This summary is based on the first quarter fiscal 2007 earnings call conducted by Marriott International, Inc. (GISX: chart) on April 19, 2007.

Key Investors Issues

- In the first quarter the company earned $182 million, or 44 cents per share versus $170 million, or 39 cents per share a year ago.
- Revenue per available room (REVPAR) rose 7% from a year ago to $2.9 billion.
- Interest expenses increased 22% from a year ago to $33 million.
- REVPAR growth for the second quarter is expected to range from $355 million to $365 million, $1.39 billion to $1.41 billion for the full year.
- Debt increased 31.9% to $2.4 billion from $1.8 billion at the end of 2006.
- A total of 4,783 rooms were added to the worldwide lodging portfolio, while 3,054 rooms exited the system.

First Quarter 2007 Highlights

Revenues increased 7% from a year ago to $2.904 million, with growth driven by:
- 20% growth in incentive management fees to $71 million;
- 21% growth in time share sales and services to $369 million;
- and 19% increase in synthetic fuel to $68 million.

Combined revenue base, franchise and incentive fee revenue increased 10% from a year ago to $296 million.

- Operating income declined 1% from a year ago to $201 million.
- Interest expenses totaled $33 million up $6 million over the 2006 first quarter;
- Net income increased 198% from last year to $182 million due primarily to the cumulative effect of change in accounting principle on Accounting for Real Estate Time Sharing Transactions during the 2006 first quarter.

Diluted earnings per share were 44 cents, up 214% from 14 cents in March 2006.

- Approximately 4,800 rooms opened in the quarter, including 1,100 rooms outside the U.S.
- Increased leverage debt rose 31.9% to $2.4 billion from $1.8 billion at the end of 2006
- The company repurchased 9.5 million shares of its common stock for $451 million in the quarter.

Revenue performance driven by core business lines:

- System now totals 517,000 rooms with additional 100000 under development;
- Regions reported company-operated RevPAR gains of 12.5%;
- Groups exceed initial blocks;
- Booking pace was strong in the fourth quarter;
- RevPAR was the strongest in business-oriented hotels.

Asian markets are expected to grow, with 2300 rooms currently under construction.

Technology aids cost reduction, improved margins:
- online reservation increased 16% from 11% two years ago;
- costs were 60% less than conventional means.

Brand enhancing started to pay off during the quarter:
- hotels paying incentive fees increased to 90% from 78% a year ago;
- there was an increase in provision of adaptable room technology;
- the company is focused on Renaissance brand set.

Strong balance sheets and cash flows are fuelling business growth:
- long term debt increased to over $2.4 billion;
- the company has bought back 10.7 million shares worth $512 million to date.
- The costs of the synthetic fuel business being wound down were immaterial.
- The dispute with IRS on ESOP-related federal income tax deductions is still ongoing.

Fiscal 2007 Outlook

Management sees solid REVPAR growth for the remainder of the year, particularly from international markets and U.S. full-service hotels in urban markets. The company expects comparable worldwide REVPAR to increase 7% to 9%.

The expected total fee revenue for fiscal 2007 is $1,390 million to $1,410 million, or up 14% to 15%, based on the expected 30,000 new room openings.

- House profit margins are expected to increase 150 to 200 basis points due to productivity initiatives;
- Net interest expense is expected to range from $120 million to $130 million for the full year assuming roughly $1.5 billion of share repurchases;
-Decrease from previous earnings guidance are expected to total $10 to $20 million due to construction delays;
- Earnings per share (excluding synthetic fuel) are expected to range from $1.84 to $1.94.

The management is targeting opening 100 hotels in 100 business days between April and August at a cost of $1.8 billion.

Investment spending is expected to total $1.1 billion to $1.2 billion, including:
- $600 million to $650 million for capital expenditures and acquisitions;
- $210 million to $250 million for timeshare development;
- and approximately $200 million in equity and other investments (including timeshare equity investments).

Given the risk from volatile oil prices, the company''s overall 2007 earnings guidance does not include earnings from the synthetic fuel business.

- This segment is also not considered related to core business.
- The management expects that the Synthetic Fuel segment will no longer have a material impact on business after the end of 2007, when provision for synthetic fuel tax credits expires.