What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-06 compared with 2024-11-04 · 91 added, 167 removed, 169 unchanged (60% of the section changed)

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our expectations regarding certain claims, legal proceedings, settlements or resolutions;

our comprehensive initiative to enhance our effectiveness and efficiency across the Company, including related plans and goals, anticipated charges and cost reductions, and other expected or potential benefits and outcomes;

our expectations regarding our acquisition of the citizenM brand and the addition of the citizenM hotels to our system;

and other statements that are preceded by, followed by, or include the words “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “foresees,” or similar expressions;

and similar statements concerning anticipated future events and expectations that are not historical facts.

We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including the risks and uncertainties we describe in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“2023 Form 10-K”), Part II, Item 1A of this report, and other factors we describe from time to time in our periodic filings with the SEC.

uncertainty resulting from economic, political or other global, national, and regional conditions and events, including related to tariffs, trade, travel and other policies;

the risks and uncertainties we describe in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (“2024 Form 10-K”);

Part II, Item 1A of this report;

and other factors we describe from time to time in our periodic filings with the SEC.

BUSINESS AND OVERVIEW

We are a worldwide operator, franchisor, and licensor of hotel, residential, timeshare, and other lodging properties under more than 30 brand names.

Under our asset-light business model, we typically manage or franchise

hotels, rather than own them .

We discuss our operations in the following 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 criteria for separate disclosure as a reportable business segment, and as such, we include its results in “Unallocated corporate and other.”

Terms of our management agreements vary, but our management fees generally consist of base management fees and incentive management fees.

Base management fees are typically calculated as a percentage of property-level revenue.

Incentive management fees are typically calculated as a percentage of a hotel profitability measure, and, in many cases (particularly in our U.S.

& Canada, Europe, and CALA regions), are subject to a specified owner return.

Under our franchise and license agreements for most properties, franchise fees are calculated as a percentage of property-level revenue or a portion thereof.

Additionally, we earn franchise fees for the use of our intellectual property, including primarily co-branded credit card fees, as well as timeshare and yacht fees, residential branding fees, franchise application and relicensing fees, and certain other non-hotel licensing fees.

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.”

Under our asset-light business model, we typically manage or franchise hotels and other lodging offerings, rather than own them.

Terms of our management agreements vary, but we earn a management fee that is typically composed of a base management fee, which is a percentage of the revenues of the hotel, and an incentive management fee, which is based on the profits of the hotel.

In many cases (particularly in our U.S.

& Canada, Europe, and CALA regions), incentive management fees are subject to a specified owner return.

Under our hotel franchising arrangements, we generally receive an initial application fee and continuing royalty fees, which are typically based on a percentage of room revenues, plus for certain brands, a percentage of food and beverage revenues.

We also have license and other agreements with third parties for certain offerings, such as for our timeshare properties, MGM Collection with Marriott Bonvoy, Design Hotels, and The Ritz-Carlton Yacht Collection, under which we receive royalty fees and certain other fees.

Additionally, we earn fees for other uses of our intellectual property, including primarily co-branded credit card fees, as well as residential branding fees and certain other licensing fees.

Performance Measures

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ADR, which we calculate by dividing property level room revenue by total rooms sold, measures average room price and is useful in assessing pricing levels.

RevPAR, occupancy, and ADR statistics are on a systemwide basis for comparable properties, unless otherwise stated.

Unless otherwise stated, all changes refer to year-over-year changes for the comparable period.

Unless otherwise stated, RevPAR, occupancy, and ADR statistics are on a systemwide basis for comparable properties, and all changes refer to year-over-year changes for the comparable period.

Comparisons to prior periods are on a constant U.S.

dollar basis, which we calculate by applying exchange rates for the current period to the prior comparable period.

We believe constant dollar analysis provides valuable information regarding our properties’ performance as it removes currency fluctuations from the presentation of such results.

We define our comparable properties as our properties that were open and operating under one of our hotel brands since the beginning of the last full calendar year (since January 1, 2023 for the current period) and have not, in either the current or previous year:

We believe constant dollar analysis provides valuable information regarding the performance of hotels in our system as it removes currency fluctuations from the presentation of such results.

We define our comparable properties as hotels in our system that were open and operating under one of our brands since the beginning of the last full calendar year (since January 1, 2024 for the current period) and have not, in either the current or previous year:

(1) undergone significant room or public space renovations or expansions, (2) been converted between company-operated and franchised, or (3) sustained substantial property damage or business interruption.

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Business Trends

We saw solid global RevPAR growth during the 2024 third quarter and 2024 first three quarters compared to the same periods in 2023.

For the 2024 third quarter, worldwide RevPAR increased 3.0 percent, reflecting ADR growth of 2.5 percent and occupancy improvement of 0.3 percentage points.

For the 2024 first three quarters, worldwide RevPAR increased 4.0 percent, reflecting ADR growth of 2.7 percent and occupancy improvement of 0.9 percentage points.

The increase in RevPAR in the 2024 third quarter and 2024 first three quarters was primarily driven by strong year-over-year demand growth in nearly all of our regions.

& Canada, where demand has normalized, RevPAR increased 2.6 percent in the 2024 first three quarters, led by strong group business.

In EMEA, RevPAR growth of 9.4 percent in the 2024 first three quarters was driven by strong demand across the region, strengthened by the 2024 Paris Olympics and other special events.

In APEC, RevPAR increased 13.3 percent in the 2024 first three quarters, driven by strong growth in ADR and occupancy, including an increase in inbound demand into the region.

In CALA, RevPAR increased 9.3 percent in the 2024 first three quarters, driven by strong demand throughout the region.

In Greater China, RevPAR declined 2.7 percent in the 2024 first three

quarters and 7.9 percent in the 2024 third quarter due to lower domestic demand as a result of macro-economic conditions, severe weather, and an increase in outbound travel.

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

At this point in the process, we expect this initiative to yield $80 million to $90 million of annual general and administrative cost reductions beginning in 2025.

These efforts are also anticipated to deliver cost savings to our owners and franchisees.

As part of these efforts, we implemented a voluntary retirement program for certain above-property associates in the 2024 third quarter, and we also expect that some above-property roles in the organization will be eliminated or redefined going forward.

We anticipate charges for employee termination benefits related to the above efforts primarily in the 2024 fourth quarter and expect to substantially complete this initiative by the end of the 2025 first quarter.

We saw solid global RevPAR growth during the 2025 first quarter compared to the same period in 2024.

For the 2025 first quarter, worldwide RevPAR increased 4.1 percent, reflecting ADR growth of 2.9 percent and occupancy improvement of 0.7 percentage points.

The increase in RevPAR in the 2025 first quarter was primarily driven by year-over-year demand growth in nearly all of our regions.

& Canada, RevPAR increased 3.3 percent in the 2025 first quarter, led by strong demand from our group customer segment.

In our International regions, RevPAR grew 5.9 percent in the 2025 first quarter, reflecting higher demand in APEC with RevPAR growth of 10.9 percent, EMEA with RevPAR growth of 5.9 percent, and CALA with RevPAR growth of 7.2 percent.

In Greater China, RevPAR decreased 1.6 percent in the 2025 first quarter driven by a decrease in ADR of 2.7 percent, reflecting lower domestic demand as a result of macro-economic conditions.

In the U.S., we saw some softening of demand in certain customer segments in March, primarily in government business.

We continue to monitor macro-economic conditions and impact on lodging demand.

Starwood Data Security Incident

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however, we do not believe this incident will impact our long-term financial health.

See Note 5 for additional information related to legal proceedings and governmental investigations related to the Data Security Incident.

See Note 6 for additional information related to legal proceedings and investigations related to the Data Security Incident.

System Growth and Pipeline

At the end of the 2024 third quarter, our system had 9,068 properties (1,674,600 rooms), compared to 8,785 properties (1,597,380 rooms) at year-end 2023 and 8,675 properties (1,581,002 rooms) at the end of the 2023 third quarter.

In the 2024 first three quarters, we added over 77,200 net rooms, including the addition of approximately 37,000 rooms from our exclusive, long-term strategic licensing agreement with MGM Resorts International.

At the end of the 2024 third quarter, we had approximately 3,800 hotels and 585,000 rooms in our development pipeline, which includes roughly 34,000 rooms approved for development but not yet under signed contracts.

More than 220,000 rooms in the pipeline, or 38 percent, including rooms from our long-term licensing agreement with Sonder Holdings Inc.

that we announced in August 2024, were under construction at the end of the 2024 third quarter.

Fifty-six percent of the rooms in our development pipeline are located outside U.S.

We currently expect full year 2024 net rooms growth to be around 6.5 percent.

At the end of the 2025 first quarter, our system had 9,463 properties (1,718,542 rooms), compared to 9,361 properties (1,706,331 rooms) at year-end 2024 and 8,861 properties (1,643,172 rooms) at the end of the 2024 first quarter.

In the 2025 first quarter, we added roughly 12,200 net rooms.

At the end of the 2025 first quarter, we had approximately 3,800 properties and over 587,000 rooms in our development pipeline, which included over 27,000 rooms approved for development but not yet under signed

Our development pipeline included nearly 244,000 rooms, or 42 percent, that were under construction or in the process of converting to our system at the end of the 2025 first quarter.

Over half of the rooms in our quarter-end development pipeline are located outside U.S.

We currently expect full year 2025 net rooms growth to approach 5 percent, including the rooms associated with the citizenM brand acquisition discussed in Note 2.

Properties and Rooms

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Properties Rooms

September 30, 2024 September 30, 2023 vs.

September 30, 2023 September 30, 2024 September 30, 2023 vs.

September 30, 2023

March 31, 2025 March 31, 2024 vs.

March 31, 2024 March 31, 2025 March 31, 2024 vs.

March 31, 2024

1,981 1,969 12 1 % 567,896 566,944 952 — %

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9,463 8,861 602 7 % 1,718,542 1,643,172 75,370 5 %

(1) In addition to franchised, includes timeshare, The Ritz-Carlton Yacht Collection, and certain license and other agreements.

(1) In addition to franchised, includes our timeshare properties, MGM Collection with Marriott Bonvoy, Design Hotels, and The Ritz-Carlton Yacht Collection.

Lodging Statistics

The following tables present RevPAR, occupancy, and ADR statistics for comparable properties.

The following table presents RevPAR, occupancy, and ADR statistics for comparable properties.

Systemwide statistics include data from our franchised properties, in addition to our company-operated properties.

Three Months Ended September 30, 2024 and Change vs.

Three Months Ended September 30, 2023

RevPAR Occupancy Average Daily Rate

2023 2024 vs.

Comparable Company-Operated Properties

& Canada $ 174.62 3.1 % 71.1 % 0.3 % pts.

$ 245.46 2.7 %

Europe $ 265.98 9.2 % 77.7 % 0.3 % pts.

$ 342.42 8.9 %

Middle East & Africa $ 98.15 7.2 % 64.9 % 1.5 % pts.

$ 151.29 4.7 %

Greater China $ 84.71 (8.4) % 71.1 % 0.2 % pts.

$ 119.09 (8.6) %

Asia Pacific excluding China

$ 115.85 8.9 % 72.8 % 2.7 % pts.

$ 159.05 4.8 %

Caribbean & Latin America

$ 140.89 9.0 % 63.0 % 1.6 % pts.

$ 223.53 6.2 %

International - All (1)

$ 120.81 3.7 % 70.7 % 1.2 % pts.

$ 170.92 2.0 %

Worldwide (2)

$ 143.66 3.4 % 70.9 % 0.8 % pts.

$ 202.69 2.2 %

Comparable Systemwide Properties

& Canada $ 136.15 2.1 % 73.0 % (0.2) % pts.

$ 186.48 2.3 %

Europe $ 191.93 9.5 % 77.3 % 2.7 % pts.

$ 248.42 5.8 %

Middle East & Africa $ 94.30 8.0 % 65.0 % 1.4 % pts.

$ 145.04 5.7 %

Greater China $ 78.83 (7.9) % 69.9 % (0.2) % pts.

$ 112.78 (7.7) %

Asia Pacific excluding China

$ 119.48 9.2 % 73.0 % 3.1 % pts.

$ 163.77 4.6 %

Caribbean & Latin America

$ 123.06 6.7 % 61.8 % (0.1) % pts.

$ 199.09 6.8 %

International - All (1)

$ 122.24 5.4 % 70.7 % 1.5 % pts.

$ 172.88 3.2 %

Worldwide (2)

$ 131.72 3.0 % 72.3 % 0.3 % pts.

$ 182.24 2.5 %

Nine Months Ended September 30, 2024 and Change vs.

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2025 and Change vs.

Three Months Ended March 31, 2024

RevPAR Occupancy Average Daily Rate

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$ 120.13 (3.1) %

Asia Pacific excluding China

$ 117.01 12.9 % 71.9 % 4.3 % pts.

Asia Pacific excluding China $ 133.23 10.6 % 71.3 % 1.7 % pts.

$ 186.86 8.0 %

Caribbean & Latin America

$ 177.61 8.4 % 65.9 % 2.5 % pts.

Caribbean & Latin America $ 244.14 10.8 % 70.0 % 2.0 % pts.

$ 348.58 7.6 %

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$ 112.70 (2.7) %

Asia Pacific excluding China

$ 119.35 13.3 % 71.8 % 4.4 % pts.

Asia Pacific excluding China $ 132.36 10.9 % 71.5 % 2.0 % pts.

$ 185.08 7.7 %

Caribbean & Latin America

$ 152.15 9.3 % 66.0 % 2.4 % pts.

Caribbean & Latin America $ 150.67 7.2 % 64.8 % (0.2) % pts.

$ 232.62 7.5 %

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CONSOLIDATED RESULTS

The discussion below presents an analysis of our consolidated results of operations for the 2024 third quarter compared to the 2023 third quarter and for the 2024 first three quarters compared to the 2023 first three quarters.

The discussion below presents an analysis of our consolidated results of operations for the 2025 first quarter compared to the 2024 first quarter.

Also see the “Business Trends” section above for further discussion.

Three Months Ended Nine Months Ended

Three Months Ended

($ in millions)

September 30, 2024 September 30, 2023 Change 2024 vs.

2023 September 30, 2024 September 30, 2023 Change 2024 vs.

March 31, 2025 March 31, 2024 Change 2025 vs.

Base management fees $ 325 $ 313 $ 12 4 %

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Net fee revenues $ 1,247 $ 1,187 $ 60 5 %

The increase in base management fees in the 2024 third quarter and 2024 first three quarters primarily reflected higher RevPAR.

The increase in franchise fees in the 2024 third quarter and 2024 first three quarters primarily reflected unit growth ($26 million and $74 million, respectively), higher RevPAR, higher co-branded credit card fees ($10 million and $38 million, respectively), and higher residential branding fees ($12 million and $22 million, respectively).

The increase in incentive management fees in the 2024 third quarter and 2024 first three quarters primarily reflected higher profits at managed hotels.

The increase in base management fees in the 2025 first quarter primarily reflected higher RevPAR.

The increase in franchise fees in the 2025 first quarter primarily reflected higher RevPAR as well as unit growth ($18 million).

Owned, Leased, and Other

Three Months Ended Nine Months Ended

Three Months Ended

($ in millions)

September 30, 2024 September 30, 2023 Change 2024 vs.

2023 September 30, 2024 September 30, 2023 Change 2024 vs.

March 31, 2025 March 31, 2024 Change 2025 vs.

Owned, leased, and other revenue $ 361 $ 357 $ 4 1 %

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Cost Reimbursements

Three Months Ended Nine Months Ended

Three Months Ended

($ in millions)

September 30, 2024 September 30, 2023 Change 2024 vs.

2023 September 30, 2024 September 30, 2023 Change 2024 vs.

March 31, 2025 March 31, 2024 Change 2025 vs.

Cost reimbursement revenue $ 4,655 $ 4,433 $ 222 5 %

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Cost reimbursements, net $ (67) $ (68) $ 1 1 %

Cost reimbursements, net (cost reimbursement revenue, net of reimbursed expenses) varies due to timing differences between the costs we incur for centralized programs and services and the related rei mbursemen ts we receive from property owners and franchisees.

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

The decrease in cost reimbursements, net in the 2024 third quarter and 2024 first three quarters primarily reflected lower revenues, net of expenses, for our other programs and services, higher Loyalty Program expenses, and higher expenses related to our insurance program.

Cost reimbursements, net remained relatively unchanged in the 2025 first quarter as higher revenues were offset by higher expenses for many of our centralized programs and services.

Other Operating Expenses

Three Months Ended Nine Months Ended

Three Months Ended

($ in millions)

September 30, 2024 September 30, 2023 Change 2024 vs.

2023 September 30, 2024 September 30, 2023 Change 2024 vs.

March 31, 2025 March 31, 2024 Change 2025 vs.

Depreciation, amortization, and other $ 51 $ 45 $ 6 13 %

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1 8 (7) (88) %

General, administrative, and other expenses increased in the 2024 third quarter and 2024 first three quarters primarily due to higher guarantee reserves ($21 million and $25 million, respectively).

The increase in the 2024 first three quarters was also due to higher compensation costs and higher legal expenses ($16 million).

Restructuring and merger-related charges decreased in the 2024 first three quarters primarily due to lower charges related to the Data Security Incident discussed in Note 5.

General, administrative, and other expenses decreased in the 2025 first quarter primarily due to lower compensation costs.

Non-Operating Income (Expense)

Three Months Ended Nine Months Ended

Three Months Ended

($ in millions)

September 30, 2024 September 30, 2023 Change 2024 vs.

2023 September 30, 2024 September 30, 2023 Change 2024 vs.

Gains and other income, net $ 7 $ 28 $ (21) (75) % $ 15 $ 33 $ (18) (55) %

March 31, 2025 March 31, 2024 Change 2025 vs.

(Losses) gains and other income, net $ (2) $ 4 $ (6) (150) %

Interest expense (192) (163) (29) (18) %

Interest income 9 10 (1) (10) %

Equity in earnings 3 1 2 200 % 8 9 (1) (11) %

Gains and other income, net decreased in the 2024 third quarter and 2024 first three quarters primarily due to a gain recorded in the prior year on the sale of a hotel in the CALA region ($24 million).

Interest expense increased in the 2024 third quarter and 2024 first three quarters primarily due to higher debt balances driven by Senior Notes issuances, net of maturities ($35 million and $93 million, respectively).

Three Months Ended Nine Months Ended

Equity in earnings 1 — 1 nm*

* Percentage change is not meaningful.

Interest expense increased in the 2025 first quarter primarily due to higher debt balances driven by Senior Notes issuances, net of maturities ($37 million).

Three Months Ended

($ in millions)

September 30, 2024 September 30, 2023 Change 2024 vs.

2023 September 30, 2024 September 30, 2023 Change 2024 vs.

March 31, 2025 March 31, 2024 Change 2025 vs.

Provision for income taxes $ (99) $ (163) $ 64 39 %

Provision for income taxes decreased in the 2024 third quarter primarily due to the decrease in pre-tax income ($51 million), partially offset by a shift in earnings to jurisdictions with higher tax rates ($16 million).

Provision for income taxes increased in the 2024 first three quarters primarily due to the prior year release of tax reserves ($103 million), which was mostly due to completion of a tax audit, and a shift in earnings to jurisdictions with higher tax rates ($37 million), partially offset by the decrease in pre-tax income ($61 million).

Provision for income taxes decreased in the 2025 first quarter primarily due to the current year release of tax reserves ($86 million).

BUSINESS SEGMENTS

The following discussion presents an analysis of the operating results of our reportable business segments for the 2024 third quarter compared to the 2023 third quarter and for the 2024 first three quarters compared to the 2023 first three quarters.

The following discussion presents an analysis of the operating results of our reportable business segments for the 2025 first quarter compared to the 2024 first quarter.

Also see the “Business Trends” section above for further discussion.

Three Months Ended Nine Months Ended

Three Months Ended

($ in millions)

September 30, 2024 September 30, 2023 Change 2024 vs.

2023 September 30, 2024 September 30, 2023 Change 2024 vs.

March 31, 2025 March 31, 2024 Change 2025 vs.

Segment net fee revenues

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Properties Rooms

September 30, 2024 September 30, 2023 vs.

September 30, 2023 September 30, 2024 September 30, 2023 vs.

September 30, 2023

6,090 5,927 163 3 % 1,030,074 975,391 54,683 6 %

March 31, 2025 March 31, 2024 vs.

March 31, 2024 March 31, 2025 March 31, 2024 vs.

March 31, 2024

6,280 6,013 267 4 % 1,048,111 1,019,920 28,191 3 %

EMEA 1,320 1,150 170 15 % 236,698 220,113 16,585 8 %

Greater China 606 533 73 14 % 175,114 160,972 14,142 9 %

572 516 56 11 % 168,692 157,939 10,753 7 %

606 550 56 10 % 137,568 125,986 11,582 9 %

In the 2024 third quarter and 2024 first three quarters, net fee revenue grew in U.S.

& Canada, EMEA, and APEC, compared to the same periods in 2023, primarily reflecting higher RevPAR and unit growth (see the Lodging Statistics and Properties and Rooms tables above for more information), as well as higher profits at managed hotels.

In Greater China, net fee revenue decreased in the 2024 third quarter and 2024 first three quarters, primarily due to lower demand.

Additionally, U.S.

& Canada segment profits in the 2024 third quarter and 2024 first three quarters compared to the same periods in 2023 reflected lower cost reimbursement revenue, net of reimbursed expenses ($129 million and $159 million, respectively) as well as higher general, administrative, and other expenses, primarily due to higher guarantee reserves ($21 million and $26 million, respectively).

APEC 637 578 59 10 % 144,447 132,480 11,967 9 %

In the 2025 first quarter, segment profits grew in U.S.

& Canada and APEC, compared to the same period in 2024, primarily driven by higher net fee revenues as a result of higher RevPAR and unit growth (see the Lodging Statistics and Properties and Rooms tables above for more information).

LIQUIDITY AND CAPITAL RESOURCES

Our long-term financial objectives include maintaining diversified financing sources, optimizing the mix and maturity of our long-term debt, and reducing our working capital.

At the end of the 2024 third quarter, our long-term debt had a weighted average interest rate of 4.5 percent and a weighted average maturity of approximately 5.4 years.

The ratio of our fixed-rate long-term debt to our total long-term debt was 0.9 to 1.0 at the end of the 2024 third quarter.

At the end of the 2025 first quarter, including the effect of interest rate swaps, our long-term debt had a weighted average interest rate of 4.6 percent, a weighted average maturity of approximately 5.8 years, and a ratio of fixed-rate to total long-term debt of 0.9 to 1.0.

Sources of Liquidity

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

We also pay quarterly fees on the Credit Facility at a rate based on our

public debt rating.

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

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

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We monitor the status of the capital markets and regularly evaluate the effect that changes in capital market conditions may have on our ability to fund our liquidity needs.

We believe the Credit Facility, and our access to capital markets, together with cash we expect to generate from operations, remain adequate to meet our liquidity requirements.

We believe the Credit Facility, and our access to capital markets, together with cash we expect to generate from operations, remain adequate to meet our liquidity requirements over the next 12 months and thereafter for the foreseeable future.

Commercial Paper

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Sources and Uses of Cash

Cash, cash equivalents, and restricted cash totaled $416 million at September 30, 2024, an increase of $50 million from year-end 2023, primarily due to net cash provided by operating activities ($2,431 million), Senior Notes issuances, net of repayments ($2,398 million), and issuances of common stock for our employee stock purchase plan ($73 million), partially offset by share repurchases ($3,176 million), net commercial paper repayments ($648 million), dividends paid ($506 million), capital and technology expenditures ($408 million), and financing outflows for employee stock-based compensation withholding taxes ($127 million).

Our ratio of current assets to current liabilities was 0.4 to 1.0 at the end of the 2024 third quarter.

Cash, cash equivalents, and restricted cash totaled $546 million at March 31, 2025, an increase of $121 million from year-end 2024, primarily due to long-term debt issuances, net of repayments ($1,608 million) and net cash provided by operating activities ($647 million), partially offset by net commercial paper repayments ($1,002 million), share repurchases ($751 million), dividends paid ($174 million), capital and technology expenditures ($135 million), and financing outflows for employee stock-based compensation withholding taxes ($109 million).

Our ratio of current assets to current liabilities was 0.5 to 1.0 at the end of the 2025 first quarter.

We have significant borrowing capacity under our Credit Facility should we need additional working capital.

Capital Expenditures and Other Investments

We made capital and technology expenditures of $408 million in the 2024 first three quarters and $318 million in the 2023 first three quarters.

We expect capital expenditures and other investments will total approximately $1.1 billion to $1.2 billion for the 2024 full year, including capital and technology expenditures, loan advances, contract acquisition costs, and other investing activities (including approximately $160 million for maintenance capital spending).

Our anticipated capital and technology expenditures include $200 million of spending related to our option to purchase the land underlying the Sheraton Grand Chicago, which we discuss in Note 5.

Capital and technology expenditures in 2024 include higher than typical spending on our worldwide technology systems transformation, which is overwhelmingly expected to be reimbursed over time.

We made capital and technology expenditures of $135 million in the 2025 first quarter and $109 million in the 2024 first quarter.

We expect capital expenditures and other investments will total approximately $1,355 million to $1,455 million for the 2025 full year, including capital and technology expenditures, loan advances, contract acquisition costs, and other investing activities.

This estimate includes $355 million of investment spending related to the citizenM brand acquisition discussed in Note 2, which we expect to close later in 2025, but excludes any

additional potential property or brand acquisitions, which we cannot forecast with sufficient accuracy and which may be significant.

Our anticipated capital and technology expenditures include higher than typical spending on our worldwide technology systems transformation, the overwhelming portion of which we expect to be reimbursed over time, and renovations of hotels in our owned and leased portfolio.

Share Repurchases and Dividends

We repurchased 4.5 million shares of our common stock for $1.0 billion in the 2024 third quarter.

Year-to-date through October 31, 2024, we repurchased 14.2 million shares for $3.4 billion.

We repurchased 2.8 million shares of our common stock for $0.8 billion in the 2025 first quarter.

Year-to-date through April 29, 2025, we repurchased 3.9 million shares for $1.0 billion.

For additional information, see “Issuer Purchases of Equity Securities” in Part II, Item 2.

Our Board of Directors declared the following quarterly cash dividends in 2024 to date:

(1) $0.52 per share declared on February 8, 2024 and paid on March 29, 2024 to stockholders of record on February 22, 2024;

(2) $0.63 per share declared on May 10, 2024 and paid on June 28, 2024 to stockholders of record on May 24, 2024;

$0.63 per share declared on August 2, 2024 and paid on September 30, 2024 to stockholders of record on August 16, 2024.

On February 13, 2025, our Board of Directors declared a quarterly cash dividend of $0.63 per share, which was paid on March 31, 2025 to stockholders of record on February 27, 2025.

We expect to continue to return cash to stockholders through a combination of share repurchases and cash dividends.

Material Cash Requirements

As of the end of the 2024 third quarter, there have been no material changes to our cash requirements as disclosed in our 2023 Form 10-K.

As of the end of the 2025 first quarter, other than with respect to our agreement to purchase the citizenM brand discussed in Note 2, there have been no material changes to our cash requirements as disclosed in our 2024 Form 10-K.

See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our 2024 Form 10-K for more information about our cash requirements.

Also, see Note 7 for information on our long-term debt.

At September 30, 2024, projected Deemed Repatriation Transition Tax payments under the 2017 Tax Cuts and Jobs Act totaled $135 million, which is payable within the next 12 months from September 30, 2024.

At March 31, 2025, projected Deemed Repatriation Transition Tax payments under the 2017 Tax Cuts and Jobs Act totaled $135 million, which was paid in April 2025.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

6 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis