1. Understanding Marriotts Business Model (6 pts): Review the companys reported 2020 Income Statement. How to they generate revenue? Explain what their primary sources of revenue are (i.e. their basic business model or lines of business).

2. Demand and Performance Trends (8 pts): The company uses the term RevPAR, or revenue per available room, frequently. This is not a GAAP measurement, but rather a way the hotel industry tracks strength of demand.
   1. Explain what the RevPAR term means, in your own words.
   2. Describe what happened with RevPAR in 2020 vs. 2019 (i.e. the year-over-year trend)

3. Company Financial Position (6 pts): Review managements comments on liquidity in the 4Q20 press release and earnings transcript (youll notice they do not include a statement of cash flows or balance sheet in their earning press release, though you may find them in the 2020 Annual report if youd like to review, though its not necessary for this question).
   1. Did the company take on additional debt during the year?
   2. Net income was negative for the year. Did that result in the company using or generating cash for the year? What is there overall cash strategy?

4. Reported vs. Adjusted Results (14 pts): Marriott reported full year 2020 reported Net Loss of $267 mm and EPS of $(0.82) or a loss of 82c/share (Earning Reconciliation, table on pg A-2), down vs. the reported $1.2 bb profit in 2019. This compares to the full year 2020 Adjusted Net Income of $59 mm and EPS of $0.18 table pg A-3). Take some time to review and compare these two charts. (Note: Cost reimbursement revenues and reimbursements expenses is primarily reconciliation of internal accounting you do not need to focus on these numbers).
   1. Identify (name and give $ amount) of the primary adjustments made in 2020 to move the report EPS loss of $0.82/share to a positive $0.18/share gain.
   2. Are any of the adjustments repeated in prior periods? If so, do you think they should be considered one-off events or part of ongoing operations?
   3. Are there any adjustments to 2020 results as a result of Covid? Should there be? (note, this latter answer is subjective state your case and why).
   4. In table A-12 and in their 4Q20 earnings transcript, the company talks about adjusted EBITDA? Is this a useful metric to use to analyze the company? What does this number tell us vs. reported and adjusted net income? What does the quarterly trend in table A-12 tell you?

5. 2021 Outlook (2 pts): Management offers their outlook on 2021, beginning on page 8 of the transcript (note: IMFs = Incentive Management Fees, or profit sharing with hotel owners for the hotels that they manage; in a management contract, Marriott collects a % of the profit of a hotel, once a hotel meets a minimum profit level.).
   1. Compare General, Administrative, and Other expenses in 2019, 2020, and estimated in 2021. (i.e. give $ values) how much in corporate and overhead costs does it look like Marriott has cut out of the company due to changes made post Covid?

6. 2021 Forecast (Optional 4 extra credit points possible): We will work towards forecasting in future weeks, but heres a risk-less opportunity to use what youve uncovered from questions 1-5 towards making some predictions on future trends.
   1. What do you think RevPAR can be in 2021, and what do you think total reported Net Income for the company will be in 2021. Give as much rational, either operationally and/or numerically to support you guesstimate.

Overview In this case, we will analyze the 2020 reported results of Marriott International. Marriott is the largest hotel company in the world with almost 1 million rooms, owning the Marriott, Ritz Carlton, Fairfield, etc brands, as well as Sheraton, Westin, St. Regis, etc brands from its acquisition of Starwood Hotels in 2016. In this case, you will review the year end 2020 results and supporting information the company provides to critically think about the 'reported' earnings or the company vs. the 'adjusted' earnings presented. Reported earnings follow GAAP accounting rules; adjusted results are discretionary additions or eliminations made to present the results in what the company deems the most comparative or transparent way. Adjusted results are now presented by almost every public company, and are higher than reported results >80% of the time; as such, the SEC is beginning to take a closer look at creating more regulations on how adjustments are presented. In this case, you will identify and consider the merit of the adjustments Marriott has made in an incredibly unique and atypical year. Refer to the 2020 fourth quarter and yearend earnings results press release and financial tables, earnings reconciliation table, and earnings call transcript. You are welcome to reference any other corporate documents, including their 2020 Annual Report for a great understanding of the company. Events & Presentations | Marriott International (gcs-web.com) Marriott International Reports Fourth Quarter 2020 Results Annual | Marriott International (gcs-web.com)