Marriott International(MAR) - 2024 Q2 - Quarterly Report

Part I. Financial Information Financial Statements This section presents unaudited condensed consolidated financial statements for Q2 and H1 2024, showing revenue growth, net income changes, and key financial positions Condensed Consolidated Statements of Income (Q2 & H1 2024 vs 2023) | Indicator (in millions, except per share) | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $6,439 | $6,075 | $12,416 | $11,690 | | Gross Fee Revenues | $1,343 | $1,250 | $2,553 | $2,383 | | Net Fee Revenues | $1,316 | $1,228 | $2,503 | $2,340 | | Operating Income | $1,195 | $1,096 | $2,071 | $2,047 | | Net Income | $772 | $726 | $1,336 | $1,483 | | Diluted Earnings Per Share | $2.69 | $2.38 | $4.62 | $4.81 | Condensed Consolidated Balance Sheets (As of June 30, 2024) | Account (in millions) | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Assets | $25,740 | $25,674 | | Cash and equivalents | $349 | $338 | | Goodwill | $8,783 | $8,886 | | Total Liabilities | $27,831 | $26,356 | | Long-term debt | $12,183 | $11,320 | | Liability for guest loyalty program | $7,325 | $7,006 | | Total Stockholders' Deficit | ($2,091) | ($682) | Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Cash Flow Activity (in millions) | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,551 | $1,538 | | Net cash used in investing activities | ($225) | ($243) | | Net cash used in financing activities | ($1,322) | ($1,241) | | Increase in Cash and Equivalents | $4 | $54 | - Beginning in Q1 2024, the company modified its segment structure to four reportable segments: U.S. & Canada, EMEA, Greater China, and APEC, with CALA now in 'Unallocated corporate and other'[44] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's Q2 2024 performance, emphasizing a 4.9% increase in worldwide RevPAR, robust international growth, continued net room expansion, strong liquidity, and significant capital returns Comparable Systemwide RevPAR Growth (vs. Prior Year) | Region | Q2 2024 Change | H1 2024 Change | | :--- | :--- | :--- | | Worldwide | +4.9% | +4.5% | | U.S. & Canada | +3.9% | +2.8% | | International - All | +7.4% | +9.0% | | EMEA | +12.0% (combined) | +11.8% (combined) | | Greater China | -4.2% | +0.4% | | APEC | +13.0% | +14.8% | | CALA | +8.6% | +10.3% | - The company's development pipeline included approximately 3,500 hotels with over 559,000 rooms at the end of Q2 2024, with over 209,000 rooms (37%) under construction[65] - Full-year 2024 net rooms growth is projected to be between 5.5% and 6.0%[66] - In Q2 2024, franchise fees increased by 11% to $818 million, driven by unit growth, higher RevPAR, and a $28 million increase in non-RevPAR related franchise fees[73][74] - The company repurchased 4.1 million shares for $1.0 billion in Q2 2024 and a total of 10.4 million shares for $2.5 billion year-to-date through July 29, 2024[93] Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes to its market risk exposure since the end of fiscal year 2023, referring to its 2023 Form 10-K for detailed information - There have been no material changes to the company's market risk exposure since December 31, 2023[96] Controls and Procedures The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2024, with no material changes to internal control over financial reporting during Q2 - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of the end of the quarter[97] - No material changes were made to the internal control over financial reporting during the second quarter of 2024[98] Part II. Other Information Legal Proceedings This section details ongoing litigation and government investigations related to the 2018 Starwood Data Security Incident, noting the company's defense efforts and the immaterial impact of other ordinary course legal proceedings - The company is involved in ongoing litigation and government investigations related to the 2018 Starwood Data Security Incident, as detailed in Note 5 of the financial statements[30][31][100] - The company believes it has reached a resolution with the Federal Trade Commission and is progressing in discussions with 49 state Attorneys General regarding the Data Security Incident, with an immaterial accrual for estimated loss contingency[31] Risk Factors The company reports no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 - There are no material changes to the risk factors disclosed in the 2023 Form 10-K[101] Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities The company reports no unregistered sales of equity securities and details its Q2 2024 common stock repurchases, totaling 4.1 million shares for approximately $1.0 billion Issuer Purchases of Equity Securities (Q2 2024) | Period | Total Shares Purchased (millions) | Average Price per Share | | :--- | :--- | :--- | | April 2024 | 1.4 | $247.56 | | May 2024 | 1.4 | $236.53 | | June 2024 | 1.3 | $236.57 | | Total Q2 | 4.1 | ~ $240.22 | Other Information The company confirms that no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements during Q2 2024 - No director or Section 16 officer adopted or terminated any Rule 10b5-1 plans or non-Rule 10b5-1 trading arrangements during Q2 2024[103] Exhibits This section lists the exhibits filed with the Form 10-Q, including the First Amendment to the Credit Agreement, CEO and CFO certifications, and financial statements in Inline XBRL format - Filed exhibits include CEO and CFO certifications (31.1, 31.2), Section 1350 certifications (32), and financial data in Inline XBRL format (101)[106]