What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-11 compared with 2024-02-13 · 216 added, 185 removed, 858 unchanged (32% of the section changed)

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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, 2024, 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, 2023 and 2022, and 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, 2023, and the related notes, and our report dated February 13, 2024 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, 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.

Basis for Opinion

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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 IP performance obligation under the sales-based royalty criteria, with the remaining portion recognized on a straight-line basis over the contract term.

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 and (2) 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.

(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.

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.

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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.

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Description of the Matter During 2024, the Company recognized $1,074 million of general and administrative expenses and $18,799 million of reimbursed expenses.

As discussed in Note 2 to the financial statements, the Company incurs certain expenses that are for the benefit of, and reimbursable from, hotel owners and franchisees.

As discussed in Note 2 to the financial statements, the Company incurs certain expenses that are for the benefit of, and reimbursable from, hotel owners and certain other counterparties.

Such amounts are recorded in the period in which the expense is incurred and include judgment with respect to the allocation of certain costs between general and administrative expenses, which are non-reimbursable, and reimbursed expenses.

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

Merger-related charges and other

Restructuring and merger-related charges

Reimbursed expenses (1)

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Gains and other income, net 31 40 11

Loss on extinguishment of debt — — ( 164 )

Interest expense ( 695 ) ( 565 ) ( 403 )

Interest income 40 30 26

Equity in earnings (losses) (1)

Equity in earnings (1)

INCOME BEFORE INCOME TAXES 3,151 3,378 3,114

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Other adjustments, net of tax 21 ( 4 ) 2

Total other comprehensive income (loss), net of tax 82 ( 387 ) ( 207 )

Total other comprehensive (loss) income, net of tax

( 416 ) 82 ( 387 )

Comprehensive income $ 1,959 $ 3,165 $ 1,971

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$ 26,182 $ 25,674

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities

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Other noncurrent liabilities 1,377 1,482

Stockholders’ (deficit) equity

Stockholders’ deficit

Class A Common Stock 5 5

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( 2,992 ) ( 682 )

$ 26,182 $ 25,674

See Notes to Consolidated Financial Statements.

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Adjustments to reconcile to cash provided by operating activities:

Depreciation, amortization, and other 277 282 295

Depreciation, amortization, and other (including depreciation and amortization classified in reimbursed expenses) (2)

Stock-based compensation 237 205 192

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Contract acquisition costs ( 341 ) ( 221 ) ( 149 )

Merger-related charges and other 47 ( 8 ) ( 10 )

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

Working capital changes ( 82 ) 69 ( 542 )

Loss on extinguishment of debt — — 164

4 ( 138 ) ( 49 )

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Capital and technology expenditures

( 750 ) ( 452 ) ( 332 )

Asset acquisition ( 26 ) ( 101 ) —

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Issuance of Class A Common Stock 73 29 —

Debt extinguishment costs — — ( 155 )

Dividends paid ( 682 ) ( 587 ) ( 321 )

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Net cash used in financing activities ( 1,956 ) ( 2,864 ) ( 2,962 )

(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

( 159 ) ( 896 ) 527

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

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

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(1) The 2024 amounts include beginning restricted cash of $ 28 million at December 31, 2023 and ending restricted cash of $ 29 million at December 31, 2024, 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.

See Notes to Consolidated Financial Statements.

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(in millions, except per share amounts)

Outstanding Total Class A

Stock Additional

Capital Retained

Earnings Treasury

Cost Accumulated

Comprehensive Loss

Common Shares Outstanding

Total Class A Common Stock

Additional Paid-in-Capital

Retained Earnings

Treasury Stock, at Cost

Accumulated Other Comprehensive Loss

326.3 Balance at December 31, 2021 $ 1,414 $ 5 $ 5,892 $ 10,305 $ ( 14,446 ) $ ( 342 )

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

— Dividends ($ 1.00 per share)

( 321 ) — — ( 321 ) — —

1.1 Stock-based compensation plans 104 — 73 — 31 —

( 16.8 ) Purchase of treasury stock ( 2,600 ) — — — ( 2,600 ) —

310.6 Balance at December 31, 2022 568 5 5,965 12,342 ( 17,015 ) ( 729 )

— 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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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 Caribbean and Latin America, Europe, Middle East and Africa, Greater China, and Asia Pacific excluding China regions, as “International.” In addition, references throughout to numbered “Notes” refer to these Notes to Consolidated Financial Statements, unless otherwise stated.

& 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 ® .

Preparation of financial statements that conform with U.S.

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For our managed properties, we have performance obligations to provide hotel management services and a license to our intellectual property for the use of our brand names.

As compensation for such services, we are generally entitled to receive base fees, which are a percentage of the revenues of properties, and incentive management fees, which are generally based on a measure of hotel profitability.

Both the base and incentive management fees are variable consideration, as the transaction price is based on a percentage of revenue or profit, as defined in each contract.

As compensation for such services, we are generally entitled to receive base management fees, which are a percentage of the revenues of properties, and incentive management fees, which are generally based on a measure of hotel profitability.

Both the base management and incentive management fees are variable consideration, as the transaction price is based on a percentage of revenue or profit, as defined in each contract.

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

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Cost Reimbursements :

Under our management and franchise agreements, we are entitled to be reimbursed for certain costs we incur on behalf of the managed, franchised, and licensed 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 owners.

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.

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.

Under our management and franchise agreements, hotel owners and franchisees participate in certain centralized programs and services, such as marketing, sales, reservations, and insurance programs.

We operate these programs and services for the benefit of our hotel owners.

We do not operate these programs and services to generate a profit over the long term, and accordingly, when we recover the costs that we incur for these programs and services from our hotel owners, we do not seek a mark-up.

Hotel owners and certain other counterparties participate in certain centralized programs and services, such as marketing, sales, reservations, and insurance programs, which we operate for their benefit.

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 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 from hotel owners in our operating and net income.

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.

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 $ 161 million ($ 120 million after-tax) in 2023, $ 69 million ($ 52 million after-tax) in 2022, and $ 56 million ($ 42 million after-tax) in 2021.

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 :

Includes Global Design fees, which we describe below, termination fees, and other property and brand revenues.

Includes Global Design fees (described below), termination fees, and other property and brand revenues, which we present within the “Owned, leased, and other revenue” caption of our Income Statements.

We generally recognize termination fees when collection is probable and other revenue as services are rendered.

Amounts received in advance are deferred as liabilities.

We provide certain hotel design and construction review (“Global Design”) services to our managed and franchised hotel owners, generally during the period prior to a hotel’s opening or during the period a hotel is converting to a Marriott brand (the “pre-opening period”).

We provide certain hotel design and construction review (“Global Design”) services to hotel owners, generally during the period prior to a hotel’s opening or during the period a hotel is converting to a Marriott brand (the “pre-opening period”).

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.

As these services are not a distinct performance obligation, we recognize the fees on a straight-line basis over the initial term of the management or franchise agreement within the “Owned, leased, and other revenue” caption of our Income Statements.

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.

Practical Expedients and Exemptions :

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Loyalty Program :

Loyalty Program members earn points based on the money they spend at our properties;

Loyalty Program members earn points based on the money they spend at participating properties;

the exchange of timeshare ownership interests;

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and through participation in travel experiences and affiliated partners’ programs, such as those offered by credit card, car rental, airline, and other companies.

Members can redeem points for stays at most of our properties, airline tickets, airline frequent flyer program miles, rental cars, merchandise, and a variety of other awards.

Members can redeem points for stays at participating properties, airline tickets, airline frequent flyer program miles, rental cars, merchandise, and a variety of other awards.

Points cannot be redeemed for cash.

Under our Loyalty Program, we have a performance obligation to provide or arrange for the provision of goods or services for free or at a discount to Loyalty Program members in exchange for the redemption of points earned from past activities.

Under our Loyalty Program, we have a performance obligation to provide or arrange for the provision of goods or services to Loyalty Program members in exchange for the redemption of points earned from past activities.

We operate our Loyalty Program as a cross-brand marketing program to participating properties.

Our management and franchise agreements require that properties reimburse us for a portion of the costs of operating the Loyalty Program, with no added mark-up, including costs related to the following activities, which we expense as incurred in our “Reimbursed expenses” caption of our Income Statements:

Our agreements with hotel owners and certain other counterparties require that properties reimburse us for costs of operating the Loyalty Program, with no added mark-up, including costs related to the following activities, which we expense as incurred in our “Reimbursed expenses” caption of our Income Statements:

marketing, promotion, and communications and services provided to Loyalty Program members.

We generally receive monthly cash contributions from managed, franchised, owned, and leased properties based on a portion of qualified spend by Loyalty Program members (when the points are earned).

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).

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.

We estimate breakage based on our historical experience 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 managed or franchised property or program partner.

Our redemption cost, which is generally based on redemption rates that can increase in periods in which occupancy at the property exceeds a certain threshold, could be higher or lower than our revenue recognized in any given period.

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

Our redemption cost could be higher or lower than our revenue recognized in any given period.

We have multi-year agreements for our co-branded credit cards associated with our Loyalty Program.

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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 decreased by $ 108 million, to $ 1,223 million at December 31, 2023, from $ 1,331 million at December 31, 2022, primarily as a result of $ 274 million of revenue recognized in 2023 that was deferred as of December 31, 2022, as well as the reclassification from deferred revenue to the liability for guest loyalty program, which we discuss below.

The decrease was partially offset by revenue deferred in 2023 related to our gift cards, co-branded credit cards, franchise application and relicensing fees, and certain centralized programs and services fees.

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.

The increase was partially offset by $ 222 million of revenue recognized in 2024 that was deferred as of December 31, 2023.

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.

This includes a $ 112 million reclassification from deferred revenue to the liability for guest loyalty program primarily due to points that were earned during the period by members using our U.S.-issued co-branded credit cards, which were prepaid by the financial institutions in 2020.

The increase was partially offset by $ 3,010 million of revenue recognized in 2024, that was deferred as of December 31, 2023.

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 a gain or loss on real estate transactions when control of the asset transfers to the buyer, generally at the time the sale closes.

In sales transactions where we retain a management contract, the terms and conditions of the management

contract are generally comparable to the terms and conditions of the management contracts obtained directly with third-party owners in competitive processes.

In sales transactions where we retain a management contract, the terms and conditions of the management contract are generally comparable to the terms and conditions of the management contracts obtained directly with hotel owners in competitive processes.

Retirement Savings Plan

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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’ 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.

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Advertising Costs

We expense costs to produce advertising as they are incurred and to communicate advertising as the communication occurs and record such amounts in our “Reimbursed expenses” caption of our Income Statements to the extent undertaken on behalf of our owners and franchisees.

We recognized advertising costs of $ 993 million in 2024, $ 794 million in 2023, and $ 635 million in 2022.

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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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Accounts Receivable

Our accounts receivable primarily consist of amounts due from hotel owners with whom we have management and franchise agreements and include reimbursements of costs we incurred on behalf of managed and franchised properties.

Our accounts receivable primarily consist of amounts due from hotel owners and include reimbursements of costs we incurred on their behalf.

We record an allowance for credit losses measured over the contractual life of the instrument based on an assessment of historical collection activity and current and forecasted future economic conditions by region.

Our allowance for credit losses was $ 199 million at December 31, 2024 and $ 197 million at December 31, 2023.

The increase during 2023 was primarily due to our provision for credit losses, partially offset by write-offs of amounts deemed uncollectible.

Our provision for credit losses totaled $ 29 million in 2023, $ 27 million in 2022, and $ 22 million in 2021.

Assets Held for Sale

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

We utilize the same assumptions and methodology for the income approach that we describe in the “Goodwill” caption of our Balance Sheets.

We utilize the same assumptions and methodology for the income approach that we describe in the “Goodwill” caption above.

For the market approach, we use internal analyses based primarily on market comparables and assumptions about market capitalization rates, growth rates, and inflation.

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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.

We account for financial assets at fair value if it is readily determinable, or using the fair value alternative method, whereby investments are measured at cost less impairment, adjusted for observable price changes.

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.

We consolidate entities that we control.

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We have various financial instruments we must measure at fair value on a recurring basis, including certain marketable securities and derivatives.

See Note 12 for further information.

We also apply the provisions of fair value measurement to various nonrecurring measurements for our financial and nonfinancial assets and liabilities.

See Note 12 for further information.

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price).

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As a matter of policy, we only enter into transactions that we believe will be highly effective at offsetting the underlying risk, and we do not use derivatives for trading or speculative purposes.

Loan Loss Reserves

We may make mezzanine and other loans to owners of hotels that we operate or franchise, generally to facilitate the development or renovation of a hotel and sometimes to facilitate brand programs or initiatives.

We expect the owners to repay the loans in accordance with the loan agreements, or earlier as the performance of the hotels and capital markets permit.

We use metrics such as loan-to-value ratios and debt service coverage, and other information about collateral and from third-party rating agencies to assess the credit quality of the loan receivable, both upon entering into the loan agreement and on an ongoing basis as applicable.

At inception and throughout the term of the loan agreement, we individually assess loans for impairment.

We consider current and forecasted future economic conditions in addition to our historical experience.

We use internally generated cash flow projections to determine the likelihood that the loans will be repaid under the terms of the loan agreements.

We calculate the present value of expected future cash flows discounted at the loan’s original effective interest rate or the estimated fair value of the collateral.

If the present value or the estimated collateral are less than the carrying value of the loan receivable, we establish a specific impairment reserve for the difference.

We determine if an arrangement is a lease or contains a lease at the inception of the contract.

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For finance leases, the amortization of the asset is recognized over the shorter of the lease term or useful life of the underlying asset.

We measure and record our liability for the fair value of a guarantee on a nonrecurring basis, that is when we issue or modify a guarantee, using Level 3 internally developed inputs, as described above in this footnote under the caption “Fair Value

Measurements.” We base our calculation of the estimated fair value of a guarantee on the income approach or the market approach, depending on the type of guarantee.

We measure and record our liability for the fair value of a guarantee on a nonrecurring basis, that is when we issue or modify a guarantee.

We base our calculation of the estimated fair value of a guarantee on the income approach or the market approach, depending on the type of guarantee.

For the income approach, we use internally developed discounted cash flow and Monte Carlo simulation models that include the following assumptions, among others:

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Goodwill is not recognized in an asset acquisition.

On May 1, 2023, we completed the acquisition of the City Express brand portfolio from Hoteles City Express, S.A.B.

for $ 100 million.

As a result of the transaction, we added 149 properties located in Mexico, Costa Rica, Colombia, and Chile to our franchise portfolio.

We accounted for the transaction as an asset acquisition and allocated the cost of the acquisition, including direct and incremental transaction costs, to an indefinite-lived brand asset of approximately $ 85 million and franchise contract assets, with a weighted-average term of 20 years, totaling $ 21 million.

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.

EARNINGS PER SHARE

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Other Information

No further shares are authorized for grant under the Marriott International, Inc.

Stock and Cash Incentive Plan or the Starwood Hotels & Resorts Worldwide, LLC, formerly known as Starwood Hotels & Resorts Worldwide, Inc., stock plans.

Beginning May 2023, awards are granted under the 2023 Marriott International, Inc.

Stock and Cash Incentive Plan (“2023 Plan”).

At year-end 2023, we had approximately 12 million remaining shares authorized for grant under the 2023 Plan.

At year-end 2024, we had approximately 11 million remaining shares authorized for grant under the 2023 Marriott International, Inc.

Stock and Cash Incentive Plan.

The components of our earnings before income taxes for the last three fiscal years consisted of:

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77 543 ( 155 )

$ ( 776 ) $ ( 295 ) $ ( 756 )

Unrecognized Tax Benefits

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

Related interest expense (benefit) totaled $ 6 million in 2023, $ 13 million in 2022, and $( 21 ) million in 2021.

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

We accrued interest and penalties related to our unrecognized tax benefits of approximately $ 63 million at year-end 2024 and $ 52 million at year-end 2023.

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Interest limitation 123 67

Property and equipment 15 —

Deferred tax assets 2,403 2,432

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net operating loss carry-forwards.

During 2023, our valuation allowance decreased primarily due to the release of certain non-U.S.

tax benefits ($ 223 million) as the Company concluded that it is more likely than not to recognize those tax benefits.

In addition, during 2023, our intangibles deferred tax liability decreased primarily due to intellectual property restructuring transactions, resulting in non-U.S.

tax benefits ($ 228 million).

At year-end 2024, we had approximately $ 50 million of tax credits that will expire through 2034 and $ 12 million of tax credits that do not expire.

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

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

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

The terms of guarantees to lenders generally require us to fund if cash flows from hotel operations are inadequate to cover annual debt service or to repay the loan at maturity.

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Guarantee fundings to lenders and hotel owners are generally recoverable out of future hotel cash flows and/or proceeds from the sale or refinancing of hotels.

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 (excluding contingent purchase obligations) for which we are the primary obligor at year-end 2023 in the following table:

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 year-end 2024 in the following table:

(in millions)

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In conjunction with financing obtained for specific projects or properties owned by us or entities in which we have an investment, we may provide industry standard indemnifications to the lender for loss, liability, or damage occurring as a result of the actions of the entity or our own actions.

Contingent Purchase Obligation

Sheraton Grand Chicago .

In 2017, 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”).

In the 2021 third quarter, we entered into an amendment with the owner to move the exercise period of the put option from the 2022 first half to the 2024 first half.

In January 2024, the owner exercised the put option, and we exercised our option to purchase, at the same time the put transaction closes, the fee

simple interest in the underlying land for an additional $ 200 million in cash, resulting in an expected total cash payment of approximately $ 500 million.

The closing is expected to occur in the 2024 fourth quarter.

We account for the put option as a guarantee, and our recorded liability was $ 300 million at year-end 2023 and 2022.

The liability is reflected in our Balance Sheets as “Accrued expenses and other” at year-end 2023 and as “Other noncurrent liabilities” at year-end 2022.

We concluded that the entity that owns the Sheraton Grand Chicago hotel is a variable interest entity.

We did not consolidate the entity because we do not have the power to direct the activities that most significantly impact the entity’s economic performance.

Our maximum exposure to loss related to the entity is equal to the difference between the purchase price and the fair value of the hotel at the time of closing, plus the maximum funding amount of an operating profit guarantee that we provided for the hotel.

At year-end 2023, we had various purchase commitments for goods and services in the normal course of business, primarily for programs and services for which we are reimbursed by third-party owners, totaling $ 735 million.

We expect to purchase goods and services subject to these commitments as follows:

$ 385 million in 2024, $ 202 million in 2025, $ 85 million in 2026, and $ 63 million thereafter.

Letters of Credit

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Description of Event

On November 30, 2018, we announced a data security incident involving unauthorized access to the Starwood reservations database (the “Data Security Incident”).

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 t he Starwood reservations database for business operations at the end of 2018 .

We discontinued use of the Starwood reservations database for business operations at the end of 2018.

Litigation, Claims, and Government Investigations

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

On January 18, 2024, the Fourth Circuit granted that petition, and we are preparing to file such appeal.

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.

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

Although some of these matters have been resolved or no longer appear to be active, some remain open.

We are in discussions with the Attorney General offices from 49 states and the District of Columbia and the Federal Trade Commission.

Based on the ongoing discussions, we believe it is probable that we will incur losses, and as of December 31, 2023, we have an accrual for an estimated loss contingency, which is not material to our Financial Statements.

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 regulatory investigations related to the Data Security Incident, it is not possible to reasonably estimate the amount of such losses or range of loss 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 specific allegations 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) in the case of the above described regulatory investigations, the lack of resolution with the Federal Trade Commission and the state Attorneys General.

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.

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

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We have generally not included these renewal periods in the lease term as it is not reasonably certain that we will exercise the renewal option.

The following table details the composition of lease expense for 2023, 2022, and 2021:

The following table details the composition of lease expense and supplemental cash flow information for 2024, 2023, and 2022:

(in millions) 2024 2023 2022

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Variable lease cost 122 128 90

Operating cash outflows for operating leases 154 240 191

The following table presents our future minimum lease payments at year-end 2024:

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Weighted Average Discount Rate 4.3 % 4.4 % 4.3 % 4.4 %

The following table presents supplemental cash flow information for 2023, 2022, and 2021:

(in millions) 2023 2022 2021

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash outflows for operating leases $ 240 $ 191 $ 181

Lease assets obtained in exchange for lease obligations:

Operating leases 25 75 463

LONG-TERM DEBT

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(effective interest rate of 3.3 %)

Series U Notes, interest rate of 3.1 %, face amount of $ 291 , matured February 15, 2023

(effective interest rate of 3.1 %)

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

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(effective interest rate of 4.2 %)

Series Z Notes, interest rate of 4.2 %, face amount of $ 350 , matured December 1, 2023

(effective interest rate of 4.4 %)

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 , maturing April 15, 2024

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

(effective interest rate of 3.9 %)

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(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 %)

Commercial paper 1,582 1,421

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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 September 2023, we issued $ 450 million aggregate principal amount of 5.45 percent Series LL Notes due September 15, 2026 (the “Series LL Notes”) and $ 700 million aggregate principal amount of 5.55 percent Series MM Notes due October 15, 2028 (the “Series MM Notes”).

We will pay interest on the Series LL Notes in March and September of each year, commencing in March 2024, and we will pay interest on the Series MM Notes in April and October of each year, commencing

in April 2024.

We received net proceeds of approximately $ 1.135 billion from the offering of the Series LL Notes and Series MM Notes, after deducting the underwriting discount and expenses, which were made available for general corporate purposes, including working capital, capital expenditures, acquisitions, stock repurchases, or repayment of outstanding indebtedness.

In March 2023, we issued $ 800 million aggregate principal amount of 4.90 percent Series KK Notes due April 15, 2029 (the “Series KK Notes”).

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

We received net proceeds of approximately $ 783 million from the offering of the Series KK Notes, after deducting the underwriting discount and expenses, which 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 (the “Credit Facility”).

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”).

Available borrowings under the Credit Facility support our commercial paper program and general corporate needs.

Borrowings under the Credit Facility generally bear interest at SOFR (the Secured Overnight Financing Rate) plus a spread based on our public debt rating.

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.

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The following table presents future principal payments, net of discounts, premiums, and debt issuance costs, for our debt at year-end 2024:

Debt Principal Payments (in millions)

(in millions)

Debt Principal Payments

Thereafter 6,608

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Costs incurred to obtain contracts with customers $ 2,538 $ 2,185

Contracts acquired in business combinations and other 2,426 2,173

Acquired contracts and other

Accumulated amortization ( 1,471 ) ( 1,328 )

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$ 9,488 $ 9,190

We capitalize direct costs that we incur to obtain management, franchise, and license agreements.

We amortize these costs on a straight-line basis over the initial term of the agreements, generally ranging from 15 to 30 years.

For contracts acquired in business combinations and other intangible assets, we recorded amortization expense of $ 226 million in 2023, $ 197 million in 2022, and $ 165 million in 2021 (of which $ 122 million in 2023, $ 83 million in 2022, and $ 62 million in 2021 was included in the “Reimbursed expenses” caption of our Income Statements).

We capitalize direct costs that we incur to obtain contracts with customers, which we amortize on a straight-line basis over the initial term of the agreements, generally ranging from 15 to 30 years.

For contracts acquired in business combinations and asset acquisitions, we record a definite-lived intangible asset at the acquisition date, which is amortized on a straight-line basis over the remaining life of the contract.

We capitalize costs incurred to develop internal-use software and acquire software licenses and begin amortizing these costs when the software is substantially ready for its intended use on a straight-line basis over its estimated useful life, generally ranging from two to seven years .

For acquired contracts, software, and other intangible assets, we recorded amortization expense of $ 255 million in 2024, $ 226 million in 2023, and $ 197 million in 2022 (of which $ 158 million in 2024, $ 122 million in 2023, and $ 83 million in 2022 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.

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(in millions) U.S.

International

Total Goodwill

EMEA Greater China APEC CALA Total Goodwill

Balance at year-end 2023 $ 5,333 $ 1,467 $ 999 $ 763 $ 324 $ 8,886

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Amount Fair Value

Mezzanine and other loans

Notes receivable

$ 136 $ 133 $ 138 $ 131

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Commercial paper ( 1,582 ) ( 1,582 ) ( 1,421 ) ( 1,421 )

Other long-term debt ( 56 ) ( 52 ) ( 56 ) ( 49 )

Other noncurrent liabilities ( 80 ) ( 80 ) ( 394 ) ( 394 )

Total noncurrent financial liabilities $ ( 13,001 ) $ ( 12,665 ) $ ( 11,141 ) $ ( 10,814 )

We estimate the fair value of our mezzanine and other loans by discounting cash flows using risk-adjusted rates, both of which are Level 3 inputs.

Our notes receivable include mezzanine and other loans to hotel owners, generally to facilitate the development or renovation of a hotel and sometimes to facilitate brand programs or initiatives.

We estimate the fair value of our notes receivable by discounting cash flows using risk-adjusted rates, both of which are Level 3 inputs.

We determine the fair value of our Senior Notes using quoted market prices, which are directly observable Level 1 inputs.

The carrying amount of our commercial paper borrowings approximate fair value due to their short maturity and because they bear interest at a market rate.

We estimate the fair value of our other long-term debt, excluding leases, using quoted market prices, which are directly observable Level 1 inputs.

Our other noncurrent liabilities consist of guarantees.

As we note in the

“Guarantees” caption of Note 2, we measure our liability for guarantees at fair value on a nonrecurring basis, which is when we issue or modify a guarantee using Level 3 internally developed inputs.

At year-end 2023 and year-end 2022, we determined that the carrying amounts of our guarantee liabilities approximated their fair values based on Level 3 inputs.

See the “Fair Value Measurements” caption of Note 2 for more information on the input levels we use in determining fair value.

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Balance at year-end 2021

$ ( 351 ) $ 9 $ ( 342 )

Other comprehensive (loss) income before reclassifications (1)

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Balance at year-end 2022 $ ( 740 ) $ 11 $ ( 729 )

Other comprehensive (loss) income before reclassifications (1)

( 390 ) 11 ( 379 )

Other comprehensive income (loss) before reclassifications (1)

Reclassification adjustments ( 3 ) — ( 3 )

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

Net other comprehensive income (loss)

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

Other comprehensive income (loss) before reclassifications (1)

( 437 ) 25 ( 412 )

Reclassification adjustments — ( 4 ) ( 4 )

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

(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 (losses)/gains of $( 28 ) million for 2023, $ 32 million for 2022, and $ 40 million for 2021.

(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.

BUSINESS SEGMENTS

We discuss our operations in the following two operating segments, both of which meet the applicable criteria for separate disclosure as a reportable business segment:

& Canada and (2) International.

In January 2024, we modified our segment structure as a result of a change in the way management intends to evaluate results and allocate resources within the Company.

Beginning with the 2024 first quarter, we will report the following four operating segments:

& Canada, (2) Europe, Middle East, and Africa, (3) Asia Pacific excluding China, and (4) Greater China.

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

We evaluate 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 merger-related costs.

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:

& 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 vacation ownership licensing agreements), revenues and expenses for our Loyalty Program, general, administrative, and other expenses, merger-related charges and other expenses, equity in earnings or losses, and other gains or losses that we do not allocate to our segments.

Our chief operating decision maker 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

The following table presents our revenues disaggregated by segment and major revenue stream for the last three fiscal years:

“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 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.

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 each of the last three fiscal years:

(in millions) U.S.

& Canada EMEA Greater China APEC

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

Contract investment amortization ( 76 ) ( 14 ) ( 1 ) ( 5 )

Net fee revenues 2,875 575 249 340

Owned, leased, and other revenue 437 595 27 141

Cost reimbursement revenue 15,300 1,236 306 495

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

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

Depreciation, amortization, and other 84 38 9 8

General, administrative, and other 182 110 55 64

Reimbursed expenses 15,381 1,252 319 510

Other segment items (primarily non-operating income and expenses)

( 5 ) ( 5 ) ( 1 ) ( 4 )

Total reportable segment profit $ 2,640 $ 512 $ 186 $ 280

(in millions) U.S.

& Canada International Total U.S.

& Canada International Total

EMEA Greater China APEC

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

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

Unallocated corporate and other 1,562 1,534 1,247

Total revenue $ 23,713 $ 20,773 $ 13,857

Revenues attributed to operations located outside the U.S.

were $ 5,160 million in 2023, $ 4,032 million in 2022, and $ 2,615 million in 2021, including cost reimbursement revenue outside the U.S.

of $ 2,806 million in 2023, $ 2,231 million in 2022, and $ 1,553 million in 2021.

Segment Profits

Owned, leased, and other - direct

340 481 12 116

Depreciation, amortization, and other

General, administrative, and other

154 140 55 61

Reimbursed expenses

14,399 1,168 317 409

Other segment items (primarily non-operating income and expenses)

( 5 ) ( 2 ) ( 2 ) ( 8 )

Total reportable segment profit $ 2,724 $ 441 $ 208 $ 243

(in millions) U.S.

EMEA Greater China APEC

Gross fee revenues $ 2,486 $ 455 $ 120 $ 181

Contract investment amortization ( 60 ) ( 17 ) — ( 3 )

Net fee revenues 2,426 438 120 178

Owned, leased, and other revenue 479 481 17 97

Cost reimbursement revenue 12,848 1,010 214 289

Total reportable segment revenue 15,753 1,929 351 564

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

Depreciation, amortization, and other 81 45 12 9

General, administrative, and other 135 103 50 48

Reimbursed expenses 12,714 979 210 281

Other segment items (primarily non-operating income and expenses)

( 9 ) ( 2 ) 3 ( 7 )

Total reportable segment profit $ 2,446 $ 435 $ 62 $ 134

The following table presents reconciliations of our total reportable segment revenue and profit to consolidated revenue and income before income taxes for each of the last three fiscal years:

(in millions) 2024 2023 2022

Reconciliation of revenue

Total reportable segment revenue

$ 22,576 $ 21,394 $ 18,597

International (2)

Unallocated corporate and other

2,524 2,319 2,176

Consolidated revenue

$ 25,100 $ 23,713 $ 20,773

Reconciliation of income before income taxes

Total reportable segment profit

$ 3,618 $ 3,616 $ 3,077

Unallocated corporate and other 188 297 414

Interest expense, net of interest income ( 655 ) ( 535 ) ( 377 )

Provision for income taxes ( 295 ) ( 756 ) ( 81 )

Net income $ 3,083 $ 2,358 $ 1,099

(1) Includes cost reimbursements, net of $ 57 million in 2023, $ 134 million in 2022, and $ 51 million in 2021.

(2) Includes cost reimbursements, net of $ 17 million in 2023, $ 49 million in 2022, and $ 14 million in 2021.

Consolidated income before income taxes

$ 3,151 $ 3,378 $ 3,114

Revenues attributed to operations located outside the U.S.

were $ 5,512 million in 2024, $ 5,160 million in 2023, and $ 4,032 million in 2022, including cost reimbursement revenue outside the U.S.

of $ 3,018 million in 2024, $ 2,806 million in 2023, and $ 2,231 million in 2022.

Segment profits attributed to operations located outside the U.S.

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of $( 55 ) million in 2024, $ 23 million in 2023, and $ 67 million in 2022.

Depreciation, Amortization, and Other

(in millions) 2023 2022 2021

$ 84 $ 81 $ 92

International

Unallocated corporate and other

$ 189 $ 193 $ 220

RELATED PARTY TRANSACTIONS

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Reimbursed expenses ( 135 ) ( 126 ) ( 104 )

Equity in earnings (losses) 9 18 ( 24 )

Equity in earnings 8 9 18

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

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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”

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