MARMarriott International

Following our announcement of the Data Security Incident, approximately 100 lawsuits were filed by consumers and others against us in U.S. federal, U.S. state and Canadian courts related to the incident. The plaintiffs in the cases that remain pending, these cases, who generally purport to represent various classes of consumers, generally claim to have been harmed by alleged actions and/or omissions by the Company in connection with the Data Security Incident and assert a variety of common law and statutory claims seeking monetary damages, injunctive relief, costs and attorneys’ fees, and other related relief. The active U.S. cases are were consolidated in the U.S. District Court for the District of Maryland (the “District Court”), pursuant to orders of the U.S. Judicial Panel on Multidistrict Litigation (the “MDL”). The District Court granted in part and denied in part class certification of various U.S. groups of consumers. In August 2023, On June 3, 2025, the U.S. Court of Appeals for the Fourth Circuit (the “Fourth Circuit”) vacated reversed the District Court’s certification of a class certification decision because the District Court failed to first consider the effect of consumer plaintiffs, holding that 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 members was enforceable. Following the Fourth Circuit, Circuit’s reversal of class certification, some plaintiffs filed lawsuits in New York state court on an individual basis, alleging violations of New York statutory law and seeking leave to appeal that ruling. The Fourth Circuit granted that petition on January 18, 2024, oral argument was held on November 1, 2024, monetary damages, attorneys’ fees, and we await a decision. A case brought by other related relief. We have been engaged in mediation discussions with the City of Chicago (which is consolidated consumer plaintiffs in the MDL. We believe it is probable that we will incur losses in relation to the MDL proceeding) also remains pending. The Canadian cases have effectively been consolidated into a single case in and the province state court cases, and as of Ontario. We dispute the allegations in these lawsuits and are vigorously defending against such claims. December

An increase Changes in the use of Internet travel intermediaries to book way hotel reservations rooms are booked could adversely impact our business. Some of our hotel rooms are booked through Internet travel intermediaries such as Expedia.com, Priceline.com, Booking.com, Travelocity.com, Orbitz.com, and Trip.com. intermediaries. In addition to their focus on leisure travel, these intermediaries also provide offerings for corporate travel and group meetings. Internet search engines may also divert business away from our channels to intermediaries. Although our Best Rate Guarantee and Member Rate programs have helped limit guest preference shift to intermediaries and greatly reduced the ability of intermediaries to undercut the published rates at hotels in our system, intermediaries Intermediaries continue to use a variety of aggressive online marketing methods to attract guests, including the purchase by certain companies of trademarked online keywords such as “Marriott” from Internet search engines. Internet search engines such as Google, Bing, Yahoo, may also divert business away from our direct digital channels to intermediaries. Many intermediaries also operate their own loyalty programs designed to foster customer loyalty to their platforms, which could erode loyalty to our brands, offerings, and Baidu direct digital channels. Bookings through these intermediaries are more costly to steer guests toward their websites. Our business and profitability could be harmed to hotels in our system than bookings through our direct digital channels. To the extent that guest booking preference shifts from our direct digital channels to Internet travel intermediaries, diverting bookings away from our direct digital channels and increasing the overall cost of bookings for hotels in our system. system, our business and profitability could be harmed. In addition, the introduction of AI capabilities by existing and emerging travel intermediaries may change the way guests plan, book, and pay for travel, which may disrupt how our products and services are marketed and distributed, potentially eroding brand loyalty, increasing distribution costs, and negatively affecting our Loyalty Program, which could adversely impact our financial performance and our ability to grow our business. At the same time, if we are not able to negotiate new agreements on satisfactory terms when our existing contracts with intermediaries (which generally have two- to three-year terms) come up for renewal, our business and prospects could be negatively impacted in a number of ways, including by reducing bookings or making our brands less attractive to hotel owners.

Under our asset-light business model and consistent with our focus on franchising, management, and licensing, we own or lease very few of our lodging properties. 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. 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. 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.

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. 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 and other counterparties counterparties, we do not seek a mark-up. The amounts we charge for these programs and services are generally a combination of fixed fees and variable fees based on sales or other metrics and are payable on a monthly basis. We generally recognize revenue within the “Cost reimbursement revenue” caption of our Income Statements when the amounts may be billed to hotel owners and other counterparties, and counterparties. Amounts we charge for system implementations are generally recognized on a straight-line basis over the term of the franchise or management agreement. We recognize expenses within the “Reimbursed expenses” caption as they are incurred. This pattern of recognition results in timing differences between the costs incurred for centralized programs and services and the related reimbursement in our operating and net income. Over the long term, these programs and services are not designed to impact our economics, either positively or negatively. In addition, we present in the “Reimbursed expenses” caption of our Income Statements spending funded by the proceeds ($664 million, $425 million after-tax) from the 2017 sale of our interest in Avendra LLC, which we committed would be used for the benefit of hotels in our system. Such spending totaled less than $1 million in 2024, $161 million ($120 million after-tax) in 2023, and $69 million ($52 million after-tax) in 2022. As of December 31, 2024, we have completed our spending funded by the Avendra sale proceeds.