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In preparation for MAR's F2Q 2013 earnings release tonight, we’ve put together the recent pertinent forward looking company commentary.

GOLDMAN SACHS CONFERENCE (JUNE 4)

  • "As we look at the U.S., we think it's steady as you go, good growth environment."
  • "We get about 10% of our fees out of Europe. It's still flat. The economies in Western Europe, Germany, France, some of those countries, obviously still have some structural issues to get through. Southern Europe, Spain, Portugal, Italy, suffering with high unemployment, so I think Europe's going to be kind of flat for a while."
  • "One area in Europe that is doing well is Eastern Europe, Russia, the 'stans', Georgia, those areas with the natural resources, commodities, continue to drive well and especially Russia seems to be doing well right now."
  • "China, same thing, growing middle class, growing business community, so a lot of new travel that's taking place in that part of the world. We think it'll be choppy, but over the long-term it's a great place."
  • [Long-term, short-term group bookings] "In fact, they were up significantly in the first quarter, the pace for 2014, and we saw big movement in the year for 2014 bookings.  On the shorter horizon, though, on what we call, in the year for the year, that short-term bookings, as we said in the first quarter, we are seeing a little hesitancy at corporate America pulling the trigger on those."
    • "For 2014, we'll probably have 40%, 45% of the group business on the books I would think. And so we're building that book and obviously by the time we get to the end of year we should be something closer to 70%, actually we could be 50%-ish now, maybe low 50% for the total business for 2014 that's already on the books."
  • "On DC, in referring to the government, I guess, DC obviously feels sequestration more than others. But it hasn't been a big mover. I think the government, quite frankly, started cutting costs and stopped traveling or slowed down their travel pretty dramatically in 2012...I think we talked in the first quarter that it's going to cost us 60 basis points to 70 basis points. That hasn't changed. We still see that probably holding up. I think DC, it's interesting as you look at DC, it kind of leveled off. And it's holding its own."

YOUTUBE FROM Q1 CONFERENCE CALL

  • "Transient business was very strong, particularly nonqualified or retail-rated business as we eliminated discounts, pushed business into higher rated categories and raised rates."
  • "First quarter association group attendance exceeded our expectations, and association bookings for 2014 and beyond were very strong."
  • "Incentive fees exceeded our expectations, largely due to strong performance among our full-service hotels in the U.S., particularly in New York and Florida."
  • "Asia Pacific REVPAR should grow at a low single-digit rate, reflecting weak trends in Seoul and Beijing. We expect flattish REVPAR growth in Europe, low single-digit REVPAR growth in CALA, and high single-digit REVPAR growth in the Middle East. For you modelers, we estimate the shift in fiscal calendar will add approximately $20 million."
  • "We expect second quarter operating income will total $275 million to $295 million and diluted EPS will total $0.55 to $0.59. For full year 2013, we expect worldwide system-wide REVPAR to increase 4% to 7%. Fee revenue could increase 8% to 12%. We expect owned, leased, and other revenue net of direct expenses will decline 9% to 15% for full year 2013."
  • "We expect lower year-over-year termination and residential branding fees and higher pre-opening costs."
  • "We'll continue to manage our cash flows to a 3 to 3.25-type leverage ratio."
  • "As it relates to the $800 million to $1 billion to return to shareholders, we continue to look at that."
  • "Q3 is the relatively weaker time for group business generally. You're talking about the bulk of the summer being in that quarter. I think we'd be a bit more bullish about Q2 and about Q4 because of that kind of seasonality."
  • [Edition] "We have obviously intended to sell all three of these assets. For internal planning purposes and even more so for external expectations, we don't think it's wise to expect that there will be recycling of that capital until after they open, because before they open you have not just the ramp risk, but you've got construction risk and other things, which make a sale practically much more difficult."
  • "We would expect North America to be the stronger of the continents out there."
  • "When you look into 2014, certainly ObamaCare is the biggest new potential wrinkle in the cost profile. Our estimates today for the managed portfolio in the United States is about $60 million to $100 million, and that would be, oh, I don't know, maybe about half of a point, so a 50 basis point impact on margins....obviously these are system costs that will ultimately be borne by the hotel. We will pick up a share of that through incentive fees for the managed portfolio. We don't know what the number would be for the franchise portfolio, but in terms of number of rooms, the franchise portfolio is about the same as the managed portfolio in the United States, so the numbers could be around the same order of magnitude."
  • "We're more likely to see inflation go up than vice versa, and that will have some modest impact. On the other hand, with each passing year, more of the REVPAR growth comes from rates, and obviously a REVPAR coming through rate is better for margins then REVPAR coming through occupancy. And I think, guys, it's way too early to be giving guidance for 2014 and 2015, but I think our expectations would be that we will net-net see margin growth above 100 basis points in each of those years."

MAR YOUTUBE - MAR123