This summary is based on the third quarter fiscal 2007 earnings call conducted by Marriott International, Inc. (MAR: chart) on October 4, 2007.

Management:
Chief Financial Officer, Executive Vice President, President - Continental European Lodging: Arne Sorenson
Executive Vice President, Financial Information and Enterprise Risk Management, Chief Accounting Officer: Carl Berquist

Key Investors Issues

- EPS were 33 cents per share, flat compared to last year.
- Net income was $131 million compared to $141 million in the 2006 period.
- Revenue was $3.04 billion compared to $2.7 billion in the prior-year quarter.

Second Quarter Highlights

Transient business was strong, including both corporate and leisure, weekend and weekday. U.S. transient business benefited from the weak dollar.

- Group REVPAR rose almost 4%. It was softer in Chicago and Orlando, reflecting fewer citywide and more competition for near-term group meetings.
- The company had approximately 115,000 rooms either approved for development or under construction. Of those, more than 36,000 are full service hotel rooms and more than half of those are located outside the United States.

Asia continues to offer great development opportunities.

In India, the company has six hotels and 18 more scheduled to open by 2010. The company has 11 hotel projects in the pipeline in Thailand, five of which are conversions.

In White Plains, New York the 123 room Westchester Ritz Carlton opens in November.

- Its 185 residences are priced at $800,000 to $10 million each and the project has already sold 94% of the first tower for more than $260 million.
- Ritz Carlton has 23 residential projects in sales, most with little or no capital investment.

Not included in pipeline yet is a project the company is working on in Las Vegas.

The company has broad convention hotel network, and Las Vegas is an important, high demand group market where it is not adequately represented. Still in its formative stages, the company controls a site of about 15 acres across the street from the Las Vegas convention center. The company expects it will contain approximately 3,500 hotel rooms, half a million square feet of meeting space and a 75,000 square foot casino.

The proximity of the site to the convention center plays well to strong suit - business meetings and conferences. While the company has invested about $230 million to-date, it is working with possible partners on the project and do not plan to build it on balance sheet, nor does it expect to ultimately manage the casino. Construction should begin in about a year or so with completion 30 to 36 months thereafter.

Typically financing for select service hotels, which come from local banks, and construction loans are arranged far in advance of breaking ground so it may be several months before the company sees any measurable impact on new limit service applications. For larger deals, the company hasn’t seen much deal slippage due to the debt markets yet. However, the company believes lenders are becoming more selective and underwriting criteria are likely to become somewhat more conservative, which should constrain supply growth in the U.S.

One area where the capital markets will probably have an impact is on relicensing fees.

Since 2003 over half of franchised hotels have changed hands. Relicensing fees were about $11 million in 2006. With a more challenging financing environment, the company estimates relicensing fees should total only about $5 million in 2008.

Timeshare sales and services revenue net of direct expenses was about $5 million to $10 million ahead of guidance.

In the year-ago quarter, the company booked a $15 million reversal of a contingency reserve related to marketing incentives. The 2007 out-performance was largely due to strong financing profits.

Year-over-year delinquencies and prepayments are down and financing propensity is up. Credit scores of newly originated loans averaged 745. Timeshare reported revenue was constrained by a few soft projects including Orlando where inventory is nearing sellout, Newport Coast where sales have been relatively soft all year, and Lake Tahoe where forest fires kept customers away during the quarter.