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Item 1. Financial Statements

2025-05-06 compared with 2024-11-04 · 147 added, 200 removed, 251 unchanged (58% of the section changed)

3 unchanged sentences

(in millions, except per share amounts)

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Three Months Ended

March 31, 2025 March 31, 2024

Base management fees $ 325 $ 313

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Cost reimbursement revenue 4,655 4,433

6,255 5,928 18,671 17,618

OPERATING COSTS AND EXPENSES

Owned, leased, and other - direct

300 293 882 861

Depreciation, amortization, and other 51 45

2 unchanged sentences

Reimbursed expenses 4,722 4,501

5,311 4,829 15,656 14,472

OPERATING INCOME 948 876

Gains and other income, net 7 28 15 33

(Losses) gains and other income, net ( 2 ) 4

Interest expense ( 192 ) ( 163 )

11 unchanged sentences

(in millions)

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Three Months Ended

March 31, 2025 March 31, 2024

Net income $ 665 $ 564

8 unchanged sentences

(in millions)

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Current assets

39 unchanged sentences

(in millions)

Nine Months Ended

September 30, 2024 September 30, 2023

Three Months Ended

March 31, 2025 March 31, 2024

OPERATING ACTIVITIES

1 unchanged sentence

Adjustments to reconcile to cash provided by operating activities:

Depreciation, amortization, and other 213 204

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

Stock-based compensation 52 53

7 unchanged sentences

Capital and technology expenditures ( 135 ) ( 109 )

Asset acquisition — ( 102 )

Dispositions — 1

1 unchanged sentence

Loan collections 5 8

Other ( 1 ) 6

Net cash used in investing activities ( 143 ) ( 95 )

7 unchanged sentences

Stock-based compensation withholding taxes ( 109 ) ( 121 )

Other — ( 25 )

Net cash used in financing activities ( 383 ) ( 602 )

2 unchanged sentences

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

(1) The 2024 amounts include beginning restricted cash of $ 28 million at December 31, 2023, and ending restricted cash of $ 22 million at September 30, 2024, which we present in the “Prepaid expenses and other” and “Other noncurrent assets” captions of our Balance Sheets.

(1) The 2025 amounts include beginning restricted cash of $ 29 million at December 31, 2024, and ending restricted cash of $ 23 million at March 31, 2025, which we present in the “Prepaid expenses and other” and “Other noncurrent assets” captions of our Balance Sheets.

(2) The 2024 first quarter reflects the reclassification of $ 48 million of depreciation and amortization classified in reimbursed expenses from the “Other” caption within operating activities to the “Depreciation, amortization, and other” caption of our Statements of Cash Flows to conform to our current presentation.

See Notes to Condensed Consolidated Financial Statements.

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The condensed 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 Condensed Consolidated Financial Statements as our “Financial Statements,” (2) our Condensed Consolidated Statements of Income as our “Income Statements,” (3) our Condensed Consolidated Balance Sheets as our “Balance Sheets,” (4) our Condensed Consolidated Statements of Cash Flows as our “Statements of Cash Flows,” (5) our properties, brands, or markets in the United States and Canada as “U.S.

& Canada,” and (6) our properties, brands, or markets in our Caribbean & Latin America, Europe, Middle East & Africa, Greater China, and Asia Pacific excluding China regions, as “International.” In addition, references throughout to numbered “Notes” refer to these Notes to Condensed 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 Condensed Consolidated Financial Statements, unless otherwise stated.

In addition, we use the term “hotel owners” throughout this report to refer, collectively, to owners of hotels and other lodging offerings operating in our system pursuant to management agreements, franchise agreements, license agreements or similar arrangements, and we use the term “hotels in our system” to refer to hotels and other lodging offerings operating in our system pursuant to such arrangements, as well as hotels that we own or lease.

The terms “hotel owners” and “hotels in our system” exclude Homes & Villas by Marriott Bonvoy ® (which we also exclude from our property and room count), timeshare, residential, and The Ritz-Carlton Yacht Collection ® .

These Financial Statements have not been audited.

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Accordingly, ultimate results could differ from those estimates.

The accompanying Financial Statements reflect all normal and recurring adjustments necessary to present fairly our financial position as of September 30, 2024 and December 31, 2023, the results of our operations for the three and nine months ended September 30, 2024 and September 30, 2023, and cash flows for the nine months ended September 30, 2024 and September 30, 2023.

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

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

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

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.

We may also pay earn-out payments to the seller up to $ 110 million, based on the future growth of the brand over a specified, multi-year timeframe.

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

As of April 28, 2025, citizenM’s portfolio included 36 open select-service hotels ( 8,544 rooms) located around the world.

Upon closing of the transaction, which is subject to regulatory approval and other customary closing conditions, the citizenM portfolio will become part of our system, with the hotels owned and leased by the seller subject to new long-term franchise agreements with us.

We expect the transaction to close later in 2025.

EARNINGS PER SHARE

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

Three Months Ended Nine Months Ended

(in millions, except per share amounts) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Three Months Ended

(in millions, except per share amounts) March 31, 2025 March 31, 2024

Computation of Basic Earnings Per Share

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STOCK-BASED COMPENSATION

We granted 0.8 million restricted stock units (“RSUs”) during the 2024 first three quarters to certain officers and employees, and those units vest generally over four years in equal annual installments commencing one year after the grant date.

We also granted 0.1 million performance-based RSUs (“PSUs”) in the 2024 first three quarters to certain executives, which are earned subject to continued employment and the satisfaction of certain performance and market conditions based on the degree of achievement of pre-established targets for 2026 adjusted EBITDA performance and relative total stockholder return over the 2024 to 2026 performance period.

RSUs, including PSUs, granted in the 2024 first three quarters had a weighted average grant-date fair value of $ 226 per unit.

We recorded stock-based compensation expense for RSUs and PSUs of $ 54 million in the 2024 third quarter, $ 47 million in the 2023 third quarter, $ 148 million in the 2024 first three quarters, and $ 129 million in the 2023 first three quarters.

Deferred compensation costs for unvested awards for RSUs and PSUs totaled $ 224 million at September 30, 2024 and $ 171 million at December 31, 2023.

Our effective tax rate increased to 25.7 percent for the 2024 third quarter compared to 23.9 percent for the 2023 third quarter, primarily due to a shift in earnings to jurisdictions with higher tax rates.

Our effective tax rate increased to 24.8 percent for the 2024 first three quarters compared to 20.1 percent for the 2023 first three quarters, primarily due to the prior year release of tax reserves and a shift in earnings to jurisdictions with higher tax rates.

We paid cash for income taxes, net of refunds, of $ 729 million in the 2024 first three quarters and $ 669 million in the 2023 first three quarters.

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

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

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

We recorded stock-based compensation expense for RSUs and PSUs of $ 43 million in the 2025 first quarter and $ 45 million in the 2024 first quarter.

Deferred compensation costs for unvested awards for RSUs and PSUs totaled $ 320 million at March 31, 2025 and $ 173 million at December 31, 2024.

Our effective tax rate decreased to 13.0 percent for the 2025 first quarter compared to 22.4 percent for the 2024 first quarter, primarily due to the current year release of tax reserves.

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

Our unrecognized tax benefit balance included $ 103 million at March 31, 2025 and $ 171 million at December 31, 2024 of tax positions that, if recognized, would impact our effective tax rate.

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

The actual amount of any change to our unrecognized tax benefits could vary depending on the timing and nature of the settlement.

Therefore, an estimate of the change cannot be provided.

We paid cash for income taxes, net of refunds, of $ 73 million in the 2025 first quarter and $ 58 million in the 2024 first quarter.

COMMITMENTS AND CONTINGENCIES

We present the maximum potential amount of our future guarantee fundings and the carrying amount of our liability for our debt service, operating profit, and other guarantees (excluding contingent purchase obligations) for which we are the primary obligor at September 30, 2024 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 March 31, 2025 in the following table:

(in millions)

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Our maximum potential guarantees listed in the preceding table include $ 60 million of operating profit guarantees that will not be in effect until the underlying properties open and we begin to operate the properties or certain other events occur.

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 (reflected in the “Accrued expenses and other” caption of our Balance Sheets) was $ 300 million at September 30, 2024 and December 31, 2023.

Starwood Data Security Incident

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.

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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.

We continue our efforts to appeal the District Court’s decision to certify a class of U.S.

consumers, and we are awaiting a decision from the U.S.

Court of Appeals for the Fourth Circuit.

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

1 unchanged sentence

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 October 2024, we reached final resolutions with the Federal Trade Commission and the Attorney General offices from 49 states and the District of Columbia (the “AG Offices”).

Among other terms, the resolution with the AG Offices includes a $ 52 million monetary payment, which we have fully accrued for as of September 30, 2024, 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 MDL proceedings or further regulatory investigations related to the Data Security Incident, it is not possible to reasonably estimate the amount of such losses or range of loss in excess of the amounts recorded that might result from adverse judgments, settlements, fines, penalties or other resolution of these proceedings and investigations based on:

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

Other Legal Proceedings

During the 2024 third quarter, 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.

As of May 2025, we have resolved most of the claims brought against the Company regarding the use of copyrighted music.

The amounts recorded for the completed settlements to date are not material to our Financial Statements, and we do not expect any remaining claims or resolutions to have a material impact on the Company’s financial position or operations.

LONG-TERM DEBT

We provide detail on our long-term debt balances, net of discounts, premiums, and debt issuance costs, in the following table as of September 30, 2024 and year-end 2023:

(in millions) September 30, 2024 December 31, 2023

We provide detail on our long-term debt balances, net of discounts, premiums, and debt issuance costs, in the following table as of March 31, 2025 and year-end 2024:

($ in millions)

Interest Rate Effective Interest Rate Face Amount

Balance as of March 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, maturing October 1, 2025

3.8 % 4.0 % $ 350 $ 350 $ 349

Series R Notes, maturing June 15, 2026

3.1 % 3.3 % 750 749 749

Series V Notes, matured March 15, 2025

3.8 % 2.8 % 318 — 319

Series W Notes, maturing October 1, 2034

4.5 % 4.1 % 278 287 287

Series X Notes, maturing April 15, 2028

4.0 % 4.2 % 450 448 447

Series AA Notes, maturing December 1, 2028

4.7 % 4.8 % 300 299 298

Series EE Notes, matured May 1, 2025

5.8 % 6.0 % 600 600 599

Series FF Notes, maturing June 15, 2030

4.6 % 4.8 % 1,000 991 991

Series GG Notes, maturing October 15, 2032

3.5 % 3.7 % 1,000 989 989

Series HH Notes, maturing April 15, 2031

2.9 % 3.0 % 1,100 1,093 1,093

Series II Notes, maturing October 15, 2033

2.8 % 2.8 % 700 695 695

Series JJ Notes, maturing October 15, 2027

5.0 % 5.4 % 1,000 991 990

Series KK Notes, maturing April 15, 2029

4.9 % 5.3 % 800 788 788

Series LL Notes, maturing September 15, 2026

5.5 % 5.9 % 450 447 447

Series MM Notes, maturing October 15, 2028

5.6 % 5.9 % 700 693 693

Series NN Notes, maturing May 15, 2029

4.9 % 5.3 % 500 492 491

Series OO Notes, maturing May 15, 2034

5.3 % 5.6 % 1,000 980 980

Series PP Notes, maturing March 15, 2030

4.8 % 5.0 % 500 495 495

Series QQ Notes, maturing March 15, 2035

5.4 % 5.5 % 1,000 986 986

Series RR Notes, maturing April 15, 2032

5.1 % 5.4 % 500 492 —

Series SS Notes, maturing April 15, 2037

5.5 % 5.7 % 1,500 1,474 —

Commercial paper 578 1,582

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$ 14,103 $ 13,138

We paid cash for interest, net of amounts capitalized, of $ 350 million in the 2024 first three quarters and $ 266 million in the 2023 first three quarters.

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 paid cash for interest, net of amounts capitalized, of $ 87 million in the 2025 first quarter and $ 48 million in the 2024 first quarter.

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,

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

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

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 estimated expenses, and were made available for general corporate purposes, including working capital, capital expenditures, acquisitions, stock repurchases, or repayment of outstanding indebtedness.

FAIR VALUE OF FINANCIAL INSTRUMENTS

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

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

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ACCUMULATED OTHER COMPREHENSIVE LOSS AND STOCKHOLDERS’ DEFICIT

The following tables detail the accumulated other comprehensive loss activity for the 2024 first three quarters and 2023 first three quarters:

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

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

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

Other comprehensive loss before reclassifications

Other comprehensive income (loss) before reclassifications (1)

112 ( 9 ) 103

Reclassification adjustments — ( 2 ) ( 2 )

Net other comprehensive loss

Net other comprehensive income (loss)

112 ( 11 ) 101

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

Balance at March 31, 2025 $ ( 979 ) $ 17 $ ( 962 )

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

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

$ ( 740 ) $ 11 $ ( 729 )

Other comprehensive (loss) income before reclassifications (1)

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( 157 ) 10 ( 147 )

Balance at September 30, 2023 $ ( 872 ) $ 23 $ ( 849 )

The following tables detail the changes in common shares outstanding and stockholders’ deficit for the 2024 first three quarters and 2023 first three quarters:

Balance at March 31, 2024 $ ( 811 ) $ 17 $ ( 794 )

(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 of $ 19 million for the 2025 first quarter and gains of $ 12 million for the 2024 first quarter.

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

(in millions, except per share amounts)

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— Net income 665 — — 665 — —

— Other comprehensive loss ( 147 ) — — — — ( 147 )

— Dividends ($ 0.52 per share)

( 151 ) — — ( 151 ) — —

1.3 Stock-based compensation plans ( 36 ) — ( 73 ) — 37 —

( 4.8 ) Purchase of treasury stock ( 1,164 ) — — — ( 1,164 ) —

287.0 Balance at March 31, 2024

$ ( 1,616 ) $ 5 $ 5,978 $ 15,251 $ ( 22,056 ) $ ( 794 )

— Net income 772 — — 772 — —

— Other comprehensive loss ( 111 ) — — — — ( 111 )

— Dividends ($ 0.63 per share)

( 179 ) — — ( 179 ) — —

— Stock-based compensation plans 53 — 52 — 1 —

( 4.1 ) Purchase of treasury stock ( 1,010 ) — — — ( 1,010 ) —

282.9 Balance at June 30, 2024

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

— Net income 584 — — 584 — —

— Other comprehensive income 101 — — — — 101

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( 2.8 ) Purchase of treasury stock ( 755 ) — — — ( 755 ) —

278.6 Balance at September 30, 2024

275.0 Balance at March 31, 2025

$ ( 3,168 ) $ 5 $ 6,135 $ 17,022 $ ( 25,368 ) $ ( 962 )

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— Net income 564 — — 564 — —

— Other comprehensive income 82 — — — — 82

— Dividends ($ 0.40 per share)

( 124 ) — — ( 124 ) — —

0.9 Stock-based compensation plans ( 34 ) — ( 59 ) — 25 —

( 6.8 ) Purchase of treasury stock ( 1,109 ) — — — ( 1,109 ) —

304.7 Balance at March 31, 2023

$ 140 $ 5 $ 5,906 $ 12,975 $ ( 18,099 ) $ ( 647 )

— Net income 726 — — 726 — —

— Other comprehensive loss ( 147 ) — — — — ( 147 )

3 unchanged sentences

( 4.8 ) Purchase of treasury stock ( 1,164 ) — — — ( 1,164 ) —

299.6 Balance at June 30, 2023

$ ( 224 ) $ 5 $ 5,952 $ 13,544 $ ( 19,009 ) $ ( 716 )

— Net income 752 — — 752 — —

— Other comprehensive loss ( 133 ) — — — — ( 133 )

— Dividends ($ 0.52 per share)

( 154 ) — — ( 154 ) — —

0.4 Stock-based compensation plans 56 — 44 — 12 —

( 4.8 ) Purchase of treasury stock ( 958 ) — — — ( 958 ) —

295.2 Balance at September 30, 2023

287.0 Balance at March 31, 2024

$ ( 1,616 ) $ 5 $ 5,978 $ 15,251 $ ( 22,056 ) $ ( 794 )

CONTRACTS WITH CUSTOMERS

Our current and noncurrent liability for guest loyalty program increased by $ 365 million, to $ 7,371 million at September 30, 2024, from $ 7,006 million at December 31, 2023, primarily reflecting an increase in points earned by members.

The increase was partially offset by $ 2,410 million of revenue recognized in the 2024 first three quarters, that was deferred as of December 31, 2023.

Our allowance for credit losses was $ 207 million at September 30, 2024 and $ 197 million at December 31, 2023.

Our current and noncurrent liability for guest loyalty program increased by $ 183 million, to $ 7,702 million at March 31, 2025, from $ 7,519 million at December 31, 2024, primarily reflecting points earned by members.

The increase was partially offset by $ 843 million of revenue recognized in the 2025 first quarter, that was deferred as of December 31, 2024.

Our allowance for credit losses was $ 207 million at March 31, 2025 and $ 199 million at December 31, 2024.

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.

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 certain restructuring and merger-related charges.

Our President and Chief Executive Officer, who is our “chief operating decision maker” (“CODM”), evaluates the performance of our operating segments using “segment profits,” which is based largely on the results of the segment without allocating corporate expenses, income taxes, indirect general, administrative, and other expenses, or restructuring and merger-related 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, certain restructuring and merger-related charges, equity in earnings or losses, and other gains or losses that we do not allocate to our segments, as well as results of our CALA operating segment.

“Unallocated corporate and other” includes a portion of our revenues (such as fees we receive from our credit card programs and timeshare licensing agreements), revenues and expenses for our Loyalty Program, general, administrative, and other expenses, restructuring and merger-related 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

The following tables present our revenues disaggregated by segment and major revenue stream for the 2024 third quarter, 2023 third quarter, 2024 first three quarters, and 2023 first three quarters:

Three Months Ended September 30, 2024

Segment Revenues, Expenses, and Profits

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

Three Months Ended March 31, 2025

(in millions) U.S.

7 unchanged sentences

Total reportable segment revenue 4,698 514 136 263

Unallocated corporate and other

Total revenues

Three Months Ended September 30, 2023

(in millions) U.S.

& Canada EMEA Greater China APEC Total

Gross fee revenues $ 690 $ 143 $ 71 $ 69 $ 973

Contract investment amortization ( 16 ) ( 4 ) — ( 1 ) ( 21 )

Net fee revenues 674 139 71 68 952

Owned, leased, and other revenue 94 155 6 28 283

Cost reimbursement revenue 3,565 309 83 103 4,060

Total reportable segment revenue $ 4,333 $ 603 $ 160 $ 199 $ 5,295

Unallocated corporate and other

Total revenues

Nine Months Ended September 30, 2024

Owned, leased, and other - direct

Depreciation, amortization, and other 27 10 2 2

General, administrative, and other 44 32 15 17

Reimbursed expenses 3,888 288 70 133

Other segment items (primarily non-operating income and expenses) ( 1 ) 2 ( 1 ) 2

Total reportable segment profit $ 644 $ 74 $ 45 $ 80

Three Months Ended March 31, 2024

(in millions) U.S.

& Canada EMEA Greater China APEC Total

& Canada EMEA Greater China APEC

Gross fee revenues $ 682 $ 118 $ 65 $ 87

4 unchanged sentences

Total reportable segment revenue 4,490 511 148 234

Unallocated corporate and other

Total revenues

Nine Months Ended September 30, 2023

(in millions) U.S.

& Canada EMEA Greater China APEC Total

Gross fee revenues $ 2,113 $ 381 $ 196 $ 199 $ 2,889

Contract investment amortization ( 49 ) ( 10 ) — ( 3 ) ( 62 )

Net fee revenues 2,064 371 196 196 2,827

Owned, leased, and other revenue 327 419 15 95 856

Cost reimbursement revenue 10,722 872 234 300 12,128

Owned, leased, and other - direct

Depreciation, amortization, and other 20 10 2 2

General, administrative, and other 44 27 13 15

Reimbursed expenses 3,722 280 79 119

Other segment items (primarily non-operating income and expenses) ( 1 ) 2 ( 1 ) ( 3 )

Total reportable segment profit $ 625 $ 81 $ 51 $ 72

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

Three Months Ended

(in millions) March 31, 2025 March 31, 2024

Reconciliation of revenue

Total reportable segment revenue

Unallocated corporate and other

Total revenues

Segment Profits

Three Months Ended Nine Months Ended

(in millions) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

& Canada $ 617 $ 707 $ 2,029 $ 2,120

EMEA 152 144 386 354

Greater China 46 60 144 165

APEC 66 58 200 171

$ 5,611 $ 5,383

Unallocated corporate and other

Consolidated revenue

$ 6,263 $ 5,977

Reconciliation of income before income taxes

Total reportable segment profit

Unallocated corporate and other 104 51

Interest expense, net of interest income ( 183 ) ( 153 )

Provision for income taxes ( 202 ) ( 237 ) ( 633 ) ( 562 )

Net income $ 584 $ 752 $ 1,920 $ 2,235

RESTRUCTURING CHARGES

Earlier this year, we launched a comprehensive initiative to enhance our effectiveness and efficiency across the Company.

In connection with these efforts, in the 2024 third quarter, we recorded an immaterial amount of charges for voluntary retirement benefits relating to our above-property organization in the “Restructuring and merger-related charges” and “Reimbursed expenses” captions of our Income Statements.

We anticipate total charges of approximately $ 100 million for employee termination benefits relating to our above-property organization.

We expect to substantially complete this initiative by the end of the 2025 first quarter and expect the above-described charges to be recorded primarily in the 2024 fourth quarter.

Consolidated income before income taxes

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

What changed 10-Q

Item 1. Financial Statements