MEMORANDUM

TO: Mariott Company Board of Directors

VIA: Chanunnett Manoonpong, Rennick Palley, Zhihui Zhang, Aaron (Jialin) Zhong DAY: August 22nd, 2013

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RE: Mariott Corporation Capital Structure

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Marriott Firm, with its relative advantage in hotel advancement and management, has anticipated excellent foreseeable future growth and profitability. This kind of increase in product sales might generate extra cash flow, resulting in underutilized debt potential. Therefore , we now have performed a thorough analysis within the proposal of increasing debt proportion and repurchase the stocks and shares.

In mid 1970s, Marriot Company was in a situation where completely limited access to a few money resources. A substantial amount of short maturities debt is used to financing the company. This financing approach put great debt burden on Marriott, resulting in huge amount of debt repayments. After figuring out this sort of heavy debts issue, Marriot broadened their potential loan providers, opened up the financial industry, refinanced with firm term financial obligations as well as to alter financial policy to lower the leverage.

In 1975, Marriott shifts their hotel approach from control to rental and management contracts wherever they have a comparison advantage. Besides, Marriott recieve more opportunities than its chain competitors and individuals to increase the organized annual resort growth because they were capable to obtain loans for new accommodations. So their business approach was to carry on implementing the investment improvement strategy to in which it had relative advantages because they build up the presence of 2 Idea Parks and shifting from hotel possession to outside the house ownership and management deals. By doing so, that expected the profitability to increase from 6. 6% in 1979 to 8. 7% in 1983 as well as the ROE to boost to 20% by 1983. Since Mariott Corporation's overall performance has been outstanding after the improvement program initiate in 1975, the...