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Marriott Valuation (1)

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VALUATION
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    Valuation of Marriott International Hotels, Incorporated Prepared by: Allison Johnston Finance 129 Dr. K.C. Chen May 15, 2007  Table of Contents   Company Overview .......................................................................................................... 3  Background.....................................................................................................................3 Awards and Recognition.................................................................................................3 Recent News...................................................................................................................4 Investment Opportunities and Risks............................................................................... 5  Investment Opportunities................................................................................................5 Investment Risks.............................................................................................................6 Historical Financial Performance ................................................................................... 6   Historical NOPLAT, Historical Invested Capital, and Historical Free Cash Flow.... 8  Calculation of Historical NOPLAT................................................................................8 Calculation of Historical Invested Capital......................................................................8 Calculation of Historical Free Cash Flow.......................................................................9 Free Cash Flow Forecast and Assumptions.................................................................... 9   Valuation.......................................................................................................................... 11  Calculating WACC.......................................................................................................12 Free Cash Flow Approach............................................................................................13  NOPLAT Approach......................................................................................................14 EBITDA Approach.......................................................................................................14 Relative Approach........................................................................................................14 Holding Period Return..............................................................................................15 Recommendation............................................................................................................. 15   Appendix.......................................................................................................................... 16  Consolidated Statement of Earnings and Shareholders’ Equity...................................16 Consolidated Balance Sheets........................................................................................16 Historical NOPLAT......................................................................................................16 Historical Invested Capital............................................................................................16 Historical Free Cash Flows...........................................................................................16 Beta Calculation............................................................................................................16 Inputs for Present Value Calculations..........................................................................16 Valuation Calculations..................................................................................................16 2  Company Overview Background Marriott International Hotels, Incorporated (MAR) is a worldwide operator and franchisor of hotels and related lodging facilities. Founded in 1971, Marriott International operates or franchises 2,832 lodging properties worldwide and provides 2,046 furnished corporate housing rental units. Marriott operates internationally in the Americas, Europe, Asia, the Middle East, the United Kingdom, and Africa. Marriott International is headquartered in the Washington D.C. area and as of year-end 2006 employed nearly 151,000 people. 1    Awards and Recognition Marriott International has received numerous honors in recent years for being an outstanding company that prides itself on employee satisfaction and its ongoing commitment to diversity. Marriott International received the following list of awards 2  over the last year:   ã   March 2007 – Marriott International was recognized by the National Association for Female Executives (NAFE) as one of the top 10 companies on their 2007 list of “Top 30 Companies for Executive Women.” ã   February 2007 – Marriott International was recognized as one of “America’s Most Admired Companies” and for the eighth consecutive year was named the  “most” admired company in the lodging industry by FORTUNE Magazine. 1  source: www.marriott.com 2  source: www.marriott.com 3  ã   January 2007 – Marriott International was recognized by FORTUNE Magazine, for the 10 th  consecutive year, as one of the “100 Best Companies to Work for.” ã   September 2006 – Marriott International was ranked seventh as one of the most innovative users of technology in the U.S. by Information Week. ã   September 2006 – Marriott International was ranked 11 th  on the list of the “Top 50 Companies for Hispanics” by Hispanic Business Magazine. ã   July 2006 – Marriott International was named one of the “ten best companies for teens” by Seventeen Magazine. ã   July 2006 – For the seventh time, Marriott International was ranked the highest of any global lodging company in the NAACP’s annual lodging industry report card. Recent News ã   May 3, 2007 - Marriott Presence in Greater Shanghai Region to Expand with New JW Marriott and Courtyard Hotels in Hangzhou 3 : By the end of 2009, Marriott will offer travelers to the Shanghai region a choice of 15 hotels. In the next three years, Marriott plans to open a 330-room JW Marriott Hotel Hang Zhou and a 330-room Courtyard by Marriott Hang Zhou City Center.   ã   May 3, 2007 – Pres. Bush invites Marriott to Share Successes of English Learning Program 4 : President Bush invited Marriott to share the company’s success with Sed de Saber ™, a handheld device used to enhance English language skills of Spanish-speaking employees. 3  source: www.finance.yahoo.com 4  source: www.finance.yahoo.com  4

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Jul 23, 2017
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