SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the plan year ended December 28, 2001
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to
Commission file number 1-12188
-------
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
MARRIOTT INTERNATIONAL, INC. EMPLOYEES'
PROFIT SHARING, RETIREMENT AND SAVINGS PLAN AND TRUST
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
MARRIOTT INTERNATIONAL, INC.
1 Marriott Drive
Washington, D.C. 20058
REQUIRED INFORMATION
Financial Statements and Exhibits as follows:
1. Financial statements
. Independent Auditors' Report
. Statements of Net Assets Available for Benefits as of
December 28, 2001 and December 29, 2000
. Statements of Changes in Net Assets Available for
Benefits for the years ended December 28, 2001 and
December 29, 2000
. Notes to Financial Statements
Certain schedules have been omitted because they are not
applicable, not material or because the information is
included in the financial statements or the notes thereto.
2. Exhibits
Consent of Independent Auditors
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Administrator of the Plan has duly caused this annual report to be
signed on its behalf by the undersigned, hereunto duly authorized.
MARRIOTT INTERNATIONAL, INC. EMPLOYEES' PROFIT SHARING, RETIREMENT
AND SAVINGS PLAN AND TRUST
Dated: June 26, 2002 By: /s/ KARL FREDERICKS
----------------------------
Karl Fredericks
Plan Administrator
As filed with the Securities and Exchange Commission on June 26, 2002
Commission File No. 1-12188
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FINANCIAL STATEMENTS AND EXHIBITS
TO
FORM 11-K
ANNUAL REPORT
Under
The Securities Exchange Act of 1934
_____________________
MARRIOTT INTERNATIONAL, INC.
EMPLOYEES' PROFIT SHARING, RETIREMENT AND
SAVINGS PLAN AND TRUST
_____________________
MARRIOTT INTERNATIONAL, INC.
1 Marriott Drive
Washington, D.C. 20058
================================================================================
INDEX TO FINANCIAL STATEMENTS AND EXHIBITS
MARRIOTT INTERNATIONAL, INC.
EMPLOYEES' PROFIT SHARING, RETIREMENT AND SAVINGS PLAN AND TRUST
Sequentially
Numbered
Exhibit Page
------- ----
Financial statements
. Independent Auditors' Report ......................................... 1
. Statements of Net Assets Available for Benefits as of
December 28, 2001 and December 29, 2000 .......................... 2
. Statement of Changes in Net Assets Available for Benefits
for the years ended December 28, 2001 and December
29, 2000 ......................................................... 3
. Notes to Financial Statements ........................................ 4
MARRIOTT INTERNATIONAL, INC. EMPLOYEES'
PROFIT SHARING, RETIREMENT AND SAVINGS
PLAN AND TRUST
Financial Statements and Supplemental Schedules
December 28, 2001 and December 29, 2000
(With Independent Auditors' Report Thereon)
Independent Auditors' Report
The Profit Sharing Committee and Participants
Marriott International, Inc. Employees' Profit Sharing, Retirement and
Savings Plan and Trust:
We have audited the accompanying statements of net assets available for benefits
of Marriott International, Inc. Employees' Profit Sharing, Retirement and
Savings Plan and Trust (the Plan) as of December 28, 2001 and December 29, 2000,
and the related statements of changes in net assets available for benefits for
the years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Marriott
International, Inc. Employees' Profit Sharing, Retirement and Savings Plan and
Trust as of December 28, 2001 and December 29, 2000, and the changes in net
assets available for benefits for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedules as of and for the plan
year ended December 28, 2001, of Assets Held at End of Year (schedule I), and
Assets Held for Investment Purposes Which Were Both Acquired and Disposed of
Within the Plan Year (schedule II) are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ KPMG LLP
McLean, Virginia
June 7, 2002
MARRIOTT INTERNATIONAL, INC. EMPLOYEES' PROFIT SHARING,
RETIREMENT AND SAVINGS PLAN AND TRUST
Statements of Net Assets Available for Benefits
December 28, 2001 and December 29, 2000
2001 2000
------------------- -------------------
Assets:
Investments directed by participants:
Investments, at fair value $ 1,288,285,560 1,364,984,326
Investment, at contract value 404,768,221 353,872,672
Investments not directed by participants:
Marriott International, Inc. ESOP convertible preferred
stock, at estimated fair value 263,005,476 676,028,200
------------------- -------------------
Total investments 1,956,059,257 2,394,885,198
------------------- -------------------
Receivables:
Due from Marriott International, Inc. for:
Company contribution 59,025,043 42,833,494
Participants' contributions -- 2,768,240
Receivables from sale of investments 1,977,479 7,609,647
Accrued interest and dividends 2,533,478 2,443,662
Other 211,985 852,004
------------------- -------------------
Total receivables 63,747,985 56,507,047
------------------- -------------------
Total assets 2,019,807,242 2,451,392,245
------------------- -------------------
Liabilities:
Accounts payable on investments purchased 6,076,662 32,006,428
Accrued interest payable on ESOP note 1,012,406 2,504,994
Custodian and advisor fees payable 980,522 754,030
Excess contributions due to participants 2,710 1,527,640
Other 389,437 217,805
ESOP note 291,247,597 679,531,141
------------------- -------------------
Total liabilities 299,709,334 716,542,038
------------------- -------------------
Net assets available for benefits $ 1,720,097,908 1,734,850,207
=================== ===================
See accompanying notes to financial statements.
2
MARRIOTT INTERNATIONAL, INC. EMPLOYEES' PROFIT SHARING,
RETIREMENT AND SAVINGS PLAN AND TRUST
Statements of Changes in Net Assets Available for Benefits
Years ended December 28, 2001 and December 29, 2000
2001 2000
--------------- ---------------
Additions to net assets attributed to:
Investment income (loss):
Net appreciation (depreciation) in fair value of investments $ (96,596,741) 25,430,782
Interest 36,989,077 34,714,429
Dividends 27,510,044 56,625,755
Gain on forgiveness of ESOP note interest 21,977,356 27,237,237
Less investment expense (2,285,549) (2,495,165)
--------------- ---------------
(12,405,813) 141,513,038
Contributions:
Participants 97,129,238 89,291,553
Company 59,596,909 42,833,494
Transfers from other plans 6,394,846 6,195,059
Other 171,845 30,008
--------------- ---------------
Total additions 150,887,025 279,863,152
--------------- ---------------
Deductions from net assets attributed to:
Benefits paid to participants 119,305,691 120,258,439
Administrative expenses 2,822,287 2,467,937
Interest expense on ESOP note 36,094,702 36,669,324
Transfers to other plans 7,416,644 --
--------------- ---------------
Total deductions 165,639,324 159,395,700
--------------- ---------------
Net increase (decrease) (14,752,299) 120,467,452
Net assets available for benefits, beginning of year 1,734,850,207 1,614,382,755
--------------- ---------------
Net assets available for benefits, end of year $ 1,720,097,908 1,734,850,207
=============== ===============
See accompanying notes to financial statements.
3
MARRIOTT INTERNATIONAL, INC. EMPLOYEES' PROFIT SHARING,
RETIREMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 28, 2001 and December 29, 2000
(1) Description of Plan
The following description of the Marriott International, Inc. (the
Company) Employees' Profit Sharing, Retirement and Savings Plan and Trust
(the Plan), provides only general information. Participants should refer
to the Plan document for a more complete description of the Plan's
provisions.
During 1999, the Plan was amended to allow for a leveraged employee stock
ownership plan feature (ESOP) to fund certain employer contributions to
the Plan. During the second quarter of 2000, the ESOP, at the direction
of an independent fiduciary, borrowed $1 billion dollars from the Company
to acquire 100,000 shares of special-purpose Marriott International, Inc.
ESOP Convertible Preferred Stock (ESOP Convertible Preferred Stock). The
ESOP Convertible Preferred Stock has a stated value and a liquidation
preference of $10,000 per share, pays a quarterly dividend of 1% of the
stated value, and is convertible into the Company's Class A Common Stock
at any time based on the amount of contributions the Company has made to
the ESOP and the market price of the Company's Class A Common Stock on
the conversion date, subject to certain caps and a floor price. The
shares of ESOP Convertible Preferred Stock are pledged as collateral for
the repayment of the ESOP's note, and those shares are released from the
pledge as principal on the note is repaid. Shares of ESOP Convertible
Preferred Stock released from the pledge are either converted to the
Company's Class A Common Stock or are redeemed for cash based on the
value of the Class A Common Stock into which those shares may be
converted for allocation to participants' accounts. Principal and
interest on the ESOP's note are expected to be forgiven periodically to
release shares of ESOP Convertible Preferred Stock with a value
sufficient to fund certain employer contributions to the Plan.
(a) General
The Plan is a defined contribution plan covering certain employees
of the Company who are at least 21 years of age and have completed
at least one year of service. It is subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA). The
plan year is the same as the fiscal year of the Company.
(b) Contributions
Each pay period, participants may contribute up to 15% or a fixed
dollar amount (minimum of $3 per week) of compensation. The
Company's contribution to the Plan has changed for the 2001 plan
year from a discretionary amount determined by the Company's board
of directors for the 2000 plan year, to a fixed match of 100% on
the first 3% of annual contributions, and 50% on the next 3% of
annual contributions. In general, Company contributions are
allocated among active participants' accounts after the close of
the Plan year, in proportion to each participant's basic savings
during the year. For the 2000 plan year, basic savings represent
up to the first 6% of a participant's compensation contributed
each pay period to the Plan. For the 2001 plan year, basic savings
represent up to the first 6% of a participant's annual
compensation. Contributions are subject to certain limitations.
(c) Participant Accounts
Each participant's account is credited with the participant's
contribution and allocations of (a) the Company's contribution,
and (b) Plan earnings or losses, and charged with an allocation of
administrative expenses. Forfeitures of terminated participants'
nonvested accounts are to be used to
4
MARRIOTT INTERNATIONAL, INC. EMPLOYEES' PROFIT SHARING,
RETIREMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 28, 2001 and December 29, 2000
pay administrative expenses. Allocations of the Company's
contribution are based on participant contributions, as defined
above. The benefit to which a participant is entitled is the
benefit that can be provided from the participant's vested
account.
(d) Vesting
Participants are immediately vested in their contributions plus
actual earnings thereon. Based on the change in Company
contributions for 2001 Plan year, participants are immediately
100% vested in 2001 Company contributions and earnings thereon.
However, vesting in the Company contribution prior to 2001 and
earnings thereon is based on years of service. For Company
contributions attributable to the Plan year ended December 29,
2000, the Company contribution vests 20% per year of service,
becoming 100% vested after 5 years of service. All participants
become fully vested upon divestiture of unit (place of work),
death, termination of employment due to permanent disability, or
attainment of age 55 for salaried participants or age 45 for most
hourly participants.
(e) Participant Notes Receivable
Participants may borrow from their accounts a minimum of $1,000
(or $400 prior to July 1, 2000) up to a maximum equal to the
lesser of $50,000 or 50% of their vested account balance. Loan
transactions are treated as a transfer to (from) the investment
fund from (to) the Participant Notes fund. Loan terms range from 1
to 4 years or up to 10 years for the purchase of a primary
residence. The loans are collateralized by the vested balance in
the participant's account and bear interest at the prime rate
published by the Wall Street Journal plus 100 basis points.
Interest rates range from 7% to 10.50%. Principal and interest are
paid ratably through weekly or biweekly after-tax payroll
deductions. Participants are limited to one outstanding loan. As
of December 28, 2001, participant notes receivable totaled
$37,109,761, and is recorded in investments, at fair value or
contract value on the Statement of Net Assets Available for
Benefits.
(f) Payment of Benefits
For distributions which began before July 31, 2001, on termination
of service, a participant with a vested account balance greater
than $5,000 may elect to receive either a lump-sum amount or
installment payments equal to the value of the participant's
vested interest in his or her account, or have the Plan purchase
an annuity contract from a commercial insurance company for
payment for a term certain or life. For distributions that begin
on or after July 31, 2001, the Plan will no longer provide for the
purchase of an annuity contract. A participant with an account
balance of $5,000 or less must take a lump sum distribution.
(g) Forfeited Accounts
On termination of service, the unvested portion of a participant's
Company contribution account is forfeited after five consecutive
one-year breaks in service or, if earlier, when he takes a
distribution of his entire account balance. Forfeitures are used
to pay Plan expenses.
(h) Administration
The Company serves as the named fiduciary of the Plan.
Administration of the Plan is under the direction of (i) a
five-member Profit Sharing Committee, all of whom are corporate
officers of the
5
MARRIOTT INTERNATIONAL, INC. EMPLOYEES' PROFIT SHARING,
RETIREMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 28, 2001 and December 29, 2000
Company, (ii) two trustees, both of whom are corporate officers of
the Company, and (iii) a Plan Administrator, who is an employee of
the Company. The trustees and their investment advisors and
investment managers appointed by the Profit Sharing Committee are
responsible for investment of the Plan assets.
(i) Administrative and Investment Expenses
Certain administrative and all investment expenses are paid by the
Plan and are allocated to participants based on account balances.
(j) Plan Termination
Although it has not expressed any intent to do so, the Company has
the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions of ERISA.
In the event of Plan termination, participants will become 100%
vested in their accounts.
(2) Summary of Significant Accounting Policies
(a) Basis of Accounting
The financial statements of the Plan are prepared under the
accrual method of accounting.
(b) Use of Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of additions to and
deductions from net assets during the reporting period. Actual
results could differ from those estimates.
(c) Investments Valuation and Income Recognition
The investments directed by participants as of December 28, 2001
and December 29, 2000, are stated at fair value except for the
Plan's investments in Guaranteed Investment Contracts (GICs) with
fully benefit responsive features, which are valued at contract
value. Shares of mutual and collective investment funds are valued
at estimated market prices, which represent the net asset value of
shares held by the Plan at year-end. The Company stock is valued
at its quoted market price. Participant notes receivable are
valued at cost, which approximates fair value.
The investment in the ESOP Convertible Preferred Stock is recorded
at the value reported to the Plan by the investment manager. This
value is a good faith estimate based on the value of Marriott
International, Inc. Class A Common Stock that the Plan could have
acquired after exercising certain exchange and conversion rights
of the ESOP Convertible Preferred Stock.
Purchases and sales of securities are recorded on a trade-date
basis. Interest income is recorded on the accrual basis. Dividends
are recorded on the ex-dividend date. Realized gains and losses
from security transactions are reported on an average cost method.
Investment earnings are allocated to accounts of Plan participants
on a daily basis.
6
MARRIOTT INTERNATIONAL, INC. EMPLOYEES' PROFIT SHARING,
RETIREMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 28, 2001 and December 29, 2000
(d) Payment of Benefits
Benefits are recorded when paid.
(e) New Accounting Pronouncement
In June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, Accounting for Derivative Instruments and Hedging
Activities (SFAS No. 133). SFAS No. 133 requires that an entity
recognize all derivatives and measure those instruments at fair
value.
SFAS No. 133 is effective for fiscal years beginning after June
15, 2000. Pursuant to SFAS No. 137, the Plan is required to adopt
SFAS No. 133 effective January 1, 2001. Management has determined
that SFAS No. 133 has no impact on the Plan financial statements.
(3) Investments
The following presents investments shown on the Statement of Net Assets
Available for Benefits that represent 5% or more of the Plan's net
assets.
Percentage of
Fair value net assets
----------------- -----------------
Marriott International, Inc. common stock $ 290,831,408 16.94%
Marriott International, Inc. ESOP convertible preferred stock 263,005,476 15.29%
During 2001, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
(depreciated) in value by $(96,596,741) as follows:
December 28,
2001
----------------
Mutual and collective investment funds $ (36,013,365)
Other common stock (28,892,027)
Preferred stock (92,202)
Corporate bonds, notes and other obligations 2,439,930
Government obligations 967,415
Marriott International, Inc. common stock (10,267,312)
Marriott International, Inc. ESOP convertible preferred stock (24,739,180)
---------------
$ (96,596,741)
===============
(Continued)
7
MARRIOTT INTERNATIONAL, INC. EMPLOYEES' PROFIT SHARING,
RETIREMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 28, 2001 and December 29, 2000
The ESOP Preferred Stock accrues a cumulative cash dividend equal to $100
per share outstanding at each quarter end. For the years ended December
28, 2001 and December 29, 2000, the Plan recorded dividend income of
$15,609,943 and $15,222,338, respectively. In accordance with the stock
purchase agreement, the dividends earned on the ESOP Preferred Stock were
used to pay principal and the interest accrued on the ESOP Note.
(4) Investments Not Directed by Participants
Information about the net assets available for benefits relating to
investments not directed by participants, as of December 28, 2001 and
December 29, 2000, are presented in the following tables:
2001 2000
--------------- ---------------
Assets:
Investment in Marriott International, Inc. ESOP convertibile
preferred stock, at estimated fair value $ 263,005,476 $ 676,028,200
--------------- ---------------
Total investment 263,005,476 676,028,200
--------------- ---------------
Liabilities:
ESOP note 291,247,597 679,531,141
Accrued interest payable on ESOP note 1,012,406 2,504,994
--------------- ---------------
Total liabilities 292,260,003 682,036,135
--------------- ---------------
Net assets available for benefits $ (29,254,527) $ (6,007,935)
=============== ===============
Marriott International, Inc.ESOP convertible preferred stock:
Number of shares 29,124.7597 67,953.1140
Cost $ 291,247,597 $ 679,631,141
Estimated fair value 263,005,476 676,028,200
Information about the significant components of the changes in net assets
relating to investments not directed by participants was as follows for
the year ended December 28, 2001 and December 29, 2000:
2001 2000
--------------- ---------------
Net depreciation $ (24,739,180) $ (11,798,186)
Dividend income 15,609,934 15,222,338
ESOP note interest expense (36,094,702) (36,669,324)
Gain on forgiveness of ESOP note interest expense 21,977,356 27,237,237
--------------- ---------------
Decrease in net assets (23,246,592) (6,007,935)
Net assets:
Beginning of year (6,007,935) --
--------------- ---------------
End of year $ (29,254,527) $ (6,007,935)
=============== ===============
(Continued)
8
MARRIOTT INTERNATIONAL, INC. EMPLOYEES' PROFIT SHARING,
RETIREMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 28, 2001 and December 29, 2000
(5) Related-Party Transactions
The Plan may, at the discretion of Plan participants, invest an unlimited
amount of its assets in securities issued by the Company. The Plan held
7,067,592 and 7,353,048 shares of common stock of the Company as of
December 28, 2001 and December 29, 2000, respectively. Dividends on
Marriott International, Inc. common stock approximated $1,852,934 and
$1,863,173 for the years ended December 28, 2001 and December 29, 2000,
respectively. In addition, as described in note 1, in June 2000, the Plan
purchased ESOP Convertible Preferred Stock from Marriott International,
Inc. in exchange for a note (as described in note 7). As of December 28,
2001, the Plan held 29,124.7597 shares of the ESOP Convertible Preferred
Stock. Dividends earned on the ESOP Convertible Preferred Stock was
$15,609,943 for the year ended December 28, 2001.
Certain investments are purchased from the Custodian and certain
investments are managed by the Plan recordkeeper (T. Rowe Price). Fees
paid by the Plan for the investment management services amounted to
approximately $225,000 and $220,000 for Bankers Trust Company and
$676,000 and $730,000 for T. Rowe Price for the years ended December 28,
2001 and December 29, 2000, respectively.
(6) Guaranteed Investment Contracts
The Plan is invested in certain investment contracts with insurance
companies. The custodians of these investment contracts are T. Rowe Price
and PRIMCO. The investment contracts are credited with earnings on the
underlying investments and charged for Plan withdrawals and
administrative expenses. The contracts are carried at contract value
(which represents contributions made under the contracts, plus earnings,
less withdrawals and administrative expenses), because they are fully
benefit responsive. There are no reserves against contract value for
credit risk of the contract issuer or otherwise. The estimated fair value
of the investment contracts at December 28, 2001 and December 29, 2000
was $440,278,674 and $367,030,898, respectively. The average yield was
approximately 5.73% and 6.45% for the years ended December 28, 2001 and
December 29, 2000, respectively.
The fair values for these GICs have been estimated based on a discounted
cash flow analysis. The estimated fair value is calculated based on the
net present value of expected future payments, which include interest and
a lump sum contract amount, discounted at a rate determined by the
quality of the GICs and the average remaining life. This calculation is
necessary, as GICs are not actively traded investments for which a daily
fair value is readily available.
The issuers of the GICs are generally insurance companies. Where there
are no underlying assets collateralizing the investment, the Plan's
ultimate realization of amounts invested in GICs is dependent on the
continued financial stability of the issuers of the GICs.
(7) ESOP Note
As discussed in note 1, the Plan was amended to include an ESOP to fund
certain employer contributions to the Plan. On June 13, 2000, the Plan
purchased $1.0 billion of ESOP Convertible Preferred Stock with the
proceeds of a loan from the Company. The ESOP issued a note (the ESOP
Note) in connection with the purchase of the ESOP Convertible Preferred
Stock, which matures on June 13, 2010. Principal payments of $25 million
are scheduled on September 13, December 13, March 13, and June 13 of each
year with all remaining amounts due at maturity. The interest rate on the
ESOP Note is 8.33% per annum and is due on
(Continued)
9
MARRIOTT INTERNATIONAL, INC. EMPLOYEES' PROFIT SHARING,
RETIREMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 28, 2001 and December 29, 2000
the same dates as the principal payments. There is no penalty for
prepayment of this note. Repayment of the ESOP Note principal and
interest can only be made from: (i) collateral given for the loan (ESOP
Convertible Preferred Stock), (ii) employer contributions made to the
Plan to repay such loan, and (iii) earnings attributable to the ESOP
Convertible Preferred Stock.
For the year ended December 28, 2001 and December 29, 2000, the Plan
recorded interest expense of $36,094,702 and $36,669,324 on the ESOP
Note, respectively.
During the year ended December 28, 2001, the Company caused $388,283,544
of principal and $21,977,356 of interest payable on the ESOP Note to be
forgiven. For the year ended December 28, 2001, $15,609,943 in dividends
on the ESOP Convertible Preferred Stock were used to repay the principal
and interest on the ESOP Note.
(8) Tax Status
The Internal Revenue Service has determined and informed the Company by
letter dated March 30, 2001, that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code.
Although the Plan has been amended since receiving the determination
letter, the Plan administrator and the Plan's counsel believe that the
Plan is designed and is currently being operated in compliance with the
applicable provisions of the Internal Revenue Code.
(Continued)
10
MARRIOTT INTERNATIONAL, INC. EMPLOYEES' PROFIT SHARING,
RETIREMENT AND SAVINGS PLAN AND TRUST
Notes to Financial Statements
December 28, 2001 and December 29, 2000
(9) Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits as
reported in the financial statements to the Form 5500:
December 28, December 29,
2001 2000
------------------- ------------------
Net assets available for benefits as reported in
financial statements $ 1,720,097,908 1,734,850,207
Less distributions payable to terminated employees 62,590 223,721
------------------- ------------------
Net assets available for benefits as reported in Form 5500 $ 1,720,035,318 1,734,626,486
=================== ==================
The following is a reconciliation of benefits paid to participants as
reported in the financial statements to the Form 5500:
Year ended
December 28,
2001
------------------
Benefits paid to participants as reported in the financial statements $ 119,305,691
Add amounts allocated to withdrawing participants
at December 28, 2001 62,590
Less amounts allocated to withdrawing participants
at December 29, 2000 (223,721)
------------------
Benefits paid to participants as reported in the Form 5500 $ 119,144,560
==================
Amounts allocated to withdrawing participants are recorded on the Form
5500 for benefit claims that have been processed and approved for payment
prior to December 28, 2001 but not yet paid as of that date.
11
Schedule I
Supplement
MARRIOTT INTERNATIONAL, INC. EMPLOYEES PROFIT SHARING,
RETIRMENT AND SAVINGS PLAN AND TRUST
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 28, 2001
Fair Value or
Identity of issue, borrower, or similar party Contract Value
------------------------------------------------------------- ----------------
Banker's Trust Company - Account Total (See detail at Schedule I) $ 1,246,554,458
Guaranteed Investment Contracts - T. Rowe Price (See detail at Schedule I-a) 175,871,669
Guaranteed Investment Contracts - PRIMCO (See detail at Schedule I-b) 228,896,552
Interest Bearing Cash 4,621,341
Marriott International, Inc. ESOP Convertible Preferred Stock* 263,005,476
----------------
1,918,949,496
Loans to participants 37,109,761
----------------
$ 1,956,059,257
================
*Party-in-interest
See accompanying independent auditors' report.
12