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Harvard Business School Case #289-047
Case Software #XLS069
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Table A Market-Value Target-Leverage Ratios and Credit Spreads for Marriott and
Its Divisions
Maturity Rate
30-year 8.95%
10-year 8.72%
1-year 6.90%
Exhibit 1 Financial History of Marriott Corporation (dollars in millions, except per share amounts)
1978 1979 1980 1981 1982 1983 1984 1985 1986 1987
Summary of Operations
Sales 1,174.1 1,426.0 1,633.9 1,905.7 2,458.9 2,950.5 3,524.9 4,241.7 5,266.5 6,522.2
Earnings before interest expense and
income taxes 107.1 133.5 150.3 173.3 205.5 247.9 297.7 371.3 420.5 489.4
Interest expense 23.7 27.8 46.8 52.0 71.8 62.8 61.6 75.6 60.3 90.5
Income before income taxes 83.5 105.6 103.5 121.3 133.7 185.1 236.1 295.7 360.2 398.9
Income taxes 35.4 43.8 40.6 45.2 50.2 76.7 100.8 128.3 168.5 175.9
Income from continuing operationsa 48.1 61.8 62.9 76.1 83.5 108.4 135.3 167.4 191.7 223
Net income 54.3 71.0 72.0 86.1 94.3 115.2 139.8 167.4 191.7 223
Funds provided from cont. operationsb 101.2 117.5 125.8 160.8 203.6 272.7 322.5 372.3 430.3 472.8
Lodging:
Contract Services:
Restaurants:
Arithmetica 1987
Average Equityb Marketc Revenues
Return Beta Leverage ($ billions)
Hotels:
Restaurants:
Arithmetic Standard
Years Average Deviation
Source: Casewriter estimates based on data from the University of Chicago’s Center for Research
in Security Prices.