-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TcQfUqj7QQFMJBmkgGFvT/YQLWJ5tRwMFzFrJ4m2UUXdv3A2nUNyKIPx7YCJmbqh 25qj0k7qGKdHKheZd2cETA== 0000928385-98-000270.txt : 19980220 0000928385-98-000270.hdr.sgml : 19980220 ACCESSION NUMBER: 0000928385-98-000270 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19980219 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARRIOTT INTERNATIONAL INC CENTRAL INDEX KEY: 0000905036 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 520936594 STATE OF INCORPORATION: DE FISCAL YEAR END: 0101 FILING VALUES: FORM TYPE: DEFA14A SEC ACT: SEC FILE NUMBER: 001-12188 FILM NUMBER: 98545190 BUSINESS ADDRESS: STREET 1: 10400 FERNWOOD RD CITY: BETHESDA STATE: MD ZIP: 20817 BUSINESS PHONE: 3013803000 MAIL ADDRESS: STREET 1: 10400 FERNWOOD RD CITY: BETHESDA STATE: MD ZIP: 20817 DEFA14A 1 ADDITIONAL MATERIALS (SLIDE PRESENTATION) ================================================================================ SCHEDULE 14A (RULE 14A-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [_] Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [_] Definitive Proxy Statement [X] Definitive Additional Materials [_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12. MARRIOTT INTERNATIONAL, INC. (Name of Registrant as Specified in Its Charter) - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: [_] Fee paid previously with preliminary materials: - -------------------------------------------------------------------------------- [_] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. (1) Amount previously paid: ----------------------------------------------------------------------- (2) Form, Schedule or Registration Statement no.: ----------------------------------------------------------------------- (3) Filing Party: ----------------------------------------------------------------------- (4) Date Filed: ----------------------------------------------------------------------- ================================================================================ [MARRIOTT INTERNATIONAL LOGO APPEARS HERE] MARRIOTT INTERNATIONAL, INC. FEBRUARY 1998 THIS PRESENTATION CONTAINS "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF FEDERAL SECURITIES LAW, INCLUDING STATEMENTS CONCERNING THE NUMBER OF LODGING AND SENIOR LIVING COMMUNITIES EXPECTED TO BE ADDED IN FUTURE YEARS, PLANNED TRANSACTIONS AND THEIR INTENDED RESULTS, AND SIMILAR STATEMENTS CONCERNING ANTICIPATED FUTURE EVENTS AND EXPECTATIONS THAT ARE NOT HISTORICAL FACTS. THE FORWARD-LOOKING STATEMENTS IN THIS PRESENTATION ARE SUBJECT TO NUMEROUS RISKS AND UNCERTAINTIES, INCLUDING THE EFFECTS OF ECONOMIC CONDITIONS; SUPPLY AND DEMAND CHANGES FOR HOTEL ROOMS, VACATION TIMESHARING INTERVALS AND SENIOR LIVING ACCOMMODATIONS; COMPETITIVE CONDITIONS IN THE LODGING AND CONTRACT SERVICES INDUSTRIES; RELATIONSHIPS WITH CLIENTS AND PROPERTY OWNERS; THE IMPACT OF GOVERNMENT REGULATIONS; AND THE AVAILABILITY OF CAPITAL TO FINANCE GROWTH, WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN OR IMPLIED BY THE STATEMENTS HEREIN. MARRIOTT SODEXHO MARRIOTT SERVICES SODEXHO ALLIANCE [Sodexho Marriott Services appears in shaded diamond between Marriott and Sodexho Alliance] SPIN OFF OF MARRIOTT INTERNATIONAL HOSPITALITY BUSINESSES MARRIOTT TAX FREE (NEW) INTERNATIONAL, ------- DISTRIBUTION ------------------ MARRIOTT INC. INTERNATIONAL, | INC. NAME CHANGE | | . LODGING SODEXHO MARRIOTT SERVICES, INC. . SENIOR LIVING SERVICES | . MARRIOTT MANAGEMENT . DISTRIBUTION SERVICES SERVICES (MMS) MERGER OF MMS AND SODEXHO NORTH AMERICA MARRIOTT INTERNATIONAL SODEXHO ALLIANCE SHAREHOLDERS \ / \ / SODEXHO \ / NORTH AMERICA \ / (INT'L. CATERING CORP.) \ / / 51% 49% / / / SODEXHO MARRIOTT SERVICES, INC. ("SMS") LARGEST FOOD SERVICE AND FACILITIES MANAGEMENT COMPANY IN NORTH AMERICA NEW MARRIOTT INTERNATIONAL . INDUSTRY LEADER WITH POWERFUL BRANDS . STRONG BALANCE SHEET AND SUBSTANTIAL INVESTMENT CAPACITY . STRATEGIC GROWTH OPPORTUNITIES IN LODGING AND SENIOR LIVING SERVICES SODEXHO MARRIOTT SERVICES . COMBINES MARRIOTT MANAGEMENT SERVICES' STRENGTH IN U.S. WITH SODEXHO ALLIANCE'S INTERNATIONAL LEADERSHIP . CREATES NORTH AMERICAN LEADER WITH FOCUS ON HIGH-END MARKETS - #1 IN HEALTH CARE - #1 IN EDUCATION - #1 IN CORPORATE . YIELDS SIGNIFICANT SYNERGIES REFINANCING PLAN FOR MARRIOTT INTERNATIONAL DEBT ($ MILLIONS)
YEAR-END 1997 ------------------------- SODEXHO NEW MARRIOTT MARRIOTT TOTAL SERVICES INT'L. ------- -------- -------- SENIOR NOTES/TENDER/REFINANCING $ 720 $ 720 $ - LYONs 310 25 285 REVOLVING LOANS/COMMERCIAL PAPER 695 695 - ENDOWMENT DEPOSITS AND OTHER 125 10 115 ------- -------- -------- TOTAL $ 1,850 $ 1,450 $ 400 ======= ======== ========
MARRIOTT INTERNATIONAL (MILLIONS)
1996 --------------------------- OLD MARRIOTT NEW MARRIOTT ------------ ------------ SALES $ 10,172 $ 7,267 ======== ======= OPERATING PROFIT $ 629 $ 508 NET INTEREST EXPENSE (48) -- CORPORATE AND OTHER (79) (72) -------- ------- PRETAX INCOME 502 436 INCOME TAXES (196) (165) -------- ------- NET INCOME $ 306 $ 271 ======== ======= EPS (DILUTED) $ 2.25 $ .99 ======== ======= AVERAGE SHARES (DILUTED) 138.9 277.8 ======== =======
SPIN OFF AND MERGER KEY REMAINING STEPS . SEC CLEARANCE OF PROXY (OBTAINED) . TAX RULING (OBTAINED) . SHAREHOLDER APPROVAL . DEBT REFINANCINGS . CLOSING MARRIOTT LODGING WORLDWIDE HOTELS -1997 [GRAPHIC MAP OF WORLD APPEARS HERE]
REGION HOTELS ROOMS - ------ ------- ------- UNITED STATES 1,243 233,000 OTHER AMERICAS* 36 12,400 ASIA/PACIFIC 65 21,700 EUROPE, MIDDLE EAST, AND AFRICA 134 30,000 ------- ------- TOTAL 1,478 297,100
* INCLUDES CANADA, MEXICO, CARIBBEAN, AND SOUTH AMERICA U.S. INDUSTRY REVPAR GROWTH [GRAPHIC: BAR GRAPH SHOWING FOLLOWING YEARS AND PERCENTAGES] YEAR PERCENTAGE ---- ---------- 1987 2.7 1988 4.0 1989 4.9 1990 1.6 1991 (2.5) 1992 2.8 1993 4.2 1994 6.1 1995 5.4 1996 6.5 1997 5.3 1998E 4.6 1999E 3.6 SOURCE: SMITH TRAVEL/MARRIOTT INTERNATIONAL (1998-1999) 1996 CHAIN AFFILIATION BY REGION % BRANDED ROOMS [GRAPHIC: MAP OF WORLD WITH FOLLOWING TEXT LOCATED IN CORRESPONDING REGION: US & CANADA 70%; OTHER AMERICAS 18%; EUROPE 15%; MIDDLE EAST/AFRICA 26%; ASIA/PACIFIC 27%] LODGING VISION BE THE PREEMINENT PROVIDER OF A WORLDWIDE PORTFOLIO OF PREFERRED BRANDS AND SERVICES THAT FULFILL CUSTOMERS WORK, LIFE AND LEISURE NEEDS AWAY FROM HOME DISTRIBUTION PREEMINENT PREFERENCE PROFITABILITY MARRIOTT LODGING PORTFOLIO [BRAND LOGOS: THE RITZ-CARLTON HOTEL COMPANY LLC; MARRIOTT-HOTELS-RESORTS-SUITES; RENAISSANCE HOTELS AND RESORTS; NEW WORLD HOTELS INTERNATIONAL; TOWNEPLACE SUITES BY MARRIOTT; MARRIOTT VACATION CLUB INTERNATIONAL; EXECUTIVE RESIDENCES BY MARRIOTT; FAIRFIELD INN BY MARRIOTT; COURTYARD BY MARRIOTT; RESIDENCE INN BY MARRIOTT; RAMADA INTERNATIONAL HOTELS & RESORTS] MARRIOTT RESERVATION NETWORK . 13 WORLDWIDE RESERVATION CENTERS . 70 MILLION CALLS ANNUALLY . 25 MILLION RESERVATIONS . CROSS SELLING OPPORTUNITIES . HIGHEST CALL CONVERSION RATIO . LOWEST TOTAL COST PER NET RESERVATION MARRIOTT REWARDS - ---------------- . LARGEST AND MOST POWERFUL LOYALTY PROGRAM IN THE INDUSTRY . NINE MILLION MEMBERS . MULTIPLE BRAND PARTICIPATION . 1,300 HOTELS AND VACATION CLUB RESORTS PARTICIPATING YIELD INDEX (REVPAR PREMIUM) [GRAPHIC: BAR GRAPH SHOWING REVPAR PREMIUM (BY PERCENTAGE) FOR MARRIOTT LODGING BRANDS AS FOLLOWS: BRAND REVPAR PREMIUM ----- -------------- RENAISSANCE 97% MARRIOTT HOTELS (U.S.) 112% FAIRFIELD INN 112% COURTYARD 114% RITZ-CARLTON 120% RESIDENCE INN 122% MARRIOTT HOTELS (INT'L) 120-125%] SOURCE: SMITH TRAVEL RESEARCH, MARRIOTT DATA AS OF NOVEMBER 1997 YTD ROOM GROWTH: 1997-2002 TOTAL LODGING ROOMS [graphic: bar graph showing total lodging rooms for the United States and International for 1997 and 2002F as follows: 1997 US: 233,000 US and International: 297,000 2002F US: 329,000 US and International: 427,000] LODGING 1996 OPERATING PROFIT [graphic: pie chart showing following sections: Base Fees 35%; Profit Participations 33%; Franchise Fees 15%; Vacation Club 12%; Land Rent 5%; and total, $452 million] MARRIOTT TIMESHARE COMPETITIVE ADVANTAGES . SKILL IN OPERATING HOTELS AND DELIGHTING CUSTOMERS . FLEXIBILITY FOR PURCHASERS . NETWORK OF MVCI AND HOTEL LOCATIONS . FINANCING . HIGH QUALITY PRODUCT MARRIOTT VACATION CLUB INTERNATIONAL CURRENTLY IN SALES: START SALES IN 1998: - ------------------- -------------------- OCEAN CLUB, ARUBA BARONY BEACH, HILTON HEAD CUSTOM HOUSE, BOSTON PALM BEACH SHORES, FLORIDA GRANDE VISTA, ORLANDO MALLORCA, SPAIN KAUAI BEACH CLUB, HAWAII PELICAN HILL, CALIFORNIA SUMMIT WATCH, PARK CITY MANOR CLUB, WILLIAMSBURG MOUNTAIN VALLEY, BRECKENRIDGE GRANDE OCEAN RESORT, HILTON HEAD BEACHPLACE TOWERS, FORT LAUDERDALE DESERT SPRINGS VILLAS II, PALM DESERT MARBELLA BEACH RESORT, SPAIN MARRIOTT SENIOR LIVING SERVICES STRATEGY . LARGE, RAPIDLY GROWING MARKET . EXISTING CORE SKILLS . ACQUIRED HEALTH CARE EXPERTISE . LEVERAGED MARRIOTT BRAND EQUITY IN FRAGMENTED COMPETITIVE ENVIRONMENT POPULATION GROWTH 1995-2005 [graphic: bar graph showing U.S. population growth by age segments as follows: U.S. Population (total) 9% Age 75+ 25% Age 85+ 41%] SOURCE: U.S. CENSUS SLS BUSINESS TODAY 89 COMMUNITIES [graphic: pie chart showing following sections: Independent Full-Service 49%; Brighton Gardens 33%; Village Oaks 16%; Hearthside 2%] 17,700 LIVING UNITS/BEDS [graphic: pie chart showing following sections: Assisted Living 40%; Independent Living 43%; Nursing/Special Care 17%] ASSISTED LIVING BRANDS
BRIGHTON VILLAGE GARDENS OAKS HEARTHSIDE - --------------------------- ------------- ------------------- ---------------- MARKET TIER QUALITY MODERATE QUALITY/MODERATE - --------------------------- ------------- ------------------- ---------------- AVERAGE AL PER DIEM $75 TO $85 $60 TO $80 SINGLE $65 TO $75 $50 TO $60 DOUBLE - --------------------------- ------------- ------------------- ---------------- SIZE 320 SQ. FT. 344 SQ. FT. 221 SQ. FT. - --------------------------- ------------- ------------------- ---------------- ASSISTED LIVING UNITS 90 100 56 - --------------------------- ------------- ------------------- ---------------- NURSING/SPECIAL CARE BEDS 25 --- 28 - --------------------------- ------------- ------------------- ---------------- NO. OF COMMUNITIES AT 12/97 29 14 2 - --------------------------- ------------- ------------------- ----------------
MDS DISTRIBUTION CENTERS [graphic: map of continental United States identifying following locations: Salem, Oregon; Milpitas, California; Santa Fe Springs, California; Los Alamitos, California; Denver, Colorado; Ft. Worth, Texas; Chicago, Illinois; Warren, Michigan; Colombus, Ohio; Fort Mill, South Carolina; Groveland, Florida; Port St. Lucie, Florida; Savage, Maryland; Edison, New Jersey; Westborough, Massachussetts] 1997 GROSS INVESTMENT OUTLAYS* [graphic: pie chart showing following sections: Strategic Acquisitions $860M; Senior Living Services $290M; Share Repurchases $200M; Owned Lodging $200M; Managed and Franchised Lodging $150M; Timeshare, net $110M; Other $70M; Total $1,880M] * Preliminary NEW MARRIOTT INTERNATIONAL FIVE YEAR GROWTH PLAN . ADD MORE THAN 140,000 LODGING ROOMS WORLDWIDE . DOUBLE CUMULATIVE NUMBER OF TIMESHARE INTERVALS SOLD . TRIPLE THE SIZE OF SENIOR LIVING SERVICES BUSINESS BY DEVELOPING MORE THAN 200 NEW COMMUNITIES . EXPAND DISTRIBUTION SERVICES CUSTOMER BASE AND "NATIONAL ACCOUNT" SERVICE CAPABILITIES [LOGO OF MARRIOTT INTERNATIONAL, INC. APPEARS HERE] [LOGO OF SODEXHO MARRIOTT SERVICES APPEARS HERE] FORWARD-LOOKING INFORMATION ================================================================================ This presentation contains certain forward-looking statements about future growth prospects, strategies and expected synergies from the merger, outsourcing trends, earnings growth and similar matters as well as information relating to the Company that is based on the beliefs of Company Management as well as assumptions made by and information currently available to the Company. Such forward-looking statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. Estimates contained herein of future performance reflect Management's assessment of probable results of operations, given certain assumptions that Management believes are reasonable. Should one or more of these underlying assumptions prove incorrect, actual results may vary materially from those described in this presentation. The Company's estimates are also based on industry data obtained from public sources and third-parties which the Company believes to be reliable but have not been verified. The Company does not intend to update any of the forward-looking statements contained in this presentation. For additional information relating to the Company and its future, investors should review the Marriott International Proxy Statement dated February 12, 1998. [photographs: employees in commercial kitchen; customer in cafeteria line; employee engaging in groundskeeping; food service employee at work; maintenance employee at work] SODEXHO MARRIOTT SERVICES OVERVIEW ================================================================================ . TICKER: SDH (NYSE) . SHARES: 62 MILLION (AFTER REVERSE 1:4 SPLIT) . PRO FORMA CY 1997 SALES: $4B . PRO FORMA CY 1997 EBITDA: $240MM . NET INCOME: CAGR 17-20% P.A. SODEXHO MARRIOTT SERVICES' BUSINESS IS OUTSOURCING ================================================================================ HOUSEKEEPING & JANITORIAL SERVICES PLANT OPERATIONS & MAINTENANCE INTEGRATED FACILITIES MANAGEMENT LAUNDRY AND LINEN GROUNDS KEEPING ADMINISTRATIVE FUNCTIONS FOOD SERVICE HEALTHCARE . INPATIENT FOOD SERVICE . VISITOR FOOD SERVICE EDUCATION . BOARD PLAN . VENDING CORPORATE . CORPORATE CAFETERIA . CATERING . VENDING [ABOVE TEXT CONTAINED IN CONCENTRIC OVALS, WITH "HEALTHCARE", "EDUCATION", "CORPORATE", AND "FOOD SERVICE" IN THE INNER OVAL] TRANSACTION: EXPECTED CLOSING 3/27/98 ================================================================================ SODEXHO ALLIANCE MARRIOTT INTERNATIONAL | /\ CONTRIBUTION NAME CHANGE \ | | \ | MARRIOTT \ SODEXHO NA MANAGEMENT \ AND $304MM / SERVICES \ TAX FREE \ / \ DISTRIBUTION \ / \ \ / \ \ / \ SODEXHO / \ MARRIOTT / (NEW) MARRIOTT SERVICES INTERNATIONAL / | \ | \ 42% / 10% 48% 80% 20% OTHER PUBLIC MARRIOTT SODEXHO OTHER PUBLIC MARRIOTT SHAREHOLDERS FAMILY ALLIANCE SHAREHOLDERS FAMILY SODEXHO ALLIANCE IS THE WORLD'S LARGEST FOOD AND MANAGEMENT SERVICES COMPANY ================================================================================ . FOUNDED IN '66 BY CURRENT CHAIRMAN, PIERRE BELLON, WHO OWNS 42% OF ENTERPRISE . GLOBAL BUSINESS OPERATING FROM 14,400 SITES IN 66 COUNTRIES . LISTED ON PARIS BOURSE: FF 26.9B ($4.5B) MARKET CAPITALIZATION SODEXHO'S STOCK PRICE HAS GROWN AT A COMPOUND ANNUAL RATE OF 26% OVER LAST 5 YEARS MMS/SODEXHO MERGER RATIONALE ================================================================================ . CAPITALIZING ON 2 BRAND NAMES RECOGNIZED FOR QUALITY SERVICE AND INNOVATION . EXPANDING LEADERSHIP POSITION IN MARKET . PROVIDING GLOBAL SOLUTIONS TO CLIENTS . SHARING INNOVATIONS AND BEST PRACTICES WHAT MAKES THIS BUSINESS ATTRACTIVE? ================================================================================ GROWTH RISK FINANCIAL REQ.. - ------ ---- --------------- LARGE, FRAGMENTED & LOW CLIENT CASH BUSINESS UNDERPENETRATED CONCENTRATION MARKET LITTLE TO NO PREDICTABLE WORKING CAPITAL TREND IN VOLUMES OUTSOURCING MINIMAL CAPITAL DIVERSIFIED INVESTMENT CROSS-SELLING OPPT'Y CUSTOMER BASE REQUIRED FOOD AND MAMAGEMENT SERVICES INDUSTRY ================================================================================ . $157B MARKET IN NORTH AMERICA - $48B IS FOOD SERVICE - $109B IS FACILITIES MANAGEMENT . CONTRACTED MARKET UNDERPENETRATED . TREND TOWARD OUTSOURCING SERVICES FOOD SERVICE MARKET IS HIGHLY FRAGMENTED ================================================================================ PROFORMA 1996 SHARES OF TOTAL $48B FOOD SERVICE MARKET [GRAPHIC: PIE CHART SHOWING FOLLOWING SECTIONS: SELF-OPERATED (NOT CONTRACTED) 62%; REGIONAL AND LOCAL CONTRACTORS 24%; SODEXHO MARRIOTT SERVICES 7%; ARAMARK 4%; COMPASS 3%] SOURCE: COMPANY ESTIMATES OUR BUSINESS SEGMENTS ARE UNDERPENETRATED ================================================================================ [Bar graph showing (i) contracted market penetration and (ii) self-operated market size, as follows: Contracted Market Self-Operated ----------------- ------------- (in billions) Healthcare 20% $12.0 Univ. and Colleges 60% 9.3 Schools 15% 12.0 Corporate Services 55% 14.0] Note: Percent represents the proportion of each market segment that is outsourced Source: Company's estimates, based upon a compilation of data from trade publications and industry associations WE ARE THE MARKET LEADER ================================================================================ PRO FORMA 1996 SHARES OF $18B CONTRACTED FOOD SERVICE MARKET [graphic: pie chart showing following sections: Regional and local contractors 63%; Sodexho Marriott Services 19%; Aramark 11%; Compass 7%] Note: Excludes self-operated units Source: Company estimates THE U.S. FACILITIES MANAGEMENT SERVICES INDUSTRY IS VIRTUALLY UNTAPPED ================================================================================ [Bar graph showing (i) contracted market penetration and (ii) self-operated market size, as follows: Contracted Market Self-Operated ----------------- ------------- (in billions) Healthcare 10% $37.6 Univ. and Colleges 15% 12.3 Schools 3% 20.0 Corporate Services 6% 39.4] Note: Percent represents the proportion of each market segment that is outsourced Source: Company's estimates, based upon a compilation of data from trade publications and industry associations 5 POINT GROWTH STRATEGY ================================================================================ . PROTECT OUR CUSTOMER BASE . WIN NEW ACCOUNTS . EXPAND FACILITIES MANAGEMENT SERVICES . GAIN OPERATIONAL EFFICIENCIES . MAKE SELECTIVE STRATEGIC ACQUISITIONS SELECTED BUSINESS SEGMENT INFORMATION ================================================================================ UNAUDITED PRO FORMA RESULTS FOR CY 1997 SALES = $4.2B [graphic: pie chart showing following sections: Healthcare 31%, Corporate 30%; Higher Education 27%; Schools 7%; Other 5%] DIVISIONAL OP. PROFIT = $260MM [graphic: pie chart showing following sections: Healthcare 40%, Corporate 30%; Higher Education 21%; Schools 6%; Other 3%] HEALTHCARE SERVICES ================================================================================ . SELECTED ACCOUNTS [photo: healthcare employee at work] NIH CLEVELAND CLINIC STANFORD UNIV. HOSPITAL LENOX HILL (NYC) DETROIT MEDICAL CENTER ST. ELIZABETH MED. CTR. (BOS.) . NO. 1 IN CONTRACTED FOOD SERVICE BUSINESS WITH 42% MARKET SHARE . ONLY 13% CONTRACTED MARKET - TRADITIONALLY SELF-OPERATED . 7% SHARE OF CONTRACTED FACILITIES MANAGEMENT MARKET CORPORATE SERVICES ================================================================================ . SELECTED ACCOUNTS [photo: food service employee serving customer] LUCENT TECHNOLOGIES HEWLETT-PACKARD UNITED AIRLINES SATURN FORD MOTOR MICROSOFT . NO. 1 IN CONTRACTED FOOD SERVICES MARKET WITH 15% SHARE . INNOVATION IS CRITICAL TO GAINING SHARE - CROSSROADS CUISINES(R) . FACILITIES MANAGEMENT SERVICES AND FEDERAL GOVERNMENT SEGMENTS OFFER SUBSTANTIAL GROWTH POTENTIAL OUTSOURCING IS NOW AN ACCEPTED BUSINESS MANAGEMENT TOOL HIGHER EDUCATION SERVICES ================================================================================ . SELECTED ACCOUNTS [photo: students seated at cafeteria table] UNIVERSITY OF PITTSBURGH NORTHWESTERN UNIVERSITY GEORGIA TECH UCLA NORTH CAROLINA A&T COLORADO STATE UNIVERSITY . NO. 1 WITH 19% SHARE OF CONTRACTED FOOD SERVICES MARKET . ENROLLMENT INCREASING AFTER A DECADE OF NO GROWTH . TREND TOWARD OUTSOURCING FACILITIES MANAGEMENT CONTROLLING RISING STUDENT FEES IS DRIVING INCREASED OUTSOURCING SCHOOL SERVICES ================================================================================ . SELECTED ACCOUNTS [photo: school children in cafeteria line] CHICAGO, IL TULSA, OK NORFOLK, VA BURBANK, CA GRANITE DISTRICT (SLC, UT) COLORADO SPRINGS, CO . NO. 1 IN MARKET . 11% SHARE OF CONTRACTED FOOD SERVICES MARKET AND 10% SHARE OF CONTRACTED FACILITIES MARKET . SODEXHO MARRIOTT IS THE ONLY PROVIDER ALREADY MEETING NEW USDA GUIDELINES OUTSOURCING IS RAPIDLY GAINING GROUND FINANCIAL DYNAMICS SODEXHO MARRIOTT'S FINANCIAL PROFILE ================================================================================ "CASH IS KING" . INCREASING MARGINS . GOAL OF ZERO TO NEGATIVE WORKING CAPITAL . NOT CAPITAL INTENSIVE . REDUCE DEBT BY ABOUT $600MM OVER 6 YEARS . PREDICTABLE SEASONALITY PATTERN PRO FORMA BALANCE SHEET ================================================================================ AS OF 9/12/97 UNAUDITED ($MILLIONS) ASSESTS LIABILITIES & OE - ------- ---------------- CURRENT ASSETS $ 535 CURRENT LIABILITIES $ 477 PP & E 82 LONG-TERM DEBT 1,222 INTANGIBLE ASSETS 584 OTHER LT LIABILITIES 142 OTHER 98 STOCKHOLDERS EQUITY (542) ------ ------ TOTAL ASSETS $1,299 TOTAL L&OE $1,299 ====== ====== PRO FORMA FINANCIAL SUMMARY ================================================================================ UNAUDITED ($millions) 53 WEEKS 52 WEEKS 1996 1997 -------- -------- SALES $ 4,020 $ 4,164 EBITDA (1) 220 240 (1) EXCLUDES THE EFFECT OF SYNERGIES AND ONE-TIME TRANSACTION AND INTEGRATION COSTS THE STRATEGIC COMBINATION RESULTS IN SIGNIFICANT COST SAVING SYNERGIES ================================================================================ . EXPECTED TO GROW TO $60 MILLION ANNUALLY OVER THE NEXT 3 YEARS - 2/3 FROM INCREASED PURCHASING POWER - 1/3 FROM ELIMINATING DUPLICATIVE EFFORTS NET INCOME CAGR IN HIGH TEENS ================================================================================ . CONTRACTED MARKET GROWING FASTER THAN INFLATION . INCREASED MARKET SHARE . DECLINING DEBT BALANCES . MARGIN EXPANSION - OPERATING LEVERAGE - SYNERGIES EXPERIENCED MANAGEMENT TEAM ================================================================================ [Chart: Management structure showing Chuck O'Dell, President & Chief Executive Officer, and officers reporting to him: Michel Landel, Executive V.P. Schools, Laundry, Canada; Tony Alibrio, President Health Care Services; Bill Hamman, President, Higher Education Services; Bob Jantzen, President Corporate Services; Larry Hyatt, S.V.P. & CFO; Randy Harris, S.V.P. & Chief H.R. Officer; Bob Stern, S.V.P. & General Counsel; Tony Wilson, S.V.P. Marketing & Prod. Development; David Smail, S.V.P. & CIO; Steve Brady, S.V.P. Corp. Comm.; New Ventures, TBD] EACH MEMBER OF THIS TEAM HAS AN AVERAGE OF 15 YEARS IN THE INDUSTRY LEADERSHIP TEAM ================================================================================ . PROVEN INTEGRATION SKILLS . PUBLIC COMPANY EXPERIENCE . INCENTIVE-BASED COMPENSATION . EQUITY OWNERSHIP SODEXHO MARRIOTT'S DIRECTORS ARE PROVEN VALUE CREATORS ================================================================================ BILL SHAW (CHAIRMAN) - PRESIDENT & COO, MARRIOTT INTERNATIONAL CHUCK O'DELL - PRESIDENT & CEO, SODEXHO MARRIOTT SERVICES PIERRE BELLON - CHAIRMAN AND CEO, SODEXHO ALLIANCE BERNARD CARTON - SVP AND CFO, SODEXHO ALLIANCE JOHN MARRIOTT - SVP, MARRIOTT INTERNATIONAL EDOUARD DE ROYERE - FORMER CHAIRMAN AND CEO OF L'AIR LIQUIDE DANIEL ALTOBELLO - CHAIRMAN, ONEX FOOD SERVICES DOCTOR CRANTS - FOUNDER, CORRECTIONS CORPORATION OF AMERICA INVESTMENT HIGHLIGHTS ================================================================================ . SUBSTANTIAL GROWTH OPPORTUNITIES . CLEAR MARKET LEADER . FOCUSED STRATEGY . PART OF THE WORLDWIDE SODEXHO ALLIANCE NETWORK . PROVEN MANAGEMENT TEAM . STRONG RELIABLE EARNINGS STREAM -----END PRIVACY-ENHANCED MESSAGE-----