In the May 5 issue of Washington Business, the number of Marriott Corp.'s Roy Rogers Restaurants was incorrectly stated. There are 356 company-operated Roy Rogers and 187 franchised restaurants.
#1. MARTIN MARIETTA CORP.
6801 Rockledge Dr. Bethesda, Md. 20817 REVENUE: $4.4 billion PROFITS: $249.4 million EARNINGS PER SHARE: $4.36 DIVIDEND: 97 1/3 cents ASSETS: $2.3 billion STOCKHOLDERS' EQUITY: $707.9 million RETURN ON EQUITY: 35.2 percent EXCHANGE: NYSE EMPLOYES: 66,000 TOP EXECUTIVES: Thomas G. Pownall, chairman; Norman R. Augustine, president. FOUNDED: 1961
DESCRIPTION: Martin Marietta is a leading aerospace company whose government projects include production of the external fuel tank for the space shuttle, tail sections for the B-1B bomber, and work on the MX missile and a variety of other missiles and projectiles. A growing area of the company's government contracting involves development of complex electronic components and information control systems for military and civilian use, including a new air-traffic control network for the Federal Aviation Administration. Although Martin Marietta concentrates on high technology and defense, it also produces gravel and other construction materials, and magnesia chemicals for the metals industry.
DEVELOPMENTS: Sales to the federal government accounted for $3.8 billion of Martin Marietta's $4.4 billion in total revenue, with the largest gains coming in its expanding electronics and tactical-weapons system businesses.
Martin Marietta's top managers, most of whom rose through the aerospace side of the business, are steering the company toward diversification within defense and related nondefense technology fields. Its 10 largest aerospace programs account for less than half the sales in that area, reducing its vulnerability to cutbacks in specific contracts. And the shadow over the Space Shuttle's future is cushioned by the company's role as the leading supplier of unmanned missiles to the Air Force for satellite launchings.
Although Martin Marietta's net sales from continuing operations rose 12 percent last year, its profit from operations rose only 3 percent because of high costs, including an increase in R&D spending. But the company's profit was boosted by $160 million from one-time gains, including the sale of a specialty chemical line.
#1. MARRIOTT CORP.
1 Marriott Dr. Washington, D.C. 20058 REVENUE: $4.2 billion PROFITS: $167.4 million EARNINGS PER SHARE: $6.20 DIVIDEND: 56 1/2 cents ASSETS: $3.7 billion STOCKHOLDERS' EQUITY: $848.5 million RETURN ON EQUITY: 22.1 percent EXCHANGE: NYSE EMPLOYES: 154,000 TOP EXECUTIVE: J. W. Marriott Jr., chairman and president. FOUNDED: 1927
DESCRIPTION: Marriott is an international hotel and food service conglomerate. It operates 149 hotels and resorts with about 69,000 rooms, and more than 1,700 restaurants, including Big Boy, Roy Rogers, Hot Shoppes and the recently acquired Howard Johnson chain. The company's catering operations serve airlines around the world, and Marriott has airport terminal concessions at 48 domestic and five foreign airports. The company's Sun Line subsidiary operates three luxury ships that sail the Caribbean and Mediterranean.
DEVELOPMENTS: On Aug. 13, 1985, J. Willard Marriott, the company's founder and chairman, died at 84. Beginning with a small Washington root beer stand about 50 years ago, he lived the American dream by building a widely respected international conglomerate. From his A&W root beer stands and Hot Shoppes to his generous support for the Mormon Church, J. Willard Marriott will long be remembered as a man who led an extraordinarily successful and well-balanced life. A few months after he died, Marriott's son, J. W. Marriott Jr., took over as the company's chairman.
Marriott Corp. turned in a strong financial performance in 1985, as the company's revenue passed $4 billion and both revenue and net income increased 20 percent. Growth was achieved through construction of new hotels and acquisitions in the food service and restaurant businesses.
The company opened major new hotels in New York's Times Square and in Atlanta. These Marriott Marquis Hotels are giants: The Times Square hotel has 1,876 rooms and the Atlanta Marquis has 1,674. Marriott's hotel group also moved in two new directions by starting work on the company's first all-suite hotel and its first scaled-down version of a regular Marriott hotel. Marriott expects to build up to 40 scaled-down hotels by the early 1990s.
Acquisitions highlighted growth in the restaurant and food service sectors. Marriott's food service operations nearly tripled through the acquisitions of Service Systems Corp. and Gladieux Corp. The two food service acquisitions gave Marriott a nationwide presence.
Marriott's Big Boy chain will grow by more than 200 units during the next three years as a result of the acquisition of Howard Johnson restaurants. Marriott plans to convert most of the Howard Johnson restaurants to Big Boys. Marriott already has 171 company-owned Big Boys, 713 franchised Big Boys, 256 company-owned Roy Rogers and 189 franchised Roy Rogers. The company also operates 15 Hot Shoppes, 10 of which are cafeterias. #3. CHESAPEAKE & POTOMAC TELEPHONE COS.
1710 H St. NW Washington, D.C. 20006 REVENUE: $3.6 billion PROFITS: $480.7 million EARNINGS PER SHARE: NA DIVIDEND: NA ASSETS: $7.8 billion STOCKHOLDERS' EQUITY: $3.1 billion RETURN ON EQUITY: NA EXCHANGE: NYSE (Bell Atlantic) EMPLOYES: 30,154 TOP EXECUTIVE: Thomas M. Gibbons, president and chief executive officer. FOUNDED: 1883
DESCRIPTION: The companies, owned by Bell Atlantic Corp., provide communications services, primarily local telephone service, for residential and business customers in the District, Maryland, Virginia and West Virginia.
DEVELOPMENTS: During their second year as companies independent from American Telephone & Telegraph Co., the C&P Telephone Cos. increased their profits by 15 percent to $480.7 million, up from $417 million a year ago.
After winning sizable rate increases in 1983, the C&P companies won another round in 1985 in the District, Maryland and West Virginia. In the District, rates rose up to 50 percent for residential service and up to 63 percent for business service when the Public Service Commission awarded a $31.5 million rate hike. C&P of Maryland received two rate awards totaling $50 million that raised residential and business rates by about 20 percent. In West Virginia, rates rose by $33.6 million, raising residential rates by 15 percent and business rates by 5 percent.
In the District, the Public Service Commission rejected C&P's request to charge separately for access to a dial tone and for usage for the second time. The same proposal was rejected by West Virginia regulators. New rate structures that separate charges for access to a dial tone from actual use already had been introduced in Maryland.
All jurisdictions, except the District, now offer a form of local measured service, under which customers are billed according to time, distance and length of calls. In early 1986, lifeline programs that offer economy service for low-income elderly residents were introduced in Maryland and the District. In Maryland, the program was mandated by legislation.
In the District, C&P renegotiated a contract to build a cable TV system for District Cablevision, now worth $40 million, and completed a $20 million fiber-optic loop, primarily for businesses, that transmits voice and data information over thin strands of glass via light pulses. All three companies are expanding construction budgets for digital switching, which makes possible such services as high-speed data transmission.
The companies are concentrating on introducing new digital business services and have upgraded Centrex business service, which provides businesses with a private telephone network. C&P of Maryland won a contract worth $20 million over six years to build a digital Centrex system for the Westinghouse Defense and Electronics Center in Baltimore. Through special Federal Communications Commission permission, the companies can also now act as contractors for Centrex telephone service and associated terminal equipment.
This year, the companies trimmed their work force by about 1,941 employes and are close to completing "equal access" service, which allows customers to reach the long-distance company of their choice without dialing a lengthy access code. #4. MCI COMMUNICATIONS CORP.
1133 19th St. NW Washington, D.C. 20036 REVENUE: $2.5 billion PROFITS: $113.3 million EARNINGS PER SHARE: 48 cents DIVIDEND: None ASSETS: $4.5 billion STOCKHOLDERS' EQUITY: $1.3 billion RETURN ON EQUITY: 8.7 percent EXCHANGE: OTC EMPLOYES: 12,445 TOP EXECUTIVES: William G. McGowan, chairman and chief executive officer; Bert C. Roberts Jr., president and chief operating officer. FOUNDED: 1968
DESCRIPTION: MCI is a telecommunications company that earns the bulk of its revenue from its long-distance services. For businesses, it provides data, telex and MCI Mail electronic-mail services and other sophisticated telecommunications services. It owns and operates the world's second-largest communications network using advanced fiber optics, digital microwave and satellite technologies.
DEVELOPMENTS: In 1985, MCI settled antitrust lawsuits with American Telephone & Telegraph Co., the Bell operating companies and several other large independent telephone companies, and has received $206.6 million so far in those settlements.
MCI and International Business Machines Corp. last year announced a major strategic alliance that promised to increase competition in the long-distance market. IBM acquired a 16 percent stake in MCI, with an option to increase it up to 30 percent over the next three years. As part of the deal, MCI acquired Satellite Business Systems in exchange for 47 million shares of MCI common stock, which gave IBM a 16.6 percent interest in MCI.
IBM also agreed to purchase $400 million in convertible MCI securities, providing MCI with additional funds for capital investment.
The company agreed to sell its paging and cellular mobile-phone subsidiary and hopes to complete the sale by the middle of this year. It also increased its investments in communications networks to the tune of about $20 million a week.
Last year also was the year for 30 million Americans to select a long-distance telephone company. By the end of this year, MCI said it expects to have a 10 percent to 15 percent average share in the dial-one long-distance market. As part of its marketing strategy, MCI plans to join forces with other major corporations such as Sears, Roebuck & Co., with which it has had such an arrangement for three years. Last year, the 500,000 Amway products distributors began taking orders for MCI residential and commercial services.
MCI last year also decided to decentralize its long-distance company and started seven new divisions that geographically coincide with the boundaries of the seven regional holding companies of the Bell system. Each division is responsible for profits, sales, service and operations within its borders.
Last year, the company also announced completion of the country's longest, high-capacity single-mode fiber-optic route, 891 miles between Downers Grove, Ill., and Perryman, Md. #5. GIANT FOOD INC.
6300 Sheriff Rd. Landover, Md. 20785 REVENUE: $2.2 billion PROFITS: $57 million EARNINGS PER SHARE: $1.90 DIVIDEND: 50 cents ASSETS: $623 million STOCKHOLDERS' EQUITY: $271.3 million RETURN ON EQUITY: 22.8 percent EXCHANGES: Amex and Philadelphia EMPLOYES: 19,300 TOP EXECUTIVE: Israel Cohen, chairman, president and chief executive officer. FOUNDED: 1936
DESCRIPTION: Giant is a leading regional supermarket chain and the 40th-largest retail company in the United States. With sales of more than $2 billion and 137 stores (79 are food-pharmacy combinations), it is the 12th-largest food chain in the United States and the biggest in the Washington area, maintaining a 41 percent share of the local market and a 20 percent share in the Baltimore area. Giant operates stores in the District, Maryland and Virginia.
A pioneer in the use of technology in the supermarket industry, Giant was the first food chain to install electronic-scanning equipment at checkout counters in all of its stores. Giant also makes extensive use of technology to improve productivity in other areas of its prototype 55,000-square-foot stores and at the company's semi-automated dry-grocery warehouse and frozen-food distribution center in Jessup, Md.
In addition to being a major retail chain, Giant owns several food-manufacturing and processing operations, including Heidi Bakery, a dairy and plants where it makes soft drinks, ice cream and plastic containers for liquid dairy products. In nonfood-related activities, Giant -- through a construction subsidiary -- develops commercial properties, including several area department stores and retail centers for its own supermarkets.
DEVELOPMENTS: Giant recently celebrated its 50th anniversary as the first supermarket in the Washington area. Officials of the company project strong sales and earnings in the 50th-anniversary year. They base their optimism, in part, on a previously announced major expansion program in which Giant plans to build 23 new stores at the end of 1987, increasing total retail space by 25 percent.
The Landover chain recently reported a 5 percent gain in sales and a 26 percent increase in net income for the fiscal year that ended in February, continuing to outperform the industry standard, with a record profit margin of 2.54 percent. In other words, Giant earned better than 2.5 cents in net income for every dollar in sales. The industry average is slightly more than 1 percent.
Giant credits its food-manufacturing and processing operations with being substantial contributors to its latest profit performance. The company soon will expand its wholesale and manufacturing operations when it opens an ice-cube plant in Landover.
Giant opened five stores in 1985 and has 11 under construction. It plans to open at least 12 supermarkets in 1986.