What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-11-04 compared with 2025-08-05 · 97 added, 60 removed, 387 unchanged (29% of the section changed)

3 unchanged sentences

(in millions, except per share amounts)

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Three Months Ended Nine Months Ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Base management fees $ 314 $ 312 $ 979 $ 955

12 unchanged sentences

General, administrative, and other 234 276 724 785

Restructuring and merger-related charges

Restructuring and merger-related (recoveries) charges, and other

( 40 ) 9 ( 31 ) 25

Reimbursed expenses 4,739 4,681 14,335 13,827

15 unchanged sentences

(in millions)

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Three Months Ended Nine Months Ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Net income $ 728 $ 584 $ 2,156 $ 1,920

8 unchanged sentences

(in millions)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Current assets

39 unchanged sentences

(in millions)

Six Months Ended

June 30, 2025 June 30, 2024

Nine Months Ended

September 30, 2025 September 30, 2024

OPERATING ACTIVITIES

6 unchanged sentences

Contract acquisition costs ( 301 ) ( 256 )

Restructuring and merger-related charges ( 18 ) 15

Restructuring and merger-related (recoveries) charges, and other ( 66 ) 24

Working capital changes ( 345 ) ( 162 )

3 unchanged sentences

Capital and technology expenditures ( 432 ) ( 408 )

Asset acquisition ( 349 ) —

Dispositions 9 4

14 unchanged sentences

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period (1)

(1) The 2025 amounts include beginning restricted cash of $ 29 million at December 31, 2024, and ending restricted cash of $ 21 million at June 30, 2025, which we present in the “Prepaid expenses and other” and “Other noncurrent assets” captions of our Balance Sheets.

(2) The 2024 first half reflects the reclassification of $ 98 million of depreciation and amortization classified in reimbursed expenses from the “Other” caption within operating activities to the “Depreciation, amortization, and other” caption of our Statements of Cash Flows to conform to our current presentation.

(1) The 2025 amounts include beginning restricted cash of $ 29 million at December 31, 2024, and ending restricted cash of $ 16 million at September 30, 2025, which we present in the “Prepaid expenses and other” and “Other noncurrent assets” captions of our Balance Sheets.

(2) The 2024 first three quarters reflect the reclassification of $ 150 million of depreciation and amortization classified in reimbursed expenses from the “Other” caption within operating activities to the “Depreciation, amortization, and other” caption of our Statements of Cash Flows to conform to our current presentation.

See Notes to Condensed Consolidated Financial Statements.

15 unchanged sentences

Accordingly, ultimate results could differ from those estimates.

The accompanying Financial Statements reflect all normal and recurring adjustments necessary to present fairly our financial position as of June 30, 2025 and December 31, 2024, the results of our operations for the three and six months ended June 30, 2025 and June 30, 2024, and cash flows for the six months ended June 30, 2025 and June 30, 2024.

The accompanying Financial Statements reflect all normal and recurring adjustments necessary to present fairly our financial position as of September 30, 2025 and December 31, 2024, the results of our operations for the three and nine months ended September 30, 2025 and September 30, 2024, and cash flows for the nine months ended September 30, 2025 and September 30, 2024.

Interim results may not be indicative of fiscal year performance because of seasonal and short-term variations.

We have eliminated all material intercompany transactions and balances between entities consolidated in these Financial Statements.

New Accounting Standards Not Yet Adopted

Accounting Standards Update (“ASU”) 2025-06 - “Targeted Improvements to the Accounting for Internal-Use Software” (Topic 350).

ASU 2025-06 eliminates references to software development project stages and revises the criteria that must be met to begin capitalizing internal-use software costs.

The standard permits entities to adopt the guidance using a prospective, retrospective, or modified transition approach and becomes effective for us beginning January 1, 2028, with early adoption permitted.

We are currently assessing the potential impact that ASU 2025-06 will have on our financial statements and disclosures.

In the 2025 second quarter, we announced that we reached an agreement with citizenM Holding BV and certain of its affiliates (the “seller”) to acquire the citizenM brand and related intellectual property for $ 355 million, and we completed the acquisition in the 2025 third quarter.

1 unchanged sentence

Earn-out payments would not begin until the fourth year following closing of the transaction.

As of July 23, 2025, the citizenM portfolio included 37 open select-service hotels ( 8,789 rooms).

As of September 30, 2025, the citizenM portfolio included 37 open select-service hotels ( 8,789 rooms), which we expect to integrate into our system and platforms in the 2025 fourth quarter.

We accounted for the transaction as an asset acquisition and allocated the cost of the acquisition, including direct and incremental transaction costs, on a relative fair value basis, to an indefinite-lived brand asset of approximately $ 289 million and contract assets, with a weighted-average term of 20 years, totaling $ 60 million .

EARNINGS PER SHARE

The table below illustrates the reconciliation of the earnings and number of shares used in our calculations of basic and diluted earnings per share, the latter of which uses the treasury stock method to calculate the dilutive effect of the Company’s potential common stock:

Three Months Ended Six Months Ended

(in millions, except per share amounts) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Three Months Ended Nine Months Ended

(in millions, except per share amounts) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Computation of Basic Earnings Per Share

10 unchanged sentences

STOCK-BASED COMPENSATION

We granted 0.7 million restricted stock units (“RSUs”) during the 2025 first half to certain officers and employees, and those units vest generally over four years in equal annual installments commencing one year after the grant date.

We also granted 0.1 million performance-based RSUs (“PSUs”) in the 2025 first half to certain executives, which are earned subject to continued employment and the satisfaction of certain performance and market conditions based on the degree of achievement of pre-established targets for 2027 adjusted EBITDA performance and relative total stockholder return over the 2025 to 2027 performance period.

RSUs, including PSUs, granted in the 2025 first half had a weighted average grant-date fair value of $ 273 per unit.

We recorded stock-based compensation expense for RSUs and PSUs of $ 49 million in the 2025 second quarter, $ 49 million in the 2024 second quarter, $ 92 million in the 2025 first half, and $ 94 million in the 2024 first half.

Deferred compensation costs for unvested awards for RSUs and PSUs totaled $ 269 million at June 30, 2025 and $ 173 million at December 31, 2024.

Our effective tax rate increased to 27.6 percent for the 2025 second quarter compared to 25.8 percent for the 2024 second quarter, primarily due to a shift in earnings to jurisdictions with higher tax rates.

Our effective tax rate decreased to 21.4 percent for the 2025 first half compared to 24.4 percent for the 2024 first half, primarily due to the current year release of tax reserves, partially offset by a shift in earnings to jurisdictions with higher tax rates.

Our unrecognized tax benefit balance decreased by $ 69 million to $ 114 million at June 30, 2025 from $ 183 million at December 31, 2024, primarily due to the lapse of the statute of limitations on certain tax positions.

Our unrecognized tax benefit balance included $ 104 million at June 30, 2025 and $ 171 million at December 31, 2024 of tax positions that, if recognized, would impact our effective tax rate.

We granted 0.7 million restricted stock units (“RSUs”) during the 2025 first three quarters to certain officers and employees, and those units vest generally over four years in equal annual installments commencing one year after the grant date.

We also granted 0.1 million performance-based RSUs (“PSUs”) in the 2025 first three quarters to certain executives, which are earned subject to continued employment and the satisfaction of certain performance and market conditions based on the degree of achievement of pre-established targets for 2027 adjusted EBITDA performance and relative total stockholder return over the 2025 to 2027 performance period.

RSUs, including PSUs, granted in the 2025 first three quarters had a weighted average grant-date fair value of $ 273 per unit.

We recorded stock-based compensation expense for RSUs and PSUs of $ 50 million in the 2025 third quarter, $ 54 million in the 2024 third quarter, $ 142 million in the 2025 first three quarters, and $ 148 million in the 2024 first three quarters.

Deferred compensation costs for unvested awards for RSUs and PSUs totaled $ 219 million at September 30, 2025 and $ 173 million at December 31, 2024.

Our effective tax rate increased to 26.8 percent for the 2025 third quarter compared to 25.7 percent for the 2024 third quarter, primarily due to a shift in earnings to jurisdictions with higher tax rates.

Our effective tax rate decreased to 23.3 percent for the 2025 first three quarters compared to 24.8 percent for the 2024 first three quarters, primarily due to the current year release of tax reserves, partially offset by a shift in earnings to jurisdictions with higher tax rates.

Our unrecognized tax benefit balance decreased by $ 65 million to $ 118 million at September 30, 2025 from $ 183 million at December 31, 2024, primarily due to the lapse of the statute of limitations on certain tax positions.

Our unrecognized tax benefit balance included $ 108 million at September 30, 2025 and $ 171 million at December 31, 2024 of tax positions that, if recognized, would impact our effective tax rate.

It is reasonably possible that within the next 12 months we will reach resolution of income tax examinations in one or more jurisdictions.

1 unchanged sentence

Therefore, an estimate of the change cannot be provided.

We paid cash for income taxes, net of refunds, of $ 534 million in the 2025 first half and $ 433 million in the 2024 first half.

We paid cash for income taxes, net of refunds, of $ 792 million in the 2025 first three quarters and $ 729 million in the 2024 first three quarters.

COMMITMENTS AND CONTINGENCIES

We present the maximum potential amount of our future guarantee fundings and the carrying amount of our liability for our debt service, operating profit, and other guarantees for which we are the primary obligor at June 30, 2025 in the following table:

(in millions)

20 unchanged sentences

On June 3, 2025, the U.S.

Court of Appeals for the Fourth Circuit reversed the District Court's certification of a class of plaintiffs, holding that a class-action waiver signed by putative class members was enforceable.

In the case brought by the City of Chicago (which is consolidated in the MDL proceeding), we are progressing in our settlement negotiations with the City, and we do not expect a settlement to be material to our Financial Statements.

Court of Appeals for the Fourth Circuit reversed the District Court’s certification of a class of consumer plaintiffs, holding that a class-action waiver signed by putative class members was enforceable.

We expect to engage in mediation with the consumer plaintiffs in the 2025 fourth quarter.

The Canadian cases have effectively been consolidated into a single case in the province of Ontario.

We dispute the allegations in these lawsuits and are vigorously defending against such claims.

In the 2025 third quarter, we reached a settlement in the case brought by the City of Chicago (which was consolidated in the MDL proceeding).

The settlement amount is not material to our Financial Statements.

In addition, most inquiries and investigations by U.S.

2 unchanged sentences

While we believe it is reasonably possible that we may incur losses in excess of the amounts recorded associated with the above-described MDL proceedings or further regulatory investigations related to the Data Security Incident, it is not possible to reasonably estimate the amount of such losses or range of loss in excess of the amounts recorded that might result from adverse judgments, settlements, fines, penalties or other resolution of these proceedings and investigations based on:

(1) in the case of the above-described MDL proceedings, the current stage of these proceedings, the absence of specificity as to alleged damages, the uncertainty as to the certification of a

class or classes and the size of any certified class, and the lack of resolution of significant factual and legal issues, and (2) uncertainty regarding further regulatory inquiries or investigations.

(1) in the case of the above-described MDL proceedings, the current stage of these proceedings, the absence of specificity as to alleged damages, the uncertainty as to the certification of a class or classes and the size of any certified class, and the lack of resolution of significant factual and legal issues, and (2) uncertainty regarding further regulatory inquiries or investigations.

Insurance Recoveries

During the 2025 third quarter, we recorded insurance recoveries for costs incurred related to the Data Security Incident, which are not material to our Financial Statements.

We recognize insurance recoveries when they are probable of receipt and present them in our Income Statements in the same caption as the related expense, up to the amount of total expense incurred in prior and current periods.

Insurance recoveries related to the Data Security Incident recorded in the 2025 third quarter are presented in the “Restructuring and merger-related (recoveries) charges, and other” caption of our Income Statements.

Other Legal Proceedings

As of the end of the 2025 second quarter, we had resolved all claims brought against the Company regarding the use of copyrighted music.

The settlement amounts are not material to our Financial Statements.

We have been and are currently party to other legal proceedings involving claims that we infringe the intellectual property rights of others.

1 unchanged sentence

LONG-TERM DEBT

We provide detail on our long-term debt balances, net of discounts, premiums, and debt issuance costs, in the following table as of June 30, 2025 and year-end 2024:

We provide detail on our long-term debt balances, net of discounts, premiums, and debt issuance costs, in the following table as of September 30, 2025 and year-end 2024:

($ in millions)

Interest Rate Effective Interest Rate Face Amount

Balance as of June 30, 2025 Balance as of December 31, 2024

Balance as of September 30, 2025 Balance as of December 31, 2024

Senior Notes:

Series P Notes, maturing October 1, 2025

Series P Notes, matured October 1, 2025

3.8 % 4.0 % $ 350 $ 350 $ 349

39 unchanged sentences

5.5 % 5.7 % 1,500 1,483 —

Series TT Notes, maturing July 15, 2027

4.2 % 4.5 % 400 398 —

Series UU Notes, maturing October 15, 2031

4.5 % 4.9 % 500 491 —

Series VV Notes, maturing October 15, 2035

5.3 % 5.5 % 600 592 —

Commercial paper 618 1,582

4 unchanged sentences

$ 14,442 $ 13,138

We paid cash for interest, net of amounts capitalized, of $ 328 million in the 2025 first half and $ 303 million in the 2024 first half.

We paid cash for interest, net of amounts capitalized, of $ 403 million in the 2025 first three quarters and $ 350 million in the 2024 first three quarters.

We are party to a $ 4.5 billion multicurrency revolving credit agreement (as amended, the “Credit Facility”).

2 unchanged sentences

We also pay quarterly fees on the Credit Facility at a rate based on our public debt rating.

We classify outstanding borrowings under the Credit Facility and outstanding commercial paper

borrowings (which generally have short-term maturities of 45 days or less) as long-term based on our ability and intent to refinance the outstanding borrowings on a long-term basis.

We classify outstanding borrowings under the Credit Facility and outstanding commercial paper borrowings (which generally have short-term maturities of 45 days or less) as long-term based on our ability and intent to refinance the outstanding borrowings on a long-term basis.

The Credit Facility expires on December 14, 2027.

In August 2025, we issued $ 400 million aggregate principal amount of 4.200 percent Series TT Notes due July 15, 2027 (the “Series TT Notes”), $ 500 million aggregate principal amount of 4.500 percent Series UU Notes due October 15, 2031 (the “Series UU Notes”), and $ 600 million aggregate principal amount of 5.250 percent Series VV

Notes due October 15, 2035 (the “Series VV Notes”).

We will pay interest on the Series TT Notes in January and July of each year, commencing in January 2026.

We will pay interest on the Series UU Notes and Series VV Notes in April and October of each year, commencing in April 2026.

In connection with the offering, we entered into interest rate swap agreements, which have the economic effect of converting $ 500 million of the Series VV Notes into floating rate debt with a variable interest rate of SOFR plus approximately 1.44 percent.

Net proceeds from the offering of the Series TT Notes, Series UU Notes, and Series VV Notes were approximately $ 1.477 billion, after deducting the underwriting discount and expenses, and were made available for general corporate purposes, including working capital, capital expenditures, acquisitions, stock repurchases, or repayment of outstanding indebtedness.

In February 2025, we issued $ 500 million aggregate principal amount of 5.100 percent Series RR Notes due April 15, 2032 (the “Series RR Notes”) and $ 1.5 billion aggregate principal amount of 5.500 percent Series SS Notes due April 15, 2037 (the “Series SS Notes”).

We will pay interest on the Series RR Notes and Series SS Notes in April and October of each year, commencing in October 2025.

We pay interest on the Series RR Notes and Series SS Notes in April and October of each year.

In connection with the offering, we entered into interest rate swap agreements, which have the economic effect of converting $ 700 million of the Series SS Notes into floating rate debt with a variable interest rate of SOFR plus approximately 1.49 percent.

3 unchanged sentences

We present the carrying amounts and the fair values of noncurrent financial assets and liabilities that qualify as financial instruments in the following table:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(in millions) Carrying Amount Fair Value Carrying Amount Fair Value

8 unchanged sentences

ACCUMULATED OTHER COMPREHENSIVE LOSS AND STOCKHOLDERS’ DEFICIT

The following tables detail the accumulated other comprehensive loss activity for the 2025 first half and 2024 first half:

The following tables detail the accumulated other comprehensive loss activity for the 2025 first three quarters and 2024 first three quarters:

(in millions) Foreign Currency Translation Adjustments Other Adjustments Accumulated Other Comprehensive Loss

2 unchanged sentences

414 ( 24 ) 390

Balance at June 30, 2025 $ ( 671 ) $ ( 3 ) $ ( 674 )

Balance at September 30, 2025 $ ( 677 ) $ 4 $ ( 673 )

(in millions) Foreign Currency Translation Adjustments Other Adjustments Accumulated Other Comprehensive Loss

Balance at year-end 2023 $ ( 654 ) $ 7 $ ( 647 )

Other comprehensive (loss) income (1)

Other comprehensive loss (1)

( 62 ) ( 5 ) ( 67 )

Balance at June 30, 2024 $ ( 925 ) $ 20 $ ( 905 )

(1) Other comprehensive income (loss) includes intra-entity foreign currency transactions that are of a long-term investment nature, which resulted in losses of $ 68 million for the 2025 first half and gains of $ 21 million for the 2024 first half.

The following tables detail the changes in common shares outstanding and stockholders’ deficit for the 2025 first half and 2024 first half:

Balance at September 30, 2024 $ ( 716 ) $ 2 $ ( 714 )

(1) Other comprehensive income (loss) includes intra-entity foreign currency transactions that are of a long-term investment nature, which resulted in losses of $ 72 million for the 2025 first three quarters and $ 2 million for the 2024 first three quarters.

The following tables detail the changes in common shares outstanding and stockholders’ deficit for the 2025 first three quarters and 2024 first three quarters:

(in millions, except per share amounts)

18 unchanged sentences

$ ( 2,964 ) $ 5 $ 6,193 $ 17,602 $ ( 26,090 ) $ ( 674 )

— Net income 728 — — 728 — —

— Other comprehensive income 1 — — — — 1

— Dividends ($ 0.67 per share)

( 182 ) — — ( 182 ) — —

0.3 Stock-based compensation plans 105 — 98 — 7 —

( 3.0 ) Purchase of treasury stock ( 807 ) — — — ( 807 ) —

269.4 Balance at September 30, 2025

$ ( 3,119 ) $ 5 $ 6,291 $ 18,148 $ ( 26,890 ) $ ( 673 )

Common Shares Outstanding

18 unchanged sentences

$ ( 2,091 ) $ 5 $ 6,030 $ 15,844 $ ( 23,065 ) $ ( 905 )

— Net income 584 — — 584 — —

— Other comprehensive income 191 — — — — 191

— Dividends ($ 0.63 per share)

( 177 ) — — ( 177 ) — —

0.2 Stock-based compensation plans 101 — 95 — 6 —

( 4.5 ) Purchase of treasury stock ( 1,029 ) — — — ( 1,029 ) —

278.6 Balance at September 30, 2024

$ ( 2,421 ) $ 5 $ 6,125 $ 16,251 $ ( 24,088 ) $ ( 714 )

CONTRACTS WITH CUSTOMERS

Our current and noncurrent liability for guest loyalty program increased by $ 256 million, to $ 7,775 million at June 30, 2025, from $ 7,519 million at December 31, 2024, primarily reflecting points earned by members.

The increase was partially offset by $ 1,782 million of revenue recognized in the 2025 first half, that was deferred as of December 31, 2024.

Our allowance for credit losses was $ 209 million at June 30, 2025 and $ 199 million at December 31, 2024.

Our current and noncurrent liability for guest loyalty program increased by $ 301 million, to $ 7,820 million at September 30, 2025, from $ 7,519 million at December 31, 2024, primarily reflecting points earned by members.

The increase was partially offset by $ 2,589 million of revenue recognized in the 2025 first three quarters, that was deferred as of December 31, 2024.

Our allowance for credit losses was $ 221 million at September 30, 2025 and $ 199 million at December 31, 2024.

BUSINESS SEGMENTS

2 unchanged sentences

Our Caribbean & Latin America (“CALA”) operating segment does not meet the applicable accounting criteria for separate disclosure as a reportable business segment, and as such, we include its results in “Unallocated corporate and other.”

segment without allocating corporate expenses, income taxes, indirect general, administrative, and other expenses, or restructuring and merger-related charges.

Our President and Chief Executive Officer, who is our “chief operating decision maker” (“CODM”), evaluates the performance of our operating segments using “segment profits,” which is based largely on the results of the segment without allocating corporate expenses, income taxes, indirect general, administrative, and other expenses, or restructuring and merger-related recoveries/charges, and other expenses.

We assign gains and losses, equity in earnings or losses, and direct general, administrative, and other expenses to each of our segments.

“Unallocated corporate and other” includes a portion of our revenues (such as fees we receive from our credit card programs and timeshare licensing agreements), revenues and expenses for our Loyalty Program, general, administrative, and other expenses, restructuring and merger-related charges, equity in earnings or losses, and other gains or losses that we do not allocate to our segments, as well as results of our CALA operating segment.

“Unallocated corporate and other” includes a portion of our revenues (such as fees we receive from our credit card programs and timeshare licensing agreements), revenues and expenses for our Loyalty Program, general, administrative, and other expenses, restructuring and merger-related recoveries/charges, and other expenses, equity in earnings or losses, and other gains or losses that we do not allocate to our segments, as well as results of our CALA operating segment.

Our CODM uses segment profits to allocate resources (including employees and investment spending) to each segment, primarily as part of the annual budget process.

3 unchanged sentences

Segment Revenues, Expenses, and Profits

The following tables present our revenues (disaggregated by segment and major revenue stream), segment expenses, and segment profits for the 2025 second quarter, 2024 second quarter, 2025 first half, and 2024 first half:

Three Months Ended June 30, 2025

The following tables present our revenues (disaggregated by segment and major revenue stream), segment expenses, and segment profits for the 2025 third quarter, 2024 third quarter, 2025 first three quarters, and 2024 first three quarters:

Three Months Ended September 30, 2025

(in millions) U.S.

13 unchanged sentences

Total reportable segment profit $ 680 $ 158 $ 44 $ 63

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

(in millions) U.S.

12 unchanged sentences

Total reportable segment profit $ 617 $ 152 $ 46 $ 66

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

(in millions) U.S.

12 unchanged sentences

Total reportable segment profit $ 2,110 $ 389 $ 142 $ 219

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

(in millions) U.S.

12 unchanged sentences

Total reportable segment profit $ 2,029 $ 386 $ 144 $ 200

The following table presents reconciliations of our total reportable segment revenue and profit to consolidated revenue and income before income taxes for the 2025 second quarter, 2024 second quarter, 2025 first half, and 2024 first half:

Three Months Ended Six Months Ended

(in millions) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

The following table presents reconciliations of our total reportable segment revenue and profit to consolidated revenue and income before income taxes for the 2025 third quarter, 2024 third quarter, 2025 first three quarters, and 2024 first three quarters:

Three Months Ended Nine Months Ended

(in millions) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Reconciliation of revenue

13 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements