What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-10 compared with 2025-02-11 · 214 added, 215 removed, 859 unchanged (33% of the section changed)

8 unchanged sentences

Consolidated Statements of Cash Flows

Consolidated Statements of Stockholders’ (Deficit) Equity

Consolidated Statements of Stockholders’ Deficit

Notes to Consolidated Financial Statements

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Related Party Transactions

Restructuring Charges

MANAGEMENT’S REPORT ON

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders’ (deficit) equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes, and our report dated February 11, 2025 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, stockholders’ deficit and cash flows for each of the three years in the period ended December 31, 2025, and the related notes, and our report dated February 10, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

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We have audited the accompanying consolidated balance sheets of Marriott International, Inc.

(the Company) as of December 31, 2024, and 2023, the related consolidated statements of income, comprehensive income, stockholders’ (deficit) equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, stockholders’ deficit and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S.

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As discussed in Note 2 to the financial statements, the Company recognizes revenue for performance obligations relating to Loyalty Program points and free night certificates as they are redeemed and the related performance obligations are satisfied.

The Company recognizes a portion of revenue for the licensed intellectual property performance obligation under the sales-based royalty criteria, with the remaining portion recognized on a straight-line basis over the contract term.

Revenue is recognized utilizing complex models based upon the estimated standalone selling price per point and per free night certificate, which includes judgment in making the estimates of variable consideration and breakage of points.

Auditing Loyalty Program results is complex due to:

(1) the complexity of models and high volume of data used to monitor and account for Loyalty Program results, (2) the complexity in accounting for the amendment to one of the Company’s domestic co-branded credit card agreements, as well as the judgment in estimating the relative standalone selling price of the related performance obligations, and (3) the complexity and judgment of estimating the standalone selling price per Loyalty Program point, including both the estimate of variable consideration under the Company’s co-branded credit card agreements which has significant estimation uncertainty associated with projecting future cardholder spending and redemption activity, and the estimated breakage of Loyalty Program points which requires the use of specialists.

Auditing Loyalty Program results is complex due to the complexity and judgment of estimating the standalone selling price per Loyalty Program point, including the estimated breakage of Loyalty Program points which requires the use of specialists.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s process of accounting for the Loyalty Program.

For example, we tested controls over the accounting methods and model used in reporting results of the Loyalty Program, management’s review of the assumptions and data inputs utilized in estimating the standalone selling price per Loyalty Program point, as well as the development of the estimated breakage.

To test the recognition of revenues and costs associated with the Loyalty Program, we performed audit procedures that included, among others, testing the clerical accuracy and consistency with US GAAP of the accounting model developed by the Company to recognize revenue and costs associated with the Loyalty Program, and testing significant inputs into the accounting model, including the estimated standalone selling price and recognition of points earned and redeemed during the period.

We involved our valuation specialists to assist in our testing procedures with respect to the estimate of relative standalone selling price of the performance obligations associated with the amendment to a domestic co-branded credit card agreement.

We involved our actuarial professionals to assist in our testing procedures with respect to the estimate of the breakage of Loyalty Program points.

For example, we tested controls over management’s review of the development of the estimated breakage.

To test the recognition of points and free night certificates revenue associated with the Loyalty Program, we performed audit procedures that included, among others, involving our actuarial professionals to assist in our testing procedures with respect to the estimate of the breakage of Loyalty Program points.

We evaluated management’s methodology for estimating the breakage of Loyalty Program points, and we tested underlying data and actuarial assumptions used in estimating the breakage.

We evaluated the reasonableness of management’s assumptions, including projections of cash flows, used to estimate variable consideration under the Company’s co-branded credit cards.

Accounting for General and Administrative Expenses and Reimbursed Expenses

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For example, we tested management’s controls over the review of the allocation of certain costs to determine if they were reasonably classified.

To test the recognition of reimbursed expenses for appropriate classification, we performed audit procedures that included, among others, (1) testing manual journal entries made to reimbursed expenses and general and administrative expenses and (2) performing analytical procedures over total reimbursed expenses and general and administrative expenses in order to identify any trends or indicators of material errors in the classification of expenses.

To test the recognition of reimbursed expenses for appropriate classification, we performed audit procedures that included, among others, (1) testing certain manual journal entries made to reimbursed expenses and general and administrative expenses and (2) performing analytical procedures over total reimbursed expenses and general and administrative expenses in order to identify any trends or indicators of material errors in the classification of expenses.

/s/ Ernst & Young LLP

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2025 2024 2023

Base management fees $ 1,288 $ 1,238 $ 1,044

Franchise fees $ 3,325 $ 3,113 $ 2,831

Base management fees 1,322 1,288 1,238

Incentive management fees 791 769 755

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OPERATING COSTS AND EXPENSES

Owned, leased, and other - direct

Owned, leased, and other expense (2)

1,461 1,329 1,309

Depreciation, amortization, and other 213 183 189

General, administrative, and other 1,074 1,011 891

Restructuring and merger-related charges

General and administrative (2)

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

Reimbursed expenses (1)

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(1) See Note 15 for disclosure of related party amounts.

(2) In the 2025 fourth quarter, we reclassified amounts attributable to other expenses previously reported under the “General, administrative, and other” caption to the “Owned, leased, and other expense” caption of our Income Statements.

See Note 1 for additional information.

See Notes to Consolidated Financial Statements.

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Other adjustments, net of tax ( 21 ) 21 ( 4 )

Total other comprehensive (loss) income, net of tax

Total other comprehensive income (loss), net of tax

421 ( 416 ) 82

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Contract acquisition costs ( 434 ) ( 341 ) ( 221 )

Restructuring and merger-related charges ( 278 ) 47 ( 8 )

Restructuring and merger-related (recoveries) charges, and other ( 15 ) ( 278 ) 47

Working capital changes ( 147 ) ( 82 ) 69

4 unchanged sentences

( 604 ) ( 750 ) ( 452 )

Asset acquisition ( 26 ) ( 101 ) —

Asset acquisitions

( 350 ) ( 26 ) ( 101 )

Dispositions 9 16 71

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Net cash used in financing activities ( 2,318 ) ( 1,956 ) ( 2,864 )

INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 59 ( 159 ) ( 896 )

(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 54 ) 59 ( 159 )

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

366 525 1,421

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

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(1) The 2025 amounts include beginning restricted cash of $ 29 million at December 31, 2024 and ending restricted cash of $ 13 million at December 31, 2025, which we present in the “Prepaid expenses and other” and “Other noncurrent assets” captions of our Balance Sheets.

(2) We reclassified 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.

We reclassified prior period amounts, which totaled $ 159 million in 2023 and $ 118 million in 2022, to conform to our current presentation.

(2) The 2023 amounts reflect the reclassification of $ 159 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 Consolidated Financial Statements.

MARRIOTT INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

Fiscal Years 2025, 2024, and 2023

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— Net income 3,083 — — 3,083 — —

— Other comprehensive loss ( 387 ) — — — — ( 387 )

— Other comprehensive income 82 — — — — 82

— Dividends ($ 1.96 per share)

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— Net income 2,375 — — 2,375 — —

— Other comprehensive income 82 — — — — 82

— Other comprehensive loss ( 416 ) — — — — ( 416 )

— Dividends ($ 2.41 per share)

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— Net income 2,601 — — 2,601 — —

— Other comprehensive loss ( 416 ) — — — — ( 416 )

— Other comprehensive income 421 — — — — 421

— Dividends ($ 2.64 per share)

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The consolidated financial statements present the results of operations, financial position, and cash flows of Marriott International, Inc.

and subsidiaries (referred to in this report as “we,” “us,” “Marriott,” or the “Company”).

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 Consolidated Financial Statements as our “Financial Statements,” (2) our Consolidated Statements of Income as our “Income Statements,” (3) our Consolidated Balance Sheets as our “Balance Sheets,” (4) our 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 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 ® .

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 franchise agreements, management 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 SM (which we also exclude from our property and room count), timeshare, residential, and The Ritz-Carlton Yacht Collection ® .

Preparation of financial statements that conform with U.S.

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

In addition, in the 2025 fourth quarter, to enhance understanding of the Company’s general and administrative costs, we reclassified amounts attributable to other expenses previously reported under the “General, administrative, and other” caption to the “Owned, leased, and other expense” caption of our Income Statements.

The expenses that were reclassified from “General, administrative, and other” are certain costs associated with our property-related fee revenues, such as guarantee expense, provision for credit losses, and certain brand-related or property-related expenses, as well as costs associated with certain third-party agreements.

We reclassified prior period amounts, which totaled $ 129 million in 2024 and $ 144 million in 2023, to conform to our current presentation.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

Franchise Fee and Royalty Fee Revenue :

For our franchised properties, we have a performance obligation to provide franchisees a license to our intellectual property for use of certain of our brand names.

As compensation for such services, we are typically entitled to initial application fees and ongoing royalty fees.

Our ongoing royalty fees represent variable consideration, as the transaction price is based on a percentage of certain revenues of the properties, as defined in each contract.

We recognize royalty fees on a monthly basis over the term of the agreement as those amounts become payable.

Initial application and relicensing fees are fixed consideration payable upon submission of a franchise application or renewal and are recognized on a straight-line basis over the initial or renewal term of the franchise agreements.

Base Management and Incentive Management Fees :

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We recognize incentive management fees on a monthly basis over the term of the agreement based on each property’s financial results, as long as we do not expect a significant reversal due to projected future hotel performance or cash flows in future periods.

Franchise Fee and Royalty Fee Revenue :

For our franchised properties, we have a performance obligation to provide franchisees and operators a license to our intellectual property for use of certain of our brand names.

As compensation for such services, we are typically entitled to initial application fees and ongoing royalty fees.

Our ongoing royalty fees represent variable consideration, as the transaction price is based on a percentage of certain revenues of the properties, as defined in each contract.

We recognize royalty fees on a monthly basis over the term of the agreement as those amounts become payable.

Owned and Leased Hotel Revenue :

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As compensation for such goods and services, we are typically entitled to a fixed nightly fee for an agreed upon period and additional fixed fees for any ancillary services purchased.

These fees are generally payable at the time the hotel guest checks out of the hotel.

fees are generally payable at the time the hotel guest checks out of the hotel.

We generally satisfy the performance obligations over time, and we recognize the revenue from room sales and from other ancillary guest services on a daily basis, as the rooms are occupied and we have rendered the services.

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Under our agreements with hotel owners and certain other counterparties, we are entitled to be reimbursed for certain costs we incur on behalf of their properties, with no added mark-up.

These costs primarily consist of

payroll and related expenses at managed properties where we are the employer of the employees at the properties and include certain operational and administrative costs as provided for in our contracts with the hotel owners.

These costs primarily consist of payroll and related expenses at managed properties where we are the employer of the employees at the properties and include certain operational and administrative costs as provided for in our contracts with the hotel owners.

We are entitled to reimbursement in the period we incur the related reimbursable costs, which we recognize within the “Cost reimbursement revenue” caption of our Income Statements.

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The amounts we charge for these programs and services are generally a combination of fixed fees and variable fees based on sales or other metrics and are payable on a monthly basis.

We generally recognize revenue within the “Cost reimbursement revenue” caption of our Income Statements when the amounts may be billed to hotel owners and other counterparties, and we recognize expenses within the “Reimbursed expenses” caption as they are incurred.

We generally recognize revenue within the “Cost reimbursement revenue” caption of our Income Statements when the amounts may be billed to hotel owners and other counterparties.

Amounts we charge for system implementations are generally recognized on a straight-line basis over the term of the franchise or management agreement.

We recognize expenses within the “Reimbursed expenses” caption as they are incurred.

This pattern of recognition results in timing differences between the costs incurred for centralized programs and services and the related reimbursement in our operating and net income.

Over the long term, these programs and services are not designed to impact our economics, either positively or negatively.

In addition, we present in the “ Reimbursed expenses ” caption of our Income Statements spending funded by the proceeds ($ 664 million, $ 425 million after-tax) from the 2017 sale of our interest in Avendra LLC, which we committed would be used for the benefit of hotels in our system.

Such spending totaled less than $ 1 million in 2024, $ 161 million ($ 120 million after-tax) in 2023, and $ 69 million ($ 52 million after-tax) in 2022.

As of December 31, 2024, we have completed our spending funded by the Avendra sale proceeds.

Other Revenue :

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As compensation for such services, we may be entitled to receive a fixed fee that is payable during the pre-opening period of the hotel.

These services are not a distinct performance obligation, and therefore we recognize the fees on a straight-line basis over the initial term of the management, franchise, or license agreement.

These services are not a distinct performance obligation, and therefore we recognize the fees on a straight-line basis over the initial term of the franchise, management, or license agreement.

Practical Expedients and Exemptions :

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We generally receive monthly cash contributions from participating properties based on a portion of qualified spend by Loyalty Program members (when the points are earned).

We recognize these contributions into revenue as we provide the related service (when the points are redeemed).

We recognize these contributions into revenue as we provide the related

service (when the points are redeemed).

The amount of revenue we recognize upon point redemption is based on a blend of historical funding rates and is impacted by our estimate of the “breakage” for points that members will never redeem.

is estimated based on historical member activity and expectations of future member behavior.

Breakage is estimated based on historical member activity and expectations of future member behavior.

We recognize revenue net of the redemption cost within our “Cost reimbursement revenue” caption on our Income Statements, as our performance obligation is to facilitate the transaction between the Loyalty Program member and the property or program partner.

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We receive fees from these agreements, including fixed amounts that are primarily payable at contract inception, and variable amounts that are paid to us monthly over the term of the agreements, generally based on:

(1) the number of free night certificates issued or redeemed;

(2) the number of Loyalty Program points purchased;

(1) the volume of cardholder spend;

(2) the number of Loyalty Program points purchased;

(3) the number of free night certificates issued or redeemed;

and (4) the number of gift cards issued.

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We recognize the revenue related to the free night certificates and gift cards when the related service is provided.

We recognize revenue net of the redemption cost, as our performance obligation is to facilitate the transaction between the Loyalty Program member and the managed or franchised property.

We recognize revenue net of the redemption cost, as our performance obligation is to facilitate the transaction between the Loyalty Program member and the property or program partner.

Contract Balances :

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We record deferred revenue when we receive payment, or have the unconditional right to receive payment, in advance of the satisfaction of our performance obligations related to franchise application and relicensing fees, Global Design fees, credit card branding license fees, and our Loyalty Program.

Our current and noncurrent deferred revenue increased by $ 76 million, to $ 1,299 million at December 31, 2024, from $ 1,223 million at December 31, 2023, primarily as a result of revenue deferred in 2024 related to our co-branded credit cards, gift cards, franchise application and relicensing fees, and certain centralized programs and services fees.

Our current and noncurrent deferred revenue increased by $ 110 million, to $ 1,409 million at December 31, 2025, from $ 1,299 million at December 31, 2024, primarily as a result of revenue deferred in 2025 related to our co-branded credit cards, gift cards, residential branding fees, certain centralized programs and services fees, and franchise application and relicensing fees.

The increase was partially offset by $ 242 million of revenue recognized in 2025 that was deferred as of December 31, 2024.

Our current and noncurrent liability for guest loyalty program increased by $ 513 million, to $ 7,519 million at December 31, 2024, from $ 7,006 million at December 31, 2023, primarily reflecting an increase in points earned by members.

Our current and noncurrent liability for guest loyalty program increased by $ 473 million, to $ 7,992 million at December 31, 2025, from $ 7,519 million at December 31, 2024, primarily reflecting points earned by members.

The increase was partially offset by $ 3,160 million of revenue recognized in 2025, that was deferred as of December 31, 2024.

The current portion of our liability for guest loyalty program increased compared to December 31, 2023, due to higher estimated redemptions in the short-term.

At each reporting period, we evaluate the estimates used in the recognition of Loyalty Program revenues, including estimates of the breakage of points that members will never redeem and the amount of funding we expect to receive over the life of the agreements with various third parties.

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We recognize an impairment loss for the amount by which the carrying amount exceeds the expected net future cash flows.

We classify certain direct costs to fulfill a contract with a customer in the “Other noncurrent assets” and “Prepaid expenses and other” captions of our Balance Sheets, and the related amortization in the “Owned, leased, and other - direct” caption of our Income Statements.

We had capitalized costs to fulfill contracts with customers of $ 439 million at December 31, 2025 and $ 419 million at December 31, 2024.

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We translate assets and liabilities at the exchange rate in effect as of the financial statement date and translate income statement accounts using the weighted average exchange rate for the period.

We include translation adjustments from currency exchange and the effect of exchange rate changes on intercompany transactions of a long-term investment nature as a separate component of stockholders’ (deficit) equity.

We report gains and losses from currency exchange rate changes for intercompany receivables and payables that are not of a long-term investment nature, as well as for third-party transactions, currently in operating costs and expenses.

1 unchanged sentence

Our stock-based compensation awards primarily consist of restricted stock units (“RSUs”).

We measure compensation costs for our stock-based payment transactions at fair value based on the average of the high and low stock price on the grant date (discounted for the lack of marketability and dividends), and we recognize those costs in our Financial Statements over the vesting period during which the employee provides service in exchange for the award.

We measure compensation costs for our stock-based payment transactions at fair value based on the average of the high and low stock price on the grant date (discounted for the lack of marketability and dividends), and we recognize those costs in our Financial Statements on a straight-line basis over the vesting period during which the employee provides service in exchange for the award.

Advertising Costs

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tax on Global Intangible Low-Taxed Income in the period incurred.

We generally recognize the effect of the tax law changes in the period of enactment.

We generally recognize the effect of tax law changes in the period of enactment.

Changes in existing tax laws and rates, their related interpretations, and the uncertainty generated by the current economic environment may affect the amounts of our deferred tax liabilities or the valuations of our deferred tax assets over time.

1 unchanged sentence

For tax positions we have taken or expect to take in a tax return, we apply a more likely than not threshold (that is, a likelihood of more than 50 percent), under which we must conclude a tax position is more likely than not to be sustained, assuming that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information, to recognize the benefit.

In determining our provision for income taxes, we use judgment, reflecting our estimates

and assumptions, in applying the more likely than not threshold.

In determining our provision for income taxes, we use judgment, reflecting our estimates and assumptions, in applying the more likely than not threshold.

We recognize accrued interest and penalties for our unrecognized tax benefits as a component of tax expense.

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If the comparison indicates that we will not be able to recover the carrying amount of an asset group, we recognize an impairment loss for the amount by which the carrying amount exceeds the estimated fair value.

When we recognize an

impairment loss for assets to be held and used, we depreciate the adjusted carrying amount of those assets over their remaining useful life.

When we recognize an impairment loss for assets to be held and used, we depreciate the adjusted carrying amount of those assets over their remaining useful life.

We calculate the estimated fair value of an intangible asset or asset group using the income approach or the market approach.

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We apply the equity method of accounting if we have significant influence over the entity, typically when we hold 20 percent or more of the voting common stock (or equivalent) of an investee but do not have a controlling financial interest.

In certain circumstances, such as with investments in limited liability companies or limited partnerships, we apply the equity method of accounting when we own as little as three to five percent.

In certain circumstances, such as investments in limited liability companies or limited partnerships, we apply the equity method of accounting when we own as little as three to five percent.

We account for financial assets at fair value if it is readily determinable, at our share of the entity’s net assets if the investment qualifies for the net asset value practical expedient, or using the fair value alternative method, whereby investments are measured at cost less impairment, adjusted for observable price changes.

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Under the accounting guidance for the consolidation of variable interest entities, we analyze our variable interests, including equity investments, loans, and guarantees, to determine if an entity in which we have a variable interest is a variable interest entity.

Our analysis includes both quantitative and qualitative reviews.

We base our quantitative analysis on the forecasted cash flows of the entity, and our qualitative analysis on our review of the design of the entity, its organizational structure including decision-making ability, and relevant financial agreements.

Our analysis may include both quantitative and qualitative reviews and is based primarily on our review of the design of the entity, its organizational structure including decision-making ability, and relevant financial agreements.

We also use our qualitative analysis to determine if we must consolidate a variable interest entity as its primary beneficiary.

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Self-Insurance Programs

We self-insure for certain levels of liability, workers’ compensation, property insurance, and employee medical coverage.

We accrue estimated costs of these self-insurance programs at the present value of projected settlements for known and incurred but not reported claims.

We use a discount rate of 4.25 percent, based upon market rates, to determine the present value of the projected settlements, which we consider to be reasonable given our history of settled claims, including payment patterns and the fixed nature of the individual settlements.

We classify the current portion of our self-insurance reserve in the “Accrued expenses and other” caption and the noncurrent portion in the “Other noncurrent liabilities” caption of our Balance Sheets.

The current portion of our self-insurance reserve was $ 198 million at December 31, 2024 and $ 172 million at December 31, 2023.

The noncurrent portion of our self-insurance reserve was $ 422 million at December 31, 2024 and $ 387 million at December 31, 2023.

We self-insure for certain levels of liability, workers’ compensation, and employee benefits-related coverages, with purchased insurance protection for costs over specified thresholds.

We accrue estimated costs of these insurance programs at the present value of projected settlements for known claims and incurred but not reported claims.

We use a discount rate of 3.50 percent, based upon market rates, which we consider to be reasonable given our history of settled claims, including payment patterns.

Our employee benefits-related insurance reserve was $ 72 million at December 31, 2025 and $ 74 million at December 31, 2024 and was recorded in the “Accrued payroll and benefits” caption of our Balance Sheets.

For our other insurance programs, we classify the current and noncurrent portions of these insurance reserves in the “Accrued expenses and other” and “Other noncurrent liabilities” captions of our Balance Sheets, respectively.

The current portion of these reserves was $ 178 million at December 31, 2025 and $ 198 million at December 31, 2024.

The noncurrent portion of these reserves was $ 496 million at December 31, 2025 and $ 422 million at December 31, 2024.

Legal Contingencies

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New Accounting Standards Adopted

Accounting Standards Update (“ASU”) 2023-07 - “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures”:

ASU 2023-07, issued by the Financial Accounting Standards Board, requires the disclosure of significant segment expenses by reportable segment if such expenses are regularly provided to the chief operating decision maker (“CODM”) and included in each reported measure of segment profit or loss.

ASU 2023-07 also requires disclosure of the CODM’s title and position and an explanation of how the CODM uses the reported measure of a segment profit or loss in assessing segment performance and allocating resources.

We adopted ASU 2023-07 retrospectively in the 2024 fourth quarter to the disclosures presented in Note 14.

In the 2024 fourth quarter, we completed the asset acquisition of the Sheraton Grand Chicago hotel and the fee simple interest in the land underlying the hotel for a purchase price of $ 514 million, including direct transaction costs.

This acquisition is the result of a 2017 transaction in which we granted the owner a one-time right to require us to purchase the leasehold interest in the land and the hotel for $ 300 million in cash (the “put option”), which we previously accounted for as a guarantee liability.

In January 2024, the owner exercised the put option, and at the same time the put transaction closed, we exercised our option to purchase the fee simple interest in the underlying land for an additional $ 200 million in cash.

We determined that the capitalizable value of the acquired assets was $ 214 million on the acquisition date.

We estimated the fair value of the hotel and land using a combination of two income approaches, which included Level 3 inputs such as forecasted future net cash flows, property resale value, and discount rates.

We recorded the acquired assets in the Property and equipment, net caption of our Balance Sheets and applied the remaining $ 300 million of the purchase price to the release of the guarantee liability.

Accounting Standards Update (“ASU”) 2023-09 - “Improvements to Income Tax Disclosures” (Topic 740).

ASU 2023-09 requires enhanced income tax disclosures, including additional disaggregated information related to the effective tax rate reconciliation, the underlying nature and category of individual reconciling items, and income taxes paid by jurisdictions.

We adopted ASU 2023-09 prospectively in the 2025 fourth quarter for the disclosures presented in Note 6.

New Accounting Standards Not Yet Adopted

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.

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.

In the 2025 fourth quarter, we completed the integration of the citizenM portfolio, which included 37 open select-service hotels ( 8,789 rooms), into our system and platforms.

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 $ 290 million and contract assets, with a weighted-average term of 20 years, totaling $ 60 million.

EARNINGS PER SHARE

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We also granted performance-based RSUs (“PSUs”) in 2025 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.

We had deferred compensation costs for unvested awards for RSUs, including PSUs, of approximately $ 173 million at year-end 2024 and $ 171 million at year-end 2023.

We had deferred compensation costs for unvested awards for RSUs, including PSUs, of approximately $ 173 million at year-end 2025.

The weighted average remaining term for RSUs outstanding at year-end 2025 was 2.2 years.

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Change attributable to tax positions taken during the current period 16

Decrease attributable to settlements with taxing authorities ( 2 )

Decrease attributable to lapse of statute of limitations ( 106 )

Unrecognized tax benefit at year-end 2025

Our unrecognized tax benefit balance included $ 90 million at year-end 2025, $ 171 million at year-end 2024, and $ 161 million at year-end 2023 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 recognize accrued interest and penalties for our unrecognized tax benefits as a component of tax expenses.

Related interest expense totaled $ 14 million in 2024, $ 6 million in 2023, and $ 13 million in 2022.

Related interest (benefit) expense totaled $( 41 ) million in 2025, $ 14 million in 2024, and $ 6 million in 2023.

We accrued interest and penalties related to our unrecognized tax benefits of approximately $ 22 million at year-end 2025 and $ 63 million at year-end 2024.

We file income tax returns, including returns for our subsidiaries, in various jurisdictions around the world.

Internal Revenue Service has examined our federal income tax returns, and as of year-end 2024, we have settled all issues for

tax years through 2022.

Internal Revenue Service has examined our federal income tax returns, and as of year-end 2025, we have settled all issues for tax years through 2022.

Our 2023 and 2024 tax year audits are currently ongoing.

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Deferred Tax Liabilities

Property and equipment — ( 62 )

Intangibles ( 584 ) ( 477 )

Right-of-use assets ( 245 ) ( 223 )

Self-insurance ( 6 ) ( 22 )

Other ( 32 ) ( 64 )

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We recorded $ 5 million of net operating loss benefits in 2025 and $ 22 million in 2024.

At year-end 2024, we had approximately $ 4,611 million of primarily state and foreign net operating losses, of which $ 2,963 million will expire through 2044.

At year-end 2025, we had approximately $ 4,436 million of primarily state and foreign net operating losses, of which $ 2,867 million will expire between 2042 and 2045.

We made no provision for U.S.

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The following table reconciles the U.S.

statutory tax rate to our effective income tax rate for the last three fiscal years:

statutory tax rate to our effective income tax rate for the year ended December 31, 2025, as required by ASU 2023-09 (see “New Accounting Standards Adopted” caption in Note 2 for more information):

($ in millions)

Amount Percent

statutory tax rate $ 713 21.0 %

Effect of cross-border tax laws

Foreign Tax Credits ( 41 ) ( 1.2 )

Other ( 24 ) ( 0.7 )

State and local income tax, net of federal tax benefit (1)

Effect of cross-border tax laws

Changes in valuation allowance

( 56 ) ( 1.6 )

Nontaxable or nondeductible items

Other Non-U.S.

jurisdictions

Changes in unrecognized tax benefits ( 129 ) ( 3.8 )

Effective rate $ 793 23.4 %

(1) State and local taxes in California, Maryland, and New York make up the majority (greater than 50%) of the tax in this category.

The following table reconciles the U.S.

statutory tax rate to our effective income tax rate for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09:

statutory tax rate 21.0 % 21.0 %

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Intellectual property restructuring

0.0 ( 7.9 ) 0.0

Other, net 0.1 0.3

1 unchanged sentence

Other Information

We paid cash for income taxes, net of refunds, of $ 947 million in 2024, $ 907 million in 2023, and $ 476 million in 2022.

The following table presents income taxes paid (net of refunds received) for the year ended December 31, 2025, as required by ASU 2023-09:

(in millions)

Other jurisdictions

Total cash paid $ 1,070

We paid cash for income taxes, net of refunds, of $ 947 million in 2024 and $ 907 million in 2023.

COMMITMENTS AND CONTINGENCIES

We issue guarantees to certain lenders and hotel owners, chiefly to obtain long-term management and franchise contracts.

We issue guarantees to certain lenders and hotel owners, chiefly to obtain long-term franchise and management contracts.

The guarantees generally have a stated maximum funding amount and a term of three to 10 years.

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(“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.

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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.

The plaintiffs in these cases, 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.

cases were 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”).

The District Court granted in part and denied in part class certification of various U.S.

groups of consumers.

In August 2023, the U.S.

Court of Appeals for the Fourth Circuit (the “Fourth Circuit”) vacated the District Court’s class certification decision because the District Court failed to first consider the effect of a class-action waiver signed by all putative class members.

On remand, after briefing, the District Court issued an order reinstating the same classes that had previously been certified.

We promptly petitioned the Fourth Circuit, seeking leave to appeal that ruling.

The Fourth Circuit granted that petition on January 18, 2024, oral argument was held on November 1, 2024, and we await a decision.

A case brought by the City of Chicago (which is consolidated in the MDL proceeding) also remains pending.

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.

Following the Fourth Circuit’s reversal of class certification, some plaintiffs filed lawsuits in New York state court on an individual basis, alleging violations of New York statutory law and seeking monetary damages, attorneys’ fees, and other related relief.

We have been engaged in mediation discussions with the consumer plaintiffs in the MDL.

We believe it is probable that we will incur losses in relation to the MDL and the state court cases, and as of December

31, 2025, we have recorded an accrual for an estimated loss contingency related to these matters, which is not material to our Financial Statements.

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 addition, various U.S.

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

federal, U.S.

state and foreign governmental authorities made inquiries, opened investigations, or requested information and/or documents related to the Data Security Incident and related matters.

Most of these matters have been resolved or no longer appear to be active.

In the 2024 fourth quarter, we reached final resolutions with the U.S.

Federal Trade Commission and the Attorney General offices from 49 U.S.

states and the District of Columbia (the “AG Offices”).

Among other terms, the resolution with the AG Offices included a $ 52 million monetary payment, the majority of which we paid in the 2024 fourth quarter, and which is not material to our Financial Statements.

We do not expect the terms of these resolutions to have a material impact on our current or ongoing operations.

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 and unresolved 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 unresolved inquiries, investigations, or requests for information and/or documents.

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 lawsuits or 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, or other resolution of these proceedings based on:

(1) in the case of the above-described lawsuits, 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 regulatory inquiries or investigations.

Insurance Recoveries

During 2025, 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 2025 are presented in the “Restructuring and merger-related (recoveries) charges, and other” caption of our Income Statements.

Other Legal Proceedings

During 2024, we recorded certain expenses related to settled and ongoing claims brought against the Company regarding the use of copyrighted music.

These amounts are not material to our Financial Statements.

While we believe it is reasonably possible that we may incur losses in excess of the amounts already recorded for the unresolved claims, we are currently unable to reasonably estimate the amount of losses or range of loss in excess of the amounts recorded.

At this time, we do not expect these claims or resolutions to have a material impact on the Company’s financial position or operations.

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.

We enter into operating and finance leases primarily for hotels, offices, and equipment.

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Operating cash outflows for operating leases 152 154 240

Operating lease assets obtained in exchange for lease obligation

The following table presents our future minimum lease payments at year-end 2025:

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

(in millions) At Year-End 2024 At Year-End 2023

($ in millions)

Interest Rate Effective Interest Rate Face Amount

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

Senior Notes:

Series P Notes, interest rate of 3.8 %, face amount of $ 350 , maturing October 1, 2025

(effective interest rate of 4.0 %)

Series R Notes, interest rate of 3.1 %, face amount of $ 750 , maturing June 15, 2026

(effective interest rate of 3.3 %)

Series V Notes, interest rate of 3.8 %, face amount of $ 318 , maturing March 15, 2025

(effective interest rate of 2.8 %)

Series W Notes, interest rate of 4.5 %, face amount of $ 278 , maturing October 1, 2034

(effective interest rate of 4.1 %)

Series X Notes, interest rate of 4.0 %, face amount of $ 450 , maturing April 15, 2028

(effective interest rate of 4.2 %)

Series AA Notes, interest rate of 4.7 %, face amount of $ 300 , maturing December 1, 2028

(effective interest rate of 4.8 %)

Series CC Notes, interest rate of 3.6 %, face amount of $ 550 , matured April 15, 2024

(effective interest rate of 3.9 %)

Series EE Notes, interest rate of 5.8 %, face amount of $ 600 , maturing May 1, 2025

(effective interest rate of 6.0 %)

Series FF Notes, interest rate of 4.6 %, face amount of $ 1,000 , maturing June 15, 2030

(effective interest rate of 4.8 %)

Series GG Notes, interest rate of 3.5 %, face amount of $ 1,000 , maturing October 15, 2032

(effective interest rate of 3.7 %)

Series HH Notes, interest rate of 2.9 %, face amount of $ 1,100 , maturing April 15, 2031

(effective interest rate of 3.0 %)

Series II Notes, interest rate of 2.8 %, face amount of $ 700 , maturing October 15, 2033

(effective interest rate of 2.8 %)

Series JJ Notes, interest rate of 5.0 %, face amount of $ 1,000 , maturing October 15, 2027

(effective interest rate of 5.4 %)

Series KK Notes, interest rate of 4.9 %, face amount of $ 800 , maturing April 15, 2029

(effective interest rate of 5.3 %)

Series LL Notes, interest rate of 5.5 %, face amount of $ 450 , maturing September 15, 2026

(effective interest rate of 5.9 %)

Series MM Notes, interest rate of 5.6 %, face amount of $ 700 , maturing October 15, 2028

(effective interest rate of 5.9 %)

Series NN Notes, interest rate of 4.9 %, face amount of $ 500 , maturing May 15, 2029

(effective interest rate of 5.3 %)

Series OO Notes, interest rate of 5.3 %, face amount of $ 1,000 , maturing May 15, 2034

(effective interest rate of 5.6 %)

Series PP Notes, interest rate of 4.8 %, face amount of $ 500 , maturing March 15, 2030

(effective interest rate of 5.0 %)

Series QQ Notes, interest rate of 5.4 %, face amount of $ 1,000 , maturing March 15, 2035

(effective interest rate of 5.5 %)

Series P Notes, matured October 1, 2025

3.8 % 4.0 % $ 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 1,094 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 % 1,000 994 990

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 % 450 449 447

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 % 1,000 982 980

Series PP Notes, maturing March 15, 2030

4.8 % 5.0 % 500 496 495

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 1,475 —

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 % 600 588 —

Commercial paper 1,177 1,582

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We may redeem some or all of each series of the Senior Notes before maturity under the terms provided in the applicable form of Senior Note.

In August 2024, we issued $ 500 million aggregate principal amount of 4.800 percent Series PP Notes due March 15, 2030 (the “Series PP Notes”) and $ 1.0 billion aggregate principal amount of 5.350 percent Series QQ Notes due March 15, 2035 (the “Series QQ Notes”).

We will pay interest on the Series PP Notes and Series QQ Notes in March and September of each year, commencing in March 2025.

Net proceeds from the offering of the Series PP Notes and Series QQ Notes were approximately $ 1.480 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 2024, we issued $ 500 million aggregate principal amount of 4.875 percent Series NN Notes due May 15, 2029 (the “Series NN Notes”) and $ 1.0 billion aggregate principal amount of 5.300 percent Series OO Notes due May 15, 2034 (the “Series OO Notes”).

We pay interest on the Series NN Notes and Series OO Notes in May and November of each year.

Net proceeds from the offering of the Series NN Notes and Series OO Notes were approximately $ 1.468 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.

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

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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 pay interest on the Series TT Notes in January and July of each year.

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.

The following table presents future principal payments, net of discounts, premiums, and debt issuance costs, for our debt at year-end 2025:

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For acquired contracts, software, and other intangible assets, we recorded amortization expense of $ 313 million in 2025, $ 255 million in 2024, and $ 226 million in 2023 (of which $ 206 million in 2025, $ 158 million in 2024, and $ 122 million in 2023 was included in the “Reimbursed expenses” caption of our Income Statements).

For these assets, we estimate that our aggregate amortization expense will be $ 241 million in 2025, $ 205 million in 2026, $ 175 million in 2027, $ 138 million in 2028, and $ 102 million in 2029.

For these assets, we estimate that our

aggregate amortization expense will be $ 308 million in 2026, $ 272 million in 2027, $ 225 million in 2028, $ 181 million in 2029, and $ 131 million in 2030.

The following table details the carrying amount of our goodwill at year-end 2025 and 2024:

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At Year-End 2025 At Year-End 2024

(in millions) Carrying

Amount Fair Value Carrying

Amount Fair Value

(in millions) Carrying Amount

Fair Value Carrying Amount

Notes receivable

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$ ( 740 ) $ 11 $ ( 729 )

Other comprehensive (loss) income before reclassifications (1)

( 390 ) 11 ( 379 )

Reclassification adjustments 1 ( 9 ) ( 8 )

Net other comprehensive (loss) income ( 389 ) 2 ( 387 )

Other comprehensive income (loss) (1)

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

Other comprehensive income (loss) before reclassifications (1)

Reclassification adjustments ( 3 ) — ( 3 )

Net other comprehensive income (loss)

Other comprehensive (loss) income (1)

( 437 ) 21 ( 416 )

Balance at year-end 2024 $ ( 1,091 ) $ 28 $ ( 1,063 )

Other comprehensive income (loss) before reclassifications (1)

Other comprehensive income (loss) (1)

442 ( 21 ) 421

Reclassification adjustments — ( 4 ) ( 4 )

Net other comprehensive income (loss) ( 437 ) 21 ( 416 )

Balance at year-end 2025 $ ( 649 ) $ 7 $ ( 642 )

(1) Other comprehensive income (loss) before reclassifications for foreign currency translation adjustments includes intra-entity foreign currency transactions that are of a long-term investment nature, which resulted in gains (losses) of $ 30 million for 2024, $( 28 ) million for 2023, and $ 32 million for 2022.

(1) Other comprehensive income (loss) includes intra-entity foreign currency transactions that are of a long-term investment nature, which resulted in (losses) gains of $( 71 ) million for 2025, $ 30 million for 2024, and $( 28 ) million for 2023.

BUSINESS SEGMENTS

Beginning in the 2024 first quarter, we modified our segment structure as a result of a change in the way our “chief operating decision maker” (“CODM”) evaluates performance and allocates resources within the Company, resulting in the following four reportable business segments:

We discuss our operations in the following four reportable business segments:

& 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.” We revised the prior period amounts shown in the tables below to conform to our current presentation.

Our President and Chief Executive Officer, who is our 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 charges.

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.

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 and administrative expenses, or restructuring and merger-related recoveries/charges, and other expenses.

We assign gains and losses, equity in earnings or losses, and direct general and administrative 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, indirect general and administrative 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.

5 unchanged sentences

(in millions) U.S.

& Canada EMEA Greater China APEC

& Canada EMEA Greater China

Gross fee revenues $ 3,004 $ 640 $ 261 $ 376

4 unchanged sentences

Total reportable segment revenue 19,349 2,407 590 1,073

Owned, leased, and other - direct 330 499 14 118

Owned, leased, and other expense 434 530 28 146

Depreciation, amortization, and other 108 40 12 9

General, administrative, and other 182 110 55 64

General and administrative 118 104 52 63

Reimbursed expenses 16,015 1,211 315 552

3 unchanged sentences

(in millions) U.S.

EMEA Greater China APEC

EMEA Greater China

Gross fee revenues $ 2,951 $ 589 $ 250 $ 345

4 unchanged sentences

Total reportable segment revenue 18,612 2,406 582 976

Owned, leased, and other - direct

Owned, leased, and other expense

399 519 24 129

Depreciation, amortization, and other

General, administrative, and other

154 140 55 61

General and administrative

Reimbursed expenses

4 unchanged sentences

(in millions) U.S.

EMEA Greater China APEC

EMEA Greater China

Gross fee revenues $ 2,799 $ 529 $ 265 $ 288

4 unchanged sentences

Total reportable segment revenue 17,696 2,268 600 830

Owned, leased, and other - direct 386 369 14 99

Owned, leased, and other expense 380 537 25 130

Depreciation, amortization, and other 84 40 10 9

General, administrative, and other 135 103 50 48

General and administrative 114 84 42 47

Reimbursed expenses 14,399 1,168 317 409

34 unchanged sentences

Equity in earnings 11 8 9

The carrying amount of our equity method investments was $ 298 million at year-end 2024 and $ 308 million at year-end 2023.

The carrying amount of our equity method investments was $ 298 million at both year-end 2025 and year-end 2024.

This value exceeded our share of the book value of the investees’ net assets by $ 216 million at year-end 2025 and $ 223 million at year-end 2024, primarily due to the value that we assigned to land, contracts, and buildings owned by the investees.

Other Related Parties

We earned management fees of approximately $ 13 million in 2024, $ 13 million in 2023, and $ 11 million in 2022, plus reimbursement of certain expenses, from our operation of properties in which JWM Family Enterprises, L.P., which is beneficially owned and controlled by J.W.

Marriott, Jr., Deborah Marriott Harrison, David S.

Marriott, and other members of the Marriott family, indirectly holds varying percentages of ownership.

We earned gross fee revenues of approximately $ 6 million in 2024, $ 4 million in 2023, and $ 4 million in 2022, plus reimbursement of certain expenses, from managed and franchised properties in which other members of the Marriott family hold varying interests.

RESTRUCTURING CHARGES

In 2024, we launched a comprehensive initiative to enhance our effectiveness and efficiency across the Company.

In connection with these efforts, in 2024, we recorded $ 68 million of charges for employee termination benefits, of which we present $ 37 million in the “ Restructuring and merger-related charges ” caption and $ 31 million in the “ Reimbursed expenses ” caption of our Income Statements.

We substantially completed this initiative as of year-end 2024.

The following table presents our restructuring reserve activity during the period:

(in millions)

Employee termination benefits

Balance at December 31, 2023

Cash payments ( 8 )

Balance at December 31, 2024, classified in “Accrued expenses and other”

We earned gross fee revenues plus reimbursement of certain expenses from franchised and managed properties in which members of the Marriott family hold varying interests.

These amounts are not material to our Financial Statements.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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-K

Item 8. Financial Statements and Supplementary Data