MARRIOTT INTERNATIONAL INC /MD/ 10-Q

Item 1 . Financial Statements MARRIOTT INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share amounts) (Unaudited) Three Months Ended Nine Months Ended September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 REVENUES Base management fees $ 314 $ 312 $ 979 $ 955 Franchise fees 876 812 2,482 2,318 Incentive management fees 148 159 552 563 Gross fee revenues 1,338 1,283 4,013 3,836 Contract investment amortization ( 29 ) ( 26 ) ( 86 ) ( 76 ) Net fee revenues 1,309 1,257 3,927 3,760 Owned, leased, and other revenue 420 381 1,222 1,133 Cost reimbursement revenue 4,760 4,617 14,347 13,778 6,489 6,255 19,496 18,671 OPERATING COSTS AND EXPENSES Owned, leased, and other - direct 326 300 950 882 Depreciation, amortization, and other 50 45 154 137 General, administrative, and other 234 276 724 785 Restructuring and merger-related (recoveries) charges, and other ( 40 ) 9 ( 31 ) 25 Reimbursed expenses 4,739 4,681 14,335 13,827 5,309 5,311 16,132 15,656 OPERATING INCOME 1,180 944 3,364 3,015 Gains and other income, net 3 7 6 15 Interest expense ( 206 ) ( 179 ) ( 601 ) ( 515 ) Interest income 12 11 33 30 Equity in earnings 5 3 10 8 INCOME BEFORE INCOME TAXES 994 786 2,812 2,553 Provision for income taxes ( 266 ) ( 202 ) ( 656 ) ( 633 ) NET INCOME $ 728 $ 584 $ 2,156 $ 1,920 EARNINGS PER SHARE Earnings per share – basic $ 2.68 $ 2.08 $ 7.86 $ 6.71 Earnings per share – diluted $ 2.67 $ 2.07 $ 7.84 $ 6.69 See Notes to Condensed Consolidated Financial Statements. 3 Table of Contents MARRIOTT INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) (Unaudited) 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 Other comprehensive income (loss) Foreign currency translation adjustments ( 6 ) 209 414 ( 62 ) Other adjustments, net of tax 7 ( 18 ) ( 24 ) ( 5 ) Total other comprehensive income (loss), net of tax 1 191 390 ( 67 ) Comprehensive income $ 729 $ 775 $ 2,546 $ 1,853 See Notes to Condensed Consolidated Financial Statements. 4 Table of Contents MARRIOTT INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in millions) (Unaudited) September 30, 2025 December 31, 2024 ASSETS Current assets Cash and equivalents $ 678 $ 396 Accounts and notes receivable, net 3,101 2,795 Prepaid expenses and other 332 294 4,111 3,485 Property and equipment, net 1,917 1,833 Intangible assets Brands 6,188 5,770 Contract acquisition costs and other 4,015 3,718 Goodwill 8,886 8,731 19,089 18,219 Equity method investments 298 298 Notes receivable, net 153 136 Deferred tax assets 571 650 Operating lease assets 947 845 Other noncurrent assets 747 716 $ 27,833 $ 26,182 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities Current portion of long-term debt $ 1,557 $ 1,309 Accounts payable 759 763 Accrued payroll and benefits 1,323 1,449 Liability for guest loyalty program 3,550 3,487 Accrued expenses and other 1,609 1,641 8,798 8,649 Long-term debt 14,442 13,138 Liability for guest loyalty program 4,270 4,032 Deferred tax liabilities 117 81 Deferred revenue 1,158 1,103 Operating lease liabilities 887 794 Other noncurrent liabilities 1,280 1,377 Stockholders’ deficit Class A Common Stock 5 5 Additional paid-in-capital 6,291 6,179 Retained earnings 18,148 16,531 Treasury stock, at cost ( 26,890 ) ( 24,644 ) Accumulated other comprehensive loss ( 673 ) ( 1,063 ) ( 3,119 ) ( 2,992 ) $ 27,833 $ 26,182 See Notes to Condensed Consolidated Financial Statements. 5 Table of Contents MARRIOTT INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (Unaudited) Nine Months Ended September 30, 2025 September 30, 2024 OPERATING ACTIVITIES Net income $ 2,156 $ 1,920 Adjustments to reconcile to cash provided by operating activities: Depreciation, amortization, and other (including depreciation and amortization classified in reimbursed expenses) (2) 422 363 Stock-based compensation 171 173 Income taxes ( 136 ) ( 96 ) Liability for guest loyalty program 301 365 Contract acquisition costs ( 301 ) ( 256 ) Restructuring and merger-related (recoveries) charges, and other ( 66 ) 24 Working capital changes ( 345 ) ( 162 ) Other 181 100 Net cash provided by operating activities 2,383 2,431 INVESTING ACTIVITIES Capital and technology expenditures ( 432 ) ( 408 ) Asset acquisition ( 349 ) — Dispositions 9 4 Loan advances ( 31 ) ( 10 ) Loan collections 16 10 Other 12 15 Net cash used in investing activities ( 775 ) ( 389 ) FINANCING ACTIVITIES Commercial paper/Credit Facility, net ( 960 ) ( 648 ) Issuance of long-term debt 3,436 2,948 Repayment of long-term debt ( 957 ) ( 556 ) Issuance of Class A Common Stock 92 73 Dividends paid ( 539 ) ( 506 ) Purchase of treasury stock ( 2,300 ) ( 3,176 ) Stock-based compensation withholding taxes ( 111 ) ( 127 ) Net cash used in financing activities ( 1,339 ) ( 1,992 ) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 269 50 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period (1) 425 366 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period (1) $ 694 $ 416 (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. 6 Table of Contents MARRIOTT INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1. BASIS OF PRESENTATION The condensed consolidated financial statements present the results of operations, financial position, and cash flows of Marriott International, Inc. and its consolidated subsidiaries (referred to in this report as “we,” “us,” “Marriott,” or the “Company”). In order to make this report easier to read, we also refer throughout to (1) our Condensed Consolidated Financial Statements as our “Financial Statements,” (2) our Condensed Consolidated Statements of Income as our “Income Statements,” (3) our Condensed Consolidated Balance Sheets as our “Balance Sheets,” (4) our Condensed Consolidated Statements of Cash Flows as our “Statements of Cash Flows,” (5) our properties, brands, or markets in the United States and Canada as “U.S. & Canada,” and (6) our properties, brands, or markets in our Europe, Middle East & Africa, Greater China, Asia Pacific excluding China, and Caribbean & Latin America regions, as “International.” References throughout to numbered “Notes” refer to these Notes to Condensed Consolidated Financial Statements, unless otherwise stated. In addition, we use the term “hotel owners” throughout this report to refer, collectively, to owners of hotels and other lodging offerings operating in our system pursuant to management agreements, franchise agreements, license agreements or similar arrangements, and we use the term “hotels in our system” to refer to hotels and other lodging offerings operating in our system pursuant to such arrangements, as well as hotels that we own or lease. The terms “hotel owners” and “hotels in our system” exclude Homes & Villas by Marriott Bonvoy ® (which we also exclude from our property and room count), timeshare, residential, and The Ritz-Carlton Yacht Collection ® . These Financial Statements have not been audited. We have condensed or omitted certain information and disclosures normally included in financial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”). The Financial Statements in this report should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (“2024 Form 10-K”). Certain terms not otherwise defined in this Form 10-Q have the meanings specified in our 2024 Form 10-K. Preparation of financial statements that conform with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, the reported amounts of revenues and expenses during the reporting periods, and the disclosures of contingent liabilities. 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 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. 7 Table of Contents NOTE 2. ACQUISITION 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. In addition, we may pay earn-out payments to the seller up to $ 110 million, based on the future growth of the brand over a specified, multi-year timeframe. Earn-out payments would not begin until the fourth year following closing of the transaction. 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 . NOTE 3. 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 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 Net income $ 728 $ 584 $ 2,156 $ 1,920 Shares for basic earnings per share 271.8 281.5 274.3 285.9 Basic earnings per share $ 2.68 $ 2.08 $ 7.86 $ 6.71 Computation of Diluted Earnings Per Share Net income $ 728 $ 584 $ 2,156 $ 1,920 Shares for basic earnings per share 271.8 281.5 274.3 285.9 Effect of dilutive securities Stock-based compensation 0.7 0.9 0.7 1.0 Shares for diluted earnings per share 272.5 282.4 275.0 286.9 Diluted earnings per share $ 2.67 $ 2.07 $ 7.84 $ 6.69 NOTE 4. STOCK-BASED COMPENSATION 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. NOTE 5. INCOME TAXES 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. 8 Table of Contents 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. The actual amount of any change to our unrecognized tax benefits could vary depending on the timing and nature of the settlement. Therefore, an estimate of the change cannot be provided. 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. NOTE 6. COMMITMENTS AND CONTINGENCIES Guarantees 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 September 30, 2025 in the following table: (in millions) Guarantee Type Maximum Potential Amount of Future Fundings Recorded Liability for Guarantees Debt service $ 62 $ 6 Operating profit 120 73 Other 21 4 $ 203 $ 83 Our maximum potential guarantees listed in the preceding table include $ 62 million of operating profit guarantees that will not be in effect until the underlying properties open and we begin to operate the properties or certain other events occur. Starwood Data Security Incident Description of Event On November 30, 2018, we announced a data security incident involving unauthorized access to the Starwood Hotels & Resorts Worldwide, LLC, formerly known as Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”), reservations database (the “Data Security Incident”). Working with leading security experts, we determined that there was unauthorized access to the Starwood network since 2014 and that an unauthorized party had copied information from the Starwood reservations database and taken steps towards removing it. We discontinued use of the Starwood reservations database for business operations at the end of 2018. Litigation, Claims, and Government Investigations Following our announcement of the Data Security Incident, approximately 100 lawsuits were filed by consumers and others against us in U.S. federal, U.S. state and Canadian courts related to the incident. The plaintiffs in the cases that remain pending, who generally purport to represent various classes of consumers, generally claim to have been harmed by alleged actions and/or omissions by the Company in connection with the Data Security Incident and assert a variety of common law and statutory claims seeking monetary damages, injunctive relief, costs and attorneys’ fees, and other related relief. The active U.S. cases are consolidated in the U.S. District Court for the District of Maryland (the “District Court”), pursuant to orders of the U.S. Judicial Panel on Multidistrict Litigation (the “MDL”). On June 3, 2025, the U.S. 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. 9 Table of Contents 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. federal, U.S. state and foreign governmental authorities have been resolved or no longer appear to be active. 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. 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 We have been and are currently party to other legal proceedings involving claims that we infringe the intellectual property rights of others. At this time, we do not expect these proceedings to have a material impact on the Company’s business, financial condition, results of operations, or cash flows. 10 Table of Contents NOTE 7. 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 September 30, 2025 and year-end 2024: ($ in millions) Interest Rate Effective Interest Rate Face Amount Balance as of September 30, 2025 Balance as of December 31, 2024 Senior Notes: Series P Notes, matured October 1, 2025 3.8 % 4.0 % $ 350 $ 350 $ 349 Series R Notes, maturing June 15, 2026 3.1 % 3.3 % 750 749 749 Series V Notes, matured March 15, 2025 3.8 % 2.8 % 318 — 319 Series W Notes, maturing October 1, 2034 4.5 % 4.1 % 278 287 287 Series X Notes, maturing April 15, 2028 4.0 % 4.2 % 450 448 447 Series AA Notes, maturing December 1, 2028 4.7 % 4.8 % 300 299 298 Series EE Notes, matured May 1, 2025 5.8 % 6.0 % 600 — 599 Series FF Notes, maturing June 15, 2030 4.6 % 4.8 % 1,000 992 991 Series GG Notes, maturing October 15, 2032 3.5 % 3.7 % 1,000 990 989 Series HH Notes, maturing April 15, 2031 2.9 % 3.0 % 1,100 1,093 1,093 Series II Notes, maturing October 15, 2033 2.8 % 2.8 % 700 695 695 Series JJ Notes, maturing October 15, 2027 5.0 % 5.4 % 1,000 993 990 Series KK Notes, maturing April 15, 2029 4.9 % 5.3 % 800 790 788 Series LL Notes, maturing September 15, 2026 5.5 % 5.9 % 450 448 447 Series MM Notes, maturing October 15, 2028 5.6 % 5.9 % 700 694 693 Series NN Notes, maturing May 15, 2029 4.9 % 5.3 % 500 493 491 Series OO Notes, maturing May 15, 2034 5.3 % 5.6 % 1,000 981 980 Series PP Notes, maturing March 15, 2030 4.8 % 5.0 % 500 495 495 Series QQ Notes, maturing March 15, 2035 5.4 % 5.5 % 1,000 987 986 Series RR Notes, maturing April 15, 2032 5.1 % 5.4 % 500 493 — Series SS Notes, maturing April 15, 2037 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 Credit Facility — — Finance lease obligations 117 124 Other 23 55 $ 15,999 $ 14,447 Less current portion ( 1,557 ) ( 1,309 ) $ 14,442 $ 13,138 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”). Available borrowings under the Credit Facility support our commercial paper program and general corporate needs. U.S. dollar borrowings under the Credit Facility bear interest at SOFR (the Secured Overnight Financing Rate) plus a spread based on our public debt rating. 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. 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 11 Table of Contents 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 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. Net proceeds from the offering of the Series RR Notes and Series SS Notes were approximately $ 1.960 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. NOTE 8. FAIR VALUE OF FINANCIAL INSTRUMENTS We believe that the fair values of our current assets and current liabilities approximate their reported carrying amounts. We present the carrying amounts and the fair values of noncurrent financial assets and liabilities that qualify as financial instruments in the following table: September 30, 2025 December 31, 2024 (in millions) Carrying Amount Fair Value Carrying Amount Fair Value Notes receivable $ 153 $ 151 $ 136 $ 133 Total noncurrent financial assets $ 153 $ 151 $ 136 $ 133 Senior Notes $ ( 13,694 ) $ ( 13,772 ) $ ( 11,419 ) $ ( 11,083 ) Commercial paper ( 618 ) ( 618 ) ( 1,582 ) ( 1,582 ) Total noncurrent financial liabilities $ ( 14,312 ) $ ( 14,390 ) $ ( 13,001 ) $ ( 12,665 ) See Note 12. Fair Value of Financial Instruments and the “Fair Value Measurements” caption of Note 2. Summary of Significant Accounting Policies of our 2024 Form 10-K for more information on the input levels we use in determining fair value. NOTE 9. ACCUMULATED OTHER COMPREHENSIVE LOSS AND STOCKHOLDERS’ DEFICIT 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 Balance at year-end 2024 $ ( 1,091 ) $ 28 $ ( 1,063 ) Other comprehensive income (loss) (1) 414 ( 24 ) 390 Balance at September 30, 2025 $ ( 677 ) $ 4 $ ( 673 ) 12 Table of Contents (in millions) Foreign Currency Translation Adjustments Other Adjustments Accumulated Other Comprehensive Loss Balance at year-end 2023 $ ( 654 ) $ 7 $ ( 647 ) Other comprehensive loss (1) ( 62 ) ( 5 ) ( 67 ) 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) Common Shares Outstanding Total Class A Common Stock Additional Paid-in-Capital Retained Earnings Treasury Stock, at Cost Accumulated Other Comprehensive Loss 276.7 Balance at year-end 2024 $ ( 2,992 ) $ 5 $ 6,179 $ 16,531 $ ( 24,644 ) $ ( 1,063 ) — Net income 665 — — 665 — — — Other comprehensive income 101 — — — — 101 — Dividends ($ 0.63 per share) ( 174 ) — — ( 174 ) — — 1.1 Stock-based compensation plans ( 13 ) — ( 44 ) — 31 — ( 2.8 ) Purchase of treasury stock ( 755 ) — — — ( 755 ) — 275.0 Balance at March 31, 2025 $ ( 3,168 ) $ 5 $ 6,135 $ 17,022 $ ( 25,368 ) $ ( 962 ) — Net income 763 — — 763 — — — Other comprehensive income 288 — — — — 288 — Dividends ($ 0.67 per share) ( 183 ) — — ( 183 ) — — ( 0.1 ) Stock-based compensation plans 58 — 58 — — — ( 2.8 ) Purchase of treasury stock ( 722 ) — — — ( 722 ) — 272.1 Balance at June 30, 2025 $ ( 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 ) 13 Table of Contents Common Shares Outstanding Total Class A Common Stock Additional Paid-in-Capital Retained Earnings Treasury Stock, at Cost Accumulated Other Comprehensive Loss 290.5 Balance at year-end 2023 $ ( 682 ) $ 5 $ 6,051 $ 14,838 $ ( 20,929 ) $ ( 647 ) — Net income 564 — — 564 — — — Other comprehensive loss ( 147 ) — — — — ( 147 ) — Dividends ($ 0.52 per share) ( 151 ) — — ( 151 ) — — 1.3 Stock-based compensation plans ( 36 ) — ( 73 ) — 37 — ( 4.8 ) Purchase of treasury stock ( 1,164 ) — — — ( 1,164 ) — 287.0 Balance at March 31, 2024 $ ( 1,616 ) $ 5 $ 5,978 $ 15,251 $ ( 22,056 ) $ ( 794 ) — Net income 772 — — 772 — — — Other comprehensive loss ( 111 ) — — — — ( 111 ) — Dividends ($ 0.63 per share) ( 179 ) — — ( 179 ) — — — Stock-based compensation plans 53 — 52 — 1 — ( 4.1 ) Purchase of treasury stock ( 1,010 ) — — — ( 1,010 ) — 282.9 Balance at June 30, 2024 $ ( 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 ) NOTE 10. CONTRACTS WITH CUSTOMERS 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. NOTE 11. BUSINESS SEGMENTS We discuss our operations in the following four reportable business segments: (1) U.S. & Canada, (2) Europe, Middle East & Africa (“EMEA”), (3) Greater China, and (4) Asia Pacific excluding China (“APEC”). 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.” 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 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. Our CODM reviews budget-to-actual variances on a quarterly basis to assess segment performance. Additionally, our CODM uses segment profits to compare the results of each segment with one another and in the determination of compensation for segment leadership. 14 Table of Contents Our CODM monitors assets for the consolidated Company but does not use assets by operating segment when assessing performance or making operating segment resource allocations. 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 third quarter, 2024 third quarter, 2025 first three quarters, and 2024 first three quarters: Three Months Ended September 30, 2025 (in millions) U.S. & Canada EMEA Greater China APEC Gross fee revenues $ 740 $ 172 $ 64 $ 86 Contract investment amortization ( 19 ) ( 5 ) ( 1 ) ( 1 ) Net fee revenues 721 167 63 85 Owned, leased, and other revenue 130 161 4 32 Cost reimbursement revenue 3,890 285 75 130 Total reportable segment revenue 4,741 613 142 247 Less: Owned, leased, and other - direct 96 132 5 32 Depreciation, amortization, and other 23 9 5 2 General, administrative, and other 40 32 15 19 Reimbursed expenses 3,903 284 74 131 Other segment items (primarily non-operating income and expenses) ( 1 ) ( 2 ) ( 1 ) — Total reportable segment profit $ 680 $ 158 $ 44 $ 63 Three Months Ended September 30, 2024 (in millions) U.S. & Canada EMEA Greater China APEC Gross fee revenues $ 747 $ 153 $ 62 $ 82 Contract investment amortization ( 19 ) ( 3 ) — ( 2 ) Net fee revenues 728 150 62 80 Owned, leased, and other revenue 95 169 5 30 Cost reimbursement revenue 3,773 316 75 120 Total reportable segment revenue 4,596 635 142 230 Less: Owned, leased, and other - direct 82 132 3 27 Depreciation, amortization, and other 21 9 2 2 General, administrative, and other 59 25 14 15 Reimbursed expenses 3,820 317 76 120 Other segment items (primarily non-operating income and expenses) ( 3 ) — 1 — Total reportable segment profit $ 617 $ 152 $ 46 $ 66 15 Table of Contents Nine Months Ended September 30, 2025 (in millions) U.S. & Canada EMEA Greater China APEC Gross fee revenues $ 2,249 $ 458 $ 188 $ 267 Contract investment amortization ( 60 ) ( 13 ) ( 1 ) ( 4 ) Net fee revenues 2,189 445 187 263 Owned, leased, and other revenue 390 439 21 110 Cost reimbursement revenue 11,822 898 222 393 Total reportable segment revenue 14,401 1,782 430 766 Less: Owned, leased, and other - direct 292 373 13 93 Depreciation, amortization, and other 77 28 10 6 General, administrative, and other 120 99 46 53 Reimbursed expenses 11,806 895 221 394 Other segment items (primarily non-operating income and expenses) ( 4 ) ( 2 ) ( 2 ) 1 Total reportable segment profit $ 2,110 $ 389 $ 142 $ 219 Nine Months Ended September 30, 2024 (in millions) U.S. & Canada EMEA Greater China APEC Gross fee revenues $ 2,227 $ 425 $ 186 $ 243 Contract investment amortization ( 57 ) ( 10 ) — ( 4 ) Net fee revenues 2,170 415 186 239 Owned, leased, and other revenue 314 444 18 98 Cost reimbursement revenue 11,367 916 226 359 Total reportable segment revenue 13,851 1,775 430 696 Less: Owned, leased, and other - direct 240 369 10 84 Depreciation, amortization, and other 63 28 7 6 General, administrative, and other 145 80 41 47 Reimbursed expenses 11,379 915 228 361 Other segment items (primarily non-operating income and expenses) ( 5 ) ( 3 ) — ( 2 ) 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 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 Total reportable segment revenue $ 5,743 $ 5,603 $ 17,379 $ 16,752 Unallocated corporate and other 746 652 2,117 1,919 Consolidated revenue $ 6,489 $ 6,255 $ 19,496 $ 18,671 Reconciliation of income before income taxes Total reportable segment profit $ 945 $ 881 $ 2,860 $ 2,759 Unallocated corporate and other 243 73 520 279 Interest expense, net of interest income ( 194 ) ( 168 ) ( 568 ) ( 485 ) Consolidated income before income taxes $ 994 $ 786 $ 2,812 $ 2,553