Spreadsheet Marriott Bartenstein Baid Marcu Hunziker

8/19/2019 Spreadsheet Marriott Bartenstein Baid Marcu Hunziker

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Q1 Asset BetaDebt @ book value

Equity beta 0.97

Leverage ratio 0.41

Equity ratio 0.59

Tax 44.1%

Asset Beta = 0.70

Debt @ Market Value

1978

Longterm ebt !09.9

A itiona" "ongterm ebt #

$emaining time to ex iry in 19&7 0.5

#

'ebt (inan)ing

Lo ging "ongterm

*ontra)t +ervi)es s,ortterm

$estaurant s,ortterm

Est. Debt @ MV 2,083

Equity - / ! 5 4

Q2 Cost of e u!t"

$is2#(ree rate 10y &.73%Beta Equity un"evere 0.7!

= ris2#(ree rate Beta Equity $6


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Target ' 0%

Target E 40%

Beta Equity re"evere 1.!4

+ rea "ongterm geom. 5. !%

Estimate $6 'imson ars, +taunton8 11.9%

Cost of #ebt= overa"" ris2#(ree rate .&1%

+ rea 1.!0%

% i enti(. Assets

Lo ging 1%$estaurant 13%

*ontra)t servi)es 37%

$ar%et &e!%'tsTarget '

Target E

$a( rate

)ACC*urrent A** 17.35%

$ar%et )ACC

Q3 *o#%!+%

kE

$is2#(ree 10y :ovt8

Beta

Estimate $6

kD


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$is2#(ree 10y :ovt8

+ rea

2' ("oat

$is2#(ree T#Bi""8

+ rea

;"oat 50%

;ixe 50%

D $ar%et 74%

E $ar%et 3 %

$a( 44.1%

Beta 6eer


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$is2#(ree T#Bi""8

+ rea

;"oat 35%

;ixe 75%

D $ar%et 43%

E $ar%et 5&%

$a( 44.1%

Beta 6eer

*,ur),>s*o""ins

;ris),>s

Luby>s

)'ona" >s

en y>s

)ACC restaura+t 13.2-

Co+tra/t erv!/es

kE

$is2#(ree 10y :ovt8

beta

Estimate $6

kD

2' (ixe

$is2#(ree 1y :ovt8

+ rea

2' ("oat


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$is2#(ree T#Bi""8

+ rea

;"oat 40%

;ixe 0%

D $ar%et 40%

E $ar%et 0%

$a( 44.1%

Beta 'ivision

Lo ging*ontra)t +ervi)es

$estaurants

ariott ?n).

)ACC /o+tra/t serv!/es 20.1-


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Market values for #ebt e u!t"

Equity beta 0.97

Equity - / !5 4

'ebt - / 30&!

Tax 44.1%

Asset Beta = 0.73

1979 1980 1981 1982

! 5.! 5! . 07.7 &&9.!

55.4 171.! 71.1 3&1.

1.5 3.5 !.5 4.5

&! 43& 349 1 3 7

;inan)ing ,ori@on y8 Avg. aturity y8 % Assets Avg. ebt maturi

10 7.3! 1% 4.!&

1 0.5 37% 0.14

1 0.5 13% 0.0

4.5&

! .9% ,tt ages.stern.nyu.e u Ca amo ar De F


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8.1-

ris2#(ree rate eig,te ris2#(ree rate

7.09% 4.!0%.54% 0.&1%

.!3% 1.71%

Gvera"" ris2#(ree rate .&1%

0-

0-

.1-

8

12. -

3!.4%

&.73%

1.34

11.9%

&.3%


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&.73%

1.10%

.5 %

5.4 %

1.10%

Beta Tax ' A E A

0.&& 44% 14% & %

1.4 44% 79% 31%

0.!& 44% 9% !1%

0.95 44% 5% !5%

Average

Beta $e"ev.

19.4%

&.73%

0.90

11.9%

&.!%

&.70%

.90%

1.&0%

7.3 %


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5.4 %

1.&0%

Beta Tax ' A E A

0.75 44% 4% 9 %0. 44% 10% 90%

0.1! 44% % 94%

0. 4 44% 1% 99%

1 44% 3!% 77%

1.0& 44% 31% 79%

Average

Beta $e"ev.

!0. %

&.73%

1.&4

11.9%

7.7%

&.!0%

.90%

1.40%

.& %


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5.4 %

1.40%

? enti(. Assets % Beta un"evere

3777 1% 0.4&13!& 37% H

5 & 13% 0. 4

45&! 100% 0.7!

Beta )ontra)t servi)es un"evere = 1.!4

Beta )ontra)t servi)es re"evere = 1.&4


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1983 198 198 198 1987

1 071. 1 115.! 1 193.! 1 3.& 3 49&.&

1&3.! 4!.7 77.0 470.5 &! .0 3 1&&.9

5.5 .5 7.5 &.5 9.5

1 00! 3&4 57& ! 999 7 943 7.3!

ty

= avg. 'ebt maturity

tions m2tva"o( ebt.,tm8

1 ) )− ∗ /


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13/32

Beta un".

0.&1

0.47

0.17

0.47

0.4&

1.34


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Beta un".

0.7!0.5

0.1!

0. 4

0.&

0.94

0. 4

0.90


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16/32

=avg. maturity o( ebt in "o ging


17/32


18/32


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arriott *or . *ost


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store in a retrieva" system ort,out t,e ermission o(


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arriott 0% 40% 0% 1.!0%

Lo ging 74 50 50 1.10*ontra)t servi)es 40 40 0 0.01$estaurants 43 35 75 0.03

$able A ar2et /a"ue#Target Leverage $atios an *re it + rea s (or arriott an ?ts 'ivisions

Debt4er/e+ta%e !+

Ca5!tal

6ra/t!o+of Debt

at 6loat!+%

6ra/t!o+of Debtat 6!(e#

Debt ate4re !u above

over+ e+t


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Matur!t" ate

!0#year &.95%10#year &.73%1#year .90%

3y 7.10% 1!y 7.!0% 34y 7.51% !5y 7.71% 4

y 7.91% 57y &.11%&y &.!3% 79y &.53% &10y &.73% 9

$able B M.+. :overnment ?nterest $ates A ri" 19&&


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1978 1979 1980 1981 1982 1983

Summary of Operations+a"es N1 174.1 N1 43 .0 N1 !!.9 N1 905.7 N3 45&.9 N3 9Earnings be(ore interest ex ense an in)ome taxes 107.1 1!!.5 150.! 17!.! 305.5 347.9?nterest ex ense 3!.7 37.& 4 .& 53.0 71.& 3.&

?n)ome be(ore in)ome taxes &!.5 105. 10!.5 131.! 1!!.7 1&5.1?n)ome taxes !5.4 4!.& 40. 45.3 50.3 7 .7

4&.1 1.& 3.9 7 .1 &!.5 10&Det in)ome 54.! 71.0 73.0 & .1 94.! 115.3

101.3 117.5 135.& 1 0.& 30!. 373.7

Capitalization and ReturnsTota" assets N1 000.! N1 0&0.4 N1 314.! N1 454.9 N3 0 3. N3 50

&3 .9 &91.9 977.7 1 1 7.50 1 !4.50 3 00Long#term ebt !09.9 ! 5.! 5! . 07.7 &&9.! 1 071.

55 171 71 3&3 1&3+,are,o" ersO equity 41&.7 41!.5 !11.5 431.7 51 .0 3&.3Long#term ebt tota" )a ita" !7.5% 41.0% 54.9% 53.1% 54.4% 5!.4%

Per Share and Other DataEarnings er s,are

N0.35 N0.!4 N0.45 N0.57 N0. 1 N0.7Det in)ome 0.39 0.!9 0.53 0. 4 0. 9 0.&!*as, ivi en s 0.03 0.0!4 0.043 0.051 0.0 ! 0.07+,are,o" ersO equity 3.3& 3.5& 3.49 !.33 !.&9 4. 7

ar2et ri)e year#en 8 3.4! !.4& .!5 7.1& 11.70 14.35+,ares outstan ing mi""ions8 1&!. 1 0.5 135.! 1!0.& 1!3.& 1!4.4$eturn on average s,are,o" ersO equity 1!.9% 17.0% 3!.&% 3!.4% 30.0% 30.0%

+our)e *om any re orts

E('!b!t 1 ;inan)ia"


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1977#19&1 1982 1983 198 198 198

Lodging

+a"es N1 091.7 N1 !30.5 N1 40.& N1 &9&.4 N3 3!!.1G erating ro(it 1!3. 1!9.7 1 1.3 1&5.& 315.7? enti(iab"e assets 909.7 1 3 4. 1 7& .! 3 10&.9 3 3! .7'e re)iation 33.7 37.4 !1.! !3.4 !7.1*a ita" ex en itures !71.5 !77.3 ! .4 &0&.! 9 .

0.033 0.01& 0.015 0.017

Contract Services

+a"es &19.& 950. 1 111.! 1 5& .! 3 3! .1G erating ro(it 51.0 71.1 & .& 11&. 154.9? enti(iab"e assets !7!.! !91. 40!.9 34.4 1 070.3'e re)iation 33.9 3 .1 3&.9 40.3 1.1*a ita" ex en itures 137.7 4!.& 55. 135.9 44&.7

0.07! 0.050 0.090 0.047Restaurants 0.0 7 0.073 0.0 4 0.057

+a"es 547.4 79.4 707.0 757.0 797.!G erating ro(it 4&.5 !.& 79.7 7&.3 79.1? enti(iab"e assets 453.3 4&!.0 49 .7 5&3. 5 3.!'e re)iation 35.1 !1.& !5.5 !4.& !&.1*a ita" ex en itures 199. 5.0 73.! 13&.4 4.0

0.10! 0.051 #0.005 0.0530.0 0.071 0.0 0 0.0 &

+our)e *om any re orts

E('!b!t 2 ;inan)ia" +ummary by Business +egment 19&3#19&7 mi""ions o( o""ars8


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1987

N3 7!.!3 !.9

3 777.44!.9

1 341.90.01 0.017 57.507

3 9 9.0170.

1 3!7.775.!

113.70.130.0 1 0.0 4 15. 00

&79.9&3.4

5 7.43.179.

0.0500.074 0.0 & 14.750


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)Boo2 va"ue o( ebt ivi e by t,e sum o( t,e boo2 va"ue o( ebt "us t,e mar2et va"ue o( equity.


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Short-Term Treasury Bill Returns

193 #19&7 !.54% !.4&% 0.94%

193 #1950 1.01 1.00 0.401951#1975 !. 7 !. 0.5197 #19&0 7.&0 7.77 0.&!19&1#19&5 10.!3 10.!0 0.7519& .1 .1 0.1919&7 5.4 0.05 0.33

Long-Term !S! "overnment Bond Returns

193 #19&7 4.5&% 4.37% 7.5&%

193 #1950 4.14 4.04 4.171951#1975 3.!9 3.33 .45197 #19&0 1.95 1. 9 11.1519&1#19&5 17.&5 1 .&3 14.319& 34.44 34.44 17.!019&7 #3. 9 #3. 9 10.3&

Long-Term# $igh-"rade Corporate Bond Returns

193 #19&7 5.34% 4.9!% .97%

193 #1950 4.&3 4.7 !.451951#1975 !.05 3.& .04197 #19&0 3.70 3.!9 10.&719&1#19&5 1&.9 17.&! 14.1719& 19.&5 19.&5 &.1919&7 #0.37 #0.37 9. 4

193 #19&7 13.01% 9.90% 30.55%

193 #1950 10.90 7. & 37.1&1951#1975 11.&7 10.3 1!.57197 #19&0 14.&1 1!.95 14. 019&1#19&5 15.49 14.71 1!.9319& 1&.47 1&.47 17.9419&7 5.3! 5.3! !0.50

E('!b!t Annua"


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+our)e *ase riterOs estimates base on ata (rom t,e Mniversity o( *,i)agoOs *enter (or $esear), in +e)urity 6ri)es.

Short-Term Treasury Bill Returns


32/32

193 #19&7 &.47% .43% 30. 0%

193 #1950 9.&9 vx)v 37.1&1951#1975 &.30 )a as 1!.71197 #19&0 7.01 as as a )as19&1#19&5 5.17 4.41 14.1519& 31.!1 13.!1 17.9319&7 #0.3! #0.3! 0.!1

193 #19&7 7.4!% 5. !% 30.7&%

193 #1950 .7 !. 4 3 .941951#1975 9.4& &.04 14.!5197 #19&0 13.& 13.3 15.5&19&1#19&5 #3.! #3.11 1!.7019& #5.97 #5.97 14.719&7 7.93 7.93 0.!5

193 #19&7 .77% 4.97% 30.!1%

193 #1950 .0& 3.93 3 .701951#1975 &.&3 7.40 1!.15197 #19&0 13.11 11.5 15.&419&1#19&5 #!.47 #!.13 1!.5919& #1.!& #1.!& 14.7319&7 5.50 5.50 !4.0

+our)e *ase riterOs estimates base on ata (rom t,e Mniversity o( *,i)agoOs *enter (or $esear), in +e)urity 6ri)es.

E('!b!t + rea s bet een +R6 500 *om osite $eturns an Bon $ates 193 #19&7

Ar!t' et!/Avera%e

eo etr!/Avera%e

ta+#ar#Dev!at!o+

Spread ,et een S%P '(( Composite Returns andShort-Term Treasury Bill Returns

Spread ,et een S%P '(( Composite Returns and Long- Term !S! "overnment Bond Returns

Spread ,et een S%P '(( Composite Returns and Long- Term# $igh-"rade Corporate Bond Returns

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Spreadsheet Marriott Bartenstein Baid Marcu Hunziker