420    3,178      242   595,461  560,681   34,780 
                          =====    =====      ===   =======  =======   ====== 



      Number of Timeshare Interval, Fractional  
               and Residential Resorts          
      ----------------------------------------  
                                    
                                   Properties          
                          Total        in         
                       Properties    Active
                           (2)      Sales(4)   
                       ----------   --------   
    100% Company-Developed                      
    ----------------------                      
        Marriott                                
         Vacation Club                            
         3                   52       29
        The Ritz-                               
         Carlton                                
         Destination                            
         Club and                               
         Residences           9        8
        Grand                                   
         Residences by                            
         Marriott and                            
         Residences           4        4
                                                
    Joint Ventures                              
    --------------                              
        The Ritz-                               
         Carlton                                
         Destination                            
         Club and                               
         Residences           4         4
                             --        --
                                                
    Total                    69        45
                             ==        ==
                                                
                                                
    (1) Total Lodging Products excludes the 2,072 and 2,332 corporate housing 
        rental units as of January 1, 2010 and January 2, 2009, 
        respectively.                              
    (2) Includes products that are in active sales as well as those that 
        are sold out. Residential products are included once they
        possess a certificate of occupancy.  
    (3) Marriott Vacation Club includes Horizons by Marriott Vacation Club 
        products that were previously reported separately. 
    (4) Products in active sales may not be ready for occupancy.  


                                                A-6

                          MARRIOTT INTERNATIONAL, INC.
                             KEY LODGING STATISTICS
                                    Constant $


              Comparable Company-Operated International Properties(1)       
              -------------------------------------------------------       
                                                                            
                                  Four Months Ended December 31, 2009 and   
                                             December 31, 2008              
                                  ---------------------------------------   
                                                               Average Daily
                                  REVPAR        Occupancy           Rate    
                                  ------        ---------      -------------
                                         vs.              vs.            vs.  
    Region                       2009  2008  2009       2008     2009  2008 
    ------                       ----  ----  ----       ----     ----  ---- 
    Caribbean & Latin America $109.05 -16.4% 65.9% -3.1% pts. $165.45 -12.4%
    Continental Europe        $121.11 -11.1% 70.6%  0.6% pts. $171.44 -11.9%
    United Kingdom            $110.38  -5.7% 74.5%  0.0% pts. $148.16  -5.7%
    Middle East & Africa       $98.17 -13.9% 71.9% -2.4% pts. $136.59 -11.0%
    Asia Pacific(2)            $91.49  -8.1% 69.4%  4.4% pts. $131.86 -13.9%
                                                                            
    Regional Composite(3)     $107.59 -10.6% 70.4%  0.6% pts. $152.88 -11.4%
                                                                            
    International Luxury(4)   $173.30 -17.1% 57.2% -1.5% pts. $303.07 -14.9%
                                                                            
    Total International(5)    $114.21 -11.7% 69.0%  0.4% pts. $165.41 -12.2%
                                                                            
    Worldwide(6)               $97.26 -12.4% 64.8% -0.9% pts. $150.05 -11.2%
                                                                            
                                                                            
                 Comparable Systemwide International Properties(1)            
                 -------------------------------------------------            
                                                                            
                                  Four Months Ended December 31, 2009 and   
                                             December 31, 2008              
                                  ---------------------------------------   
                                                               Average Daily
                                  REVPAR        Occupancy           Rate    
                                  ------        ---------      -------------
                                        vs.              vs.            vs.  
    Region                       2009  2008  2009       2008     2009  2008 
    ------                       ----  ----  ----       ----     ----  ---- 
    Caribbean & Latin America  $94.13 -15.2% 63.9% -2.5% pts. $147.24 -11.9%
    Continental Europe        $119.20 -11.8% 69.5%  0.2% pts. $171.56 -12.1%
    United Kingdom            $108.89  -6.0% 74.1% -0.1% pts. $147.03  -5.9%
    Middle East & Africa       $98.17 -13.9% 71.9% -2.4% pts. $136.59 -11.0%
    Asia Pacific(2)            $98.49  -9.9% 69.1%  2.3% pts. $142.57 -13.0%
                                                                            
    Regional Composite(3)     $106.59 -11.2% 69.3%  0.1% pts. $153.77 -11.3%
                                                                            
    International Luxury(4)   $173.30 -17.1% 57.2% -1.5% pts. $303.07 -14.9%
                                                                            
    Total International(5)    $112.08 -12.0% 68.3%  0.0% pts. $164.06 -12.0%
                                                                            
    Worldwide(6)               $81.10 -12.5% 62.8% -1.7% pts. $129.11 -10.1%
                                                                            
                                                                            
    (1) We report international results on a period basis, and international
        statistics on a monthly basis.  Statistics are in constant dollars 
        for September through December.  International includes properties 
        located outside the Continental United States and Canada, except for
        Worldwide which also includes North America. 
    (2) Does not include Hawaii. 
    (3) Regional information includes the Marriott Hotels & Resorts, 
        Renaissance Hotels & Resorts and Courtyard brands. Includes Hawaii. 
    (4) International Luxury includes The Ritz-Carlton properties outside of 
        North America and Bulgari Hotels & Resorts. 
    (5) Includes Regional Composite and International Luxury. 
    (6) Includes international statistics for the four calendar months ended 
        December 31, 2009 and December 31, 2008, and North American 
        statistics for the sixteen weeks ended January 1, 2010 and the 
        seventeen weeks ended January 2, 2009.  Includes the Marriott Hotels 
        & Resorts, Renaissance Hotels & Resorts, The Ritz-Carlton, Bulgari 
        Hotels & Resorts, Residence Inn, Courtyard, Fairfield Inn, TownePlace
        Suites and SpringHill Suites brands. 


                                                A-7

                                   MARRIOTT INTERNATIONAL, INC.
                                     KEY LODGING STATISTICS
                                           Constant $


              Comparable Company-Operated International Properties(1)         
              -------------------------------------------------------         
                                                                            
                                 Twelve Months Ended December 31, 2009 and  
                                             December 31, 2008              
                                 -----------------------------------------  
                                                               Average Daily
                                  REVPAR        Occupancy           Rate    
                                  ------        ---------      -------------
                                        vs.              vs.            vs.  
    Region                       2009  2008  2009       2008     2009  2008 
    ------                       ----  ----  ----       ----     ----  ---- 
    Caribbean & Latin America $117.59 -19.8% 67.0% -7.6% pts. $175.43 -10.8%
    Continental Europe        $107.83 -16.0% 66.9% -3.3% pts. $161.17 -11.9%
    United Kingdom            $101.41 -11.1% 72.5% -3.0% pts. $139.81  -7.5%
    Middle East & Africa       $94.21 -18.9% 68.6% -9.1% pts. $137.31  -8.1%
    Asia Pacific(2)            $80.80 -21.1% 63.6% -4.5% pts. $127.12 -15.5%
                                                                            
    Regional Composite(3)     $100.44 -17.1% 67.3% -4.6% pts. $149.15 -11.4%
                                                                            
    International Luxury(4)   $179.99 -22.1% 56.8% -7.2% pts. $317.16 -12.2%
                                                                            
    Total International(5)    $108.45 -18.0% 66.3% -4.9% pts. $163.64 -11.9%
                                                                            
    Worldwide(6)               $96.86 -18.3% 65.2% -5.0% pts. $148.61 -12.1%
                                                                            
                                                                            
                 Comparable Systemwide International Properties(1)            
                 -------------------------------------------------            
                                                                            
                                 Twelve Months Ended December 31, 2009 and  
                                             December 31, 2008              
                                 -----------------------------------------  
                                                               Average Daily
                                  REVPAR        Occupancy           Rate    
                                  ------        ---------      -------------
                                        vs.              vs.            vs.  
    Region                       2009  2008  2009       2008     2009  2008 
    ------                       ----  ----  ----       ----     ----  ---- 
    Caribbean & Latin America $101.02 -19.6% 63.6% -6.9% pts. $158.85 -10.8%
    Continental Europe        $106.00 -16.9% 65.3% -4.0% pts. $162.33 -11.8%
    United Kingdom            $100.03 -11.3% 72.0% -3.0% pts. $139.01  -7.6%
    Middle East & Africa       $94.21 -18.9% 68.6% -9.1% pts. $137.31  -8.1%
    Asia Pacific(2)            $87.33 -19.3% 64.1% -5.1% pts. $136.15 -12.9%
                                                                            
    Regional Composite(3)      $99.11 -17.2% 66.1% -4.9% pts. $149.93 -11.0%
                                                                            
    International Luxury(4)   $179.99 -22.1% 56.8% -7.2% pts. $317.16 -12.2%
                                                                            
    Total International(5)    $105.78 -17.9% 65.3% -5.1% pts. $161.89 -11.5%
                                                                            
    Worldwide(6)               $82.83 -17.3% 64.2% -4.9% pts. $128.92 -10.9%
                                                                            
                                                                            
    (1) We report international results on a period basis, and international 
        statistics on a monthly basis.  Statistics are in constant dollars 
        for January through December.  International includes properties 
        located outside the Continental United States and Canada, except for 
        Worldwide which also includes North America. 
    (2) Does not include Hawaii. 
    (3) Regional information includes the Marriott Hotels & Resorts, 
        Renaissance Hotels & Resorts and Courtyard brands. Includes Hawaii. 
    (4) International Luxury includes The Ritz-Carlton properties outside of 
        North America and Bulgari Hotels & Resorts. 
    (5) Includes Regional Composite and International Luxury. 
    (6) Includes international statistics for the twelve calendar months ended
        December 31, 2009 and December 31, 2008, and North American 
        statistics for the fifty-two weeks ended January 1, 2010 and the 
        fifty-three weeks ended January 2, 2009.  Includes the Marriott Hotels
        & Resorts, Renaissance Hotels & Resorts, The Ritz-Carlton, Bulgari 
        Hotels & Resorts, Residence Inn, Courtyard, Fairfield Inn, TownePlace 
        Suites and SpringHill Suites brands. 


                                                A-8

                             MARRIOTT INTERNATIONAL, INC.
                               KEY LODGING STATISTICS
                     (Excludes 53rd Week of 2008 for North America)


            Comparable Company-Operated North American Properties(1)       
            --------------------------------------------------------
                                                                           
                                 Sixteen Weeks Ended January 1, 2010 and   
                                             January 2, 2009               
                                 ---------------------------------------   
                                                              Average Daily
                                 REVPAR        Occupancy           Rate    
                                 ------        ---------      -------------
                                       vs.              vs.            vs.  
    Brand                       2009  2008  2009       2008     2009  2008 
    -----                       ----  ----  ----       ----     ----  ---- 
    Marriott Hotels &                                                      
     Resorts                 $104.04 -11.1% 65.0% -0.2% pts. $160.11 -10.9%
    Renaissance Hotels &                                                   
     Resorts                  $96.24 -12.5% 63.4% -0.4% pts. $151.82 -11.9%
    Composite North                                                        
     American Full-
     Service(2)              $102.69 -11.3% 64.7% -0.2% pts. $158.70 -11.1%
    The Ritz-Carlton(3)      $169.42 -11.6% 60.8%  1.0% pts. $278.52 -13.0%
    Composite North                                                        
     American Full-Service 
     & Luxury(4)             $109.42 -11.4% 64.3% -0.1% pts. $170.12 -11.3%
    Residence Inn             $74.33 -12.9% 67.2% -1.7% pts. $110.55 -10.6%
    Courtyard                 $63.88 -15.9% 59.4% -1.9% pts. $107.57 -13.2%
    TownePlace Suites         $41.61 -26.5% 57.1% -8.6% pts.  $72.83 -15.4%
    SpringHill Suites         $55.25 -14.7% 59.3% -2.0% pts.  $93.22 -11.8%
    Composite North                                                        
     American Limited-                                                     
     Service(5)               $64.87 -15.3% 61.5% -2.2% pts. $105.51 -12.2%
    Composite - All(6)        $90.40 -12.6% 63.1% -1.0% pts. $143.25 -11.2%
                                                                           
                                                                           
                Comparable Systemwide North American Properties(1)           
                --------------------------------------------------           
                                                                           
                                 Sixteen Weeks Ended January 1, 2010 and   
                                             January 2, 2009               
                                 ---------------------------------------   
                                                              Average Daily
                                 REVPAR        Occupancy           Rate    
                                 ------        ---------      -------------
                                       vs.               vs.           vs.  
    Brand                       2009  2008  2009       2008     2009  2008 
    -----                       ----  ----  ----       ----     ----  ---- 
    Marriott Hotels &                                                      
     Resorts                  $89.76 -11.8% 61.9% -0.9% pts. $145.12 -10.6%
    Renaissance Hotels &                                                   
     Resorts                  $86.11 -12.1% 62.4% -0.3% pts. $137.91 -11.8%
    Composite North                                                        
     American Full-
     Service(2)               $89.15 -11.9% 62.0% -0.8% pts. $143.90 -10.8%
    The Ritz-Carlton(3)      $169.42 -11.6% 60.8%  1.0% pts. $278.52 -13.0%
    Composite North                                                        
     American Full-Service 
     & Luxury(4)              $93.95 -11.9% 61.9% -0.7% pts. $151.82 -10.9%
    Residence Inn             $75.57 -11.3% 68.2% -1.6% pts. $110.81  -9.2%
    Courtyard                 $65.60 -13.9% 60.1% -2.3% pts. $109.09 -10.6%
    Fairfield Inn             $46.62 -12.7% 57.2% -3.0% pts.  $81.56  -8.1%
    TownePlace Suites         $46.21 -17.0% 59.3% -4.0% pts.  $77.98 -11.3%
    SpringHill Suites         $56.37 -13.4% 59.9% -2.1% pts.  $94.09 -10.4%
    Composite North                                                        
     American Limited-                                                     
     Service5                 $62.70 -13.0% 61.6% -2.3% pts. $101.79  -9.7%
    Composite - All(6)        $74.90 -12.5% 61.7% -1.7% pts. $121.37 -10.1%
                                                                           
                                                                           
    (1) North America includes properties located in the Continental United 
        States and Canada. 
    (2) Includes the Marriott Hotels & Resorts and Renaissance Hotels & 
        Resorts brands.  
    (3) Statistics for The Ritz-Carlton are for September through December.
    (4) Includes the Marriott Hotels & Resorts Renaissance Hotels & Resorts 
        and The Ritz-Carlton brands.  
    (5) Includes the Residence Inn, Courtyard, Fairfield Inn, TownePlace 
        Suites and SpringHill Suites brands. 
    (6) Includes the Marriott Hotels & Resorts, Renaissance Hotels & 
        Resorts, The Ritz-Carlton, Residence Inn, Courtyard, Fairfield Inn, 
        TownePlace Suites, and SpringHill Suites brands. 


                                                A-9 

                        MARRIOTT INTERNATIONAL, INC.
                           KEY LODGING STATISTICS
                (Excludes 53rd Week of 2008 for North America)


             Comparable Company-Operated North American Properties(1)      
             --------------------------------------------------------       
                                                                            
                                Fifty-two Weeks Ended January 1, 2010 and   
                                              January 2, 2009               
                                ------------------------------------------  
                                                               Average Daily
                                  REVPAR        Occupancy           Rate    
                                  ------        ---------      -------------
                                        vs.              vs.            vs. 
    Brand                        2009  2008  2009       2008     2009  2008 
    -----                        ----  ----  ----       ----     ----  ---- 
    Marriott Hotels & 
     Resorts                  $104.60 -17.9% 66.3% -4.8% pts. $157.81 -11.9%
    Renaissance Hotels &                                                    
     Resorts                  $100.42 -16.7% 65.3% -4.6% pts. $153.71 -10.8%
    Composite North American                                                
     Full-Service(2)          $103.87 -17.7% 66.1% -4.8% pts. $157.10 -11.7%
    The Ritz-Carlton(3)       $172.61 -23.1% 61.5% -6.5% pts. $280.76 -14.9%
    Composite North American                                                
     Full-Service & Luxury(4) $110.30 -18.5% 65.7% -4.9% pts. $167.93 -12.4%
    Residence Inn              $79.38 -17.1% 69.5% -5.8% pts. $114.27 -10.1%
    Courtyard                  $67.15 -22.5% 61.2% -6.4% pts. $109.78 -14.4%
    TownePlace Suites          $47.45 -21.8% 61.3% -8.0% pts.  $77.40 -11.6%
    SpringHill Suites          $59.63 -20.7% 61.3% -7.4% pts.  $97.32 -11.2%
    Composite North American                                                
     Limited-Service(5)        $68.83 -20.8% 63.5% -6.4% pts. $108.33 -12.8%
    Composite - All(6)         $92.52 -19.3% 64.8% -5.6% pts. $142.86 -12.3%
                                                                            
                                                                            
                Comparable Systemwide North American Properties(1)          
                --------------------------------------------------          
                                                                            
                                Fifty-two Weeks Ended January 1, 2010 and   
                                              January 2, 2009               
                                ------------------------------------------  
                                                               Average Daily
                                  REVPAR        Occupancy           Rate    
                                  ------        ---------      -------------
                                        vs.              vs.            vs. 
    Brand                        2009  2008  2009       2008     2009  2008 
    -----                        ----  ----  ----       ----     ----  ---- 
    Marriott Hotels & Resorts  $92.09 -18.2% 63.4% -5.1% pts. $145.16 -11.7%
    Renaissance Hotels &                                                    
     Resorts                   $89.75 -17.1% 63.8% -4.7% pts. $140.75 -11.0%
    Composite North American                                                
     Full-Service(2)           $91.70 -18.0% 63.5% -5.0% pts. $144.42 -11.6%
    The Ritz-Carlton(3)       $172.61 -23.1% 61.5% -6.5% pts. $280.76 -14.9%
    Composite North American                                                
     Full-Service & Luxury(4)  $96.18 -18.6% 63.4% -5.1% pts. $151.75 -12.0%
    Residence Inn              $80.48 -15.3% 70.7% -5.0% pts. $113.86  -9.2%
    Courtyard                  $69.87 -19.2% 62.8% -5.7% pts. $111.20 -11.8%
    Fairfield Inn              $51.41 -16.3% 60.8% -5.8% pts.  $84.62  -8.3%
    TownePlace Suites          $51.24 -17.7% 62.8% -6.5% pts.  $81.60  -9.3%
    SpringHill Suites          $62.01 -16.9% 62.7% -5.7% pts.  $98.97  -9.4%
    Composite North American                                                
     Limited-Service(5)        $67.40 -17.3% 64.5% -5.6% pts. $104.55 -10.2%
    Composite - All(6)         $78.59 -17.9% 64.0% -5.4% pts. $122.71 -11.0%
                                                                            
                                                                            
    (1) North America includes properties located in the Continental United 
        States and Canada. 
    (2) Includes the Marriott Hotels & Resorts and Renaissance Hotels & 
        Resorts brands.  
    (3) Statistics for The Ritz-Carlton are for January through December. 
    (4) Includes the Marriott Hotels & Resorts, Renaissance Hotels & Resorts 
        and The Ritz-Carlton brands.  
    (5) Includes the Residence Inn, Courtyard, Fairfield Inn, TownePlace 
        Suites and SpringHill Suites brands. 
    (6) Includes the Marriott Hotels & Resorts, Renaissance Hotels & Resorts, 
        The Ritz-Carlton, Residence Inn, Courtyard, Fairfield Inn, TownePlace 
        Suites, and SpringHill Suites brands. 


                                                A-10 

                          MARRIOTT INTERNATIONAL, INC.
                            KEY LODGING STATISTICS

               Comparable Company-Operated North American Properties(1)  
               -------------------------------------------------------        
                                                                              
                       Sixteen Weeks Ended January 1, 2010 and Seventeen Weeks
                                           Ended January 2, 2009              
                         ----------------------------------------------------
                                                                Average Daily 
                             REVPAR           Occupancy              Rate     
                             ------           ---------         ------------- 
    Brand               2009   vs. 2008  2009   vs. 2008      2009   vs. 2008
    -----               ----   --------  ----   --------      ----   --------
    Marriott Hotels &                                                         
     Resorts           $104.04   -11.9% 65.0%     -0.6% pts. $160.11    -11.1%
    Renaissance Hotels                                                        
     & Resorts          $96.24   -13.4% 63.4%     -0.9% pts. $151.82    -12.1%
    Composite North                                                           
     American Full-                                                           
     Service(2)        $102.69   -12.2% 64.7%     -0.7% pts. $158.70    -11.2%
    The Ritz-
     Carlton(3)        $169.42   -11.6% 60.8%      1.0% pts. $278.52    -13.0%
    Composite North                                                           
     American Full-                                                           
     Service & 
     Luxury(4)         $109.42   -11.8% 64.3%     -0.6% pts. $170.12    -11.0%
    Residence Inn       $74.33   -13.6% 67.2%     -2.2% pts. $110.55    -10.8%
    Courtyard           $63.88   -17.0% 59.4%     -2.4% pts. $107.57    -13.6%
    TownePlace Suites   $41.61   -26.7% 57.1%     -8.8% pts.  $72.83    -15.3%
    SpringHill Suites   $55.25   -15.5% 59.3%     -2.3% pts.  $93.22    -12.1%
    Composite North                                                           
     American Limited-                                                        
     Service5           $64.87   -16.2% 61.5%     -2.6% pts. $105.51    -12.6%
    Composite - All(6)  $90.40   -13.1% 63.1%     -1.4% pts. $143.25    -11.1%
                                                                              
                                                                              
                   Comparable Systemwide North American Properties(1)         
                   ------------------------------------------------           
                                                                              
                       Sixteen Weeks Ended January 1, 2010 and Seventeen Weeks
                                         Ended January 2, 2009                
                          ----------------------------------------------------
                                                               Average Daily 
                               REVPAR         Occupancy            Rate     
                               ------         ---------       ------------- 
    Brand               2009   vs. 2008  2009    vs. 2008    2009    vs. 2008
    -----               ----   --------  ----    --------    ----   ----------
    Marriott Hotels &                                                         
     & Resorts          $89.76   -12.6% 61.9%     -1.3% pts. $145.12    -10.8%
    Renaissance Hotels                                                        
     Resorts            $86.11   -13.1% 62.4%     -0.7% pts. $137.91    -12.1%
    Composite North                                                           
     American Full-                                                           
     Service(2)         $89.15   -12.7% 62.0%     -1.2% pts. $143.90    -11.0%
    The Ritz-
     Carlton(3)        $169.42   -11.6% 60.8%      1.0% pts. $278.52    -13.0%
    Composite North                                                           
     American Full-                                                           
     Service & 
     Luxury(4)          $93.95   -12.3% 61.9%     -1.1% pts. $151.82    -10.8%
    Residence Inn       $75.57   -12.0% 68.2%     -2.0% pts. $110.81     -9.4%
    Courtyard           $65.60   -14.9% 60.1%     -2.8% pts. $109.09    -11.0%
    Fairfield Inn       $46.62   -13.6% 57.2%     -3.3% pts.  $81.56     -8.5%
    TownePlace Suites   $46.21   -17.7% 59.3%     -4.4% pts.  $77.98    -11.5%
    SpringHill Suites   $56.37   -14.3% 59.9%     -2.5% pts.  $94.09    -10.8%
    Composite North                                                           
     American Limited-                                                        
     Service(5)         $62.70   -13.9% 61.6%     -2.8% pts. $101.79    -10.0%
    Composite - All(6)  $74.90   -13.1% 61.7%     -2.1% pts. $121.37    -10.1%
                                                                              
                                                                              
    1 North America includes properties located in the Continental United 
    States and Canada. 
    2 Includes the Marriott Hotels & Resorts and Renaissance Hotels & Resorts 
    brands.  
    3 Statistics for The Ritz-Carlton are for September through December. 
    4 Includes the Marriott Hotels & Resorts Renaissance Hotels & Resorts and 
    The Ritz-Carlton brands.  
    5 Includes the Residence Inn, Courtyard, Fairfield Inn, TownePlace Suites 
    and SpringHill Suites brands. 
    6 Includes the Marriott Hotels & Resorts, Renaissance Hotels & Resorts, 
    The Ritz-Carlton, Residence Inn, Courtyard, Fairfield Inn, TownePlace 
    Suites, and SpringHill Suites brands. 

                                                A-11

                            MARRIOTT INTERNATIONAL, INC.
                               KEY LODGING STATISTICS


                Comparable Company-Operated North American Properties(1) 
                    -------------------------------------------------------- 
                                                                             
                               Fifty-two Weeks Ended January 1, 2010 and   
                                Fifty-three Weeks Ended January 2, 2009   
                               ------------------------------------------  
                                                               Average Daily
                                  REVPAR        Occupancy           Rate    
                                  ------        ---------      -------------
                                        vs.              vs.            vs. 
    Brand                        2009  2008  2009       2008     2009  2008 
    -----                        ----  ----  ----       ----     ----  ---- 
    Marriott Hotels & Resorts $104.60 -17.2% 66.3% -4.3% pts. $157.81 -11.8%
    Renaissance Hotels & 
     Resorts                  $100.42 -16.1% 65.3% -4.2% pts. $153.71 -10.7%
    Composite North American 
     Full-Service(2)          $103.87 -17.0% 66.1% -4.3% pts. $157.10 -11.6%
    The Ritz-Carlton(3)       $172.61 -23.1% 61.5% -6.5% pts. $280.76 -14.9%
    Composite North American
     Full-Service & 
     Luxury(4)                $110.30 -17.8% 65.7% -4.5% pts. $167.93 -12.2%
    Residence Inn              $79.38 -16.4% 69.5% -5.3% pts. $114.27 -10.0%
    Courtyard                  $67.15 -21.7% 61.2% -5.8% pts. $109.78 -14.2%
    TownePlace Suites          $47.45 -21.1% 61.3% -7.4% pts.  $77.40 -11.5%
    SpringHill Suites          $59.63 -20.0% 61.3% -6.9% pts.  $97.32 -11.0%
    Composite North American 
     Limited-Service(5)        $68.83 -20.0% 63.5% -5.8% pts. $108.33 -12.7%
    Composite - All(6)         $92.52 -18.5% 64.8% -5.1% pts. $142.86 -12.2%
                                                                            
                                                                            
                Comparable Systemwide North American Properties(1)
                --------------------------------------------------          
                                                                            
                              Fifty-two Weeks Ended January 1, 2010 and   
                               Fifty-three Weeks Ended January 2, 2009   
                              ------------------------------------------  
                                                               Average Daily
                                REVPAR        Occupancy           Rate    
                                ------        ---------      -------------
                                        vs.              vs.            vs.
    Brand                        2009  2008  2009       2008     2009  2008 
    -----                        ----  ----  ----       ----     ----  ---- 
    Marriott Hotels & Resorts  $92.09 -17.5% 63.4% -4.6% pts. $145.16 -11.6%
    Renaissance Hotels & 
     Resorts                   $89.75 -16.5% 63.8% -4.3% pts. $140.75 -10.9%
    Composite North American 
     Full-Service(2)           $91.70 -17.3% 63.5% -4.5% pts. $144.42 -11.5%
    The Ritz-Carlton(3)       $172.61 -23.1% 61.5% -6.5% pts. $280.76 -14.9%
    Composite North American 
     Full-Service & 
     Luxury(4)                 $96.18 -17.9% 63.4% -4.6% pts. $151.75 -11.9%
    Residence Inn              $80.48 -14.6% 70.7% -4.5% pts. $113.86  -9.2%
    Courtyard                  $69.87 -18.3% 62.8% -5.1% pts. $111.20 -11.7%
    Fairfield Inn              $51.41 -15.6% 60.8% -5.4% pts.  $84.62  -8.1%
    TownePlace Suites          $51.24 -16.9% 62.8% -5.9% pts.  $81.60  -9.2%
    SpringHill Suites          $62.01 -16.1% 62.7% -5.2% pts.  $98.97  -9.2%
    Composite North American 
     Limited-Service(5)        $67.40 -16.6% 64.5% -5.1% pts. $104.55 -10.0%
    Composite - All(6)         $78.59 -17.2% 64.0% -4.9% pts. $122.71 -10.9%
                                                                            
                                                                            
    (1) North America includes properties located in the Continental United 
        States and Canada. 
    (2) Includes the Marriott Hotels & Resorts and Renaissance Hotels & 
        Resorts brands.  
    (3) Statistics for The Ritz-Carlton are for January through December. 
    (4) Includes the Marriott Hotels & Resorts, Renaissance Hotels & Resorts 
        and The Ritz-Carlton brands.  
    (5) Includes the Residence Inn, Courtyard, Fairfield Inn, TownePlace 
        Suites and SpringHill Suites brands. 
    (6) Includes the Marriott Hotels & Resorts, Renaissance Hotels & Resorts, 
        The Ritz-Carlton, Residence Inn, Courtyard, Fairfield Inn, TownePlace 
        Suites, and SpringHill Suites brands. 


                                                A-12   

                             MARRIOTT INTERNATIONAL, INC.
                                 TIMESHARE SEGMENT
                                  ($ in millions) 
                                                                             
                                                                             
                                              Adjustments                    
                                         ---------------------                    
                                                                             
                              As                                     As      
                            Reported     Restruc-                  Adjusted  
                            16 Weeks      turing     Timeshare    16 Weeks   
                             Ended       Costs &    Strategy -      Ended    
                          January 1,      Other     Impairment   January 1,  
                              2010       Charges      Charges       2010**   
    ----------------      -----------    --------   -----------  ----------- 
    Segment Revenues                                                         
    ----------------                                                         
    Segment revenues             $477          $(2)          $-         $475 
                                 ====          ===           ==         ==== 
                                                                             
                                                                             
    ---------------                                                          
    Segment Results                                                          
    ---------------                                                          
    Base fees revenue             $15           $-           $-          $15 
    Timeshare sales and                                                      
     services, net                 74           (2)           -           72 
    Timeshare strategy - 
     impairment                                          
     charges                        -            -            -            - 
    Restructuring costs            (7)           7            -            - 
    General, administrative 
     and other expense            (23)           -            -          (23)
    Gains and other                                                          
     income                         1            -            -            1 
    Joint venture equity                                                     
     earnings                      (6)           3            -           (3)
    Timeshare strategy - 
     impairment charges 
     (non-operating)                -            -            -            - 
    Noncontrolling                                                           
     interest                       -            -            -            - 
                                  ---          ---          ---          --- 
        Segment results           $54           $8           $-          $62 
                                  ===           ==           ==          === 
                                                                             
                                                                             
                                                                             
    --------------------------                                               
    Sales and Services Revenue                                               
    --------------------------                                               
    Development                  $185           $-           $-         $185 
    Services                       98            -            -           98 
    Financing                      76           (2)           -           74 
    Other revenue                  18            -            -           18 
                                   --           --           --           -- 
        Sales and                                                            
         services revenue                                                    
                                 $377          $(2)          $-         $375 
                                 ====          ===           ==         ==== 
                                                                             
                                                                             
                                                                             
    --------------                                                           
    Contract Sales                                                           
    --------------                                                           
    Company:                                                                 
        Timeshare                $183           $-           $-         $183 
        Fractional                  3            3            -            6 
        Residential                 9            -            -            9 
                                    -            -            -            - 
            Total company         195            3            -          198 
    Joint ventures:                                                          
        Timeshare                   -            -            -            - 
        Fractional                (12)          17            -            5 
        Residential                (8)           8            -            - 
                                   --            -            -            - 
            Total joint                                                      
             ventures             (20)          25            -            5 
                                  ---           --          ---          --- 
            Total                                                            
             contract                                                        
             sales,                                                          
             including                                                       
             joint                                                           
             ventures            $175          $28           $-         $203 
                                 ====          ===           ==         ==== 
                                                                             
                                                                             
                                                                             
    ---------------------------                                              
    Gain / (Loss) on Notes Sold                                              
    ---------------------------                                              
    Gain / (loss) on                                                         
     notes sold                   $38           $-           $-          $38 
                                  ===           ==           ==          === 
                                                                             
                                                                             
                                                                             
                                       Adjustments                           
                                       -----------                           
                                                                             
                                                                   Percent   
                                                                  Better /   
                                                                   (Worse)   
                              As                        As           As      
                           Reported      Restruc-    Adjusted     Adjusted   
                           17 Weeks      turing      17 Weeks     2009 vs.   
                             Ended       Costs &       Ended         As      
                          January 2,      Other     January 2,    Adjusted   
                              2009       Charges       2009**        2008    
    ----------------      -----------    --------   -----------   ---------  
    Segment Revenues                                                         
    ----------------                                                         
    Segment revenues             $424          $61         $485           (2)
                                 ====          ===         ====              
                                                                             
                                                                             
    ---------------                                                          
    Segment Results                                                          
    ---------------                                                          
    Base fees revenue              $7           $-           $7          114 
    Timeshare sales and                                                      
     services, net                (48)          58           10          620 
    Timeshare strategy - 
     impairment charges             -            -            -            - 
    Restructuring costs           (28)          28            -            - 
    General, administrative 
     and other expense            (32)           -          (32)          28 
    Gains and other                                                          
     income                         -            -            -            * 
    Joint venture equity                                                     
     earnings                       2            7            9         (133)
    Timeshare strategy - 
     impairment charges 
     (non-operating)                -            -            -            - 
    Noncontrolling                                                           
     interest                       4            -            4         (100)
                                  ---          ---          ---              
        Segment results          $(95)         $93          $(2)       3,200 
                                 ====          ===          ===              
                                                                             
                                                                             
                                                                             
    --------------------------                                               
    Sales and Services Revenue                                               
    --------------------------                                               
    Development                  $231          $17         $248          (25)
    Services                       92            -           92            7 
    Financing                      (1)          44           43           72 
    Other revenue                   3            -            3          500 
                                  ---          ---          ---              
        Sales and                                                            
         services revenue                                                    
                                 $325          $61         $386           (3)
                                 ====          ===         ====              
                                                                             
                                                                             
                                                                             
    --------------                                                           
    Contract Sales                                                           
    --------------                                                           
    Company:                                                                 
        Timeshare                $222           $-         $222          (18)
        Fractional                  1            2            3          100 
        Residential               (23)          16           (7)         229 
                                  ---           --           --              
            Total company         200           18          218           (9)
    Joint ventures:                                                          
        Timeshare                   -            -            -            - 
        Fractional                (23)          21           (2)         350 
        Residential               (74)          76            2         (100)
                                  ---           --            -              
            Total joint                                                      
             ventures             (97)          97            -            * 
                                  ---           --          ---              
            Total                                                            
             contract                                                        
             sales,                                                          
             including                                                       
             joint                                                           
             ventures            $103         $115         $218           (7)
                                 ====         ====         ====              
                                                                             
                                                                             
                                                                             
    ---------------------------                                              
    Gain / (Loss) on Notes Sold                                              
    ---------------------------                                              
    Gain / (loss) on                                                         
     notes sold                  $(12)         $12           $-            * 
                                 ====          ===           ==              

    *  Percent cannot be calculated.
    ** Denotes non-GAAP financial measures.  Please see pages A-27 and A-28 
       for additional information about our reasons for providing these 
       alternative financial measures and the limitations on their use.


                                                A-13

                                                                        
                           MARRIOTT INTERNATIONAL, INC.
                               TIMESHARE SEGMENT
                                 ($ in millions) 
                                                                              
                                                                              
                                                                              
                                                  Adjustments                 
                                              --------------------                 
                                                                              
                                    As                                  As    
                                 Reported     Restruc-               Adjusted 
                                 52 Weeks      turing    Timeshare   52 Weeks 
                                   Ended      Costs &   Strategy -     Ended  
                                January 1,     Other    Impairment  January 1,
                                   2010       Charges     Charges     2010**  
    ----------------            ----------    --------  ----------  ----------
    Segment Revenues                                                          
    ----------------                                                          
    Segment revenues               $1,439          $24         $-      $1,463
                                   ======          ===         ==      ======
                                                                              
                                                                              
    ---------------                                                           
    Segment Results                                                           
    ---------------                                                           
    Base fees revenue                 $47           $-         $-         $47
    Timeshare sales and                                                       
     services, net                     83           23          -         106
    Timeshare strategy - 
     impairment charges              (614)           -        614           - 
    Restructuring costs               (45)          45          -           - 
    General, administrative 
     and other expense                (80)           7          -         (73)
    Gains and other income              2            -          -           2 
    Joint venture equity                                                      
     earnings                         (12)           6          -          (6)
    Timeshare strategy - 
     impairment charges 
     (non-operating)                  (71)           -         71           - 
    Noncontrolling interest            11            -          -          11 
                                       --          ---        ---          -- 
        Segment results             $(679)         $81       $685         $87 
                                    =====          ===       ====         === 
                                                                              
                                                                              
                                                                              
    --------------------------                                                
    Sales and Services Revenue                                                
    --------------------------                                                
    Development                      $626           $4         $-        $630 
    Services                          330            -          -         330 
    Financing                         130           20          -         150 
    Other revenue                      37            -          -          37 
                                       --          ---        ---          -- 
        Sales and services                                                    
         revenue                   $1,123          $24         $-      $1,147 
                                   ======          ===         ==      ====== 
                                                                              
                                                                              
                                                                              
    --------------                                                            
    Contract Sales                                                            
    --------------                                                            
    Company:                                                                  
        Timeshare                    $685           $-         $-        $685 
        Fractional                     28            4          -          32 
        Residential                     8            4          -          12 
                                      ---          ---        ---          -- 
            Total company             721            8          -         729 
    Joint ventures:                                                           
        Timeshare                       -            -          -           - 
        Fractional                    (21)          40          -          19 
        Residential                   (35)          35          -           - 
                                      ---           --        ---         --- 
            Total joint                                                       
             ventures                 (56)          75          -          19 
                                      ---           --        ---          -- 
            Total contract                                                    
             sales, including                                                 
             joint ventures          $665          $83         $-        $748 
                                     ====          ===         ==        ==== 
                                                                              
                                                                              
                                                                              
    ---------------------------                                               
    Gain / (Loss) on Notes Sold                                               
    ---------------------------                                               
    Gain / (loss) on notes sold       $37           $-         $-         $37 
                                      ===           ==         ==         === 
                                                                              
                                                                              
                                                                              
                                           Adjustments                        
                                           -----------                        
                                                                     Percent 
                                                                     Better / 
                                                                     (Worse)  
                                    As                      As          As    
                                 Reported     Restruc-   Adjusted    Adjusted 
                                 53 Weeks      turing    53 Weeks    2009 vs. 
                                   Ended      Costs &      Ended        As    
                                January 2,     Other    January 2,   Adjusted 
                                   2009       Charges     2009**       2008   
    ----------------            ----------    --------  ----------   ---------
    Segment Revenues                                                          
    ----------------                                                          
    Segment revenues               $1,750          $61     $1,811         (19)
                                   ======          ===     ======             
                                                                              
                                                                              
    ---------------                                                           
    Segment Results                                                           
    ---------------                                                           
    Base fees revenue                 $42           $-        $42          12 
    Timeshare sales and                                                       
     services, net                     89           58        147         (28)
    Timeshare strategy - 
     impairment charges                 -            -          -           - 
    Restructuring costs               (28)          28          -           - 
    General, administrative 
     and other expense               (111)           -       (111)         34 
    Gains and other income              -            -          -           * 
    Joint venture equity                                                      
     earnings                          11            7         18        (133)
    Timeshare strategy - 
     impairment charges 
     (non-operating)                    -            -          -           - 
    Noncontrolling interest            25            -         25         (56)
                                       --          ---         --             
        Segment results               $28          $93       $121         (28)
                                      ===          ===       ====             
                                                                              
                                                                              
                                                                              
    --------------------------                                                
    Sales and Services Revenue                                                
    --------------------------                                                
    Development                      $953          $17       $970         (35)
    Services                          336            -        336          (2)
    Financing                         106           44        150           - 
    Other revenue                      28            -         28          32 
                                       --          ---         --             
        Sales and services                                                    
         revenue                   $1,423          $61     $1,484         (23)
                                   ======          ===     ======             
                                                                              
                                                                              
                                                                              
    --------------                                                            
    Contract Sales                                                            
    --------------                                                            
    Company:                                                                  
        Timeshare                  $1,081           $-     $1,081         (37)
        Fractional                     35            2         37         (14)
        Residential                    10           16         26         (54)
                                       --           --         --             
            Total company           1,126           18      1,144         (36)
    Joint ventures:                                                           
        Timeshare                       -            -          -           - 
        Fractional                     (6)          21         15          27 
        Residential                   (44)          76         32        (100)
                                      ---           --         --             
            Total joint                                                       
             ventures                 (50)          97         47         (60)
                                      ---           --         --             
            Total contract                                                    
             sales, including                                                 
             joint ventures        $1,076         $115     $1,191         (37)
                                   ======         ====     ======             
                                                                              
                                                                              
                                                                              
    ---------------------------                                               
    Gain / (Loss) on Notes Sold                                               
    ---------------------------                                               
    Gain / (loss) on notes sold       $16          $12        $28          32 
                                      ===          ===        ===             
                                                                              
    *  Percent cannot be calculated. 
    ** Denotes non-GAAP financial measures.  Please see pages A-27 and A-28 
       for additional information about our reasons for providing these 
       alternative financial measures and the limitations on their use. 


                                                A-14

                              MARRIOTT INTERNATIONAL, INC.            
                   Summary of Restructuring Costs and Other Charges         
                                   ($ in millions)                         
                                                                             

                                                                    2009 
                                                               --------------
                                                                       Fourth
                                                                       Quarter
                                                               Fourth  Year to
    External Line    Description                               Quarter  Date
    -------------    -----------                               -------  -----
                                                                             
    Timeshare sales                                                         
     and services                                                           
     revenue         Mark-to-market of residual interests        $(2)     $20
                     Contract sale cancellation allowances         -        4 
                                                                  --       -- 
                               Timeshare sales and services 
                                 revenue                          (2)      24
                                                                            
    Timeshare -                                                              
     direct 
     expenses         Contract sale cancellation allowances        -       (1)
                                                                 ---      --- 
                               Timeshare - direct expenses         -       (1)
                                                                              
                                                                              
    Restructuring                                                             
     costs           Severance                                     5       21 
                     Facilities exit costs                         2       29 
                     Development cancellations                     -        1 
                                                                 ---      --- 
                               Restructuring costs                 7       51 
                                                                              
    General,                                                                  
     administrative                                                           
     and other       System development write-down                 -        7
                     Accounts receivable and guarantee charges     -        4 
                     Loan impairments                              -       43 
                     Reserves for security deposits & other 
                      asset impairments, net of prior 
                      year reserves                                8       46 
                                                                 ---      --- 
                               General, administrative 
                                and other                          8      100
                                                                             
                                                                             
    Equity in                                                                
     (earnings)                                                              
     losses          Contract sale cancellation allowances         3        6
                     Investment impairment                         3       33
                                                                 ---      --- 
                               Equity in (earnings) losses         6       39 
                                                                 ---      --- 
                                                                              
                               Restructuring Costs & Other 
                                Charges Total                     19      213 
                                                                              
                               Tax Impact                         (7)     (83)
                                                                  --      --- 
                                                                              
                               Restructuring Costs & Other 
                                Charges Net of Tax               $12     $130 
                                                                 ===     ==== 

                                                A-15

                          MARRIOTT INTERNATIONAL, INC.                     
                Timeshare Strategy - Impairment Charges Summary            
                                 Full Year 2009                            
                                ($ in millions)                            
                                                                           
                                                                 Impairment
                                                                    Charge 
                                                                    ------ 
    Operating Income Impact                                                
      Inventory impairment                                            $529 
      Property and equipment impairment                                 64 
      Other impairments                                                 21 
                                                                        -- 
        Total operating income impact                                  614 
                                                                       --- 
                                                                           
    Non-Operating Income Impact                                            
      Joint venture impairment                                          71 
      Loan impairment                                                   40 
      Funding liability                                                 27 
                                                                        -- 
        Total non-operating income impact                              138 
                                                                       --- 
                                                                           
          Total impact                                                 752 
                                                                       --- 
                                                                           
    Tax Impact                                                        (250)
                                                                      ---- 
                                                                           
    Timeshare Strategy - Impairment Charges Net of Tax                $502 
                                                                      ==== 


                                                A-16

                           MARRIOTT INTERNATIONAL, INC.                      
                           Non-GAAP Financial Measure                        
                            EBITDA and Adjusted EBITDA                       
                                 ($ in millions)                             
                                                                             
                                               Fiscal Year 2009              
                                               ----------------              
                                   First   Second    Third   Fourth          
                                  Quarter  Quarter  Quarter  Quarter   Total 
                                  -------  -------  -------  -------   ----- 
    Net (Loss) / Income                                                      
     attributable to Marriott        $(23)     $37    $(466)    $106   $(346)
    Interest expense                   29       28       27       34     118 
    Tax provision, continuing                                                
     operations                        33       44     (210)      68     (65)
    Tax provision,                                                           
     noncontrolling interest            1        2        1        -       4 
    Depreciation and amortization      39       42       43       61     185 
    Less: Depreciation                                                       
     reimbursed by third-party                                               
     owners                            (2)      (2)      (2)      (3)     (9)
    Interest expense from                                                    
     unconsolidated joint                                                    
     ventures                           3        6        4        6      19 
    Depreciation and                                                         
     amortization from                                                       
     unconsolidated joint                                                    
     ventures                           6        6        6        9      27 
                                       --       --       --       --      -- 
    EBITDA **                          86      163     (597)     281     (67)
                                                                             
    Restructuring costs and other 
     charges                                    
           Severance                    2       10        4        5      21 
           Facilities exit costs        -       22        5        2      29 
           Development                                                       
            cancellations               -        1        -        -       1 
                                      ---      ---      ---      ---     --- 
              Total restructuring                                            
               costs                    2       33        9        7      51 
                                      ---      ---      ---      ---     --- 
           Impairment of investments                                         
            and other, net of prior 
            year reserves              68        3        1       11      83 
           Reserves for loan                                                 
            losses                     42        1        -        -      43 
           Contract cancellation                                             
            allowances                  4        1        1        3       9 
           Residual interests                                                
            valuation                  13       12       (3)      (2)     20 
           System development write-                                         
            off                         -        7        -        -       7 
                                      ---       --      ---      ---     --- 
              Total other charges     127       24       (1)      12     162 
                                      ---       --       --       --     --- 
    Total restructuring costs                                                
     and other charges                129       57        8       19     213 
                                      ---       --        -       --     --- 
                                                                             
    Timeshare strategy - impairment 
     charges                                  
           Operating impairments        -        -      614        -     614 
           Non-operating                                                     
            impairments                 -        -      138        -     138 
                                      ---      ---      ---      ---     --- 
    Total timeshare strategy -                                               
     impairment charges                 -        -      752        -     752 
                                      ---      ---      ---      ---     --- 
                                                                             
    Adjusted EBITDA **               $215     $220     $163     $300    $898 
                                     ====     ====     ====     ====    ==== 
                                                                             
    Decrease over 2008 Adjusted                                              
     EBITDA                           -25%     -43%     -43%     -12%    -31%
                                                                             
                                               Fiscal Year 2008              
                                               ----------------              
                                   First   Second    Third   Fourth          
                                  Quarter  Quarter  Quarter  Quarter   Total 
                                  -------  -------  -------  -------   ----- 
    Net Income / (Loss)                                                      
     attributable to Marriott        $121     $157      $94     $(10)   $362 
    Interest expense                   42       38       33       50     163 
    Tax provision, continuing                                                
     operations                        75      139      103       33     350 
    Tax provision, minority                                                  
     interest                           1        1        5        2       9 
    Tax benefit, synthetic fuel         -       (6)      (1)       -      (7)
    Depreciation and amortization      41       47       42       60     190 
    Less: Depreciation                                                       
     reimbursed by third-party                                               
     owners                            (3)      (3)      (2)      (2)    (10)
    Interest expense from                                                    
     unconsolidated joint                                                    
     ventures                           4        4        5        5      18 
    Depreciation and                                                         
     amortization from                                                       
     unconsolidated joint                                                    
     ventures                           5        6        6       10      27 
                                        -        -        -       --      -- 
    EBITDA **                         286      383      285      148   1,102 
                                                                             
    Discontinued operations                                                  
     adjustment (synthetic fuel)        1        2        1        -       4 
    Restructuring costs and other 
     charges                                    
           Severance                    -        -        -       19      19 
           Facilities exit costs        -        -        -        5       5 
           Development                                                       
            cancellations               -        -        -       31      31 
                                      ---      ---      ---       --      -- 
              Total restructuring                                            
               costs                    -        -        -       55      55 
                                      ---      ---      ---       --      -- 
           Reserves for expected                                             
            fundings                    -        -        -       16      16 
           Inventory write-downs        -        -        -        9       9 
           Contract cancellation                                             
            allowances                  -        -        -       12      12 
           Accounts receivable-bad                                           
            debts                       -        -        -        4       4 
           Residual interests                                                
            valuation                   -        -        -       32      32 
           Hedge ineffectiveness        -        -        -       12      12 
           Impairment of investments                                         
            and other                   -        -        -       30      30 
           Reserves for loan                                                 
            losses                      -        -        -       22      22 
                                      ---      ---      ---       --      -- 
              Total other charges       -        -        -      137     137 
                                      ---      ---      ---      ---     --- 
    Total restructuring costs                                                
     and other charges                  -        -        -      192     192 
                                      ---      ---      ---      ---     --- 
                                                                             
    Adjusted EBITDA **               $287     $385     $286     $340  $1,298 
                                     ====     ====     ====     ====  ====== 
                                                                             
    The following items make up 
     the discontinued operations                  
     adjustment (synthetic fuel)                                           
    Pre-tax Synthetic Fuel                                                   
     losses                            $1       $2       $1       $-      $4 
                                       --       --       --       --      -- 
    EBITDA adjustment for                                                    
     discontinued operations                                                 
     (synthetic fuel)                  $1       $2       $1       $-      $4 
                                       ==       ==       ==       ==      == 
                                                                             
    ** Denotes non-GAAP financial measures.  Please see pages A-27 and A-28 
       for additional information about our reasons for providing these 
       alternative financial measures and the limitations on their use. 


                                                A-17

                          MARRIOTT INTERNATIONAL, INC.                     
                          Non-GAAP Financial Measure                       
                             Total Debt Net of Cash                        
                                ($ in millions)                            
                                                                           
                                                                           
                                                                           
                           Balance at  Balance at        Better/        
                            Year-End     Year-End        (Worse)        
                              2009         2008          Change         
                           ----------  -----------       -------        
    Total debt                 $2,298       $3,095        $797             
    Cash and cash                                                          
     equivalents                 (115)        (134)        (19)            
                                 ----         ----         ---             
    Total debt net of                                                      
     cash**                    $2,183       $2,961        $778             
                               ======       ======        ====             
                                                                           
                                                                           
                                                                           
                                    Range                    Range         
                                    -----                    -----         
                                                    As Compared to Balance 
                                                       at Year-End 2009    
                           Estimated    Estimated    ---------------------- 
                            Balance      Balance      Better/     Better/  
                            Year-End     Year-End     (Worse)     (Worse)  
                            2010 (a)     2010 (b)   Change (a)  Change (b) 
                            ---------   ---------   ----------  ---------- 
    Total debt                 $2,851       $2,751       $(553)      $(453)
    Cash and cash                                                          
     equivalents                 (115)        (115)          -           - 
                                 ----         ----         ---         --- 
    Total debt net of                                                      
     cash**                     2,736        2,636        (553)       (453)
    Less the impact of                                                     
     ASU Nos. 2009-16 and                                                  
     2009-17                     (953)        (953)        953         953 
                                 ----         ----         ---         --- 
    Adjusted total debt                                                    
     net of cash** (c)         $1,783       $1,683        $400        $500 
                               ======       ======        ====        ==== 
                                                                           
                                                                           
    (a) Assumes $400 debt repayment in 2010.    

    (b) Assumes $500 debt repayment in 2010.    

    (c) Excludes the impact of the update to ASU Nos. 2009-16 and 2009-17.


    **  Denotes non-GAAP financial measures.  Please see pages A-27 and 
        A-28 for additional information about our reasons for providing 
        these alternative financial measures and the limitations on their 
        use.    


                                                A-18

                           MARRIOTT INTERNATIONAL, INC.                      
                    Non-GAAP Financial Measure Reconciliation                
               Adjusted Fourth Quarter and Full Year 2008 and 2009           
        General, Administrative, and Other Expenses Excluding Restructuring   
         Costs, Other Charges and Deferred Compensation Credits (Charges)    
                                 ($ in millions)                             
                                                                             
                                                                     Percent 
                                                                     Better/ 
                                                                     (Worse) 
                                                                    Adjusted 
                                                                       2009  
                                                 Fourth    Fourth      vs.   
                                                Quarter   Quarter   Adjusted 
                                                  2008      2009       2008  
                                                --------  --------  ---------
    General, administrative and other expenses      $292      $215           
    Less: Restructuring costs and other charges      (54)       (8)          
    Deferred Compensation credits (charges)           16        (5)          
                                                      --        --           
                                                                             
    Adjusted General, administrative and other                               
     expenses**                                     $254      $202       20
                                                    ====      ====           
                                                                             
                                                                             
                                                                             
                                                                      Percent 
                                                                      Better/ 
                                                                      (Worse) 
                                                                     Adjusted 
                                                                       2009  
                                                   Full      Full       vs.   
                                                   Year      Year    Adjusted 
                                                   2008      2009       2008  
                                                   -----     -----   ---------
    General, administrative and other expenses      $803      $722           
    Less: Restructuring costs and other charges      (54)     (100)          
    Deferred Compensation credits (charges)           28       (15)          
                                                      --       ---           
                                                                             
    Adjusted General, administrative and other                               
     expenses**                                     $777      $607       22
                                                    ====      ====           
                                                                             
    ** Denotes non-GAAP financial measures.  Please see pages A-27 and A-28 
       for additional information about our reasons for providing these 
       alternative financial measures and the limitations on their use.  


                                                A-19

                         MARRIOTT INTERNATIONAL, INC.                     
                          Non-GAAP Financial Measure                      
      2009 Adjusted for ASU Nos. 2009-16 and 2009-17 and Forecasted 2010  
                          EBITDA and Adjusted EBITDA                      
                                ($ in millions)                           
                                                                          
                                                                 Range    
                                                                 -----    
                                                     As                   
                                                  Adjusted                
                                                     For                  
                                          ASU     ASU Nos.                
                                          Nos.     2009-16                
                                        2009-16      and      Estimated   
                                          and      2009-17      EBITDA    
                                2009    2009-17    Fiscal        Full     
                               Fiscal    Adjust-    Year         Year     
                                 Year     ments     2009**       2010     
                               -------  --------  ---------   ----------  
    Net (Loss) / Income                                                   
     attributable to Marriott    $(346)      $(1)     $(347)  $311   $356 
    Interest expense               118        77        195    195    190 
    Tax provision, continuing                                             
     operations                    (65)                 (65)   179    204 
    Tax provision,                                                        
     noncontrolling interest         4         -          4      -      - 
    Depreciation and                                                      
     amortization                  185         -        185    187    187 
    Less: Depreciation                                                    
     reimbursed by third-party                                             
     owners                         (9)        -         (9)   (21)   (21)
    Interest expense from                                                 
     unconsolidated joint                                                 
     ventures                       19         -         19     27     27 
    Depreciation and                                                      
     amortization from                                                    
     unconsolidated joint                                                 
     ventures                       27         -         27     30     30 
                                    --        --         --     --     -- 
    EBITDA **                      (67)       76          9    908    973 
                                                                          
    Restructuring costs and 
     other charges                                 
           Severance                21         -         21      -      - 
           Facilities exit                                                
            costs                   29         -         29      -      - 
           Development                                                    
            cancellations            1         -          1      -      - 
                                   ---       ---        ---    ---    --- 
              Total restructuring                                          
               costs                51         -         51      -      - 
                                    --       ---         --    ---    --- 
           Impairment of investments                                        
            and other, net of prior                                        
            year reserves           83         -         83      -      - 
           Reserves for loan                                              
            losses                  43         -         43      -      - 
           Contract cancellation                                           
            allowances               9         -          9      -      - 
           Residual interests                                             
            valuation               20         -         20      -      - 
           System development write-                                       
            off                      7         -          7      -      - 
                                   ---       ---        ---    ---    --- 
              Total other                                                 
               charges             162         -        162      -      - 
                                   ---       ---        ---    ---    --- 
    Total restructuring costs                                             
     and other charges             213         -        213      -      - 
                                   ---       ---        ---    ---    --- 
                                                                          
    Timeshare strategy - 
     impairment charges                               
           Operating                                                      
            impairments            614         -        614      -      - 
           Non-operating                                                  
            impairments            138         -        138      -      - 
                                   ---       ---        ---    ---    --- 
    Total timeshare strategy -                                            
      impairment charges           752         -        752      -      - 
                                   ---       ---        ---    ---    --- 
                                                                          
    Adjusted EBITDA **            $898       $76       $974   $908   $973 
                                  ====       ===       ====   ====   ==== 
                                                                          
                                                                          
    ** Denotes non-GAAP financial measures.  Please see pages A-27 and A-28
       for additional information about our reasons for providing these 
       alternative financial measures and the limitations on their use. 


                                                A-20

                          MARRIOTT INTERNATIONAL, INC.                     
                   Non-GAAP Financial Measure Reconciliation               
          First Quarter 2009 General, Administrative, and Other Expenses   
                Excluding Restructuring Costs and Other Charges            
                                ($ in millions)                            
                                                                           
                                                                           
                                                                           
                                Range                          Range       
                                -----                          -----       
                                                        Percent   Percent  
                                                        Better/   Better/  
                                                        (Worse)   (Worse)  
                                                       Estimated Estimated 
                                                         First     First   
                                                        Quarter   Quarter  
                         Estimated Estimated            2010 vs.  2010 vs. 
                           First     First    First      First     First   
                          Quarter   Quarter  Quarter    Quarter   Quarter  
                            2010      2010     2009       2009      2009   
                         --------- --------- --------  --------- --------- 
      General,                                                             
       administrative                                                      
       and other                                                           
       expenses               $130      $140     $174                      
      Less:                                                                
       Restructuring                                                       
       costs and other                                                     
       charges                   -         -      (38)                     
                               ---       ---      ---                      
      General,                                                             
       administrative                                                      
       and other                                                           
       expenses                                                            
         excluding                                                         
       restructuring                                                       
       costs and other                                                     
       charges**              $130      $140     $136          4        (3)
                              ====      ====     ====                      
                                                                           
                                                                           
                                                                           
                                                                           
                                                                           
                                                                           
     ** Denotes non-GAAP financial measures.  Please see pages A-27 and 
        A-28 for additional information about our reasons for providing 
        these alternative financial measures and the limitations on their 
        use.  


                                                A-21

                      MARRIOTT INTERNATIONAL, INC.                 
                         TIMESHARE SEGMENT                          
      AS ADJUSTED HAD ASU NOS. 2009-16 AND 2009-17 (FORMERLY REFERRED 
             TO AS FAS 166 & 167) BEEN ADOPTED ON JANUARY 2, 2009  
                         FIRST QUARTER 2009                         
                          ($ in millions)                        
                                                                             
                                   Adjustments                 
                               -----------------                 
                                                                         As   
                                                                      Adjusted
                                                                        For   
                                                                        ASU   
                                                                        Nos.
                                                      As      ASU      2009-16
                        As                          Adjusted  Nos.      And  
                     Reported              Time-     12     2009-16   2009-17 
                       12      Restruc-    share    Weeks    And     12 Weeks 
                      Weeks      turing  Strategy -  Ended   2009-     Ended  
                      Ended     Costs &    Impair-  March     17       March  
                     March 27,    Other     ment     27,    Adjust-     27,  
                      2009      Charges   Charges    2009** ments***    2009**
      ---------     ----------  -------- --------- ------- --------  --------
      Segment                                                  
       Revenues                                            
      ---------                                               
      Segment                                                
       revenues        $277       $17       $-      $294       $28       $322 
                       ====       ===       ==      ====       ===       ==== 
                                                                              
                                                                              
      --------                                                               
      Segment                                                                 
       Results                                                                
      --------                                                                
      Base fees                                                               
       revenue          $10        $-       $-       $10        $-        $10 
      Timeshare                                                               
       sales and                                                              
       services, net    (11)       16        -         5        20         25 
      Timeshare                                                               
       strategy -                                                             
       impairment                                                             
       charges            -         -        -         -         -          - 
      Restructuring 
       costs (1)          1         -        -         -         -          -
      General,                                                                
       administrative                                                         
       and other                                                              
       expense          (17)        -        -       (17)        -        (17)
      Gains and                                                               
       other                                                                  
       income             -         -        -         -         -          - 
      Joint                                                                   
       venture                                                                
       equity                                                                 
       earnings          (1)        1        -         -         -          - 
      Timeshare                                                               
       strategy -                                                             
       impairment                                                             
       charges (non-                                                       
       operating)         -         -        -         -         -          - 
      Noncontrolling                                                          
       interest           3         -        -         3         -          3 
                         --        --       --        --        --         -- 
          Segment                                                             
           results     $(17)      $18       $-        $1       $20        $21 
                       ====       ===       ==        ==       ===        === 
                                                                              
                                                                              
                                                                              
      ---------                                                              
      Sales and                                                               
       Services                                                               
       Revenue                                                                
      ---------                                                               
      Development      $121        $4       $-      $125        $2       $127 
      Services           70         -        -        70         -         70 
      Financing          13        13        -        26        27         53 
      Other                                                                   
       revenue            5         -        -         5        (1)         4 
                         --        --       --        --        --         -- 
          Sales and                                                           
           services                                                           
           revenue     $209       $17       $-      $226       $28       $254 
                       ====       ===       ==      ====       ===       ==== 
                                                                              
                                                                              
                                                                              
      --------                                                               
      Contract                                                                
       Sales                                                                  
      --------                                                                
      Company:                                                                
          Timeshare    $138        $-       $-      $138        $-       $138 
          Fractional     10         -        -        10         -         10 
          Residential    (5)        4        -        (1)        -         (1)
                         --        --       --        --        --         -- 
              Total                                                           
               company  143         4        -       147         -        147 
      Joint                                                                   
       ventures:                                                              
          Timeshare       -         -        -         -         -          - 
          Fractional     13        (3)       -        10         -         10 
          Residential   (27)       27        -         -         -          - 
                         --        --       --        --        --         -- 
            Total 
             joint                                                        
             ventures   (14)       24        -        10         -         10 
                         --        --       --        --        --         -- 
            Total 
             contract                                                     
             sales,                                                           
             including                                                        
             joint 
             ventures   $129       $28       $-      $157        $-       $157
                        ====       ===       ==      ====        ==       ====
                                                                              
                                                                              
                                                                              
      -----------                                                            
      (Loss) /                                                                
       Gain on                                                                
       Notes Sold                                                             
      -----------                                                             
      (Loss) /                                                                
       gain on                                                                
       notes sold       $(1)       $-       $-       $(1)       $1         $- 
                        ===        ==       ==       ===        ==         == 
                                                      
                                                   
       **Denotes non-GAAP financial measures.  Please see pages A-27 and A-28 
         for additional information about our reasons for providing these 
         alternative financial measures and the limitations on their use.    
      ***In addition to the segment impacts shown, ASU Nos. 2009-16 and 2009-
         17 would have increased consolidated interest expense by $16 million 
         from $29 million as reported to $45 million.    

                                    A-22


                       MARRIOTT INTERNATIONAL, INC.         
                              TIMESHARE SEGMENT               
       AS ADJUSTED HAD ASU NOS. 2009-16 AND 2009-17 (FORMERLY REFERRED 
           TO AS FAS 166 & 167) BEEN ADOPTED ON JANUARY 2, 2009          
                           SECOND QUARTER 2009                
                            ($ in millions)                  
                                                                         
                                   Adjustments                 
                                -----------------                 
                                                                         As   
                                                                      Adjusted
                                                                        For   
                                                                        ASU   
                                                                        Nos.
                                                      As      ASU      2009-16
                        As                          Adjusted  Nos.       And 
                     Reported              Time-     12     2009-16   2009-17
                       12      Restruc-    share    Weeks    And     12 Weeks
                      Weeks      turing  Strategy -  Ended   2009-     Ended 
                      Ended     Costs &    Impair-   June     17       June 
                     June 19,    Other      ment     19,    Adjust-     19,   
                      2009      Charges   Charges    2009** ments***   2009** 
      ---------     ----------  -------- --------- ------- --------  --------

      Segment                                                                 
       Revenues                                                               
      ---------                                                               
      Segment                                                                 
       revenues          $355       $12      $-      $367       $36      $403 
                         ====       ===      ==      ====       ===      ==== 
                                                                              
                                                                              
      --------                                                               
      Segment                                                                 
       Results                                                                
      --------                                                                
      Base fees                                                               
       revenue            $11        $-      $-       $11        $-       $11 
      Timeshare sales                                                         
       and services,                                                          
       net                  4        12       -        16        32        48 
      Timeshare                                                               
       strategy -                                                             
       impairment                                                             
           charges          -         -       -         -         -         - 
      Restructuring 
       costs              (30)       30       -         -         -         - 
      General,                                                                
       administrative                                                         
       and other                                                              
           expense        (23)        7       -       (16)        -       (16)
      Gains and                                                               
       other                                                                  
       income               -         -       -         -         -         - 
      Joint                                                                   
       venture                                                                
       equity                                                                 
       earnings            (1)        1       -         -         -         - 
      Timeshare                                                               
       strategy -                                                             
       impairment                                                             
          charges (non-                                                       
           operating)       -         -       -         -         -         - 
      Noncontrolling                                                          
       interest             4         -       -         4         -         4 
                           --        --      --        --        --        -- 
          Segment                                                             
           results       $(35)      $50      $-       $15       $32       $47 
                         ====       ===      ==       ===       ===       === 
                                                                              
                                                                              
                                                                              
      ---------                                                              
      Sales and                                                               
       Services                                                               
       Revenue                                                                
      ---------                                                               
      Development        $182        $-      $-      $182        $6      $188 
      Services             80         -       -        80         -        80 
      Financing            14        12       -        26        30        56 
      Other                                                                   
       revenue              7         -       -         7         -         7 
                           --        --      --        --        --        -- 
          Sales and                                                           
           services                                                           
           revenue       $283       $12      $-      $295       $36      $331 
                         ====       ===      ==      ====       ===      ==== 
                                                                              
                                                                              
                                                                              
      --------                                                               
      Contract                                                                
       Sales                                                                  
      --------                                                                
      Company:                                                                
          Timeshare      $200        $-      $-      $200        $-      $200 
          Fractional        8         1       -         9         -         9 
          Residential       2         -       -         2         -         2 
                           --        --      --        --        --        -- 
              Total                                                           
               company    210         1       -       211         -       211 
      Joint                                                                   
       ventures:                                                              
          Timeshare         -         -       -         -         -         - 
          Fractional      (18)       19       -         1         -         1 
          Residential      17       (17)      -         -         -         - 
                           --        --      --        --        --        -- 
           Total                                                           
            joint                                                          
            ventures       (1)        2       -         1         -         1 
                           --        --      --        --        --        -- 
           Total 
            contract                                                  
            sales,                                                         
            including                                                      
            joint 
            ventures     $209        $3      $-      $212        $-      $212 
                         ====        ==      ==      ====        ==      ==== 
                                                                             
                                                                             
                                                                             
      ---------                                                             
      Gain /                                                                 
       (Loss)                                                                
       on Notes                                                              
       Sold                                                                  
      ---------                                                              
      Gain / loss                                                            
       on notes                                                              
       sold                $-        $-      $-        $-        $-        $- 
                           ==        ==      ==        ==        ==        == 


    **Denotes non-GAAP financial measures.  Please see pages A-27 and A-28 for
      additional information about our reasons for providing these alternative
      financial measures and the limitations on their use. 
    ***In addition to the segment impacts shown, ASU Nos. 2009-16 and 2009-17 
       would have increased consolidated interest expense by $18 million from 
       $28 million as reported to $46 million. 

                                       A-23


       
                         MARRIOTT INTERNATIONAL, INC.                        
                             TIMESHARE SEGMENT                              
     AS ADJUSTED HAD ASU NOS. 2009-16 AND 2009-17 (FORMERLY REFERRED TO 
               AS FAS 166 & 167) BEEN  ADOPTED ON JANUARY 2, 2009            
                           THIRD QUARTER 2009                                 
                            ($ in millions)                                   
                                                                              
                               Adjustments                   
                            ------------------                   
                                                                         As   
                                                                      Adjusted
                                                                        For   
                                                                      ASU Nos.
                    As                               As                2009-16
                  Reported                         Adjusted     ASU     And   
                    12                   Time-       12        Nos.    2009-17
                   Weeks    Restruc-     share      Weeks     2009-16    12   
                   Ended     turing   Strategy -    Ended      And      Weeks 
                    Sept.     Costs      Impair-     Sept.    2009-17   Ended 
                     11,     & Other      ment        11,    Adjust- Sept. 11,
                    2009     Charges    Charges     2009**   ments***  2009** 
      ---------    ---------  --------  ---------  -------  -------- ---------
      Segment                                                                 
       Revenues                                                               
      ---------                                                               
      Segment                                                                 
       revenues        $330       $(3)       $-      $327       $39      $366
                       ====       ===        ==      ====       ===      ====
                                                                              
                                                                              
      --------                                                               
      Segment                                                                 
       Results                                                                
      --------                                                                
      Base fees                                                               
       revenue          $11        $-        $-       $11        $-       $11
      Timeshare                                                               
       sales and                                                              
       services,                                                              
       net               16        (3)        -        13        32        45
      Timeshare                                                               
       strategy -                                                             
       impairment                                                             
           charges     (614)        -       614         -         -         -
      Restructuring 
       costs             (7)        7         -         -         -         -
      General,                                                                
       administrative                                                         
       and other                                                              
           expense      (17)        -         -       (17)        -       (17)
      Gains and                                                               
       other income       1         -         -         1         -         1
      Joint                                                                   
       venture                                                                
       equity                                                                 
       earnings          (4)        1         -        (3)        -        (3)
      Timeshare                                                               
       strategy -                                                             
       impairment                                                             
       charges (non-                                                          
       operating)       (71)        -        71         -         -         -
      Noncontrolling                                                          
       interest           4         -         -         4         -         4
                         --        --        --        --        --        -- 
          Segment                                                             
           results    $(681)       $5      $685        $9       $32       $41
                      =====        ==      ====        ==       ===       ===
                                                                              
                                                                              
                                                                              
      ---------                                                              
      Sales and                                                               
       Services                                                               
       Revenue                                                                
      ---------                                                               
      Development      $138        $-        $-      $138       $11      $149
      Services           82         -         -        82         -        82
      Financing          27        (3)        -        24        28        52
      Other                                                                   
       revenue            7         -         -         7         -         7
                         --        --        --        --        --        -- 
          Sales and                                                           
           services                                                           
           revenue     $254       $(3)       $-      $251       $39      $290
                       ====       ===        ==      ====       ===      ====
                                                                              
                                                                              
                                                                              
      --------------                                                         
      Contract Sales                                                          
      --------------                                                          
      Company:                                                                
          Timeshare    $164        $-        $-      $164        $-      $164
          Fractional      7         -         -         7         -         7
          Residential     2         -         -         2         -         2
                         --        --        --        --        --        -- 

              Total                                                           
               company  173         -         -       173         -       173
      Joint ventures:                                                         
          Timeshare       -         -         -         -         -         -
          Fractional     (4)        7         -         3         -         3
          Residential   (17)       17         -         -         -         -
                         --        --        --        --        --        -- 
           Total joint                                                        
            ventures    (21)       24         -         3         -         3
                         --        --        --        --        --        -- 
           Total                                                              
            contract                                                          
            sales,                                                            
            including                                                         
            joint                                                             
            ventures   $152       $24        $-      $176        $-      $176
                       ====       ===        ==      ====        ==      ====
                                                                              
                                                                              
                                                                              
      -----------                                                            
      Gain /                                                                  
       (Loss) on                                                              
       Notes Sold                                                             
      -----------                                                             
      Gain /                                                                  
       loss on                                                                
       notes                                                                  
       sold              $-        $-        $-        $-        $-         $-
                         ==        ==        ==        ==        ==         ==
                                                                          
                                                                        
       **Denotes non-GAAP financial measures.  Please see pages A-27 and A-28 
         for additional information about our reasons for providing these 
         alternative financial measures and the limitations on their use.   
      ***In addition to the segment impacts shown, ASU Nos. 2009-16 and 2009-
         17 would have increased consolidated interest expense by $17 million 
         from $27 million as reported to $44 million.    


                                     A-24



                        MARRIOTT INTERNATIONAL, INC.                    
                          TIMESHARE SEGMENT                           
     AS ADJUSTED HAD ASU NOS. 2009-16 AND 2009-17 (FORMERLY REFERRED 
          TO AS FAS 166 & 167) BEEN ADOPTED ON JANUARY 2, 2009          
                          FOURTH QUARTER 2009                         
                            ($ in millions)                         
                                                                     
                                Adjustments                    
                            ------------------                     
                                                                       As     
                                                                    Adjusted  
                                                                      For    
                                                                      ASU    
                                                                      Nos.    
                                                                     2009-16  
                      As                          As        ASU        And    
                   Reported             Time-  Adjusted     Nos.     2009-17  
                     16     Restruc-   share     16       2009-16     16     
                    Weeks    turing  Strategy -  Weeks      And       Weeks   
                     Ended   Costs &   Impair-   Ended     2009-17    Ended   
                    Jan. 1,   Other     ment    Jan. 1,    Adjust-   Jan. 1,  
                     2010    Charges  Charges    2010**   ments***    2010**  
      ---------    --------- -------- --------- --------  --------  --------- 
      Segment                                                                 
       Revenues                                                               
      ---------                                                               
      Segment                                                                 
       revenues        $477       $(2)       $-      $475       $(2)     $473 
                       ====       ===        ==      ====       ===      ==== 
                                                                              
                                                                              
      ---------------                                                         
      Segment Results                                                         
      ---------------                                                         
      Base fees                                                               
       revenue          $15        $-        $-       $15        $-       $15 
      Timeshare                                                               
       sales and                                                              
       services,                                                              
       net               74        (2)        -        72        (8)       64 
      Timeshare                                                               
       strategy -                                                             
       impairment                                                             
       charges            -         -         -         -         -         - 
      Restructuring 
       costs             (7)        7         -         -         -         - 
      General,                                                                
       administrative                                                         
       and other                                                              
       expense          (23)        -         -       (23)        -       (23)
      Gains and                                                               
       other income       1         -         -         1         -         1 
      Joint                                                                   
       venture                                                                
       equity                                                                 
       earnings          (6)        3         -        (3)        -        (3)
      Timeshare                                                               
       strategy -                                                             
       impairment         -                                                   
       charges (non-                                                          
       operating)         -         -         -         -         -         - 
      Noncontrolling                                                          
       interest           -         -         -         -         -         - 
                         --        --        --        --        --        -- 
          Segment 
           results      $54        $8        $-       $62       $(8)      $54 
                        ===        ==        ==       ===       ===       === 
                                                                              
                                                                              
                                                                              
      ---------                                                              
      Sales and                                                               
       Services                                                               
       Revenue                                                                
      ---------                                                               
      Development      $185        $-        $-      $185        $4      $189 
      Services           98         -         -        98         -        98 
      Financing          76        (2)        -        74        (6)       68 
      Other revenue      18         -         -        18         -        18 
                         --        --        --        --        --        -- 
          Sales and                                                           
           services                                                           
           revenue     $377       $(2)       $-      $375       $(2)     $373 
                       ====       ===        ==      ====       ===      ==== 
                                                                              
                                                                              
                                                                              
      --------------                                                         
      Contract Sales                                                          
      --------------                                                          
      Company:                                                                
          Timeshare    $183        $-        $-      $183        $-      $183 
          Fractional      3         3         -         6         -         6 
          Residential     9         -         -         9         -         9 
                         --        --        --        --        --        -- 
              Total                                                           
               company  195         3         -       198         -       198 
      Joint ventures:                                                         
          Timeshare       -         -         -         -         -         - 
          Fractional    (12)       17         -         5         -         5 
          Residential    (8)        8         -         -         -         - 
                         --         -         -         -         -         - 
           Total joint                                                        
            ventures    (20)       25         -         5         -         5 
                        ---        --         -         -         -         - 
           Total contract                                                     
            sales,                                                            
            including                                                         
            joint 
            ventures   $175       $28        $-      $203        $-      $203 
                       ====       ===        ==      ====        ==      ==== 
                                                                              
      -----------                                                            
      Gain /                                                                  
       (Loss) on                                                              
       Notes Sold                                                             
      -----------                                                             
      Gain / loss on                                                          
       notes sold       $38        $-        $-       $38      $(38)       $- 
                        ===        ==        ==       ===      ====        == 
                                                                              
                                                                              
       **Denotes non-GAAP financial measures.  Please see pages A-27 and A-28 
         for additional information about our reasons for providing these 
         alternative financial measures and the limitations on their use. 
      ***In addition to the segment impacts shown, ASU Nos. 2009-16 and 2009-
         17 would have increased consolidated interest expense by $26 million
         from $34 million as reported to $60 million.    

                                    A-25



                     MARRIOTT INTERNATIONAL, INC.                  
                           TIMESHARE SEGMENT                      
     AS ADJUSTED HAD ASU NOS. 2009-16 AND 2009-17 (FORMERLY REFERRED 
        TO AS FAS 166 & 167) BEEN ADOPTED ON JANUARY 2, 2009        
                             FULL YEAR 2009              
                            ($ in millions)                  
                                                                  
                                      Adjustments           
                                      -----------           
                                                                     As     
                                                                   Adjusted  
                                                                     For    
                                                                     ASU    
                                                                     Nos.    
                    As                              As     ASU     2009-16  
                 Reported               Time-    Adjusted  Nos.      And    
                    52      Restruc-    share       52   2009-16   2009-17  
                   Weeks     turing  Strategy -    Weeks   And     52 Weeks  
                   Ended    Costs &    Impair-     Ended  2009-17    Ended   
                  Jan. 1,    Other      ment      Jan. 1,  Adjust-   Jan. 1, 
                    2010     Charges   Charges     2010**  ments***  2010**  
      ---------   --------  -------- ----------- --------  -------- -------- 
      Segment                                                                 
       Revenues                                                               
      ---------                                                               
      Segment                                                                 
       revenues       $1,439       $24      $-    $1,463      $101     $1,564 
                      ======       ===      ==    ======      ====     ====== 
                                                                              
                                                                              
      ---------------                                                         
      Segment Results                                                         
      ---------------                                                         
      Base fees                                                               
       revenue           $47        $-      $-       $47        $-        $47 
      Timeshare                                                               
       sales and                                                              
       services,                                                              
       net                83        23       -       106        76        182 
      Timeshare                                                               
       strategy -                                                             
       impairment                                                             
           charges      (614)        -     614         -         -          - 
      Restructuring 
       costs             (45)       45       -         -         -          - 
      General,                                                                
       administrative                                                         
       and other                                                              
           expense       (80)        7       -       (73)        -        (73)
      Gains and                                                               
       other income        2         -       -         2         -          2 
      Joint                                                                   
       venture                                                                
       equity                                                                 
       earnings          (12)        6       -        (6)        -         (6)
      Timeshare                                                               
       strategy -                                                             
       impairment                                                             
       charges (non-                                                         
       operating)        (71)        -      71         -         -          - 
      Noncontrolling                                                          
       interest           11         -       -        11         -         11 
                          --        --      --        --        --         -- 
          Segment 
           results     $(679)      $81    $685       $87       $76       $163 
                       =====       ===    ====       ===       ===       ==== 
                                                                              
                                                                              
                                                                              
      ---------                                                              
      Sales and                                                               
       Services                                                               
       Revenue                                                                
      ---------                                                               
      Development       $626        $4      $-      $630       $23       $653 
      Services           330         -       -       330         -        330 
      Financing          130        20       -       150        79        229 
      Other revenue       37         -       -        37        (1)        36 
                          --        --      --        --        --         -- 
          Sales and                                                           
           services                                                           
           revenue    $1,123       $24      $-    $1,147      $101     $1,248 
                      ======       ===      ==    ======      ====     ====== 
                                                                              
                                                                              
                                                                              
      --------------                                                         
      Contract Sales                                                          
      --------------                                                          
      Company:                                                                
          Timeshare     $685        $-      $-      $685        $-       $685 
          Fractional      28         4       -        32         -         32 
          Residential      8         4       -        12         -         12 
                          --        --      --        --        --         -- 
              Total                                                           
               company   721         8       -       729         -        729 
      Joint ventures:                                                         
          Timeshare        -         -       -         -         -          - 
          Fractional     (21)       40       -        19         -         19 
          Residential    (35)       35       -         -         -          - 
                         ---        --      --        --        --         -- 
           Total joint                                                       
            ventures     (56)       75       -        19         -         19 
                         ---        --      --        --        --         -- 
           Total                                                             
            contract                                                         
            sales,                                                           
            including                                                        
            joint                                                            
            ventures    $665       $83      $-      $748        $-       $748
                        ====       ===      ==      ====        ==       ====
                                                                             
      -----------                                                            
      Gain /                                                                 
       (Loss) on                                                             
       Notes Sold                                                            
      -----------                                                            
      Gain / loss on                                                         
       notes sold        $37        $-      $-       $37      $(37)        $-
                         ===        ==      ==       ===      ====         ==
                                                                             
                                                                             
        **Denotes non-GAAP financial measures.  Please see pages A-27 and A-28
          for additional information about our reasons for providing these 
          alternative financial measures and the limitations on their use.    
      ***If we had adopted ASU Nos. 2009-16 and 2009-17 on the first day of 
         fiscal year 2009, the full year 2009 impact to the company would have
         been a $1 million decline in adjusted pretax income, which includes  
         the $76 million increase to Timeshare segment results shown in the
         table above more than offset by the $77 million increase in interest
         expense.    

                                    A-26

MARRIOTT INTERNATIONAL, INC.

Non-GAAP Financial Measures

In our press release and schedules, and on the related conference call, we report certain financial measures that are not prescribed or authorized by United States generally accepted accounting principles ("GAAP"). We discuss management's reasons for reporting these non-GAAP measures below, and the press release schedules reconcile the most directly comparable GAAP measure to each non-GAAP measure that we refer to (identified by a double asterisk on the preceding pages). Although management evaluates and presents these non-GAAP measures for the reasons described below, please be aware that these non-GAAP measures are not alternatives to revenue, operating income, income from continuing operations, net income, earnings per share or any other comparable operating measure prescribed by GAAP. In addition, these non-GAAP financial measures may be calculated and/or presented differently than measures with the same or similar names that are reported by other companies, and as a result, the non-GAAP measures we report may not be comparable to those reported by others.

Adjusted Measures That Exclude Certain Charges, Costs, and Other Expenses. Management evaluates non-GAAP measures that exclude the impact of Timeshare strategy - impairment charges incurred in the 2009 third quarter, restructuring costs and other charges incurred in the 2008 fourth quarter through the 2009 fourth quarter, deferred compensation charges and credits incurred in the 2008 first quarter through the 2009 fourth quarter, and certain tax expenses incurred in the 2008 second quarter through the 2009 third quarter, because those non-GAAP measures allow for period-over-period comparisons of our on-going core operations before material charges. These non-GAAP measures also facilitate management's comparison of results from our on-going operations before material charges with results from other lodging companies.

Timeshare Strategy - Impairment Charges. In response to the difficult business conditions that the Timeshare segment's timeshare, luxury residential, and luxury fractional real estate development businesses continued to experience, we evaluated our entire Timeshare portfolio in the 2009 third quarter. In order to adjust the business strategy to reflect current market conditions at that time, on September 22, 2009, we approved plans for our Timeshare segment to take the following actions: (1) for our luxury residential projects, reduce prices, convert certain proposed projects to other uses, sell some undeveloped land, and not pursue further Marriott-funded residential development projects; (2) reduce prices for existing luxury fractional units; (3) continue short-term promotions for our U.S. timeshare business and defer the introduction of new projects and development phases; and (4) for our European timeshare and fractional resorts, continue promotional pricing and marketing incentives and not pursue further development. As a result of these decisions, we recorded third quarter 2009 pretax charges totaling $752 million in our Consolidated Statements of Income ($502 million after-tax), including $614 million of pretax charges impacting operating income under the "Timeshare strategy-impairment charges" caption, and $138 million of pretax charges impacting non-operating income under the "Timeshare strategy-impairment charges (non-operating)" caption.

Restructuring Costs and Other Charges. During the latter part of 2008 and particularly the fourth quarter, we experienced a significant decline in demand for hotel rooms both domestically and internationally due, in part, to the failures and near failures of several large financial service companies and the dramatic downturn in the economy. Our capital intensive Timeshare business was also hurt by the downturn in market conditions and particularly, the significant deterioration in the credit markets, which resulted in our decision not to complete a note sale in the fourth quarter of 2008 (although we did complete a note sale in the first quarter of 2009). These declines resulted in reduced management and franchise fees, cancellation of development projects, reduced timeshare contract sales, contract cancellation allowances, and charges and reserves associated with expected fundings, loans, Timeshare inventory, accounts receivable, contract cancellation allowances, valuation of Timeshare residual interests, hedge ineffectiveness, and asset impairments. We responded by implementing various cost saving measures, beginning in the fourth quarter of 2008 and which continued in 2009, and resulted in first quarter 2009 restructuring costs of $2 million, second quarter 2009 restructuring costs of $33 million, and third quarter 2009 restructuring costs of $9 million, and 2009 fourth quarter restructuring costs of $7 million that were directly related to the downturn. We also incurred other first quarter 2009, second quarter 2009 and fourth quarter 2009 charges totaling $127 million, $24 million, and $12 million respectively, as well as $1 million in net other credits in the 2009 third quarter, that were directly related to the downturn, including asset impairment charges, accounts receivable and guarantee charges, reserves associated with loans, reversal of the liability related to expected fundings, Timeshare contract cancellation allowances, and charges related to the valuation of Timeshare residual interests.

Deferred Compensation Expenses. We evaluate adjusted general, administrative, and other expenses excluding the impact of deferred compensation expenses because this non-GAAP measure allows for period-over-period comparisons of our on-going core general, administrative, other expenses before material charges or credits associated with a program that we have modified. As we implemented changes to our deferred compensation plan in 2009, we expect to have significantly reduced expense impact and volatility in 2010 and beyond. We also utilize this metric for forecasting and modeling purposes.

Certain Tax Expenses. Certain tax expenses included $26 million in the 2009 first quarter, $17 million in the 2009 second quarter, $13 million in the 2009 third quarter and $24 million in the 2008 second quarter of non-cash charges primarily related to the treatment of funds received from certain foreign subsidiaries, an issue we are contesting with the Internal Revenue Service ("IRS"). Additionally, certain tax expenses in the 2008 second quarter also reflected $12 million of tax expense due primarily to prior years' tax adjustments, including a settlement with the IRS that resulted in a lower than expected refund of taxes associated with a 1995 leasing transaction. Certain tax expenses in the 2008 third quarter reflected $29 million of tax expense primarily related to an unfavorable court decision involving a tax planning transaction associated with a 1994 sale transaction. Certain tax expenses in the 2008 fourth quarter include income tax expense totaling $7 million primarily due to prior years' tax adjustments.

A-27

MARRIOTT INTERNATIONAL, INC.

Non-GAAP Financial Measures

(cont.)

Earnings Before Interest, Taxes, Depreciation and Amortization. Earnings before interest, taxes, depreciation and amortization ("EBITDA") reflects earnings excluding the impact of interest expense, tax expense, depreciation and amortization. Management considers EBITDA to be an indicator of operating performance because it can be used to measure our ability to service debt, fund capital expenditures, and expand our business. EBITDA is used by analysts, lenders, investors and others, as well as by us, to evaluate companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company's capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and tax expense can vary considerably among companies. EBITDA also excludes depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.

Adjusted EBITDA. Management also evaluates adjusted EBITDA which excludes: (1) Timeshare strategy - impairment charges of $752 million incurred in the 2009 third quarter; (2) the 2009 fourth quarter restructuring costs and other charges totaling $19 million; (3) the 2009 third quarter restructuring costs and other charges totaling $8 million; (4) the 2009 second quarter restructuring costs and other charges totaling $57 million; (5) the 2009 first quarter restructuring costs and other charges totaling $129 million; (6) the 2008 fourth quarter restructuring costs and other charges totaling $192 million; and (7) the first through third quarters of 2008 impact of the synthetic fuel business. Management excludes the restructuring costs and other charges incurred in the 2009 first through fourth quarters and in the 2008 fourth quarter and the timeshare strategy-impairment charges recorded in the 2009 third quarter for the reasons noted above under "Measures That Exclude Certain Charges, Costs, and Other Expenses." Fourth quarter 2008 restructuring costs and other charges included $55 million of restructuring costs and $137 million of other charges, including charges and reserves associated with expected fundings, loans, Timeshare inventory, accounts receivable, contract cancellation allowances, valuation of Timeshare residual interests, hedge ineffectiveness, and asset impairments. Management also excludes the first through third quarters of 2008 impact of the synthetic fuel business, which was discontinued in 2007 and which did not relate to our core lodging business, to allow for period-over-period comparisons of our on-going core lodging operations and facilitate management's comparison of our results with those of other lodging companies.

Adjusted Measures that Exclude the Impact of New Accounting Standards or Reflect Their Early Adoption. As of the first day of fiscal year 2010, we adopted Accounting Standards Update ("ASU") No. 2009-16 "Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets" (formerly known as FAS No. 166, "Accounting for Transfers of Financial Assets-an amendment of FASB Statement No. 140") and ASU No. 2009-17 "Consolidations (Topic 810); Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities" (formerly known as FAS No. 167, "Amendments to FASB Interpretation No. 46(R)," which requires consolidating previously securitized pools of Timeshare notes and will impact the ongoing accounting for those notes. Management evaluates non-GAAP measures that exclude the impact of these standards in future years or include the impact of these standards as if we had adopted them early in order to better perform year-over-year comparisons on a comparable basis.

Total Debt Net of Cash (or "Net Debt") and Adjusted Total Debt Net of Cash. Total debt net of cash reflects total debt less cash and cash equivalents. Management considers total debt net of cash to be a more accurate indicator of the net debt that must be repaid or refinanced at maturity (as it gives consideration to cash resources available to retire a portion of the debt when due). In addition, Management considers adjusted total debt net of cash, which excludes the debt that will be consolidated as a result of adopting ASU Nos. 2009-16 and 2009-17, because that debt is non-recourse to the Company and is not supported by the Company's cash flows. Management believes that these financial measures provide a clearer picture of the future demands on cash to repay debt and uses these measures in making decisions regarding its borrowing capacity and future refinancing needs. Management also evaluates adjusted total debt net of cash for the reason stated in the previous paragraph.

A-28

SOURCE Marriott International, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

IoT & Smart Cities Stories
Moroccanoil®, the global leader in oil-infused beauty, is thrilled to announce the NEW Moroccanoil Color Depositing Masks, a collection of dual-benefit hair masks that deposit pure pigments while providing the treatment benefits of a deep conditioning mask. The collection consists of seven curated shades for commitment-free, beautifully-colored hair that looks and feels healthy.
The textured-hair category is inarguably the hottest in the haircare space today. This has been driven by the proliferation of founder brands started by curly and coily consumers and savvy consumers who increasingly want products specifically for their texture type. This trend is underscored by the latest insights from NaturallyCurly's 2018 TextureTrends report, released today. According to the 2018 TextureTrends Report, more than 80 percent of women with curly and coily hair say they purcha...
The textured-hair category is inarguably the hottest in the haircare space today. This has been driven by the proliferation of founder brands started by curly and coily consumers and savvy consumers who increasingly want products specifically for their texture type. This trend is underscored by the latest insights from NaturallyCurly's 2018 TextureTrends report, released today. According to the 2018 TextureTrends Report, more than 80 percent of women with curly and coily hair say they purcha...
We all love the many benefits of natural plant oils, used as a deap treatment before shampooing, at home or at the beach, but is there an all-in-one solution for everyday intensive nutrition and modern styling?I am passionate about the benefits of natural extracts with tried-and-tested results, which I have used to develop my own brand (lemon for its acid ph, wheat germ for its fortifying action…). I wanted a product which combined caring and styling effects, and which could be used after shampo...
The platform combines the strengths of Singtel's extensive, intelligent network capabilities with Microsoft's cloud expertise to create a unique solution that sets new standards for IoT applications," said Mr Diomedes Kastanis, Head of IoT at Singtel. "Our solution provides speed, transparency and flexibility, paving the way for a more pervasive use of IoT to accelerate enterprises' digitalisation efforts. AI-powered intelligent connectivity over Microsoft Azure will be the fastest connected pat...
There are many examples of disruption in consumer space – Uber disrupting the cab industry, Airbnb disrupting the hospitality industry and so on; but have you wondered who is disrupting support and operations? AISERA helps make businesses and customers successful by offering consumer-like user experience for support and operations. We have built the world’s first AI-driven IT / HR / Cloud / Customer Support and Operations solution.
Codete accelerates their clients growth through technological expertise and experience. Codite team works with organizations to meet the challenges that digitalization presents. Their clients include digital start-ups as well as established enterprises in the IT industry. To stay competitive in a highly innovative IT industry, strong R&D departments and bold spin-off initiatives is a must. Codete Data Science and Software Architects teams help corporate clients to stay up to date with the mod...
At CloudEXPO Silicon Valley, June 24-26, 2019, Digital Transformation (DX) is a major focus with expanded DevOpsSUMMIT and FinTechEXPO programs within the DXWorldEXPO agenda. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of business. Only 12% still survive. Similar percentages are found throug...
Druva is the global leader in Cloud Data Protection and Management, delivering the industry's first data management-as-a-service solution that aggregates data from endpoints, servers and cloud applications and leverages the public cloud to offer a single pane of glass to enable data protection, governance and intelligence-dramatically increasing the availability and visibility of business critical information, while reducing the risk, cost and complexity of managing and protecting it. Druva's...
BMC has unmatched experience in IT management, supporting 92 of the Forbes Global 100, and earning recognition as an ITSM Gartner Magic Quadrant Leader for five years running. Our solutions offer speed, agility, and efficiency to tackle business challenges in the areas of service management, automation, operations, and the mainframe.