Marriott International · NASDAQ:MAR
Marriott International — Q1 2018 Earnings Presentation
28 slides from Marriott International's earnings presentation, May 8, 2018
Slide 1: Marriott International First Quarter 2018 Earnings Conference Call
MARRIOTT INTERNATIONAL FIRST QUARTER 2018 EARNINGS CONFERENCE CALL
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS NOTE ON FORWARD-LOOKING STATEMENTS: This document contains “forward-looking statements” within the meaning of federal securities laws, including our RevPAR, profit margin and earnings outlook and assumptions; the number of lodging properties we expect to add to or remove f
Slide 3: RevPAR Results Comparable Systemwide Properties
REVPAR RESULTS COMPARABLE SYSTEMWIDE PROPERTIES 2018 First Quarter First Quarter Outlook Results as of February 14, 2018 Greater China 11.5% Rest of Asia Pacific 8.8% Asia Pacific 10.0% Mid-single digit rate Caribbean & Latin America 8.9% Mid-single digit rate Europe 5.9% Mid-single digit rate Middl
Slide 4: North America RevPAR Results
NORTH AMERICA REVPAR RESULTS COMPARABLE SYSTEMWIDE PROPERTIES NORTH AMERICA 2018 First Quarter North America up 2.7% after adjusting for Easter timing, 2017 Luxury 4.3% Inauguration, and hurricane impact. Upper Upscale 1.0% Group constrained by Easter timing and 2017 Inauguration. Q1 exceeded expect
Slide 5: Integration
INTEGRATION 2018 Integration To Date • Combined financial reporting systems • Integrated North American sales organization • Recycled $170 million of capital Integration Coming Soon • All inventory available through Marriott and Starwood websites and apps • Unified loyalty programs • Co-branded cred
Slide 6: Innovating While Integrating
INNOVATING WHILE INTEGRATING • Expanding Marriott Moments • Launched new Alibaba storefront • Management agreement for Ritz-Carlton luxury yacht • Piloting Tribute Portfolio Homes • Launched new Customer Recognition Platform • Reduced group intermediary commission rates 6
Slide 7: Substantial Rooms Growth
SUBSTANTIAL ROOMS GROWTH SpringHill Suites By Marriott, New Orleans Aloft Celaya, Mexico The St. Regis Bahia Beach Resort, Puerto Rico Sheraton Grand Danang Resort, Vietnam Marriott, Mena House, Cairo The Ritz‐Carlton Ras Al Khaimah, Al Hamra Beach 7
Slide 8: Development Pipeline Nearly 465,000 Rooms
DEVELOPMENT PIPELINE NEARLY 465,000 ROOMS 18% Upper 49% North Midscale 45% Signed America New Build 41% Upscale 45% Under Construction 30% Asia Pacific 11% Luxury 30% Upper Upscale 8% 9% MEA Europe 4% CALA 3% Signed 7% Approved, Conversions not signed 8
Slide 9: First Quarter 2018
FIRST QUARTER 2018 Q1 2017 B/(W) ($ millions, except EPS) Q1 2018 Unit, RevPAR and IMF growth, higher credit card fees, Gross fee revenues $845 $759 11% and favorable FX Contract investment amortization (18) (11) (64)% Impact of sale of Owned, leased, and other, net 70 72 (3)% four properties Deprec
Slide 10: RevPAR Results & Outlook
REVPAR RESULTS & OUTLOOK 2018 2018E 2018E Systemwide Comparable First Quarter Second Quarter Full Year Asia Pacific 10.0% High-single digit rate High-single digit rate Caribbean & Latin 8.9% Mid-single digit rate Mid-single digit rate America Europe 5.9% Mid-single digit rate Mid-single digit rate D
Slide 11: Second Quarter 2018 Outlook
SECOND QUARTER 2018 OUTLOOK ($ millions, except EPS) Second Quarter Second Quarter 2018 Outlook Estimated 2017 Gross fee revenues $935 to $945 $848 Contract investment amortization Approx. $15 Owned, leased and other revenue, net Approx. $80 Depreciation, amortization, and other Approx. $55 General,
Slide 12: 2018 Full Year Outlook
2018 FULL YEAR OUTLOOK ($ millions, except EPS) Feb 14, 2018 Full Year 2018 Full Year Full Year Outlook Estimated 2017 2018 Outlook Gross fee revenues $3,650 to $3,690 $3,295 $3,535 to $3,620 Contract investment amortization Approx. $60 Approx. $55 Owned, leased and other revenue, net Approx. $300 $
Slide 13: 2018 Outlook
2018 OUTLOOK • Does not include merger-related costs and charges, cost reimbursement revenue or reimbursed expenses • Excludes the net tax charge and the increase in the Avendra gain, which were reported in the 2018 first quarter • $600 million to $700 million investment spending, including $225 mil
Slide 14: Questions & Answers
QUESTIONS & ANSWERS 14
Slide 15: Non-GAAP Reconciliations
Non-GAAP Reconciliations
Slide 16: Press Release Schedules Table of Contents
MARRIOTT INTERNATIONAL, INC. PRESS RELEASE SCHEDULES TABLE OF CONTENTS QUARTER 1, 2018 Consolidated Statements of Income - As Reported A-1 Non-GAAP Financial Measures A-2 Total Lodging Products A-3 Key Lodging Statistics A-6 Adjusted EBITDA A-8 Adjusted EBITDA Forecast - Second Quarter 2018 A-9 Adju
Slide 17: Consolidated Statements of Income - As Reported
MARRIOTT INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED FIRST QUARTER 2018 AND 2017 (in millions except per share amounts, unaudited) As Reported As Reported 10 Percent Three Months Ended Three Months Ended Better/(Worse) March 31, 2018 March 31, 2017 Reported 2018 vs. 2017 REVE
Slide 18: Non-GAAP Financial Measures
MARRIOTT INTERNATIONAL, INC. NON-GAAP FINANCIAL MEASURES ($ in millions except per share amounts) The following table presents our reconciliations of Adjusted operating income, Adjusted operating income margin, Adjusted net income, and Adjusted diluted EPS, to the most directly comparable GAAP measu
Slide 19: Total Lodging Products
MARRIOTT INTERNATIONAL, INC. TOTAL LODGING PRODUCTS As of March 31, 2018 North America Total International Total Worldwide Units Rooms Units Rooms Units Rooms Managed 820 249,049 1,076 286,868 1,896 535,917 Marriott Hotels 127 67,939 166 48,287 293 116,226 Sheraton 28 23,646 182 62,663 210 86,309 Sh
Slide 20: Total Lodging Products
MARRIOTT INTERNATIONAL, INC. TOTAL LODGING PRODUCTS As of March 31, 2018 North America Total International Total Worldwide Units Rooms Units Rooms Units Rooms Franchised 3,942 572,417 466 100,217 4,408 672,634 Courtyard 743 99,006 62 11,600 805 110,606 Fairfield Inn & Suites 904 82,628 6 1,157 910 8
Slide 21: Total Lodging Products
MARRIOTT INTERNATIONAL, INC. TOTAL LODGING PRODUCTS As of March 31, 2018 North America Total International Total Worldwide Total Systemwide Units Rooms Units Rooms Units Rooms Luxury 176 48,490 293 70,246 469 118,736 JW Marriott 26 14,484 55 21,245 81 35,729 The Ritz-Carlton 39 11,387 58 15,719 97 2
Slide 22: Key Lodging Statistics
MARRIOTT INTERNATIONAL, INC. KEY LODGING STATISTICS In Constant $ Comparable Company-Operated North American Properties Three Months Ended March 31, 2018 and March 31, 2017 REVPAR Occupancy Average Daily Rate Brand 2018 vs. 2017 2018 vs. 2017 2018 vs. 2017 JW Marriott $191.86 0.3% 77.7% 0.8% pts. $2
Slide 23: Key Lodging Statistics
MARRIOTT INTERNATIONAL, INC. KEY LODGING STATISTICS In Constant $ Comparable Company-Operated International Properties Three Months Ended March 31, 2018 and March 31, 2017 REVPAR Occupancy Average Daily Rate Region 2018 vs. 2017 2018 vs. 2017 2018 vs. 2017 Greater China $92.66 11.9% 68.7% 5.2% pts.
Slide 24: Non-GAAP Financial Measures: Adjusted EBITDA
MARRIOTT INTERNATIONAL, INC. NON-GAAP FINANCIAL MEASURES ADJUSTED EBITDA ($ in millions) Fiscal Year Fiscal Year 2018 2017 First First Quarter Quarter Net income, as reported $ 398 $ 371 Cost reimbursement revenue (3,773) (3,736) Reimbursed expenses 3,835 3,696 Interest expense 75 70 Interest expens
Slide 25: Adjusted EBITDA Forecast Second Quarter 2018
MARRIOTT INTERNATIONAL, INC. NON-GAAP FINANCIAL MEASURES ADJUSTED EBITDA FORECAST SECOND QUARTER 2018 ($ in millions) Range Estimated Second Quarter 2018 Second Quarter 2017 2 ** Net income, excluding certain items 1 $ 480 $ 487 Interest expense 85 85 Interest expense from unconsolidated joint ventu
Slide 26: Adjusted EBITDA Forecast Full Year 2018
MARRIOTT INTERNATIONAL, INC. NON-GAAP FINANCIAL MEASURES ADJUSTED EBITDA FORECAST FULL YEAR 2018 ($ in millions) Range Estimated Full Year 2018 Full Year 2017 2 ** Net income, excluding certain items 1 $ 1,923 $ 1,965 Interest expense 335 335 Interest expense from unconsolidated joint ventures 10 10
Slide 27: Explanation of Non-GAAP Financial and Performance Measures
MARRIOTT INTERNATIONAL, INC. EXPLANATION OF NON-GAAP FINANCIAL AND PERFORMANCE MEASURES In our press release and schedules, and on the related conference call, we report certain financial measures that are not required by, or presented in accordance with, United States generally accepted accounting
Slide 28: Explanation of Non-GAAP Financial and Performance Measures
MARRIOTT INTERNATIONAL, INC. EXPLANATION OF NON-GAAP FINANCIAL AND PERFORMANCE MEASURES We believe that Adjusted EBITDA is a meaningful indicator of our operating performance because it permits period-over-period comparisons of our ongoing operations before these items and facilitates our comparison
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