2006 Annual Report

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Consolidated Balance Sheet Fiscal Year-End 2006 and 2005 2006 2005 ($ in millions) ASSETS Current assets Cash and equivalents $ 193 $ 203 Accounts and notes receivable (1) 1,117 1,001 Inventory 1,208 1,164 Current deferred taxes, net 200 220 Assets held for sale 411 555 Other 185 247 3,314 3,390 Property and equipment Intangible assets 1,238 1,134 Goodwill 921 924 Contract acquisition costs (1) 575 466 1,496 1,390 Cost method investments (1) 70 233 Equity method investments (1) Notes receivable 332 349 Loans to equity method investees (1) 27 36 Loans to timeshare owners 316 311 Other notes receivable 217 282 560 629 Other long-term receivables 178 175 Deferred taxes, net (1) 665 545 Other (1) 735 685 $ 8,588 $ 8,530 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Current portion of long-term debt $ 15 $ 56 Accounts payable (1) 658 520 Accrued payroll and benefits 615 559 Liability for guest loyalty program 384 317 Liabilities of assets held for sale 102 30 Timeshare segment deferred revenue 178 141 Other payables and accruals (1) 570 510 2,522 2,133 Long-term debt 1,818 1,681 Liability for guest loyalty program 847 768 Self-insurance reserves 184 180 Other long-term liabilities (1) Shareholders’ equity 599 516 Class A Common Stock 5 5 Additional paid-in-capital 3,617 3,562 Retained earnings 2,860 2,500 Treasury stock, at cost (3,908) (2,667) Deferred compensation — (137) Accumulated other comprehensive income (loss) 44 (11) (1) See Footnote No. 22,“Related Party Transactions,” of the Notes to Consolidated Financial Statements for disclosure of related party amounts. See Notes to Consolidated Financial Statements 38 | MARRIOTT INTERNATIONAL, INC. 2006 2,618 3,252 $ 8,588 $ 8,530
Consolidated Statement of Cash Flows Fiscal Years 2006, 2005 and 2004 2006 2005 2004 ($ in millions) OPERATING ACTIVITIES Net income Adjustments to reconcile to cash provided by operating activities: $ 608 $ 669 $ 596 Depreciation and amortization 188 184 166 Minority interest (7) (44) (40) Income taxes (76) (86) (63) Timeshare activity, net (104) (35) 89 Liability for guest loyalty program 113 125 136 Cumulative effect of change in accounting principle 109 — — Other Working capital changes: 106 151 (83) Accounts receivable (10) (128) (6) Other current assets (9) (22) (16) Accounts payable and accruals 52 23 112 Net cash provided by operating activities 970 837 891 INVESTING ACTIVITIES Capital expenditures (529) (780) (181) Dispositions 798 298 402 Loan advances (59) (56) (129) Loan collections and sales 121 706 276 Equity and cost method investments (95) (216) (45) Purchase of available-for-sale securities (27) (15) (30) Other (90) (67) (6) Net cash provided by (used in) investing activities 119 (130) 287 FINANCING ACTIVITIES Commercial paper, net (188) 499 — Issuance of long-term debt 352 356 20 Repayment of long-term debt (17) (523) (99) Redemption of convertible debt — — (62) Debt exchange consideration, net — (29) — Issuance of Class A Common Stock 378 125 206 Dividends paid (93) (84) (73) Purchase of treasury stock (1,546) (1,644) (664) Earn-outs received, net 15 26 35 Net cash used in financing activities (1,099) (1,274) (637) (DECREASE) INCREASE IN CASH AND EQUIVALENTS (10) (567) 541 CASH AND EQUIVALENTS, beginning of year 203 770 229 CASH AND EQUIVALENTS, end of year $ 193 $ 203 $ 770 See Notes to Consolidated Financial Statements MARRIOTT INTERNATIONAL, INC. 2006 | 39
Page 1 and 2: MARRIOTT INTERNATIONAL, INC. 2006 A
Page 3 and 4: Our Brands The Ritz-Carlton ® Hote
Page 5 and 6: As the brand catering to the “enj
Page 7 and 8: A Place to Achieve At Marriott, we
Page 9 and 10: A Place to Let Go For many, leisure
Page 11 and 12: To Our Shareholders J.W. MARRIOTT,
Page 13 and 14: Risk Factors FORWARD-LOOKING STATEM
Page 15 and 16: ownership could prevent potential c
Page 17 and 18: Management’s Discussion and Analy
Page 19 and 20: eceipt in 2005, of a $10 million te
Page 21 and 22: “Accounting for Real Estate Time-
Page 23 and 24: everage and other revenue, and new
Page 25 and 26: Comparable Company- Comparable Oper
Page 27 and 28: 2006 COMPARED TO 2005 Across our No
Page 29 and 30: increase in base management and inc
Page 31 and 32: The table below details the impact
Page 33 and 34: production, our synthetic fuel prod
Page 35 and 36: Dividends. In April 2006, our Board
Page 37 and 38: previously deferred and recognize t
Page 39: Consolidated Statement of Income Fi
Page 43 and 44: Notes to Consolidated Financial Sta
Page 45 and 46: “Other long-term assets” line i
Page 47 and 48: FIN 48, only tax positions that mee
Page 49 and 50: 3 | INCOME TAXES See the “Future
Page 51 and 52: weighted average remaining term was
Page 53 and 54: 7 | PROPERTY AND EQUIPMENT ($ in mi
Page 55 and 56: 2004 Dispositions We sold two lodgi
Page 57 and 58: At year-end 2006, $1,123 million of
Page 59 and 60: the Series F Notes and Series G Not
Page 61 and 62: Audit of Employee Stock Ownership P
Page 63 and 64: Depreciation and Amortization ($ in
Page 65 and 66: JWM Family Enterprises, L.P. JWM Fa
Page 67 and 68: Selected Historical Financial Data
Page 69 and 70: Non-GAAP Financial Measure Reconcil
Page 71 and 72: Report of Independent Registered Pu
Page 73 and 74: Board of Directors [BACK ROW, LEFT

2006 Annual Report

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