Marriott International · NASDAQ:MAR
Marriott International — Q4 2017 Earnings Presentation
16 slides from Marriott International's earnings presentation, Feb 14, 2018
Slide 1: Marriott International Fourth Quarter 2017 Earnings Conference Call
MARRIOTT INTERNATIONAL FOURTH QUARTER 2017 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: Seizing the Opportunity
• More than 6,500 properties • Broad choice from 30 brands • Aspirational destinations • Leading loyalty programs • Effective and efficient sales and marketing channels • Operating know-how delivers high guest satisfaction and hotel profitability for owners and franchisees SEIZING THE OPPORTUNITY 3
Slide 4: Substantial Rooms Growth
SUBSTANTIAL ROOMS GROWTH Sheraton Petaling Jaya Hotel, Malaysia Delta Hotels by Marriott Riverfront, South Sioux City, NE The Westin Chattanooga, TN The Ritz-Carlton, Koh Samui, Thailand Moxy London Stratford 4
Slide 5: Significant Benefits of Scale: 2017 Accomplishments
5 SIGNIFICANT BENEFITS OF SCALE • Mobile check-in and check-out added to 1,600 hotels • Global GuestVoice system rollout • Marriott Moments • Alibaba joint venture • House profit margins up 80 bps • Integration cost savings • Procurement • OTA commissions • Loyalty costs 2017 ACCOMPLISHMENTS
Slide 6: Powerful Loyalty Programs
POWERFUL LOYALTY PROGRAMS • Nearly 110 million members • Member stays represent over half of occupied rooms • Lower charge‐out rate to owners in 2017 and 2018 • Harmonize program terms in 2018 • New credit card agreements with improved terms • New credit cards expected in 2018 6
Slide 7: Significant Benefits of Scale: Coming Soon
7 SIGNIFICANT BENEFITS OF SCALE Continued cost savings • Group intermediary savings • Revenue management focus on profits • More procurement and benchmarking initiatives • Lower loyalty costs COMING SOON
Slide 8: RevPAR Results & Outlook
8 REVPAR RESULTS & OUTLOOK Systemwide Comparable 2017 Fourth Quarter 2017 Full Year 2018E Full Year North America 3.9% 2.1% 1% to 2% Asia Pacific 7.2% 6.8% Mid-single digit rate Caribbean & Latin America 5.6% 4.0% Low-single digit rate Europe 5.4% 7.2% Mid-single digit rate Middle East & Africa 5.7%
Slide 9: Fourth Quarter 2017 Avendra Sale & Tax Reform Impact
9 FOURTH QUARTER 2017 AVENDRA SALE & TAX REFORM IMPACT AVENDRA SALE Marriott Share of Proceeds $659 Gain $659 Tax on Gain COMBINED IMPACT Net Income ($167) Diluted EPS ($0.45) ($ millions, except EPS) TAX REFORM Transition Tax Deferred Tax Liabilities Other Tax Impact $159 $19 ($745) ($259)
Slide 10: Fourth Quarter 2017
10 FOURTH QUARTER 2017 Total fees Owned, leased, and other, net Depreciation, amortization, and other General, administrative, and other Operating income Gains/(losses) and other income Net interest expense Equity in earnings Income before income taxes Provision for income taxes Net income Fully dil
Slide 11: Performance Versus Guidance
11 PERFORMANCE VERSUS GUIDANCE Fourth Quarter Adjusted Diluted EPS Guidance as of November 7, 2017 Total fee revenue Owned, leased, and other, net General, administrative, and other Net interest expense Equity in earnings Provision for income taxes Outperformance at midpoint $1.12 $0.98 to $1.00 $0.
Slide 12: New Revenue Recognition Rules
NEW REVENUE RECOGNITION RULES New Rule Old Rule 1. Contract Investment Amortization Reduction of Fee Revenue Included in Depreciation, Amortization & Other 2. Pre‐opening Services Revenues and direct costs are deferred and recognized over the initial term of the management or franchise agreement Rec
Slide 13: First Quarter RevPAR Outlook
13 FIRST QUARTER REVPAR OUTLOOK Systemwide Comparable 2018E First Quarter North America Flat to up 2% Asia Pacific Mid-single digit rate Caribbean & Latin America Mid-single digit rate Europe Mid-single digit rate Middle East & Africa Flat International 3% to 5% Worldwide 1% to 3%
Slide 14: 2018 Outlook
2018 OUTLOOK Fee revenues Contract Investment Amortization Owned, leased and other revenue, net of direct expenses Depreciation, amortization, and other expenses General, administrative, and other expenses Operating income Gains and other income Net interest expense Equity in earnings (losses) Earni
Slide 15: 2018 Outlook
15 2018 OUTLOOK • Excludes P&L impact of Avendra spending, merger- related costs, and timing of centralized programs and services • $600 to $700 million investment spending • Assumes no further asset sales • Approximately $2.5 billion return to shareholders
Slide 16: Questions & Answers
16 QUESTIONS & ANSWERS
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