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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
_______________________________________ 
FORM 8-K
_______________________________________  
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 6, 2018
 _______________________________________ 
MARRIOTT INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
 _______________________________________ 
 
 
 
 
 
 
Delaware
 
1-13881
 
52-2055918
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
 
 
 
10400 Fernwood Road, Bethesda, Maryland
 
20817
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (301) 380-3000
 _______________________________________ 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)
 
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o
 



Item 2.02.
Results of Operations and Financial Condition.
Financial Results for the Quarter Ended June 30, 2018
Marriott International, Inc. (“Marriott”) today issued a press release reporting financial results for the quarter ended June 30, 2018.
A copy of Marriott’s press release and earnings conference call slides are attached as Exhibits 99.1 and 99.2, respectively, and incorporated by reference.

Item 9.01.
Financial Statements and Exhibits.

(d) Exhibits. The following exhibits are furnished with this report:
Exhibit 99.1
Exhibit 99.2


2


SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MARRIOTT INTERNATIONAL, INC.
 
 
 
 
 
Date: August 6, 2018
 
 
 
 
 
By: 
 
/s/ Bao Giang Val Bauduin
 
 
 
 
 
 
 
 
Bao Giang Val Bauduin
 
 
 
 
 
 
 
 
Controller and Chief Accounting Officer


3
Exhibit
Exhibit 99


https://cdn.kscope.io/f3c72a1e3347f2b54484b5730744a999-marq42017pressrelease_image1.jpg    https://cdn.kscope.io/f3c72a1e3347f2b54484b5730744a999-marq42017pressrelease_image2.jpg
 
NEWS

CONTACT: Brendan McManus
(301) 380-4495
brendan.mcmanus@marriott.com


MARRIOTT INTERNATIONAL REPORTS SECOND QUARTER 2018 RESULTS

HIGHLIGHTS

•
Second quarter reported diluted EPS totaled $1.71, a 34 percent increase from prior year results. Second quarter adjusted diluted EPS totaled $1.73, a 56 percent increase over second quarter 2017 adjusted results. Adjusted results exclude merger-related adjustments, cost reimbursement revenue, reimbursed expenses, and an adjustment to the Avendra gain;
 
•
During the 2018 second quarter, EPS included $0.26 from gains on asset sales ($119 million pretax reflected in Gains and other income, net and Equity in earnings). During the 2017 second quarter, EPS included $0.04 from the gain on an asset sale ($24 million pretax reflected in Gains and other income, net);

•
To date, the company has recycled nearly $1.8 billion of capital since the acquisition of Starwood Hotels & Resorts on September 23, 2016, including $423 million of capital recycling in the second quarter of 2018;

•
Second quarter 2018 comparable systemwide constant dollar RevPAR rose 3.8 percent worldwide, 5.7 percent outside North America and 3.1 percent in North America;

•
The company added a record 23,000 rooms during the second quarter, including roughly 2,900 rooms converted from competitor brands and approximately 10,900 rooms in international markets;

•
At quarter-end, Marriott’s worldwide development pipeline increased to roughly 466,000 rooms, including approximately 41,500 rooms approved, but not yet subject to signed contracts;

•
Second quarter reported net income totaled $610 million, a 25 percent increase from prior year results. Second quarter adjusted net income totaled $619 million, a 46 percent increase over prior year adjusted results;

•
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $939 million in the quarter, a 15 percent increase over second quarter 2017 adjusted EBITDA;


1

•
Marriott repurchased 6.2 million shares of the company’s common stock for $850 million during the second quarter. Year-to-date through August 6, the company has repurchased 14.1 million shares for $1.9 billion.
BETHESDA, MD - August 6, 2018 - Marriott International, Inc. (NASDAQ: MAR) today reported second quarter 2018 results.

Arne M. Sorenson, president and chief executive officer of Marriott International, said,
“We were pleased with our performance in the quarter across the board. Worldwide constant dollar RevPAR grew nearly 4 percent in the second quarter, with particularly strong transient demand in many markets outside North America. In North America, solid group business allowed us to drive higher room rates in the quarter.

“Our owners opened more than 82,000 rooms over the last 12 months, yielding net rooms growth of 5.7 percent. Over 40 percent of these gross room additions are located outside North America and more than one-third are in upper-upscale and luxury tiers. Our development pipeline increased to roughly 466,000 rooms at quarter-end.

“We are excited to introduce one set of unified benefits across our three loyalty programs on August 18, creating an incredibly rich program in which members, on average, will earn 20 percent more points for every dollar spent. Members will find it easier to redeem points, achieve elite status, and book stays across the entire portfolio on each of our websites and apps or by calling our customer engagement centers. Our credit card partners, JPMorgan Chase and American Express, are offering new and refreshed co-branded credit cards in the U.S., providing valuable perks and more ways to earn points when using the cards for stays worldwide.

“Since we acquired Starwood, we have recycled capital totaling nearly $1.8 billion, exceeding our goal of recycling $1.5 billion by year-end 2018. For full year 2018, we expect to return more than $3.1 billion to shareholders through share repurchases and dividends. To date this year, we have already returned $2.2 billion to shareholders.”

Second Quarter 2018 Results
In the 2018 first quarter, the company adopted Accounting Standards Update 2014-09. Please see the “Accounting Standards Update” section of this release for more information.



2

Marriott’s reported net income totaled $610 million in the 2018 second quarter, a 25 percent increase from 2017 second quarter reported net income of $489 million. Reported diluted earnings per share (EPS) totaled $1.71 in the quarter, a 34 percent increase from reported diluted EPS of $1.28 in the year-ago quarter.

Second quarter 2018 adjusted net income totaled $619 million, a 46 percent increase over 2017 second quarter adjusted net income of $425 million.  Adjusted net income excludes merger-related adjustments, cost reimbursement revenue, reimbursed expenses, and an adjustment to the Avendra gain.  Adjusted diluted EPS in the second quarter totaled $1.73, a 56 percent increase from adjusted diluted EPS of $1.11 in the year-ago quarter.  See page A-3 for the calculation of adjusted results.

Base management and franchise fees totaled $775 million in the 2018 second quarter, a 12 percent increase over base management and franchise fees of $693 million in the year-ago quarter. The year-over-year increase in these fees is primarily attributable to higher RevPAR, unit growth, and higher credit card branding fees.

Second quarter 2018 incentive management fees totaled $176 million, a 14 percent increase compared to incentive management fees of $155 million in the year-ago quarter. The year-over-year increase was largely due to higher net house profit at properties in North America and the Asia Pacific region.

Owned, leased, and other revenue, net of direct expenses, totaled $89 million in the 2018 second quarter, compared to $98 million in the year-ago quarter. The year-over-year decrease largely reflects the $21 million negative impact from hotels sold during or after the second quarter of 2017, including in the second quarter of 2018, partially offset by stronger results at a few owned and leased hotels in North America and Europe. Results in the 2017 second quarter included $5 million of business interruption proceeds.

General, administrative, and other expenses for the 2018 second quarter totaled $217 million, compared to $234 million in the year-ago quarter. The year-over-year $17 million decrease largely reflects integration-related general and administrative cost savings.

Gains and other income, net, totaled $114 million in the 2018 second quarter, reflecting $67 million of gains associated with the sale of two hotels in Fiji and two hotels in North America, as well as $42 million of gains associated with the sale of the company’s equity interests in joint ventures in the Europe, Asia

3

Pacific, and Caribbean & Latin America regions. Gains and other income, net, totaled $25 million in the 2017 second quarter, reflecting a $24 million gain on the sale of the Charlotte Marriott City Center.

Equity in earnings for the second quarter totaled $21 million compared to $12 million in the year-ago quarter. The 2018 second quarter included a $10 million gain on the sale of a hotel in a North American joint venture.

Interest expense, net, totaled $79 million in the second quarter compared to $65 million in the year-ago quarter. The increase was largely due to higher interest rates and debt balances, and lower interest income.

The provision for income taxes totaled $186 million in the second quarter, a 23.3 percent effective tax rate, compared to $227 million in the year-ago quarter, a 31.7 percent effective tax rate. The lower effective rate in the 2018 second quarter largely reflects the effects of the U.S. Tax Cuts and Jobs Act of 2017.

For the second quarter, adjusted EBITDA totaled $939 million, a 15 percent increase over second quarter 2017 adjusted EBITDA of $820 million. Compared to the prior year, adjusted EBITDA for the second quarter of 2018 reflects the $17 million negative impact from sold hotels. See page A-11 for the adjusted EBITDA calculations.

Second Quarter 2018 Results Compared to May 8, 2018 Guidance
On May 8, 2018, the company estimated gross fee revenues for the second quarter would be $935 million to $945 million. Actual gross fee revenues of $951 million in the quarter were higher than estimated, largely reflecting greater than expected incentive fees at properties in North America and Europe, and better than expected fees from franchised properties.

Marriott estimated owned, leased, and other revenue, net of direct expenses, for the second quarter would total approximately $80 million. Actual results of $89 million in the quarter were higher than estimated, largely due to higher than expected termination fees.

The company estimated general, administrative, and other expenses for the second quarter would total approximately $250 million. Actual expenses of $217 million in the quarter were lower than expected largely due to lower than anticipated incremental profit-sharing contributions and, to a lesser extent, timing.

4


The company estimated gains and other income for the second quarter would total approximately $10 million. Actual gains of $114 million in the quarter were higher than expected, due to asset sales.

The company estimated equity in earnings for the second quarter would total approximately $10 million. Actual equity in earnings of $21 million in the quarter were higher than expected, reflecting a $10 million gain on the sale of a hotel in a North American joint venture.

The company estimated adjusted EBITDA for the second quarter would total $880 million to $890 million. Actual adjusted EBITDA of $939 million was higher than expected due to strong fee revenue, better than expected owned, leased and other revenues, net of direct expenses, and lower than expected general, administrative, and other expenses.

Selected Performance Information
The company added 142 new properties (23,287 rooms) to its worldwide lodging portfolio during the 2018 second quarter, including the Bulgari Hotel Shanghai in China, The Bodrum EDITION in Turkey and the Sheraton Bamako Hotel, the company’s first hotel in Mali. Sixteen properties (3,117 rooms) exited the system during the quarter. At quarter-end, Marriott’s lodging system encompassed 6,717 properties and timeshare resorts with nearly 1,287,000 rooms.

At quarter-end, the company’s worldwide development pipeline totaled 2,740 properties with roughly 466,000 rooms, including 1,148 properties with nearly 213,500 rooms under construction and 253 properties with approximately 41,500 rooms approved for development, but not yet subject to signed contracts.

In the 2018 second quarter, worldwide comparable systemwide constant dollar RevPAR increased 3.8 percent (a 5.1 percent increase using actual dollars). North American comparable systemwide constant dollar RevPAR increased 3.1 percent (a 3.4 percent increase using actual dollars), and international comparable systemwide constant dollar RevPAR increased 5.7 percent (a 10.1 percent increase using actual dollars) for the same period.

Worldwide comparable company-operated house profit margins increased 60 basis points in the second quarter, largely due to solid cost controls and synergies from the Starwood acquisition. House profit margins for comparable company-operated properties outside North America rose 50 basis points and

5

North American comparable company-operated house profit margins increased 60 basis points in the second quarter.

Balance Sheet
At quarter-end, Marriott’s total debt was $8,991 million and cash balances totaled $366 million, compared to $8,238 million in debt and $383 million of cash at year-end 2017.

Marriott Common Stock
Weighted average fully diluted shares outstanding used to calculate both reported and adjusted diluted EPS totaled 357.3 million in the 2018 second quarter, compared to 383.0 million shares in the year-ago quarter.

The company repurchased 6.2 million shares of common stock in the 2018 second quarter for $850 million at an average price of $136.20 per share. Year-to-date through August 6, the company has repurchased 14.1 million shares for $1.9 billion at an average price of $136.35 per share.

Accounting Standards Update
In the 2018 first quarter, the company adopted Accounting Standards Update 2014-09 (the new revenue standard), which changes the GAAP reporting for revenue and expense recognition for franchise application and relicensing fees, contract investment costs, the quarterly timing of incentive fee recognition, and centralized programs and services, among other items. While the new revenue standard results in changes to the reporting of certain revenue and expense items, Marriott’s cash flow and business fundamentals are not impacted. A discussion of revenue recognition changes can be found in the 2017 Form 10-K the company filed on February 15, 2018, which is available on Marriott’s Investor Relations website at http://www.marriott.com/investor.

The company has elected to use the full retrospective method in the adoption of the new revenue standard. As such, the company’s financial statements in SEC filings will show prior year quarterly and full year results as if the new revenue standard had been adopted on January 1, 2016. The company furnished a Form 8-K on July 25, 2018, which presented the effect of adoption of the new revenue standard on Marriott’s 2017 quarterly and full year unaudited results of operations and related financial measures.


6

Outlook
The following outlook for third quarter, fourth quarter, and full year 2018 does not include cost reimbursement revenue, reimbursed expenses, or merger-related costs and charges, which the company cannot precisely forecast. Full year 2018 outlook also excludes the net tax charge and the increase in the Avendra gain, which were reported in the first half of 2018.

For the 2018 third quarter, Marriott expects comparable systemwide RevPAR on a constant dollar basis in North America will increase 1.5 to 2 percent, reflecting the unfavorable day of the week shift of Independence Day and tough comparisons to last year’s hurricane relief efforts. The company expects third quarter comparable systemwide RevPAR on a constant dollar basis will increase 5 to 6 percent outside North America and 2.5 to 3 percent worldwide.

The company assumes third quarter 2018 gross fee revenues will total $915 million to $935 million, an 11 to 13 percent increase over third quarter 2017 gross fee revenues of $826 million.

Marriott expects third quarter 2018 owned, leased, and other revenue, net of direct expenses, could total approximately $65 million. Compared to the year-ago quarter, this estimate reflects the $23 million negative impact from sold hotels, but does not reflect additional asset sales that may occur. This estimate also reflects an increase in year-over-year results at owned and leased hotels and higher termination fees.

The company assumes third quarter 2018 general, administrative, and other expenses could total $235 million to $240 million. This estimate assumes a $10 million expense for incremental profit-sharing contributions, as well as professional fees, in part related to changes in accounting rules, and a year-over-year increase in compensation expense.

Marriott expects third quarter 2018 adjusted EBITDA could total $845 million to $870 million, a 5 to 8 percent increase over third quarter 2017 adjusted EBITDA of $806 million. This estimate reflects the roughly $19 million negative impact from sold hotels, but does not reflect additional asset sales that may occur. See page A-12 for the adjusted EBITDA calculation.

For the 2018 fourth quarter, Marriott expects comparable systemwide RevPAR on a constant dollar basis in North America will increase 1.5 to 2 percent, reflecting the tough comparisons to last year’s hurricane relief efforts. The company expects fourth quarter comparable systemwide RevPAR on a constant dollar basis will increase 5 to 6 percent outside North America and 2.5 to 3 percent worldwide.

7

The company assumes fourth quarter 2018 gross fee revenues will total $929 million to $944 million, an 8 to 10 percent increase over fourth quarter 2017 gross fee revenues of $862 million.

Marriott expects fourth quarter 2018 owned, leased, and other revenue, net of direct expenses, could total approximately $91 million. Compared to the year-ago quarter, this estimate reflects the $13 million negative impact from sold hotels, but does not reflect additional asset sales that may occur. This estimate also reflects an increase in year-over-year results at owned and leased hotels, higher termination fees and the purchase of the Sheraton Grand Phoenix.

The company assumes fourth quarter 2018 general, administrative, and other expenses could total $236 million to $241 million. This estimate assumes an $8 million expense for incremental profit-sharing contributions.

Marriott expects fourth quarter 2018 adjusted EBITDA could total $896 million to $916 million, a 14 to 16 percent increase over fourth quarter 2017 adjusted EBITDA of $789 million. This estimate reflects the roughly $10 million negative impact from sold hotels, but does not reflect additional asset sales that may occur. See page A-13 for the adjusted EBITDA calculation.

For the full year 2018, Marriott expects comparable systemwide RevPAR on a constant dollar basis will increase 2 to 3 percent in North America, 5 to 6 percent outside North America, and 3 to 4 percent worldwide.

Marriott anticipates gross room additions of 7 percent, or roughly 5 percent, net of deletions, for full year 2018. Compared to the estimate of 2018 net room additions the company provided on May 8, this estimate reflects more room deletions, largely due to product quality issues, workout of Legacy-Starwood properties, and a few hotels removed from the system due to severe damage from last year’s natural disasters.

The company assumes full year 2018 gross fee revenues will total $3,640 million to $3,675 million, a 10 to 12 percent increase over 2017 gross fee revenues of $3,295 million. Full year 2018 estimated gross fee revenues include $360 million to $380 million of credit card branding fees, compared to $242 million for full year 2017. Compared to the estimate the company provided on May 8, this estimate of gross fee revenues largely reflects unfavorable foreign exchange impact and higher than expected room deletions.

8

The company anticipates full year 2018 incentive management fees will increase roughly 10 percent over 2017 full year incentive management fees of $607 million.

Marriott expects full year 2018 owned, leased, and other revenue, net of direct expenses, could total approximately $315 million. This estimate reflects the $80 million negative impact from sold hotels, stronger results at owned and leased hotels, and higher year-over-year termination fees, but does not reflect additional asset sales that may occur. Compared to the owned, leased, and other revenue, net of direct expenses, estimate the company provided on May 8, this estimate reflects higher than expected termination fees, and the purchase of the Sheraton Grand Phoenix, partially offset by hotels sold in the 2018 second quarter.

The company assumes full year 2018 general, administrative, and other expenses could total $935 million to $945 million. This estimate assumes a $55 million expense for the company’s incremental profit-sharing contributions. This expense will not recur in 2019. Compared to the estimate the company provided on May 8, this general, administrative, and other expenses estimate reflects lower than anticipated incremental profit-sharing contributions, partially offset by increases in professional fees, in part related to changes in accounting rules, and higher compensation expense.

Marriott expects full year 2018 gains and other income could total approximately $172 million, reflecting assets sold to date.

Marriott expects full year 2018 adjusted EBITDA could total $3,450 million to $3,495 million, a 10 to 12 percent increase over 2017 adjusted EBITDA of $3,131 million. This estimate reflects the roughly $67 million negative impact from hotels sold in 2017 and to date in 2018, but does not reflect additional asset sales that may occur in 2018. See page A-14 for the adjusted EBITDA calculation.

9

 
Third Quarter 2018 1
Fourth Quarter 2018 1
Full Year 2018 1
Gross fee revenues
$915 million to $935 million
$929 million to $944 million
$3,640 million to $3,675 million
Contract investment amortization
Approx. $15 million
Approx. $14 million
Approx. $60 million
Owned, leased, and other revenue, net of direct expenses
Approx. $65 million
Approx. $91 million
Approx. $315 million
Depreciation, amortization, and other expenses
Approx. $60 million
Approx. $53 million
Approx. $225 million
General, administrative, and other expenses
$235 million to $240 million
$236 million to $241 million
$935 million to $945 million
Operating income
$665 million to $690 million
$712 million to $732 million
$2,725 million to $2,770 million
Gains and other income
Approx. $3 million
Approx. $2 million
Approx. $172 million
Net interest expense
Approx. $85 million
Approx. $76 million
Approx. $310 million
Equity in earnings (losses)
Approx. $7 million
Approx. $9 million
Approx. $50 million
Earnings per share
$1.27 to $1.32
$1.47 to $1.52
$5.81 to $5.91
Core tax rate2
 
 
23.9 percent
1 
The outlook provided in this table does not include merger-related costs and charges, cost reimbursement revenue or reimbursed expenses. Full year 2018 outlook excludes the net tax charge resulting from the Tax Act and the increase in the Avendra gain, which were reported in the first half of 2018.
2 
Guidance for Full Year 2018 reflects the impact of employee stock-based compensation excess tax benefits.  The company expects the effective tax rate will be 24.5 percent for Third Quarter 2018, 20.7 percent for Fourth Quarter 2018, and 21.7 percent for Full Year 2018.

The company expects investment spending in 2018 will total approximately $800 million to $900 million, including approximately $225 million for maintenance capital and $255 million for the purchase of the Sheraton Grand Phoenix. Investment spending also includes other capital expenditures (including property acquisitions), new mezzanine financing and mortgage notes, contract acquisition costs, and equity and other investments. Assuming this level of investment spending and no additional asset sales, more than $3.1 billion could be returned to shareholders through share repurchases and dividends in 2018.

Marriott International, Inc. (NASDAQ: MAR) will conduct its quarterly earnings review for the investment community and news media on Tuesday, August 7, 2018 at 10:00 a.m. Eastern Time (ET). The conference call will be webcast simultaneously via Marriott’s investor relations website at http://www.marriott.com/investor, click on “Events & Presentations” and click on the quarterly conference call link. Slides that will be discussed on the call will be available in pdf format on the Events & Presentations page. A replay will be available at that same website until August 7, 2019.
The telephone dial-in number for the conference call is 706-679-3455 and the conference ID is 6288233. A telephone replay of the conference call will be available from 1:00 p.m. ET, Tuesday, August 7, 2018 until 8:00 p.m. ET, Tuesday, August 14, 2018. To access the replay, call 404-537-3406. The conference ID for the recording is 6288233.

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Note on forward-looking statements: This press release and accompanying schedules contain “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 from our system in the future; the timeline for the unification and combination of our loyalty programs; our expectations regarding the estimates of the impact of new accounting standards and the new tax law; our expectations about investment spending and tax rate; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those we identify below and other risk factors that we identify in our most recent quarterly report on Form 10-Q or annual report on Form 10-K. Risks that could affect forward-looking statements in this press release include changes in market conditions; changes in global and regional economies; supply and demand changes for hotel rooms; competitive conditions in the lodging industry; relationships with clients and property owners; the availability of capital to finance hotel growth and refurbishment; the extent to which we can continue to successfully integrate Starwood and realize the anticipated benefits of combining Starwood and Marriott; changes to our provisional estimates of the impact of the U.S. Tax Cuts and Jobs Acts of 2017; and changes to our estimates of the impact of the new accounting standards. Any of these factors could cause actual results to differ materially from the expectations we express or imply in this press release. We make these forward-looking statements as of August 6, 2018. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Marriott International, Inc. (NASDAQ: MAR) is the world’s largest hotel company based in Bethesda, Maryland, USA, with more than 6,700 properties in 130 countries and territories. Marriott operates and franchises hotels and licenses vacation ownership resorts. The company’s 30 leading brands include: Bulgari®, The Ritz-Carlton® and The Ritz-Carlton Reserve®, St. Regis®, W®, EDITION®, JW Marriott®, The Luxury Collection®, Marriott Hotels®, Westin®, Le Méridien®, Renaissance® Hotels, Sheraton®, Delta Hotels by MarriottSM, Marriott Executive Apartments®, Marriott Vacation Club®, Autograph Collection® Hotels, Tribute Portfolio™, Design Hotels™, Gaylord Hotels®, Courtyard®, Four Points® by Sheraton, SpringHill Suites®, Fairfield Inn & Suites®, Residence Inn®, TownePlace Suites®, AC Hotels by Marriott®, Aloft®, Element®, Moxy® Hotels, and Protea Hotels by Marriott®. The company also operates award-winning loyalty programs: Marriott Rewards®, which includes The Ritz-Carlton Rewards®, and Starwood Preferred Guest®. For more information, please visit our website at www.marriott.com, and for the latest company news, visit www.marriottnewscenter.com and @MarriottIntl.
IRPR#1

Tables follow


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MARRIOTT INTERNATIONAL, INC.
PRESS RELEASE SCHEDULES
TABLE OF CONTENTS
QUARTER 2, 2018
 
 
Consolidated Statements of Income - As Reported
Non-GAAP Financial Measures
Total Lodging Products
Key Lodging Statistics
Adjusted EBITDA
Adjusted EBITDA Forecast - Third Quarter 2018
Adjusted EBITDA Forecast - Fourth Quarter 2018
Adjusted EBITDA Forecast - Full Year 2018
Explanation of Non-GAAP Financial and Performance Measures



MARRIOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED
SECOND 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)
 
June 30, 2018
 
June 30, 2017
 
Reported 2018 vs. 2017
REVENUES
 
 
 
 
 
Base management fees
$
300

 
$
285

 
5

Franchise fees 1
475

 
408

 
16

Incentive management fees
176

 
155

 
14

   Gross Fee Revenues
951

 
848

 
12

Contract investment amortization 2
(13
)
 
(12
)
 
(8
)
   Net Fee Revenues
938

 
836

 
12

Owned, leased, and other revenue 3
423

 
448

 
(6
)
Cost reimbursement revenue 4
3,985

 
3,927

 
1

   Total Revenues
5,346

 
5,211

 
3

 
 
 
 
 
 
OPERATING COSTS AND EXPENSES
 
 
 
 
 
Owned, leased, and other - direct 5
334

 
350

 
5

Depreciation, amortization, and other 6
58

 
71

 
18

Merger-related costs and charges
18

 
21

 
14

General, administrative, and other 7
217

 
234

 
7

Reimbursed expenses 4
3,979

 
3,791

 
(5
)
   Total Expenses
4,606

 
4,467

 
(3
)
 
 
 
 
 
 
OPERATING INCOME
740

 
744

 
(1
)
 
 
 
 
 

Gains and other income, net 8
114

 
25

 
356

Interest expense
(85
)
 
(73
)
 
(16
)
Interest income
6

 
8

 
(25
)
Equity in earnings 9
21

 
12

 
75

INCOME BEFORE INCOME TAXES
796

 
716

 
11

Provision for income taxes
(186
)
 
(227
)
 
18

NET INCOME
$
610

 
$
489

 
25

 
 
 
 
 
 
EARNINGS PER SHARE
 
 
 
 
 
   Earnings per share - basic
$
1.73

 
$
1.29

 
34

   Earnings per share - diluted
$
1.71

 
$
1.28

 
34

 
 
 
 
 
 
Basic Shares
353.4

 
378.5

 
 
Diluted Shares
357.3

 
383.0

 
 

1 
Franchise fees include fees from our franchise agreements, application and relicensing fees, licensing fees from our timeshare, credit card programs, and residential branding fees.
2 
Contract investment amortization includes amortization of capitalized costs to obtain contracts with our owner and franchisee customers, and any related impairments, accelerations, or write-offs.
3 
Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, and other revenue.
4 
Cost reimbursement revenue includes reimbursements from properties for property-level and centralized programs and services that we operate for the benefit of our hotel owners. Reimbursed expenses include costs incurred by Marriott for certain property-level operating expenses and centralized programs and services.
5 
Owned, leased, and other - direct expenses include operating expenses related to our owned or leased hotels, including lease payments and pre-opening expenses.
6 
Depreciation, amortization, and other expenses include depreciation for fixed assets, amortization of capitalized costs incurred to acquire management, franchise, and license agreements, and any related impairments, accelerations, or write-offs.
7 
General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses.
8 
Gains and other income, net includes gains and losses on the sale of real estate, the sale or impairment of joint ventures and investments, and results from other equity investments.
9 
Equity in earnings include our equity in earnings or losses of unconsolidated equity method investments.
10 
On January 1, 2018, we adopted ASU 2014-09. This column reflects our recast 2017 results under the new accounting standard.

A-1

MARRIOTT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED
SECOND QUARTER YEAR-TO-DATE 2018 AND 2017
(in millions except per share amounts, unaudited)
 
 
 
 
 
 
 
As Reported
 
As Reported 10
 
Percent
 
Six Months Ended
 
Six Months Ended
 
Better/(Worse)
 
June 30, 2018
 
June 30, 2017
 
Reported 2018 vs. 2017
REVENUES
 
 
 
 
 
Base management fees
$
573

 
$
549

 
4

Franchise fees 1
892

 
763

 
17

Incentive management fees
331

 
295

 
12

   Gross Fee Revenues
1,796

 
1,607

 
12

Contract investment amortization 2
(31
)
 
(23
)
 
(35
)
   Net Fee Revenues
1,765

 
1,584

 
11

Owned, leased, and other revenue 3
829

 
876

 
(5
)
Cost reimbursement revenue 4
7,758

 
7,663

 
1

   Total Revenues
10,352

 
10,123

 
2

 
 
 
 
 
 
OPERATING COSTS AND EXPENSES
 
 
 
 
Owned, leased, and other - direct 5
670

 
706

 
5

Depreciation, amortization, and other 6
112

 
122

 
8

Merger-related costs and charges
52

 
72

 
28

General, administrative, and other 7
464

 
446

 
(4
)
Reimbursed expenses 4
7,814

 
7,487

 
(4
)
   Total Expenses
9,112

 
8,833

 
(3
)
 
 
 
 
 
 
OPERATING INCOME
1,240

 
1,290

 
(4
)
 
 
 
 
 
 
Gains and other income, net 8
173

 
25

 
592

Interest expense
(160
)
 
(143
)
 
(12
)
Interest income
11

 
15

 
(27
)
Equity in earnings 9
34

 
23

 
48

INCOME BEFORE INCOME TAXES
1,298

 
1,210

 
7

Provision for income taxes
(290
)
 
(350
)
 
17

NET INCOME
$
1,008

 
$
860

 
17

 
 
 
 
 
 
EARNINGS PER SHARE
 
 
 
 
 
   Earnings per share - basic
$
2.83

 
$
2.25

 
26

   Earnings per share - diluted
$
2.80

 
$
2.23

 
26

 
 
 
 
 
 
Basic Shares
355.9

 
381.7

 
 
Diluted Shares
360.3

 
386.5

 
 

1 
Franchise fees include fees from our franchise agreements, application and relicensing fees, licensing fees from our timeshare, credit card programs, and residential branding fees.
2 
Contract investment amortization includes amortization of capitalized costs to obtain contracts with our owner and franchisee customers, and any related impairments, accelerations, or write-offs.
3 
Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, and other revenue.
4 
Cost reimbursement revenue includes reimbursements from properties for property-level and centralized programs and services that we operate for the benefit of our hotel owners. Reimbursed expenses include costs incurred by Marriott for certain property-level operating expenses and centralized programs and services.
5 
Owned, leased, and other - direct expenses include operating expenses related to our owned or leased hotels, including lease payments and pre-opening expenses.
6 
Depreciation, amortization, and other expenses include depreciation for fixed assets, amortization of capitalized costs incurred to acquire management, franchise, and license agreements, and any related impairments, accelerations, or write-offs.
7 
General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses.
8 
Gains and other income, net includes gains and losses on the sale of real estate, the sale or impairment of joint ventures and investments, and results from other equity method investments.
9 
Equity in earnings include our equity in earnings or losses of unconsolidated equity method investments.
10 
On January 1, 2018, we adopted ASU 2014-09. This column reflects our recast 2017 results under the new accounting standard.

A-2

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 measure. Adjusted total revenues is used in the determination of Adjusted operating income margin.

 
Three Months Ended
 
Six Months Ended
 
June 30, 2018
 
June 30, 2017 1
 
Percent Better/(Worse)
 
June 30, 2018
 
June 30, 2017 1
 
Percent Better/(Worse)
Total revenues, as reported
$
5,346

 
$
5,211

 
 
 
$
10,352

 
$
10,123

 
 
Less: Cost reimbursement revenue
(3,985
)
 
(3,927
)
 
 
 
(7,758
)
 
(7,663
)
 
 
Adjusted total revenues**
1,361

 
1,284

 


 
2,594

 
2,460

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income, as reported
740

 
744

 
 
 
1,240

 
1,290

 
 
Less: Cost reimbursement revenue
(3,985
)
 
(3,927
)
 
 
 
(7,758
)
 
(7,663
)
 
 
Add: Reimbursed expenses
3,979

 
3,791

 
 
 
7,814

 
7,487

 
 
Add: Merger-related costs, charges, and other 2
18

 
26

 
 
 
52

 
74

 
 
Adjusted operating income **
752

 
634


19
%
 
1,348

 
1,188

 
13
%
 
 
 
 
 
 
 
 
 
 
 
 
Operating income margin
14
%
 
14
%



12
%

13
%
 
 
Adjusted operating income margin **
55
%
 
49
%



52
%

48
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, as reported
610

 
489

 
 
 
1,008

 
860

 
 
Less: Cost reimbursement revenue
(3,985
)
 
(3,927
)
 
 
 
(7,758
)
 
(7,663
)
 
 
Add: Reimbursed expenses
3,979

 
3,791

 
 
 
7,814

 
7,487

 
 
Add: Merger-related costs, charges, and other 2
18

 
26

 
 
 
52

 
74

 
 
Less: Gain on sale of Avendra
(1
)
 
—

 
 
 
(6
)
 
—

 
 
Income tax effect of above adjustments
(2
)
 
46

 
 
 
(26
)
 
42

 
 
Add:  U.S. Tax Cuts and Jobs Act of 2017
—

 
—

 
 
 
22

 
—

 
 
Adjusted net income **
$
619

 
$
425


46
%
 
$
1,106

 
$
800

 
38
%
 
 
 
 
 
 
 
 
 
 
 
 
Diluted EPS, as reported
$
1.71

 
$
1.28

 
 
 
$
2.80

 
$
2.23

 
 
Adjusted Diluted EPS**
$
1.73

 
$
1.11

 
56
%
 
$
3.07

 
$
2.07

 
48
%

**
Denotes non-GAAP financial measures. Please see pages A-15 and A-16 for information about our reasons for providing these alternative financial measures and the limitations on their use.
1 
On January 1, 2018, we adopted ASU 2014-09. This column reflects our recast 2017 results under the new accounting standard.
2 Merger-related costs, charges, and other includes Starwood merger costs presented in the “Merger-related costs and charges” caption of our Income Statement and purchase accounting revisions.  

A-3

MARRIOTT INTERNATIONAL, INC.
TOTAL LODGING PRODUCTS
As of June 30, 2018

 
North America
Total International
Total Worldwide
 
Units
Rooms
Units
Rooms
Units
Rooms
Managed
822

248,999

1,107

293,233

1,929

542,232

Marriott Hotels
127

68,092

168

48,801

295

116,893

Sheraton
28

23,595

184

63,096

212

86,691

Sheraton Residences
—

—

2

262

2

262

Courtyard
240

38,355

91

19,585

331

57,940

Westin
45

24,808

68

21,749

113

46,557

Westin Residences
1

65

1

264

2

329

The Ritz-Carlton
38

10,958

55

14,986

93

25,944

The Ritz-Carlton Residences
35

4,554

11

950

46

5,504

The Ritz-Carlton Serviced Apartments
—

—

5

697

5

697

JW Marriott
16

10,038

48

19,125

64

29,163

Renaissance
27

11,773

54

17,192

81

28,965

Le Méridien
4

720

73

20,068

77

20,788

Residence Inn
110

16,863

6

643

116

17,506

Four Points
1

134

67

16,287

68

16,421

W Hotels
25

7,254

25

6,007

50

13,261

W Residences
9

1,078

4

471

13

1,549

The Luxury Collection
6

2,294

50

8,785

56

11,079

St. Regis
10

1,990

31

7,044

41

9,034

St. Regis Residences
7

585

7

593

14

1,178

Aloft
1

330

35

8,397

36

8,727

Gaylord Hotels
5

8,411

—

—

5

8,411

Delta Hotels
25

6,764

—

—

25

6,764

Fairfield Inn & Suites
6

1,432

26

4,175

32

5,607

SpringHill Suites
31

4,988

—

—

31

4,988

Marriott Executive Apartments
—

—

30

4,471

30

4,471

Protea Hotels
—

—

35

4,090

35

4,090

Autograph Collection
5

1,307

8

1,722

13

3,029

TownePlace Suites
16

1,839

—

—

16

1,839

Element
1

180

6

1,253

7

1,433

EDITION
2

567

3

801

5

1,368

EDITION Residences
1

25

—

—

1

25

Moxy
—

—

4

599

4

599

Bulgari
—

—

5

438

5

438

Bulgari Residences
—

—

2

123

2

123

Tribute Portfolio
—

—

3

559

3

559




A-4

MARRIOTT INTERNATIONAL, INC.
TOTAL LODGING PRODUCTS
As of June 30, 2018

 
North America
Total International
Total Worldwide
 
Units
Rooms
Units
Rooms
Units
Rooms
Franchised
4,017

582,480

479

103,435

4,496

685,915

Courtyard
753

100,354

65

12,161

818

112,515

Fairfield Inn & Suites
927

84,974

6

1,157

933

86,131

Marriott Hotels
214

66,639

51

14,390

265

81,029

Residence Inn
658

78,044

5

666

663

78,710

Sheraton
162

48,202

62

17,830

224

66,032

SpringHill Suites
370

42,434

—

—

370

42,434

Westin
82

26,863

23

7,237

105

34,100

Westin Residences
2

201

—

—

2

201

TownePlace Suites
338

34,035

—

—

338

34,035

Four Points
143

21,877

47

7,328

190

29,205

Autograph Collection
82

17,649

49

11,492

131

29,141

Renaissance
59

16,816

26

7,188

85

24,004

Aloft
102

14,942

13

2,094

115

17,036

The Luxury Collection
12

2,850

39

7,339

51

10,189

The Luxury Collection Residences
1

91

1

64

2

155

Delta Hotels
32

7,387

2

562

34

7,949

Le Méridien
16

3,417

15

4,012

31

7,429

Tribute Portfolio
17

5,350

9

972

26

6,322

JW Marriott
10

4,425

6

1,624

16

6,049

Moxy
7

1,503

18

4,048

25

5,551

Element
28

3,943

2

293

30

4,236

Protea Hotels
—

—

39

2,893

39

2,893

The Ritz-Carlton
1

429

—

—

1

429

The Ritz-Carlton Residences
1

55

—

—

1

55

Bulgari
—

—

1

85

1

85

Owned/Leased
29

8,281

33

8,565

62

16,846

Sheraton
2

1,474

4

1,830

6

3,304

Courtyard
19

2,814

3

645

22

3,459

Marriott Hotels
3

1,664

5

1,625

8

3,289

Westin
1

1,073

—

—

1

1,073

W Hotels
1

509

2

665

3

1,174

Protea Hotels
—

—

7

1,168

7

1,168

Renaissance
1

317

3

749

4

1,066

The Ritz-Carlton
—

—

2

553

2

553

JW Marriott
—

—

1

496

1

496

St. Regis
1

238

1

160

2

398

Residence Inn
1

192

1

140

2

332

The Luxury Collection
—

—

2

287

2

287

Autograph Collection
—

—

2

247

2

247

Unconsolidated Joint Ventures
42

7,189

98

12,004

140

19,193

AC Hotels by Marriott
42

7,189

91

11,545

133

18,734

Autograph Collection
—

—

7

459

7

459

Timeshare*
70

18,297

20

4,242

90

22,539

Marriott Vacations Worldwide
51

11,249

15

2,406

66

13,655

Vistana
19

7,048

5

1,836

24

8,884

Grand Total
4,980

865,246

1,737

421,479

6,717

1,286,725


* Timeshare property and room counts are included on this table in their geographical locations.  For external reporting purposes, these counts are captured in the Corporate segment.

A-5

MARRIOTT INTERNATIONAL, INC.
TOTAL LODGING PRODUCTS
As of June 30, 2018
 
North America
Total International
Total Worldwide
Total Systemwide
Units
Rooms
Units
Rooms
Units
Rooms
Luxury
176

47,940

301

71,293

477

119,233

JW Marriott
26

14,463

55

21,245

81

35,708

The Ritz-Carlton
39

11,387

57

15,539

96

26,926

The Ritz-Carlton Residences
36

4,609

11

950

47

5,559

The Ritz-Carlton Serviced Apartments
—

—

5

697

5

697

The Luxury Collection
18

5,144

91

16,411

109

21,555

The Luxury Collection Residences
1

91

1

64

2

155

W Hotels
26

7,763

27

6,672

53

14,435

W Residences
9

1,078

4

471

13

1,549

St. Regis
11

2,228

32

7,204

43

9,432

St. Regis Residences
7

585

7

593

14

1,178

EDITION
2

567

3

801

5

1,368

EDITION Residences
1

25

—

—

1

25

Bulgari
—

—

6

523

6

523

Bulgari Residences
—

—

2

123

2

123

Full-Service
940

342,587

849

246,777

1,789

589,364

Marriott Hotels
344

136,395

224

64,816

568

201,211

Sheraton
192

73,271

250

82,756

442

156,027

Sheraton Residences
—

—

2

262

2

262

Westin
128

52,744

91

28,986

219

81,730

Westin Residences
3

266

1

264

4

530

Renaissance
87

28,906

83

25,129

170

54,035

Autograph Collection
87

18,956

66

13,920

153

32,876

Le Méridien
20

4,137

88

24,080

108

28,217

Delta Hotels
57

14,151

2

562

59

14,713

Gaylord Hotels
5

8,411

—

—

5

8,411

Tribute Portfolio
17

5,350

12

1,531

29

6,881

Marriott Executive Apartments
—

—

30

4,471

30

4,471

Limited-Service
3,794

456,422

567

99,167

4,361

555,589

Courtyard
1,012

141,523

159

32,391

1,171

173,914

Residence Inn
769

95,099

12

1,449

781

96,548

Fairfield Inn & Suites
933

86,406

32

5,332

965

91,738

SpringHill Suites
401

47,422

—

—

401

47,422

Four Points
144

22,011

114

23,615

258

45,626

TownePlace Suites
354

35,874

—

—

354

35,874

Aloft
103

15,272

48

10,491

151

25,763

AC Hotels by Marriott
42

7,189

91

11,545

133

18,734

Protea Hotels
—

—

81

8,151

81

8,151

Moxy
7

1,503

22

4,647

29

6,150

Element
29

4,123

8

1,546

37

5,669

Timeshare*
70

18,297

20

4,242

90

22,539

Marriott Vacations Worldwide
51

11,249

15

2,406

66

13,655

Vistana
19

7,048

5

1,836

24

8,884

Grand Total
4,980

865,246

1,737

421,479

6,717

1,286,725

* Timeshare property and room counts are included on this table in their geographical locations.  For external reporting purposes, these counts are captured in the Corporate segment.

A-6

MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
In Constant $

Comparable Company-Operated North American Properties
 
 
Three Months Ended June 30, 2018 and June 30, 2017
 
 
REVPAR
 
Occupancy
 
Average Daily Rate
Brand
 
2018
 
vs. 2017
 
2018
 
vs. 2017
 
2018
 
vs. 2017
JW Marriott
 
$
198.18

 
1.1
%
 
81.4
%
 
0.1
 %
pts.
 
$
243.45

 
1.0
%
The Ritz-Carlton
 
$
281.05

 
4.9
%
 
76.4
%
 
0.7
 %
pts.
 
$
367.77

 
3.9
%
W Hotels
 
$
261.02

 
0.9
%
 
83.2
%
 
-1.5
 %
pts.
 
$
313.73

 
2.7
%
Composite North American Luxury 1
 
$
263.58

 
3.4
%
 
79.5
%
 
0.3
 %
pts.
 
$
331.50

 
3.0
%
Marriott Hotels
 
$
169.82

 
4.4
%
 
81.4
%
 
0.7
 %
pts.
 
$
208.49

 
3.6
%
Sheraton
 
$
156.33

 
4.5
%
 
80.6
%
 
2.3
 %
pts.
 
$
193.92

 
1.5
%
Westin
 
$
182.79

 
1.5
%
 
80.6
%
 
0.6
 %
pts.
 
$
226.73

 
0.7
%
Composite North American Upper Upscale 2
 
$
166.22

 
4.1
%
 
80.6
%
 
1.0
 %
pts.
 
$
206.23

 
2.8
%
North American Full-Service 3
 
$
182.40

 
3.9
%
 
80.4
%
 
0.9
 %
pts.
 
$
226.81

 
2.7
%
Courtyard
 
$
114.92

 
2.0
%
 
78.2
%
 
0.5
 %
pts.
 
$
146.99

 
1.3
%
Residence Inn
 
$
135.45

 
0.5
%
 
82.4
%
 
-0.7
 %
pts.
 
$
164.36

 
1.4
%
Composite North American Limited-Service 4
 
$
120.35

 
1.4
%
 
79.8
%
 
0.2
 %
pts.
 
$
150.83

 
1.2
%
North American - All 5
 
$
162.86

 
3.3
%
 
80.2
%
 
0.7
 %
pts.
 
$
203.01

 
2.5
%

Comparable Systemwide North American Properties
 
 
Three Months Ended June 30, 2018 and June 30, 2017
 
 
REVPAR
 
Occupancy
 
Average Daily Rate
Brand
 
2018
 
vs. 2017
 
2018
 
vs. 2017
 
2018
 
vs. 2017
JW Marriott
 
$
195.37

 
2.7
%
 
81.6
%
 
0.6
 %
pts.
 
$
239.37

 
1.9
%
The Ritz-Carlton
 
$
281.05

 
4.9
%
 
76.4
%
 
0.7
 %
pts.
 
$
367.77

 
3.9
%
W Hotels
 
$
261.02

 
0.9
%
 
83.2
%
 
-1.5
 %
pts.
 
$
313.73

 
2.7
%
Composite North American Luxury 1
 
$
251.71

 
3.9
%
 
79.9
%
 
0.7
 %
pts.
 
$
315.16

 
3.0
%
Marriott Hotels
 
$
142.53

 
3.7
%
 
77.6
%
 
0.8
 %
pts.
 
$
183.70

 
2.7
%
Sheraton
 
$
124.85

 
3.1
%
 
77.3
%
 
1.0
 %
pts.
 
$
161.48

 
1.8
%
Westin
 
$
167.33

 
2.5
%
 
80.2
%
 
0.6
 %
pts.
 
$
208.67

 
1.8
%
Composite North American Upper Upscale 2
 
$
144.26

 
3.6
%
 
78.1
%
 
0.8
 %
pts.
 
$
184.83

 
2.5
%
North American Full-Service 3
 
$
154.74

 
3.7
%
 
78.2
%
 
0.8
 %
pts.
 
$
197.80

 
2.6
%
Courtyard
 
$
112.47

 
2.2
%
 
78.0
%
 
0.9
 %
pts.
 
$
144.10

 
1.0
%
Residence Inn
 
$
125.45

 
1.7
%
 
82.8
%
 
0.7
 %
pts.
 
$
151.47

 
0.8
%
Fairfield Inn & Suites
 
$
90.48

 
2.9
%
 
76.9
%
 
1.5
 %
pts.
 
$
117.71

 
0.9
%
Composite North American Limited-Service 4
 
$
108.11

 
2.5
%
 
79.1
%
 
1.0
 %
pts.
 
$
136.64

 
1.2
%
North American - All 5
 
$
128.38

 
3.1
%
 
78.7
%
 
0.9
 %
pts.
 
$
163.05

 
1.9
%
1 
Includes JW Marriott, The Ritz-Carlton, W Hotels, The Luxury Collection, St. Regis, and EDITION.
2 
Includes Marriott Hotels, Sheraton, Westin, Renaissance, Autograph Collection, Delta Hotels, Gaylord Hotels, and Le Méridien. Systemwide also includes Tribute Portfolio.
3 
Includes Composite North American Luxury and Composite North American Upper Upscale.
4 
Includes Courtyard, Residence Inn, Fairfield Inn & Suites, SpringHill Suites, TownePlace Suites, Four Points, Aloft, Element, and AC Hotels by Marriott. Systemwide also includes Moxy.
5 
Includes North American Full-Service and Composite North American Limited-Service.

A-7

MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
In Constant $

Comparable Company-Operated International Properties
 
 
Three Months Ended June 30, 2018 and June 30, 2017
 
 
REVPAR
 
Occupancy
 
Average Daily Rate
Region
 
2018
 
vs. 2017
 
2018
 
vs. 2017
 
2018
 
vs. 2017
Greater China
 
$
95.94

 
10.0
 %
 
72.7
%
 
3.9
%
pts. 
 
$
131.97

 
4.1
 %
Rest of Asia Pacific
 
$
118.98

 
6.5
 %
 
72.2
%
 
1.6
%
pts. 
 
$
164.70

 
4.2
 %
Asia Pacific
 
$
104.51

 
8.5
 %
 
72.5
%
 
3.0
%
pts. 
 
$
144.11

 
4.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Caribbean & Latin America
 
$
127.25

 
8.8
 %
 
64.2
%
 
0.5
%
pts. 
 
$
198.35

 
7.9
 %
Europe
 
$
168.59

 
4.2
 %
 
78.1
%
 
0.8
%
pts. 
 
$
215.95

 
3.2
 %
Middle East & Africa
 
$
90.93

 
-4.2
 %
 
61.1
%
 
1.0
%
pts. 
 
$
148.75

 
-5.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International - All 1
 
$
118.79

 
5.2
 %
 
71.0
%
 
1.9
%
pts. 
 
$
167.20

 
2.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Worldwide 2
 
$
140.65

 
4.1
 %
 
75.6
%
 
1.3
%
pts. 
 
$
186.05

 
2.3
 %

Comparable Systemwide International Properties
 
 
Three Months Ended June 30, 2018 and June 30, 2017
 
 
REVPAR
 
Occupancy
 
Average Daily Rate
Region
 
2018
 
vs. 2017
 
2018
 
vs. 2017
 
2018
 
vs. 2017
Greater China
 
$
95.72

 
9.8
 %
 
72.2
%
 
3.9
%
pts. 
 
$
132.54

 
3.9
 %
Rest of Asia Pacific
 
$
121.47

 
7.7
 %
 
72.9
%
 
2.2
%
pts. 
 
$
166.55

 
4.4
 %
Asia Pacific
 
$
107.16

 
8.7
 %
 
72.5
%
 
3.2
%
pts. 
 
$
147.73

 
4.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Caribbean & Latin America
 
$
104.65

 
7.6
 %
 
63.8
%
 
0.8
%
pts. 
 
$
163.90

 
6.3
 %
Europe
 
$
144.23

 
4.9
 %
 
75.9
%
 
1.5
%
pts. 
 
$
189.91

 
2.9
 %
Middle East & Africa
 
$
88.77

 
-3.6
 %
 
61.4
%
 
0.9
%
pts. 
 
$
144.48

 
-5.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International - All 1
 
$
115.31

 
5.7
 %
 
70.9
%
 
2.1
%
pts. 
 
$
162.63

 
2.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Worldwide 2
 
$
124.53

 
3.8
 %
 
76.4
%
 
1.3
%
pts. 
 
$
162.94

 
2.1
 %

1 
Includes Asia Pacific, Caribbean & Latin America, Europe, and Middle East & Africa.
2 
Includes North American - All and International - All.

A-8

MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
In Constant $

Comparable Company-Operated North American Properties
 
 
Six Months Ended June 30, 2018 and June 30, 2017
 
 
REVPAR
 
Occupancy
 
Average Daily Rate
Brand
 
2018
 
vs. 2017
 
2018
 
vs. 2017
 
2018
 
vs. 2017
JW Marriott
 
$
195.04

 
0.7
%
 
79.6
%
 
0.4
 %
pts.
 
$
245.13

 
0.2
%
The Ritz-Carlton
 
$
292.65

 
4.8
%
 
76.0
%
 
1.0
 %
pts.
 
$
384.87

 
3.4
%
W Hotels
 
$
251.39

 
3.0
%
 
81.8
%
 
-0.2
 %
pts.
 
$
307.42

 
3.2
%
Composite North American Luxury 1
 
$
270.87

 
3.9
%
 
78.9
%
 
0.6
 %
pts.
 
$
343.16

 
3.1
%
Marriott Hotels
 
$
158.33

 
2.8
%
 
77.6
%
 
0.5
 %
pts.
 
$
204.15

 
2.2
%
Sheraton
 
$
142.73

 
2.6
%
 
76.6
%
 
0.3
 %
pts.
 
$
186.23

 
2.2
%
Westin
 
$
165.56

 
1.3
%
 
76.1
%
 
0.3
 %
pts.
 
$
217.47

 
0.9
%
Composite North American Upper Upscale 2
 
$
153.69

 
2.5
%
 
76.7
%
 
0.4
 %
pts.
 
$
200.40

 
2.0
%
North American Full-Service 3
 
$
173.17

 
2.8
%
 
77.1
%
 
0.4
 %
pts.
 
$
224.71

 
2.3
%
Courtyard
 
$
106.16

 
1.0
%
 
73.6
%
 
0.2
 %
pts.
 
$
144.15

 
0.7
%
Residence Inn
 
$
128.27

 
0.1
%
 
79.4
%
 
-0.6
 %
pts.
 
$
161.53

 
0.8
%
Composite North American Limited-Service 4
 
$
112.06

 
1.0
%
 
75.7
%
 
0.2
 %
pts.
 
$
148.05

 
0.7
%
North American - All 5
 
$
153.91

 
2.4
%
 
76.6
%
 
0.4
 %
pts.
 
$
200.85

 
1.9
%

Comparable Systemwide North American Properties
 
 
Six Months Ended June 30, 2018 and June 30, 2017
 
 
REVPAR
 
Occupancy
 
Average Daily Rate
Brand
 
2018
 
vs. 2017
 
2018
 
vs. 2017
 
2018
 
vs. 2017
JW Marriott
 
$
192.70

 
1.6
%
 
79.5
%
 
0.3
 %
pts.
 
$
242.39

 
1.2
%
The Ritz-Carlton
 
$
292.65

 
4.8
%
 
76.0
%
 
1.0
 %
pts.
 
$
384.87

 
3.4
%
W Hotels
 
$
251.39

 
3.0
%
 
81.8
%
 
-0.2
 %
pts.
 
$
307.42

 
3.2
%
Composite North American Luxury 1
 
$
255.36

 
4.1
%
 
78.8
%
 
0.8
 %
pts.
 
$
324.02

 
3.0
%
Marriott Hotels
 
$
133.89

 
2.4
%
 
73.7
%
 
0.4
 %
pts.
 
$
181.64

 
1.8
%
Sheraton
 
$
113.69

 
2.4
%
 
72.6
%
 
0.4
 %
pts.
 
$
156.65

 
1.8
%
Westin
 
$
156.61

 
1.7
%
 
76.1
%
 
0.1
 %
pts.
 
$
205.67

 
1.6
%
Composite North American Upper Upscale 2
 
$
134.80

 
2.5
%
 
74.1
%
 
0.4
 %
pts.
 
$
181.99

 
2.0
%
North American Full-Service 3
 
$
146.56

 
2.8
%
 
74.5
%
 
0.4
 %
pts.
 
$
196.63

 
2.2
%
Courtyard
 
$
103.36

 
1.7
%
 
73.5
%
 
0.8
 %
pts.
 
$
140.61

 
0.5
%
Residence Inn
 
$
117.77

 
1.9
%
 
79.4
%
 
0.9
 %
pts.
 
$
148.27

 
0.7
%
Fairfield Inn & Suites
 
$
82.17

 
3.5
%
 
71.8
%
 
1.9
 %
pts.
 
$
114.40

 
0.9
%
Composite North American Limited-Service 4
 
$
99.93

 
2.5
%
 
74.8
%
 
1.2
 %
pts.
 
$
133.53

 
0.9
%
North American - All 5
 
$
120.19

 
2.7
%
 
74.7
%
 
0.8
 %
pts.
 
$
160.89

 
1.5
%

1 
Includes JW Marriott, The Ritz-Carlton, W Hotels, The Luxury Collection, St. Regis, and EDITION.
2 
Includes Marriott Hotels, Sheraton, Westin, Renaissance, Autograph Collection, Delta Hotels, Gaylord Hotels, and Le Méridien. Systemwide also includes Tribute Portfolio.
3 
Includes Composite North American Luxury and Composite North American Upper Upscale.
4 
Includes Courtyard, Residence Inn, Fairfield Inn & Suites, SpringHill Suites, TownePlace Suites, Four Points, Aloft, Element, and AC Hotels by Marriott. Systemwide also includes Moxy.
5 
Includes North American Full-Service and Composite North American Limited-Service.

A-9


MARRIOTT INTERNATIONAL, INC.
KEY LODGING STATISTICS
In Constant $

Comparable Company-Operated International Properties
 
 
Six Months Ended June 30, 2018 and June 30, 2017
 
 
REVPAR
 
Occupancy
 
Average Daily Rate
Region
 
2018
 
vs. 2017
 
2018
 
vs. 2017
 
2018
 
vs. 2017
Greater China
 
$
94.35

 
11.0
 %
 
70.8
%
 
4.6
%
pts.
 
$
133.34

 
3.8
 %
Rest of Asia Pacific
 
$
127.98

 
7.2
 %
 
74.3
%
 
1.7
%
pts.
 
$
172.15

 
4.8
 %
Asia Pacific
 
$
106.89

 
9.3
 %
 
72.1
%
 
3.5
%
pts.
 
$
148.26

 
4.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Caribbean & Latin America
 
$
142.93

 
9.7
 %
 
66.1
%
 
1.6
%
pts.
 
$
216.22

 
7.0
 %
Europe
 
$
145.20

 
4.2
 %
 
72.1
%
 
1.0
%
pts.
 
$
201.46

 
2.8
 %
Middle East & Africa
 
$
104.87

 
-0.1
 %
 
65.5
%
 
2.5
%
pts.
 
$
160.22

 
-3.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International - All 1
 
$
118.37

 
6.3
 %
 
70.4
%
 
2.6
%
pts.
 
$
168.19

 
2.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Worldwide 2
 
$
136.02

 
4.1
 %
 
73.5
%
 
1.5
%
pts.
 
$
185.10

 
2.0
 %


Comparable Systemwide International Properties
 
 
Six Months Ended June 30, 2018 and June 30, 2017
 
 
REVPAR
 
Occupancy
 
Average Daily Rate
Region
 
2018
 
vs. 2017
 
2018
 
vs. 2017
 
2018
 
vs. 2017
Greater China
 
$
94.00

 
10.7
%
 
70.2
%
 
4.6
%
pts.
 
$
133.92

 
3.5
 %
Rest of Asia Pacific
 
$
127.24

 
8.2
%
 
74.3
%
 
2.0
%
pts.
 
$
171.33

 
5.4
 %
Asia Pacific
 
$
108.77

 
9.4
%
 
72.0
%
 
3.4
%
pts.
 
$
151.07

 
4.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Caribbean & Latin America
 
$
113.93

 
8.2
%
 
64.7
%
 
1.6
%
pts.
 
$
176.02

 
5.6
 %
Europe
 
$
124.57

 
5.4
%
 
69.6
%
 
2.0
%
pts.
 
$
179.04

 
2.3
 %
Middle East & Africa
 
$
101.10

 
0.0
%
 
65.2
%
 
2.1
%
pts.
 
$
155.17

 
-3.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International - All 1
 
$
112.98

 
6.6
%
 
69.4
%
 
2.6
%
pts.
 
$
162.78

 
2.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Worldwide 2
 
$
118.07

 
3.7
%
 
73.1
%
 
1.3
%
pts.
 
$
161.42

 
1.8
 %

1 
Includes Asia Pacific, Caribbean & Latin America, Europe, and Middle East & Africa.
2 
Includes North American - All and International - All.


A-10

MARRIOTT INTERNATIONAL, INC.
NON-GAAP FINANCIAL MEASURES
ADJUSTED EBITDA
($ in millions)

 
Fiscal Year 2018
 
 
First Quarter
 
Second
Quarter
 
Total
 
Net income, as reported
$
398

 
$
610

 
$
1,008

 
Cost reimbursement revenue
(3,773
)
 
(3,985
)
 
(7,758
)
 
Reimbursed expenses
3,835

 
3,979

 
7,814

 
Interest expense
75

 
85

 
160

 
Interest expense from unconsolidated joint ventures
2

 
3

 
5

 
Tax provision
104

 
186

 
290

 
Depreciation and amortization
54

 
58

 
112

 
Contract investment amortization
18

 
13

 
31

 
Depreciation classified in reimbursed expenses
33

 
34

 
67

 
Depreciation and amortization from unconsolidated joint ventures
10

 
10

 
20

 
Share-based compensation
38

 
47

 
85

 
Gain on asset dispositions
(58
)
 
(109
)
 
(167
)
 
Gain on investee’s property sale
—

 
(10
)
 
(10
)
 
Merger-related costs and charges
34

 
18

 
52

 
Adjusted EBITDA **
$
770

 
$
939

 
$
1,709

 
 
 
 
 
 
 
 
Increase over 2017 Adjusted EBITDA **
8
%
 
15
%
 
11
%
1 
 
Fiscal Year 2017 2
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
 
Total
Net income, as reported
$
371

 
$
489

 
$
485

 
$
114

 
$
1,459

Cost reimbursement revenue
(3,736
)
 
(3,927
)
 
(3,830
)
 
(3,962
)
 
(15,455
)
Reimbursed expenses
3,696

 
3,791

 
3,650

 
4,091

 
15,228

Interest expense
70

 
73

 
73

 
72

 
288

Interest expense from unconsolidated joint ventures
1

 
3

 
2

 
4

 
10

Tax provision
123

 
227

 
253

 
920

 
1,523

Depreciation and amortization
51

 
71

 
54

 
53

 
229

Contract investment amortization
11

 
12

 
11

 
16

 
50

Depreciation classified in reimbursed costs
32

 
33

 
28

 
33

 
126

Depreciation and amortization from unconsolidated joint ventures
11

 
10

 
10

 
11

 
42

Share-based compensation
35

 
41

 
42

 
37

 
155

Gain on asset dispositions
—

 
(24
)
 
—

 
(659
)
 
(683
)
Merger-related costs and charges
51

 
21

 
28

 
59

 
159

Adjusted EBITDA **
$
716

 
$
820

 
$
806

 
$
789

 
$
3,131


**
Denotes non-GAAP financial measures. Please see pages A-15 and A-16 for information about our reasons for providing these alternative financial measures and the limitations on their use.

1 
Represents the percentage increase of Adjusted EBITDA of $1,709 million for the first two quarters of 2018 over Adjusted EBITDA of $1,536 million for the first two quarters of 2017.
2 
On January 1, 2018, we adopted ASU 2014-09. The table above reflects our recast 2017 results under the new accounting standard.

A-11

MARRIOTT INTERNATIONAL, INC.
NON-GAAP FINANCIAL MEASURES
ADJUSTED EBITDA FORECAST
THIRD QUARTER 2018
($ in millions)

 
Range
 
 
 
Estimated
Third Quarter 2018
 
Third Quarter 2017 2 **
Net income excluding certain items 1
$
445

 
$
464

 
 
Interest expense
90

 
90

 
 
Interest expense from unconsolidated joint ventures
—

 
—

 
 
Tax provision
145

 
151

 
 
Depreciation and amortization
60

 
60

 
 
Contract investment amortization
15

 
15

 
 
Depreciation classified in reimbursed expenses
35

 
35

 
 
Depreciation and amortization from unconsolidated joint ventures
10

 
10

 
 
Share-based compensation
45

 
45

 
 
Adjusted EBITDA **
$
845

 
$
870

 
$
806

 
 
 
 
 
 
Increase over 2017 Adjusted EBITDA**
5
%
 
8
%
 
 

** Denotes non-GAAP financial measures. See pages A-15 and A-16 for information about our reasons for providing these alternative financial measures and the limitations on their use.

1 
Guidance excludes cost reimbursement revenue, reimbursed expenses, and merger-related costs and charges, which the company cannot accurately forecast and which may be significant, except for depreciation classified in reimbursed expenses, which is included in the caption “Depreciation classified in reimbursed expenses” above.
2 
On January 1, 2018, we adopted ASU 2014-09. The table above reflects our recast 2017 results under the new accounting standard. For 2017 full year recast information, see the Form 8-K that we furnished on July 25, 2018.


A-12

MARRIOTT INTERNATIONAL, INC.
NON-GAAP FINANCIAL MEASURES
ADJUSTED EBITDA FORECAST
FOURTH QUARTER 2018
($ in millions)

 
Range
 
 
 
Estimated
Fourth Quarter 2018
 
Fourth Quarter 2017 2 **
Net income excluding certain items 1
$
514

 
$
529

 
 
Interest expense
85

 
85

 
 
Interest expense from unconsolidated joint ventures
5

 
5

 
 
Tax provision
132

 
137

 
 
Depreciation and amortization
53

 
53

 
 
Contract investment amortization
14

 
14

 
 
Depreciation classified in reimbursed expenses
38

 
38

 
 
Depreciation and amortization from unconsolidated joint ventures
10

 
10

 
 
Share-based compensation
45

 
45

 
 
Adjusted EBITDA **
$
896

 
$
916

 
$
789

 
 
 
 
 
 
Increase over 2017 Adjusted EBITDA**
14
%
 
16
%
 
 

** Denotes non-GAAP financial measures. See pages A-15 and A-16 for information about our reasons for providing these alternative financial measures and the limitations on their use.

1 
Guidance excludes cost reimbursement revenue, reimbursed expenses, and merger-related costs and charges, which the company cannot accurately forecast and which may be significant, except for depreciation classified in reimbursed expenses, which is included in the caption “Depreciation classified in reimbursed expenses” above.
2 
On January 1, 2018, we adopted ASU 2014-09. The table above reflects our recast 2017 results under the new accounting standard. For 2017 full year recast information, see the Form 8-K that we furnished on July 25, 2018.


A-13

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
$
2,047

 
$
2,081

 
 
Interest expense
335

 
335

 
 
Interest expense from unconsolidated joint ventures
10

 
10

 
 
Tax provision
595

 
606

 
 
Depreciation and amortization
225

 
225

 
 
Contract investment amortization
60

 
60

 
 
Depreciation classified in reimbursed expenses
140

 
140

 
 
Depreciation and amortization from unconsolidated joint ventures
40

 
40

 
 
Share-based compensation
175

 
175

 
 
Gain on asset dispositions
(167
)
 
(167
)
 
 
Gain on investee’s property sale
(10
)
 
(10
)
 
 
Adjusted EBITDA **
$
3,450

 
$
3,495

 
$
3,131

 
 
 
 
 
 
Increase over 2017 Adjusted EBITDA**
10
%
 
12
%
 
 

** Denotes non-GAAP financial measures. See pages A-15 and A-16 for information about our reasons for providing these alternative financial measures and the limitations on their use.

1 
Guidance excludes cost reimbursement revenue, reimbursed expenses, and merger-related costs and charges, which the company cannot accurately forecast and which may be significant, except for depreciation classified in reimbursed expenses, which is included in the caption “Depreciation classified in reimbursed expenses” above.
2 
On January 1, 2018, we adopted ASU 2014-09. The table above reflects our recast 2017 results under the new accounting standard. For 2017 full year recast information, see the Form 8-K that we furnished on July 25, 2018.


A-14

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 principles (“GAAP”). We discuss management’s reasons for reporting these non-GAAP measures below, and the press release schedules reconcile the most directly comparable GAAP measure to each non-GAAP measure that we refer to. Although management evaluates and presents these non-GAAP measures for the reasons described below, please be aware that these non-GAAP measures have limitations and should not be considered in isolation or as a substitute for revenue, operating income, income from continuing operations, net income, earnings per share or any other comparable operating measure prescribed by GAAP. In addition, we may calculate and/or present these non-GAAP financial measures differently than measures with the same or similar names that other companies report, and as a result, the non-GAAP measures we report may not be comparable to those reported by others.

Adjusted Operating Income and Adjusted Operating Income Margin.  Adjusted operating income and Adjusted operating income margin exclude cost reimbursement revenue, reimbursed expenses, Starwood merger costs presented in the “Merger-related costs and charges” caption of our Income Statements, and net purchase accounting revisions. Adjusted operating income margin reflects Adjusted operating income divided by Adjusted total revenues. We believe that these are meaningful metrics because they allow for period-over-period comparisons of our ongoing operations before these items and for the reasons further described below.

Adjusted Net Income and Adjusted Diluted EPS. Adjusted net income and Adjusted diluted EPS reflect our net income and diluted earnings per share excluding the impact of cost reimbursement revenue, reimbursed expenses, merger-related costs, charges, and other merger-related adjustments due to purchase accounting, the gain on the sale of our ownership interest in Avendra, and the income tax effect of these adjustments, and our provisional estimate of the impact of the U.S. Tax Cuts and Jobs Act of 2017. We calculate the income tax effect of the adjustments using an estimated tax rate applicable to each adjustment. We believe that these measures are meaningful indicators of our performance because they allow for period-over-period comparisons of our ongoing operations before these items and for the reasons further described below.
 
Adjusted Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“Adjusted EBITDA”). Adjusted EBITDA reflects net income excluding the impact of the following items: cost reimbursement revenue and reimbursed expenses, interest expense, depreciation (including depreciation classified in “Reimbursed expenses,” as discussed below), amortization, and provision for income taxes, pre-tax transaction and transition costs associated with the Starwood merger, and share-based compensation expense for all periods presented. When applicable, Adjusted EBITDA also excludes gains and losses on asset dispositions made by us or by our joint venture investees.

In our presentations of Adjusted operating income and Adjusted operating income margin, Adjusted net income, and Adjusted diluted EPS, we exclude transaction and transition costs associated with the Starwood merger, which we record in the “Merger-related costs and charges” caption of our Income Statements, and other merger-related adjustments due to purchase accounting, to allow for period-over period comparisons of our ongoing operations before the impact of these items. We exclude cost reimbursement revenue and reimbursed expenses, which relate to property-level and centralized programs and services that we operate for the benefit of our hotel owners. We do not operate these programs and services to generate a profit over the contract term, and accordingly, when we recover the costs that we incur for these programs and services from our hotel owners, we do not seek a mark-up. For property-level services, our owners typically reimburse us at the same time that we incur expenses. However, for centralized programs and services, our owners may reimburse us before or after we incur expenses, causing temporary timing differences between the costs we incur and the related reimbursement from hotel owners in our operating and net income. Over the long term, these programs and services are not designed to impact our economics, either positively or negatively. Because we do not retain any such profits or losses over time, we exclude the net impact when evaluating period-over-period changes in our operating results.

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 of results before these items with results from other lodging companies. We use Adjusted EBITDA to evaluate companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels, and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provisions for income taxes can vary considerably among companies. Our Adjusted EBITDA also excludes depreciation and amortization expense which we report under “Depreciation, amortization, and other” as well as depreciation classified in “Reimbursed expenses” and “Contract investment amortization” in our Consolidated Statements of Income (our “Income Statements”), because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. Depreciation

A-15

MARRIOTT INTERNATIONAL, INC.
EXPLANATION OF NON-GAAP FINANCIAL AND PERFORMANCE MEASURES


classified in “Reimbursed expenses” reflects depreciation of Marriott-owned assets, for which we receive cash from owners to reimburse the company for its investments made for the benefit of the system. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We exclude share-based compensation expense in all periods presented to address the considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted.

RevPAR. In addition to the foregoing non-GAAP financial measures, we present Revenue per Available Room (“RevPAR”) as a performance measure. We believe RevPAR is a meaningful indicator of our performance because it measures the period-over-period change in room revenues for comparable properties. RevPAR may not be comparable to similarly titled measures, such as revenues. We calculate RevPAR by dividing room sales (recorded in local currency) for comparable properties by room nights available for the period. We present growth in comparative pro forma combined company RevPAR on a constant dollar basis, which we calculate by applying exchange rates for the current period to each period presented. We believe constant dollar analysis provides valuable information regarding our properties’ performance as it removes currency fluctuations from the presentation of such results.

A-16
marq22018slideswschedule
MARRIOTT INTERNATIONAL SECOND QUARTER 2018 EARNINGS CONFERENCE CALL

 
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 from our system in the future; the timeline for the unification and combination of our loyalty programs; our expectations regarding the estimates of the impact of new accounting standards and the new tax law; our expectations about investment spending and tax rate; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those we identify below and other risk factors that we identify in our most recent quarterly report on Form 10-Q or annual report on Form 10-K. Risks that could affect forward-looking statements in this document include changes in market conditions; changes in global and regional economies; supply and demand changes for hotel rooms; competitive conditions in the lodging industry; relationships with clients and property owners; the availability of capital to finance hotel growth and refurbishment; the extent to which we can continue to successfully integrate Starwood and realize the anticipated benefits of combining Starwood and Marriott; changes to our provisional estimates of the impact of the U.S. Tax Cuts and Jobs Acts of 2017; and changes to our estimates of the impact of the new accounting standards. Any of these factors could cause actual results to differ materially from the expectations we express or imply in this press release. We make these forward-looking statements as of August 6, 2018. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. 2

 
REVPAR RESULTS COMPARABLE SYSTEMWIDE PROPERTIES 2018 Second Second Quarter Outlook Quarter Results as of May 8, 2018 North America 3.1% 3% to 4% Asia Pacific 8.7% High-single digit rate Greater China 9.8% Rest of Asia Pacific 7.7% Caribbean & Latin America 7.6% Mid-single digit rate Europe 4.9% Mid-single digit rate Middle East & Africa (3.6%) Down mid-single digit rate International 5.7% 5% to 6% Worldwide 3.8% 3% to 4% 3

 
NORTH AMERICA REVPAR RESULTS COMPARABLE SYSTEMWIDE PROPERTIES 2018 Second NORTH AMERICA Quarter Strong corporate business, particularly energy, retail Luxury 3.9% and professional services. Higher leisure demand. Upper Upscale 3.6% Limited-Service 2.5% Favorable Easter timing and strong group attendance. Food and beverage Total North America 3.1% revenue rose nearly 5 percent. 1 Segmentation : Transient growth reflects higher room rates and the Group ~ 4.5% benefit of group Transient ~ 2.5% compression. 1Based on reservations data 4

 
REVPAR RESULTS &OUTLOOK 2018 2018 Systemwide 2018E 2018E 2018E First Second Comparable Third Quarter Fourth Quarter Full Year Quarter Quarter North America 2.0% 3.1% 1.5% to 2% 1.5% to 2% 2% to 3% Asia Pacific 10.0% 8.7% High-single digit rate High-single digit rate High-single digit rate Caribbean & Latin 8.9% 7.6% Mid-single digit rate Low-single digit rate Mid-single digit rate America Europe 5.9% 4.9% Mid-single digit rate Mid-single digit rate Mid-single digit rate Middle East & Africa 3.2% (3.6%) Mid-single digit rate Flat to modestly lower Flattish International 7.5% 5.7% 5% to 6% 5% to 6% 5% to 6% Worldwide 3.6% 3.8% 2.5% to 3% 2.5% to 3% 3% to 4% 5

 
LOYALTY Launch Day August 18 • Unified benefits across three loyalty programs • Earn points faster • Earn and redeem points across hotel portfolio • Achieve elite status sooner • Redeem easier & without blackout dates • Full portfolio shopping on our websites & apps • Marriott Moments redemption opportunities for local activities and experiences 6

 
LUXURY BRANDS • Leading market share with 7 brands, 477 open properties, and 206 properties in the pipeline • 9 percent of systemwide rooms • 17 percent of loyalty point redemptions • 19 percent of property-based fee revenue 7

 
2018 Openings African Pride Arabella Hotel & Spa (Autograph Collection), Hermanus, South Africa OPENED 23,000 Aloft New Delhi Aerocity, India ROOMS in Q2 Element Me’aisam, IMP Zone, Dubai W Brisbane, Australia AC Hotel Times Square, New York, NY 8

 
SECOND QUARTER 2018 ($ millions, except EPS) Q2 2018 Q2 2017 B/(W) Q2 2018 Prior Outlook Gross fee revenues $951 $848 12% $935 to $945 Contract investment amortization (13) (12) (8)% Approx. ($15) Owned, leased, and other, net 89 98 (9)% Approx. $80 Depreciation, amortization, and other (58) (71) 18% Approx. ($55) General, administrative, and other (217) (234) 7% Approx. ($250) Gains and other income, net 114 25 356% Approx. $10 Reported Operating Income $740 $744 (1)% Adjusted Operating Income $752 $634 19% $695 to $705 Reported Net Income $610 $489 25% Adjusted Net Income $619 $425 46% Reported Fully Diluted EPS $1.71 $1.28 34% Adjusted Fully Diluted EPS $1.73 $1.11 56% $1.34 to $1.36 Adjusted EBITDA $939 $820 15% $880 to $890 Adjusted results exclude merger-related costs and charges, cost reimbursement revenue and reimbursed expenses. Q2 2018 adjustedresults also exclude an adjustment to the Avendra gain. 9

 
SECOND QUARTER 2018 DEVELOPMENT PIPELINE 466,000 ROOMS WORLDWIDE 41% Upscale 43% Signed  49% North  30% Upper  New Build 46% Under  America 30% Asia  Upscale Construction Pacific 4% Caribbean &  Latin America 18% Upper  2% Signed  9% Approved,  9% Middle  8% Europe Midscale Conversions Not Signed 11% Luxury East & Africa 10

 
THIRD QUARTER 2018 OUTLOOK Third Quarter Third Quarter ($ millions, except EPS) 2018 Outlook 2017 Gross fee revenues $915 to $935 $826 Contract investment amortization Approx. ($15) ($11) Owned, leased and other revenue, net Approx. $65 $82 Depreciation, amortization, and other Approx. ($60) ($54) General, administrative, and other ($235 to $240) ($205) Reported Operating Income $790 Adjusted Operating Income $665 to $690 $632 Reported Net Income $485 Adjusted Net Income $397 Reported Fully Diluted EPS $1.29 Adjusted Fully Diluted EPS $1.27 to $1.32 $1.05 Adjusted EBITDA $845 to $870 $806 Third quarter 2017 has been recast to reflect the full retrospective application of the new revenue standard. Adjusted measures exclude merger-related adjustments, cost reimbursement revenue and reimbursed expenses. See the Form 8-K furnished on July 25, 2018 (non-GAAP reconciliations therefrom are also attached to these slides). Adjusted measures in outlook exclude merger-related adjustments, cost reimbursement revenue and reimbursed expenses, which the company cannot accurately forecast and which may be significant. 11

 
FOURTH QUARTER 2018 OUTLOOK Fourth Quarter Fourth Quarter ($ millions, except EPS) 2018 Outlook 2017 Gross fee revenues $929 to $944 $862 Contract investment amortization Approx. ($14) ($16) Owned, leased and other revenue, net Approx. $91 $89 Depreciation, amortization, and other Approx. ($53) ($53) General, administrative, and other ($236 to $241) ($270) Reported Operating Income $424 Adjusted Operating Income $712 to $732 $612 Reported Net Income $114 Adjusted Net Income $403 Reported Fully Diluted EPS $0.31 Adjusted Fully Diluted EPS $1.47 to $1.52 $1.09 Adjusted EBITDA $896 to $916 $789 Fourth quarter 2017 has been recast to reflect the full retrospective application of the new revenue standard. Adjusted measures exclude merger-related adjustments, cost reimbursement revenue and reimbursed expenses. Additionally, fourth quarter 2017 adjusted measures exclude theAvendra gain and U.S. Tax Cuts and Jobs Act of 2017. See the Form 8-K furnished on July 25, 2018 (non-GAAP reconciliations therefrom are also attached to these slides). Adjusted measures in outlook exclude merger-related adjustments, cost reimbursement revenue and reimbursed expenses, which the company cannot accurately forecast and which may be significant. 12

 
2018 FULL YEAR OUTLOOK Full Year 2018 Full Year May 8, 2018 Full Year ($ millions, except EPS) Outlook 2017 2018 Outlook Gross fee revenues $3,640 to $3,675 $3,295 $3,650 to $3,690 Contract investment amortization Approx. ($60) ($50) Approx. ($60) Owned, leased and other revenue, net Approx. $315 $341 Approx. $300 Depreciation, amortization, and other Approx. ($225) ($229) Approx. ($225) General, administrative, and other ($935 to $945) ($921) ($940 to $950) Reported Operating Income $2,504 Adjusted Operating Income $2,725 to $2,770 $2,432 $2,715 to $2,765 Reported Net Income $1,459 Adjusted Net Income $1,600 Reported Fully Diluted EPS $3.84 Adjusted Fully Diluted EPS $5.81 to $5.91 $4.21 $5.43 to $5.55 Adjusted EBITDA $3,450 to $3,495 $3,131 $3,445 to $3,500 2017 has been recast to reflect the full retrospective application of the new revenue standard. Adjusted measures exclude merger-related adjustments, cost reimbursement revenue and reimbursed expenses, the Avendra gain and the U.S. Tax Cuts and Jobs Act of 2017. See the Form 8-K furnished on July 25, 2018 (non- GAAP reconciliations therefrom are also attached to these slides). Adjusted measures in outlook exclude merger-related adjustments, cost reimbursement revenue and reimbursed expenses, which the company cannot accurately forecast and which may be significant. 13

 
2018 OUTLOOK • $800 million to $900 million investment spending, including $225 million for maintenance capital and $255 million for Sheraton Grand Phoenix • Year-to-date recycled more than $500 million of capital through asset sales & loan repayments • Since the Starwood acquisition, recycled $1.8 billion of capital • Outlook assumes no further asset sales • Expect more than $3.1 billion return to shareholders in 2018 14

 
QUESTIONS & ANSWERS

 
NON-GAAP RECONCILIATIONS

 
MARRIOTT INTERNATIONAL, INC. PRESS RELEASE SCHEDULES TABLE OF CONTENTS QUARTER 2, 2018 Consolidated Statements of Income - As Reported A-1 Non-GAAP Financial Measures A-3 Total Lodging Products A-4 Key Lodging Statistics A-7 Adjusted EBITDA A-11 Adjusted EBITDA Forecast - Third Quarter 2018 A-12 Adjusted EBITDA Forecast - Fourth Quarter 2018 A-13 Adjusted EBITDA Forecast - Full Year 2018 A-14 Explanation of Non-GAAP Financial and Performance Measures A-15

 
MARRIOTT INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED SECOND 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) June 30, 2018 June 30, 2017 Reported 2018 vs. 2017 REVENUES Base management fees$ 300 $ 285 5 Franchise fees 1 475 408 16 Incentive management fees 176 155 14 Gross Fee Revenues 951 848 12 Contract investment amortization 2 (13) (12) (8) Net Fee Revenues 938 836 12 Owned, leased, and other revenue 3 423 448 (6) Cost reimbursement revenue 4 3,985 3,927 1 Total Revenues 5,346 5,211 3 OPERATING COSTS AND EXPENSES Owned, leased, and other - direct 5 334 350 5 Depreciation, amortization, and other 6 58 71 18 Merger-related costs and charges 18 21 14 General, administrative, and other 7 217 234 7 Reimbursed expenses 4 3,979 3,791 (5) Total Expenses 4,606 4,467 (3) OPERATING INCOME 740 744 (1) Gains and other income, net 8 114 25 356 Interest expense (85) (73) (16) Interest income 6 8 (25) Equity in earnings 9 21 12 75 INCOME BEFORE INCOME TAXES 796 716 11 Provision for income taxes (186) (227) 18 NET INCOME $ 610 $ 489 25 EARNINGS PER SHARE Earnings per share - basic$ 1.73 $ 1.29 34 Earnings per share - diluted$ 1.71 $ 1.28 34 Basic Shares 353.4 378.5 Diluted Shares 357.3 383.0 1 Franchise fees include fees from our franchise agreements, application and relicensing fees, licensing fees from our timeshare, credit card programs, and residential branding fees. 2 Contract investment amortization includes amortization of capitalized costs to obtain contracts with our owner and franchisee customers, and any related impairments, accelerations, or write-offs. 3 Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, and other revenue. 4 Cost reimbursement revenue includes reimbursements from properties for property-level and centralized programs and services that we operate for the benefit of our hotel owners. Reimbursed expenses include costs incurred by Marriott for certain property-level operating expenses and centralized programs and services. 5 Owned, leased, and other - direct expenses include operating expenses related to our owned or leased hotels, including lease payments and pre-opening expenses. 6 Depreciation, amortization, and other expenses include depreciation for fixed assets, amortization of capitalized costs incurred to acquire management, franchise, and license agreements, and any related impairments, accelerations, or write-offs. 7 General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses. 8 Gains and other income, net includes gains and losses on the sale of real estate, the sale or impairment of joint ventures and investments, and results from other equity investments. 9 Equity in earnings include our equity in earnings or losses of unconsolidated equity method investments. 10 On January 1, 2018, we adopted ASU 2014-09. This column reflects our recast 2017 results under the new accounting standard. A-1

 
MARRIOTT INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED SECOND QUARTER YEAR-TO-DATE 2018 AND 2017 (in millions except per share amounts, unaudited) As Reported As Reported 10 Percent Six Months Ended Six Months Ended Better/(Worse) June 30, 2018 June 30, 2017 Reported 2018 vs. 2017 REVENUES Base management fees$ 573 $ 549 4 Franchise fees 1 892 763 17 Incentive management fees 331 295 12 Gross Fee Revenues 1,796 1,607 12 Contract investment amortization 2 (31) (23) (35) Net Fee Revenues 1,765 1,584 11 Owned, leased, and other revenue 3 829 876 (5) Cost reimbursement revenue 4 7,758 7,663 1 Total Revenues 10,352 10,123 2 OPERATING COSTS AND EXPENSES Owned, leased, and other - direct 5 670 706 5 Depreciation, amortization, and other 6 112 122 8 Merger-related costs and charges 52 72 28 General, administrative, and other 7 464 446 (4) Reimbursed expenses 4 7,814 7,487 (4) Total Expenses 9,112 8,833 (3) OPERATING INCOME 1,240 1,290 (4) Gains and other income, net 8 173 25 592 Interest expense (160) (143) (12) Interest income 11 15 (27) Equity in earnings 9 34 23 48 INCOME BEFORE INCOME TAXES 1,298 1,210 7 Provision for income taxes (290) (350) 17 NET INCOME $ 1,008 $ 860 17 EARNINGS PER SHARE Earnings per share - basic$ 2.83 $ 2.25 26 Earnings per share - diluted$ 2.80 $ 2.23 26 Basic Shares 355.9 381.7 Diluted Shares 360.3 386.5 1 Franchise fees include fees from our franchise agreements, application and relicensing fees, licensing fees from our timeshare, credit card programs, and residential branding fees. 2 Contract investment amortization includes amortization of capitalized costs to obtain contracts with our owner and franchisee customers, and any related impairments, accelerations, or write-offs. 3 Owned, leased, and other revenue includes revenue from the properties we own or lease, termination fees, and other revenue. 4 Cost reimbursement revenue includes reimbursements from properties for property-level and centralized programs and services that we operate for the benefit of our hotel owners. Reimbursed expenses include costs incurred by Marriott for certain property-level operating expenses and centralized programs and services. 5 Owned, leased, and other - direct expenses include operating expenses related to our owned or leased hotels, including lease payments and pre-opening expenses. 6 Depreciation, amortization, and other expenses include depreciation for fixed assets, amortization of capitalized costs incurred to acquire management, franchise, and license agreements, and any related impairments, accelerations, or write-offs. 7 General, administrative, and other expenses include our corporate and business segments overhead costs and general expenses. 8 Gains and other income, net includes gains and losses on the sale of real estate, the sale or impairment of joint ventures and investments, and results from other equity investments. 9 Equity in earnings include our equity in earnings or losses of unconsolidated equity method investments. 10 On January 1, 2018, we adopted ASU 2014-09. This column reflects our recast 2017 results under the new accounting standard. A-2

 
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 measure. Adjusted total revenues is used in the determination of Adjusted operating income margin. Three Months Ended Six Months Ended Percent Percent June 30, June 30, Better/ June 30, June 30, Better/ 2018 2017 1 (Worse) 2018 2017 1 (Worse) Total revenues, as reported$ 5,346 $ 5,211 $ 10,352 $ 10,123 Less: Cost reimbursement revenue (3,985) (3,927) (7,758) (7,663) Adjusted total revenues** 1,361 1,284 2,594 2,460 Operating income, as reported 740 744 1,240 1,290 Less: Cost reimbursement revenue (3,985) (3,927) (7,758) (7,663) Add: Reimbursed expenses 3,979 3,791 7,814 7,487 Add: Merger-related costs, charges, and other 2 18 26 52 74 Adjusted operating income ** 752 634 19% 1,348 1,188 13% Operating income margin 14% 14% 12% 13% Adjusted operating income margin ** 55% 49% 52% 48% Net income, as reported 610 489 1,008 860 Less: Cost reimbursement revenue (3,985) (3,927) (7,758) (7,663) Add: Reimbursed expenses 3,979 3,791 7,814 7,487 Add: Merger-related costs, charges, and other 2 18 26 52 74 Less: Gain on sale of Avendra (1) - (6) - Income tax effect of above adjustments (2) 46 (26) 42 Add: U.S. Tax Cuts and Jobs Act of 2017 - - 22 - Adjusted net income **$ 619 $ 425 46%$ 1,106 $ 800 38% Diluted EPS, as reported$ 1.71 $ 1.28 $ 2.80 $ 2.23 Adjusted Diluted EPS**$ 1.73 $ 1.11 56%$ 3.07 $ 2.07 48% ** Denotes non-GAAP financial measures. Please see pages A-15 and A-16 for information about our reasons for providing these alternative financial measures and the limitations on their use. 1 On January 1, 2018, we adopted ASU 2014-09. This column reflects our recast 2017 results under the new accounting standard. 2 Merger-related costs, charges, and other includes Starwood merger costs presented in the “Merger-related costs and charges” caption of our Income Statement and purchase accounting revisions. A-3

 
MARRIOTT INTERNATIONAL, INC. TOTAL LODGING PRODUCTS As of June 30, 2018 North America Total International Total Worldwide Units Rooms Units Rooms Units Rooms Managed 822 248,999 1,107 293,233 1,929 542,232 Marriott Hotels 127 68,092 168 48,801 295 116,893 Sheraton 28 23,595 184 63,096 212 86,691 Sheraton Residences - - 2 262 2 262 Courtyard 240 38,355 91 19,585 331 57,940 Westin 45 24,808 68 21,749 113 46,557 Westin Residences 1 65 1 264 2 329 The Ritz-Carlton 38 10,958 55 14,986 93 25,944 The Ritz-Carlton Residences 35 4,554 11 950 46 5,504 The Ritz-Carlton Serviced Apartments - - 5 697 5 697 JW Marriott 16 10,038 48 19,125 64 29,163 Renaissance 27 11,773 54 17,192 81 28,965 Le Méridien 4 720 73 20,068 77 20,788 Residence Inn 110 16,863 6 643 116 17,506 Four Points 1 134 67 16,287 68 16,421 W Hotels 25 7,254 25 6,007 50 13,261 W Residences 9 1,078 4 471 13 1,549 The Luxury Collection 6 2,294 50 8,785 56 11,079 St. Regis 10 1,990 31 7,044 41 9,034 St. Regis Residences 7 585 7 593 14 1,178 Aloft 1 330 35 8,397 36 8,727 Gaylord Hotels 5 8,411 - - 5 8,411 Delta Hotels 25 6,764 - - 25 6,764 Fairfield Inn & Suites 6 1,432 26 4,175 32 5,607 SpringHill Suites 31 4,988 - - 31 4,988 Marriott Executive Apartments - - 30 4,471 30 4,471 Protea Hotels - - 35 4,090 35 4,090 Autograph Collection 5 1,307 8 1,722 13 3,029 TownePlace Suites 16 1,839 - - 16 1,839 Element 1 180 6 1,253 7 1,433 EDITION 2 567 3 801 5 1,368 EDITION Residences 1 25 - - 1 25 Moxy - - 4 599 4 599 Bulgari - - 5 438 5 438 Bulgari Residences - - 2 123 2 123 Tribute Portfolio - - 3 559 3 559 A-4

 
MARRIOTT INTERNATIONAL, INC. TOTAL LODGING PRODUCTS As of June 30, 2018 North America Total International Total Worldwide Units Rooms Units Rooms Units Rooms Franchised 4,017 582,480 479 103,435 4,496 685,915 Courtyard 753 100,354 65 12,161 818 112,515 Fairfield Inn & Suites 927 84,974 6 1,157 933 86,131 Marriott Hotels 214 66,639 51 14,390 265 81,029 Residence Inn 658 78,044 5 666 663 78,710 Sheraton 162 48,202 62 17,830 224 66,032 SpringHill Suites 370 42,434 - - 370 42,434 Westin 82 26,863 23 7,237 105 34,100 Westin Residences 2 201 - - 2 201 TownePlace Suites 338 34,035 - - 338 34,035 Four Points 143 21,877 47 7,328 190 29,205 Autograph Collection 82 17,649 49 11,492 131 29,141 Renaissance 59 16,816 26 7,188 85 24,004 Aloft 102 14,942 13 2,094 115 17,036 The Luxury Collection 12 2,850 39 7,339 51 10,189 The Luxury Collection Residences 1 91 1 64 2 155 Delta Hotels 32 7,387 2 562 34 7,949 Le Méridien 16 3,417 15 4,012 31 7,429 Tribute Portfolio 17 5,350 9 972 26 6,322 JW Marriott 10 4,425 6 1,624 16 6,049 Moxy 7 1,503 18 4,048 25 5,551 Element 28 3,943 2 293 30 4,236 Protea Hotels - - 39 2,893 39 2,893 The Ritz-Carlton 1 429 - - 1 429 The Ritz-Carlton Residences 1 55 - - 1 55 Bulgari - - 1 85 1 85 Owned/Leased 29 8,281 33 8,565 62 16,846 Sheraton 2 1,474 4 1,830 6 3,304 Courtyard 19 2,814 3 645 22 3,459 Marriott Hotels 3 1,664 5 1,625 8 3,289 Westin 1 1,073 - - 1 1,073 W Hotels 1 509 2 665 3 1,174 Protea Hotels - - 7 1,168 7 1,168 Renaissance 1 317 3 749 4 1,066 The Ritz-Carlton - - 2 553 2 553 JW Marriott - - 1 496 1 496 St. Regis 1 238 1 160 2 398 Residence Inn 1 192 1 140 2 332 The Luxury Collection - - 2 287 2 287 Autograph Collection - - 2 247 2 247 Unconsolidated Joint Ventures 42 7,189 98 12,004 140 19,193 AC Hotels by Marriott 42 7,189 91 11,545 133 18,734 Autograph Collection - - 7 459 7 459 Timeshare* 70 18,297 20 4,242 90 22,539 Marriott Vacations Worldwide 51 11,249 15 2,406 66 13,655 Vistana 19 7,048 5 1,836 24 8,884 Grand Total 4,980 865,246 1,737 421,479 6,717 1,286,725 *Timeshare property and room counts are included on this table in their geographical locations. For external reporting purposes, these counts are captured in the Corporate segment. A-5

 
MARRIOTT INTERNATIONAL, INC. TOTAL LODGING PRODUCTS As of June 30, 2018 North America Total International Total Worldwide Total Systemwide Units Rooms Units Rooms Units Rooms Luxury 176 47,940 301 71,293 477 119,233 JW Marriott 26 14,463 55 21,245 81 35,708 The Ritz-Carlton 39 11,387 57 15,539 96 26,926 The Ritz-Carlton Residences 36 4,609 11 950 47 5,559 The Ritz-Carlton Serviced Apartments - - 5 697 5 697 The Luxury Collection 18 5,144 91 16,411 109 21,555 The Luxury Collection Residences 1 91 1 64 2 155 W Hotels 26 7,763 27 6,672 53 14,435 W Residences 9 1,078 4 471 13 1,549 St. Regis 11 2,228 32 7,204 43 9,432 St. Regis Residences 7 585 7 593 14 1,178 EDITION 2 567 3 801 5 1,368 EDITION Residences 1 25 - - 1 25 Bulgari - - 6 523 6 523 Bulgari Residences - - 2 123 2 123 Full-Service 940 342,587 849 246,777 1,789 589,364 Marriott Hotels 344 136,395 224 64,816 568 201,211 Sheraton 192 73,271 250 82,756 442 156,027 Sheraton Residences - - 2 262 2 262 Westin 128 52,744 91 28,986 219 81,730 Westin Residences 3 266 1 264 4 530 Renaissance 87 28,906 83 25,129 170 54,035 Autograph Collection 87 18,956 66 13,920 153 32,876 Le Méridien 20 4,137 88 24,080 108 28,217 Delta Hotels 57 14,151 2 562 59 14,713 Gaylord Hotels 5 8,411 - - 5 8,411 Tribute Portfolio 17 5,350 12 1,531 29 6,881 Marriott Executive Apartments - - 30 4,471 30 4,471 Limited-Service 3,794 456,422 567 99,167 4,361 555,589 Courtyard 1,012 141,523 159 32,391 1,171 173,914 Residence Inn 769 95,099 12 1,449 781 96,548 Fairfield Inn & Suites 933 86,406 32 5,332 965 91,738 SpringHill Suites 401 47,422 - - 401 47,422 Four Points 144 22,011 114 23,615 258 45,626 TownePlace Suites 354 35,874 - - 354 35,874 Aloft 103 15,272 48 10,491 151 25,763 AC Hotels by Marriott 42 7,189 91 11,545 133 18,734 Protea Hotels - - 81 8,151 81 8,151 Moxy 7 1,503 22 4,647 29 6,150 Element 29 4,123 8 1,546 37 5,669 Timeshare* 70 18,297 20 4,242 90 22,539 Marriott Vacations Worldwide 51 11,249 15 2,406 66 13,655 Vistana 19 7,048 5 1,836 24 8,884 Grand Total 4,980 865,246 1,737 421,479 6,717 1,286,725 *Timeshare property and room counts are included on this table in their geographical locations. For external reporting purposes, these counts are captured in the Corporate segment. A-6

 
MARRIOTT INTERNATIONAL, INC. KEY LODGING STATISTICS In Constant $ Comparable Company-Operated North American Properties Three Months Ended June 30, 2018 and June 30, 2017 REVPAR Occupancy Average Daily Rate Brand 2018 vs. 2017 2018vs. 2017 2018 vs. 2017 JW Marriott $198.18 1.1% 81.4% 0.1% pts. $243.45 1.0% The Ritz-Carlton $281.05 4.9% 76.4% 0.7% pts. $367.77 3.9% W Hotels $261.02 0.9% 83.2% -1.5% pts. $313.73 2.7% Composite North American Luxury1 $263.58 3.4% 79.5% 0.3% pts. $331.50 3.0% Marriott Hotels $169.82 4.4% 81.4% 0.7% pts. $208.49 3.6% Sheraton $156.33 4.5% 80.6% 2.3% pts. $193.92 1.5% Westin $182.79 1.5% 80.6% 0.6% pts. $226.73 0.7% Composite North American Upper Upscale2 $166.22 4.1% 80.6% 1.0% pts. $206.23 2.8% North American Full-Service3 $182.40 3.9% 80.4% 0.9% pts. $226.81 2.7% Courtyard $114.92 2.0% 78.2% 0.5% pts. $146.99 1.3% Residence Inn $135.45 0.5% 82.4% -0.7% pts. $164.36 1.4% Composite North American Limited-Service4 $120.35 1.4% 79.8% 0.2% pts. $150.83 1.2% North American - All5 $162.86 3.3% 80.2% 0.7% pts. $203.01 2.5% Comparable Systemwide North American Properties Three Months Ended June 30, 2018 and June 30, 2017 REVPAR Occupancy Average Daily Rate Brand 2018 vs. 2017 2018vs. 2017 2018 vs. 2017 JW Marriott $195.37 2.7% 81.6% 0.6% pts. $239.37 1.9% The Ritz-Carlton $281.05 4.9% 76.4% 0.7% pts. $367.77 3.9% W Hotels $261.02 0.9% 83.2% -1.5% pts. $313.73 2.7% Composite North American Luxury1 $251.71 3.9% 79.9% 0.7% pts. $315.16 3.0% Marriott Hotels $142.53 3.7% 77.6% 0.8% pts. $183.70 2.7% Sheraton $124.85 3.1% 77.3% 1.0% pts. $161.48 1.8% Westin $167.33 2.5% 80.2% 0.6% pts. $208.67 1.8% Composite North American Upper Upscale2 $144.26 3.6% 78.1% 0.8% pts. $184.83 2.5% North American Full-Service3 $154.74 3.7% 78.2% 0.8% pts. $197.80 2.6% Courtyard $112.47 2.2% 78.0% 0.9% pts. $144.10 1.0% Residence Inn $125.45 1.7% 82.8% 0.7% pts. $151.47 0.8% Fairfield Inn & Suites $90.48 2.9% 76.9% 1.5% pts. $117.71 0.9% Composite North American Limited-Service4 $108.11 2.5% 79.1% 1.0% pts. $136.64 1.2% North American - All5 $128.38 3.1% 78.7% 0.9% pts. $163.05 1.9% 1 Includes JW Marriott, The Ritz-Carlton, W Hotels, The Luxury Collection, St. Regis, and EDITION. 2 Includes Marriott Hotels, Sheraton, Westin, Renaissance, Autograph Collection, Delta Hotels, Gaylord Hotels, and Le Méridien. Systemwide also includes Tribute Portfolio. 3 Includes Composite North American Luxury and Composite North American Upper Upscale. 4 Includes Courtyard, Residence Inn, Fairfield Inn & Suites, SpringHill Suites, TownePlace Suites, Four Points, Aloft, Element, and AC Hotels by Marriott. Systemwide also includes Moxy. 5 Includes North American Full-Service and Composite North American Limited-Service. A-7

 
MARRIOTT INTERNATIONAL, INC. KEY LODGING STATISTICS In Constant $ Comparable Company-Operated International Properties Three Months Ended June 30, 2018 and June 30, 2017 REVPAR Occupancy Average Daily Rate Region 2018 vs. 2017 2018vs. 2017 2018 vs. 2017 Greater China $95.94 10.0% 72.7% 3.9% pts. $131.97 4.1% Rest of Asia Pacific $118.98 6.5% 72.2% 1.6% pts. $164.70 4.2% Asia Pacific $104.51 8.5% 72.5% 3.0% pts. $144.11 4.0% Caribbean & Latin America $127.25 8.8% 64.2% 0.5% pts. $198.35 7.9% Europe $168.59 4.2% 78.1% 0.8% pts. $215.95 3.2% Middle East & Africa $90.93 -4.2% 61.1% 1.0% pts. $148.75 -5.7% International - All1 $118.79 5.2% 71.0% 1.9% pts. $167.20 2.4% Worldwide2 $140.65 4.1% 75.6% 1.3% pts. $186.05 2.3% Comparable Systemwide International Properties Three Months Ended June 30, 2018 and June 30, 2017 REVPAR Occupancy Average Daily Rate Region 2018 vs. 2017 2018vs. 2017 2018 vs. 2017 Greater China $95.72 9.8% 72.2% 3.9% pts. $132.54 3.9% Rest of Asia Pacific $121.47 7.7% 72.9% 2.2% pts. $166.55 4.4% Asia Pacific $107.16 8.7% 72.5% 3.2% pts. $147.73 4.0% Caribbean & Latin America $104.65 7.6% 63.8% 0.8% pts. $163.90 6.3% Europe $144.23 4.9% 75.9% 1.5% pts. $189.91 2.9% Middle East & Africa $88.77 -3.6% 61.4% 0.9% pts. $144.48 -5.1% International - All1 $115.31 5.7% 70.9% 2.1% pts. $162.63 2.6% Worldwide2 $124.53 3.8% 76.4% 1.3% pts. $162.94 2.1% 1 Includes Asia Pacific, Caribbean & Latin America, Europe, and Middle East & Africa. 2 Includes North American - All and International - All. A-8

 
MARRIOTT INTERNATIONAL, INC. KEY LODGING STATISTICS In Constant $ Comparable Company-Operated North American Properties Six Months Ended June 30, 2018 and June 30, 2017 REVPAR Occupancy Average Daily Rate Brand 2018 vs. 2017 2018 vs. 2017 2018 vs. 2017 JW Marriott $195.04 0.7% 79.6% 0.4% pts. $245.13 0.2% The Ritz-Carlton $292.65 4.8% 76.0% 1.0% pts. $384.87 3.4% W Hotels $251.39 3.0% 81.8% -0.2% pts. $307.42 3.2% Composite North American Luxury1 $270.87 3.9% 78.9% 0.6% pts. $343.16 3.1% Marriott Hotels $158.33 2.8% 77.6% 0.5% pts. $204.15 2.2% Sheraton $142.73 2.6% 76.6% 0.3% pts. $186.23 2.2% Westin $165.56 1.3% 76.1% 0.3% pts. $217.47 0.9% Composite North American Upper Upscale2 $153.69 2.5% 76.7% 0.4% pts. $200.40 2.0% North American Full-Service3 $173.17 2.8% 77.1% 0.4% pts. $224.71 2.3% Courtyard $106.16 1.0% 73.6% 0.2% pts. $144.15 0.7% Residence Inn $128.27 0.1% 79.4% -0.6% pts. $161.53 0.8% Composite North American Limited-Service4 $112.06 1.0% 75.7% 0.2% pts. $148.05 0.7% North American - All5 $153.91 2.4% 76.6% 0.4% pts. $200.85 1.9% Comparable Systemwide North American Properties Six Months Ended June 30, 2018 and June 30, 2017 REVPAR Occupancy Average Daily Rate Brand 2018 vs. 2017 2018 vs. 2017 2018 vs. 2017 JW Marriott $192.70 1.6% 79.5% 0.3% pts. $242.39 1.2% The Ritz-Carlton $292.65 4.8% 76.0% 1.0% pts. $384.87 3.4% W Hotels $251.39 3.0% 81.8% -0.2% pts. $307.42 3.2% Composite North American Luxury1 $255.36 4.1% 78.8% 0.8% pts. $324.02 3.0% Marriott Hotels $133.89 2.4% 73.7% 0.4% pts. $181.64 1.8% Sheraton $113.69 2.4% 72.6% 0.4% pts. $156.65 1.8% Westin $156.61 1.7% 76.1% 0.1% pts. $205.67 1.6% Composite North American Upper Upscale2 $134.80 2.5% 74.1% 0.4% pts. $181.99 2.0% North American Full-Service3 $146.56 2.8% 74.5% 0.4% pts. $196.63 2.2% Courtyard $103.36 1.7% 73.5% 0.8% pts. $140.61 0.5% Residence Inn $117.77 1.9% 79.4% 0.9% pts. $148.27 0.7% Fairfield Inn & Suites $82.17 3.5% 71.8% 1.9% pts. $114.40 0.9% Composite North American Limited-Service4 $99.93 2.5% 74.8% 1.2% pts. $133.53 0.9% North American - All5 $120.19 2.7% 74.7% 0.8% pts. $160.89 1.5% 1 Includes JW Marriott, The Ritz-Carlton, W Hotels, The Luxury Collection, St. Regis, and EDITION. 2 Includes Marriott Hotels, Sheraton, Westin, Renaissance, Autograph Collection, Delta Hotels, Gaylord Hotels, and Le Méridien. Systemwide also includes Tribute Portfolio. 3 Includes Composite North American Luxury and Composite North American Upper Upscale. 4 Includes Courtyard, Residence Inn, Fairfield Inn & Suites, SpringHill Suites, TownePlace Suites, Four Points, Aloft, Element, and AC Hotels by Marriott. Systemwide also includes Moxy. 5 Includes North American Full-Service and Composite North American Limited-Service. A-9

 
MARRIOTT INTERNATIONAL, INC. KEY LODGING STATISTICS In Constant $ Comparable Company-Operated International Properties Six Months Ended June 30, 2018 and June 30, 2017 REVPAR Occupancy Average Daily Rate Region 2018 vs. 2017 2018vs. 2017 2018 vs. 2017 Greater China $94.35 11.0% 70.8% 4.6% pts. $133.34 3.8% Rest of Asia Pacific $127.98 7.2% 74.3% 1.7% pts. $172.15 4.8% Asia Pacific $106.89 9.3% 72.1% 3.5% pts. $148.26 4.0% Caribbean & Latin America $142.93 9.7% 66.1% 1.6% pts. $216.22 7.0% Europe $145.20 4.2% 72.1% 1.0% pts. $201.46 2.8% Middle East & Africa $104.87 -0.1% 65.5% 2.5% pts. $160.22 -3.9% International - All1 $118.37 6.3% 70.4% 2.6% pts. $168.19 2.4% Worldwide2 $136.02 4.1% 73.5% 1.5% pts. $185.10 2.0% Comparable Systemwide International Properties Six Months Ended June 30, 2018 and June 30, 2017 REVPAR Occupancy Average Daily Rate Region 2018 vs. 2017 2018vs. 2017 2018 vs. 2017 Greater China $94.00 10.7% 70.2% 4.6% pts. $133.92 3.5% Rest of Asia Pacific $127.24 8.2% 74.3% 2.0% pts. $171.33 5.4% Asia Pacific $108.77 9.4% 72.0% 3.4% pts. $151.07 4.2% Caribbean & Latin America $113.93 8.2% 64.7% 1.6% pts. $176.02 5.6% Europe $124.57 5.4% 69.6% 2.0% pts. $179.04 2.3% Middle East & Africa $101.10 0.0% 65.2% 2.1% pts. $155.17 -3.2% International - All1 $112.98 6.6% 69.4% 2.6% pts. $162.78 2.6% Worldwide2 $118.07 3.7% 73.1% 1.3% pts. $161.42 1.8% 1 Includes Asia Pacific, Caribbean & Latin America, Europe, and Middle East & Africa. 2 Includes North American - All and International - All. A-10

 
MARRIOTT INTERNATIONAL, INC. NON-GAAP FINANCIAL MEASURES ADJUSTED EBITDA ($ in millions) Fiscal Year 2018 First Second Quarter Quarter Total Net income, as reported $ 398 $ 610 $ 1,008 Cost reimbursement revenue (3,773) (3,985) (7,758) Reimbursed expenses 3,835 3,979 7,814 Interest expense 75 85 160 Interest expense from unconsolidated joint ventures 2 3 5 Tax provision 104 186 290 Depreciation and amortization 54 58 112 Contract investment amortization 18 13 31 Depreciation classified in reimbursed expenses 33 34 67 Depreciation and amortization from unconsolidated joint ventures 10 10 20 Share-based compensation 38 47 85 Gain on asset dispositions (58) (109) (167) Gain on investee’s property sale - (10) (10) Merger-related costs and charges 34 18 52 Adjusted EBITDA ** $ 770 $ 939 $ 1,709 Increase over 2017 Adjusted EBITDA ** 8% 15% 11% 1 Fiscal Year 2017 2 First Second Third Fourth Quarter Quarter Quarter Quarter Total Net income, as reported$ 371 $ 489 $ 485 $ 114 $ 1,459 Cost reimbursement revenue (3,736) (3,927) (3,830) (3,962) (15,455) Reimbursed expenses 3,696 3,791 3,650 4,091 15,228 Interest expense 70 73 73 72 288 Interest expense from unconsolidated joint ventures 1 3 2 4 10 Tax provision 123 227 253 920 1,523 Depreciation and amortization 51 71 54 53 229 Contract investment amortization 11 12 11 16 50 Depreciation classified in reimbursed expenses 32 33 28 33 126 Depreciation and amortization from unconsolidated joint ventures11 10 10 11 42 Share-based compensation 35 41 42 37 155 Gain on asset dispositions - (24) - (659) (683) Merger-related costs and charges 51 21 28 59 159 Adjusted EBITDA ** $ 716 $ 820 $ 806 $ 789 $ 3,131 ** Denotes non-GAAP financial measures. Please see pages A-15 and A-16 for information about our reasons for providing these alternative financial measures and the limitations on their use. 1 Represents the percentage increase of Adjusted EBITDA of $1,709 million for the first two quarters of 2018 over Adjusted EBITDA of $1,536 million for the first two quarters of 2017. 2 On January 1, 2018, we adopted ASU 2014-09. The table above reflects our recast 2017 results under the new accounting standard. A-11

 
MARRIOTT INTERNATIONAL, INC. NON-GAAP FINANCIAL MEASURES ADJUSTED EBITDA FORECAST THIRD QUARTER 2018 ($ in millions) Range Estimated Third Quarter 2018 Third Quarter 2017 2 ** Net income excluding certain items 1 $ 445 $ 464 Interest expense 90 90 Interest expense from unconsolidated joint ventures - - Tax provision 145 151 Depreciation and amortization 60 60 Contract investment amortization 15 15 Depreciation classified in reimbursed expenses 35 35 Depreciation and amortization from unconsolidated joint ventures10 10 Share-based compensation 45 45 Adjusted EBITDA ** $ 845 $ 870 $ 806 Increase over 2017 Adjusted EBITDA ** 5% 8% ** Denotes non-GAAP financial measures. See pages A-15 and A-16 for information about our reasons for providing these alternative financial measures and the limitations on their use. 1 Guidance excludes cost reimbursement revenue, reimbursed expenses, and merger-related costs and charges, which the company cannot accurately forecast and which may be significant, except for depreciation classified in reimbursed expenses, which is included in the caption "Depreciation classified in reimbursed expenses" above. 2 On January 1, 2018, we adopted ASU 2014-09. The table above reflects our recast 2017 results under the new accounting standard. For 2017 full year recast information, see the Form 8-K that we furnished on July 25, 2018. A-12

 
MARRIOTT INTERNATIONAL, INC. NON-GAAP FINANCIAL MEASURES ADJUSTED EBITDA FORECAST FOURTH QUARTER 2018 ($ in millions) Range Estimated Fourth Quarter 2018 Fourth Quarter 2017 2 ** Net income excluding certain items 1 $ 514 $ 529 Interest expense 85 85 Interest expense from unconsolidated joint ventures 5 5 Tax provision 132 137 Depreciation and amortization 53 53 Contract investment amortization 14 14 Depreciation classified in reimbursed expenses 38 38 Depreciation and amortization from unconsolidated joint ventures10 10 Share-based compensation 45 45 Adjusted EBITDA ** $ 896 $ 916 $ 789 Increase over 2017 Adjusted EBITDA ** 14% 16% ** Denotes non-GAAP financial measures. See pages A-15 and A-16 for information about our reasons for providing these alternative financial measures and the limitations on their use. 1 Guidance excludes cost reimbursement revenue, reimbursed expenses, and merger-related costs and charges, which the company cannot accurately forecast and which may be significant, except for depreciation classified in reimbursed expenses, which is included in the caption "Depreciation classified in reimbursed expenses" above. 2 On January 1, 2018, we adopted ASU 2014-09. The table above reflects our recast 2017 results under the new accounting standard. For 2017 full year recast information, see the Form 8-K that we furnished on July 25, 2018. A-13

 
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 $ 2,047 $ 2,081 Interest expense 335 335 Interest expense from unconsolidated joint ventures 10 10 Tax provision 595 606 Depreciation and amortization 225 225 Contract investment amortization 60 60 Depreciation classified in reimbursed expenses 140 140 Depreciation and amortization from unconsolidated joint ventures40 40 Share-based compensation 175 175 Gain on asset dispositions (167) (167) Gain on investee’s property sale (10) (10) Adjusted EBITDA ** $ 3,450 $ 3,495 $ 3,131 Increase over 2017 Adjusted EBITDA ** 10% 12% ** Denotes non-GAAP financial measures. See pages A-15 and A-16 for information about our reasons for providing these alternative financial measures and the limitations on their use. 1 Guidance excludes cost reimbursement revenue, reimbursed expenses, and merger-related costs and charges, which the company cannot accurately forecast and which may be significant, except for depreciation classified in reimbursed expenses, which is included in the caption "Depreciation classified in reimbursed expenses" above. 2 On January 1, 2018, we adopted ASU 2014-09. The table above reflects our recast 2017 results under the new accounting standard. For 2017 full year recast information, see the Form 8-K that we furnished on July 25, 2018. A-14

 
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 principles (“GAAP”). We discuss management’s reasons for reporting these non-GAAP measures below, and the press release schedules reconcile the most directly comparable GAAP measure to each non-GAAP measure that we refer to. Although management evaluates and presents these non-GAAP measures for the reasons described below, please be aware that these non-GAAP measures have limitations and should not be considered in isolation or as a substitute for revenue, operating income, income from continuing operations, net income, earnings per share or any other comparable operating measure prescribed by GAAP. In addition, we may calculate and/or present these non-GAAP financial measures differently than measures with the same or similar names that other companies report, and as a result, the non-GAAP measures we report may not be comparable to those reported by others. Adjusted Operating Income and Adjusted Operating Income Margin. Adjusted operating income and Adjusted operating income margin exclude cost reimbursement revenue, reimbursed expenses, Starwood merger costs presented in the “Merger-related costs and charges” caption of our Income Statements, and net purchase accounting revisions. Adjusted operating income margin reflects Adjusted operating income divided by Adjusted total revenues. We believe that these are meaningful metrics because they allow for period-over- period comparisons of our ongoing operations before these items and for the reasons further described below. Adjusted Net Income and Adjusted Diluted EPS. Adjusted net income and Adjusted diluted EPS reflect our net income and diluted earnings per share excluding the impact of cost reimbursement revenue, reimbursed expenses, merger-related costs, charges, and other merger-related adjustments due to purchase accounting, the gain on the sale of our ownership interest in Avendra, and the income tax effect of these adjustments, and our provisional estimate of the impact of the U.S. Tax Cuts and Jobs Act of 2017. We calculate the income tax effect of the adjustments using an estimated tax rate applicable to each adjustment. We believe that these measures are meaningful indicators of our performance because they allow for period- over-period comparisons of our ongoing operations before these items and for the reasons further described below. Adjusted Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“Adjusted EBITDA”). Adjusted EBITDA reflects net income excluding the impact of the following items: cost reimbursement revenue and reimbursed expenses, interest expense, depreciation (including depreciation classified in “Reimbursed expenses,” as discussed below), amortization, and provision for income taxes, pre- tax transaction and transition costs associated with the Starwood merger, and share-based compensation expense for all periods presented. When applicable, Adjusted EBITDA also excludes gains and losses on asset dispositions made by us or by our joint venture investees. In our presentations of Adjusted operating income and Adjusted operating income margin, Adjusted net income, and Adjusted diluted EPS, we exclude transaction and transition costs associated with the Starwood merger, which we record in the “Merger-related costs and charges” caption of our Income Statements, and other merger-related adjustments due to purchase accounting, to allow for period-over period comparisons of our ongoing operations before the impact of these items. We exclude cost reimbursement revenue and reimbursed expenses, which relate to property-level and centralized programs and services that we operate for the benefit of our hotel owners. We do not operate these programs and services to generate a profit over the contract term, and accordingly, when we recover the costs that we incur for these programs and services from our hotel owners, we do not seek a mark-up. For property-level services, our owners typically reimburse us at the same time that we incur expenses. However, for centralized programs and services, our owners may reimburse us before or after we incur expenses, causing temporary timing differences between the costs we incur and the related reimbursement from hotel owners in our operating and net income. Over the long term, these programs and services are not designed to impact our economics, either positively or negatively. Because we do not retain any such profits or losses over time, we exclude the net impact when evaluating period-over-period changes in our operating results. A-15

 
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 of results before these items with results from other lodging companies. We use Adjusted EBITDA to evaluate companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels, and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provisions for income taxes can vary considerably among companies. Our Adjusted EBITDA also excludes depreciation and amortization expense which we report under “Depreciation, amortization, and other” as well as depreciation classified in “Reimbursed expenses” and “Contract investment amortization” in our Consolidated Statements of Income (our “Income Statements”), because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. Depreciation classified in “Reimbursed expenses” reflects depreciation of Marriott-owned assets, for which we receive cash from owners to reimburse the company for its investments made for the benefit of the system. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We exclude share-based compensation expense in all periods presented to address the considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted. RevPAR. In addition to the foregoing non-GAAP financial measures, we present Revenue per Available Room (“RevPAR”) as a performance measure. We believe RevPAR is a meaningful indicator of our performance because it measures the period-over-period change in room revenues for comparable properties. RevPAR may not be comparable to similarly titled measures, such as revenues. We calculate RevPAR by dividing room sales (recorded in local currency) for comparable properties by room nights available for the period. We present growth in comparative pro forma combined company RevPAR on a constant dollar basis, which we calculate by applying exchange rates for the current period to each period presented. We believe constant dollar analysis provides valuable information regarding our properties’ performance as it removes currency fluctuations from the presentation of such results. A-16

 
MARRIOTT INTERNATIONAL, INC. RECAST OF SELECTED FINANCIAL INFORMATION TABLE OF CONTENTS Results of Operations Information 2 Non-GAAP Financial Measures 3 Explanation of Non-GAAP Financial Measures 5 1

 
MARRIOTT INTERNATIONAL, INC. RESULTS OF OPERATIONS 2017 RECAST UNDER ASU 2014-09 (in millions except per share amounts, unaudited) We adopted ASU 2014-09 “Revenue from Contracts with Customers” (Topic 606) and several related ASUs (collectively referred to as “ASU 2014-09”) in the 2018 first quarter using the full retrospective transition method. The following table presents our 2017 unaudited results of operations as recast under ASU 2014-09. Fiscal Year 2017 First Second Third Fourth Quarter Quarter Quarter Quarter Total REVENUES Base management fees $ 264 $ 285 $ 269 $ 284 $ 1,102 Franchise fees 355 408 419 404 1,586 Incentive management fees 140 155 138 174 607 Gross Fee Revenues 759 848 826 862 3,295 Contract investment amortization (11) (12) (11) (16) (50) Net Fee Revenues 748 836 815 846 3,245 Owned, leased, and other revenue 428 448 433 443 1,752 Cost reimbursement revenue 3,736 3,927 3,830 3,962 15,455 Total Revenues 4,912 5,211 5,078 5,251 20,452 OPERATING COSTS AND EXPENSES Owned, leased, and other - direct 356 350 351 354 1,411 Depreciation, amortization, and other 51 71 54 53 229 General, administrative, and other 212 234 205 270 921 Merger-related costs and charges 51 21 28 59 159 Reimbursed expenses 3,696 3,791 3,650 4,091 15,228 Total Expenses 4,366 4,467 4,288 4,827 17,948 OPERATING INCOME 546 744 790 424 2,504 Gains and other income, net — 25 6 657 688 Interest expense (70) (73) (73) (72) (288) Interest income 7 8 9 14 38 Equity in earnings 11 12 6 11 40 INCOME BEFORE INCOME TAXES 494 716 738 1,034 2,982 Provision for income taxes (123) (227) (253) (920) (1,523) NET INCOME $ 371 $ 489 $ 485 $ 114 $ 1,459 EARNINGS PER SHARE Earnings per share - basic 1 $ 0.96 $ 1.29 $ 1.30 $ 0.31 $ 3.89 Earnings per share - diluted 1 $ 0.95 $ 1.28 $ 1.29 $ 0.31 $ 3.84 Basic Shares 384.9 378.5 372.3 365.1 375.2 Diluted Shares 390.0 383.0 376.6 369.9 379.9 1 The sum of the earnings per share for the four quarters differs from annual earnings per share due to the required method of computing the weighted average shares in interim periods. 2

 
MARRIOTT INTERNATIONAL, INC. NON-GAAP FINANCIAL MEASURES 2017 RECAST UNDER ASU 2014-09 ($ in millions except per share amounts) The following table presents our reconciliations of 2017 Adjusted operating income, Adjusted operating income margin, Adjusted net income, and Adjusted diluted EPS, to the most directly comparable GAAP measure as recast under ASU 2014-09. Adjusted total revenues is used in the determination of Adjusted operating income margin. Fiscal Year 2017 First Second Third Fourth Quarter Quarter Quarter Quarter Total Total revenues, as recast on page 2 $ 4,912 $ 5,211 $ 5,078 $ 5,251 $ 20,452 Less: Cost reimbursement revenue (3,736) (3,927) (3,830) (3,962) (15,455) Less: Merger-related adjustments 1 — — (3) — (3) Adjusted total revenues** 1,176 1,284 1,245 1,289 4,994 Operating income, as recast on page 2 546 744 790 424 2,504 Less: Cost reimbursement revenue (3,736) (3,927) (3,830) (3,962) (15,455) Add: Reimbursed expenses 3,696 3,791 3,650 4,091 15,228 Add: Merger-related adjustments 2 48 26 22 59 155 Adjusted operating income ** 554 634 632 612 2,432 Operating income margin 11% 14% 16% 8% 12% Adjusted operating income margin ** 47% 49% 51% 47% 49% Net income, as recast on page 2 371 489 485 114 1,459 Less: Cost reimbursement revenue (3,736) (3,927) (3,830) (3,962) (15,455) Add: Reimbursed expenses 3,696 3,791 3,650 4,091 15,228 Add: Merger-related adjustments 2 48 26 22 59 155 Less: Gain on sale of Avendra — — — (659) (659) Income tax effect of above adjustments (4) 46 70 197 309 Add: U.S. Tax Cuts and Jobs Act of 2017 — — — 563 563 Adjusted net income ** $ 375 $ 425 $ 397 $ 403 $ 1,600 Diluted EPS, as recast on page 2 3 $ 0.95 $ 1.28 $ 1.29 $ 0.31 $ 3.84 Adjusted Diluted EPS 3 ** $ 0.96 $ 1.11 $ 1.05 $ 1.09 $ 4.21 ** Denotes non-GAAP financial measures. Please see pages 5 and 6 for information about our reasons for providing these alternative financial measures and the limitations on their use. 1 Merger-related adjustments to revenues include Starwood purchase accounting revisions. 2 Merger-related adjustments to operating income include Starwood merger costs presented in the “Merger-related costs and charges” caption of our Income Statement and net purchase accounting revisions. 3 The sum of the earnings per share for the four quarters differs from annual earnings per share due to the required method of computing the weighted average shares in interim periods. 3

 
MARRIOTT INTERNATIONAL, INC. NON-GAAP FINANCIAL MEASURES 2017 RECAST UNDER ASU 2014-09 ($ in millions except per share amounts) The following table presents our reconciliation of 2017 Adjusted EBITDA to Net income as recast under ASU 2014-09. Fiscal Year 2017 First Second Third Fourth Quarter Quarter Quarter Quarter Total Net income, as recast on page 2 $ 371 $ 489 $ 485 $ 114 $ 1,459 Cost reimbursement revenue (3,736) (3,927) (3,830) (3,962) (15,455) Reimbursed expenses 3,696 3,791 3,650 4,091 15,228 Interest expense 70 73 73 72 288 Interest expense from unconsolidated joint ventures 1 3 2 4 10 Tax provision 123 227 253 920 1,523 Depreciation and amortization 51 71 54 53 229 Contract investment amortization 11 12 11 16 50 Depreciation classified in reimbursed expenses 32 33 28 33 126 Depreciation and amortization from unconsolidated joint ventures 11 10 10 11 42 Share-based compensation 35 41 42 37 155 Gain on asset dispositions — (24) — (659) (683) Merger-related costs and charges 51 21 28 59 159 Adjusted EBITDA ** $ 716 $ 820 $ 806 $ 789 $ 3,131 ** Denotes non-GAAP financial measures. Please see pages 5 and 6 for information about our reasons for providing these alternative financial measures and the limitations on their use. 4

 
MARRIOTT INTERNATIONAL, INC. EXPLANATION OF NON-GAAP FINANCIAL MEASURES We report certain financial measures that are not required by, or presented in accordance with, United States generally accepted accounting principles (“GAAP”). We discuss management’s reasons for reporting these non-GAAP measures below, and the preceding schedules reconcile the most directly comparable GAAP measure to each non-GAAP measure that we refer to. Although management evaluates and presents these non-GAAP measures for the reasons described below, please be aware that these non-GAAP measures have limitations and should not be considered in isolation or as a substitute for revenue, operating income, income from continuing operations, net income, earnings per share or any other comparable operating measure prescribed by GAAP. In addition, we may calculate and/or present these non-GAAP financial measures differently than measures with the same or similar names that other companies report, and as a result, the non-GAAP measures we report may not be comparable to those reported by others. Adjusted Operating Income and Adjusted Operating Income Margin. Adjusted operating income and Adjusted operating income margin exclude cost reimbursement revenue, reimbursed expenses, Starwood merger costs presented in the “Merger- related costs and charges” caption of our Income Statement, and net purchase accounting revisions. We believe that these are meaningful metrics because they allow for period-over-period comparisons of our ongoing operations before these items and for the reasons further described below. Adjusted Net Income and Adjusted Diluted EPS. Adjusted net income and Adjusted diluted EPS reflect our net income and diluted earnings per share excluding the impact of cost reimbursement revenue, reimbursed expenses, merger-related costs, charges, and other merger-related adjustments due to purchase accounting, the gain on the sale of our ownership interest in Avendra, and the income tax effect of these adjustments, and with respect to our 2017 fourth quarter and full year results, our provisional estimate of the impact of the U.S. Tax Cuts and Jobs Act of 2017. We calculate the income tax effect of the adjustments using an estimated tax rate applicable to each adjustment. We believe that these measures are meaningful indicators of our performance because they allow for period-over-period comparisons of our ongoing operations before these items and for the reasons further described below. Adjusted Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“Adjusted EBITDA”). Adjusted EBITDA reflects net income excluding the impact of the following items: cost reimbursement revenue and reimbursed expenses, interest expense, depreciation (including depreciation classified in “Reimbursed expenses,” as discussed below), amortization, and provision for income taxes, pre-tax transaction and transition costs associated with the Starwood merger, gains and losses on asset dispositions, and share-based compensation expense for all periods presented. In our presentations of Adjusted operating income and operating income margin, Adjusted net income, and Adjusted diluted EPS, we exclude transaction and transition costs associated with the Starwood merger, which we record in the “Merger-related costs and charges” caption of our Income Statements, and other merger-related adjustments due to purchase accounting, to allow for period-over period comparisons of our ongoing operations before the impact of these items. We exclude cost reimbursement revenue and reimbursed expenses, which relate to property-level and centralized programs and services that we operate for the benefit of our hotel owners. We do not operate these programs and services to generate a profit over the contract term, and accordingly, when we recover the costs that we incur for these programs and services from our hotel owners, we do not seek a mark-up. For property-level services, our owners typically reimburse us at the same time that we incur expenses. However, for centralized programs and services, our owners may reimburse us before or after we incur expenses, causing temporary timing differences between the costs we incur and the related reimbursement from hotel owners in our operating and net income. Over the long term, these programs and services are not designed to impact our economics, either positively or negatively. Because we do not retain any such profits or losses over time, we exclude the net impact when evaluating period- over-period changes in our operating results. 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 of results before these items with results from other lodging companies. We use Adjusted EBITDA to evaluate companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels, and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provisions for income taxes can vary considerably among companies. Our Adjusted EBITDA also excludes depreciation and amortization expense which we report under “Depreciation, amortization, and other” as well as depreciation classified in “Reimbursed expenses” and “Contract investment amortization” in our Consolidated Statements of Income (our “Income Statements”), because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. Depreciation classified in “Reimbursed expenses” reflects depreciation of 5

 
MARRIOTT INTERNATIONAL, INC. EXPLANATION OF NON-GAAP FINANCIAL MEASURES Marriott-owned assets, for which we receive cash from owners to reimburse the company for its investments made for the benefit of the system. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We exclude share-based compensation expense in all periods presented to address the considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted. 6