Marriott International reported third quarter 2016 results. Marriott reported net income totaled $70 million in the third quarter.
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This is a 67 percent decrease over 2015 third quarter net income of $210 million.
Reported diluted earnings per share (EPS) was $0.26 in the quarter, a 67 percent decrease from diluted EPS in the year-ago quarter.
Marriott revenues totaled more than $3.9 billion in the 2016 third quarter, compared to revenues of approximately $3.6 billion for the third quarter of 2015. Revenues for the third quarter of 2016 include $168 million related to the eight days of Starwood’s results in the quarter.
Base management and franchise fees totaled $430 million in the 2016 third quarter, compared to $397 million in the year-ago quarter.
The year-over-year increase in fees largely reflects $16 million related to the eight days of Starwood’s results in the quarter, higher RevPAR and unit growth, partially offset by $7 million of unfavorable foreign exchange and $3 million of lower relicensing fees.
Third quarter worldwide incentive management fees increased 19 percent to $81 million, primarily due to $4 million related to the eight days of Starwood’s results in the quarter, higher RevPAR and house profit margins, as well as increased international distribution, partially offset by $2 million of unfavorable foreign exchange.
Owned, leased, and other revenue, net of direct expenses, totaled $85 million in the 2016 third quarter, compared to $54 million in the year-ago quarter.
The year-over-year increase largely reflects $12 million related to the eight days of Starwood’s results in the quarter, improved results at several leased properties, including recently renovated hotels, the results for two recently opened owned properties in Rio de Janeiro and $4 million of higher residential and credit card branding fees.
Depreciation, amortization, and other expenses totaled $36 million in the third quarter compared to $31 million in the year-ago quarter. The year-over-year increase largely reflects $4 million related to the eight days of Starwood’s results.
Merger-related costs and charges totaled $228 million in the third quarter compared to none in the year-ago quarter. Included in the merger-related costs and charges are $186 million of severance and retention costs, $24 million of integration costs and $18 million of transaction costs.
General, administrative, and other expenses for the 2016 third quarter totaled $161 million compared to $149 million in the year-ago quarter.
The increase in expenses year-over-year was largely due to $7 million of expenses related to the eight days of Starwood’s results in the quarter and higher routine administrative costs.
Gains and other income increased to $3 million in the 2016 third quarter. The year-over-year increase was largely due to a distribution related to the sale of a hotel in an investment fund.
Interest expense, net totaled $46 million in the third quarter, an $8 million increase over the year-ago quarter, largely due to $9 million of interest expense related to the debt raised for the Starwood acquisition and $1 million related to the eight days of Starwood results, partially offset by interest earned on a larger portfolio of loans.
Equity in earnings totaled $3 million in the third quarter, compared to $8 million in the year-ago quarter.
The year-over-year decrease was largely due to the favorable adjustment of liabilities in an International joint venture in the third quarter of 2015, partially offset by $1 million related to the eight days of Starwood results in the quarter. ■