v3.24.3
Document and Entity Information Document - shares
9 Months Ended
Sep. 30, 2024
Oct. 18, 2024
Entity Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2024  
Document Transition Report false  
Entity File Number 001-36243  
Entity Registrant Name Hilton Worldwide Holdings Inc.  
Entity incorporation, sate or country code DE  
Entity Tax Identification Number 27-4384691  
Entity Address, Address Line One 7930 Jones Branch Drive  
Entity Address, Address Line Two Suite 1100  
Entity Address, City or Town McLean  
Entity Address, State or Province VA  
Entity Address, Postal Zip Code 22102  
City Area Code 703  
Local Phone Number 883-1000  
Title of 12(b) Security Common Stock, $0.01 par value per share  
Trading Symbol HLT  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity common stock shares outstanding   243,779,806
Entity Central Index Key 0001585689  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q3  
Amendment Flag false  
v3.24.3
Condensed Consolidated Balance Sheets - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Current Assets:    
Cash and cash equivalents $ 1,580 $ 800
Restricted cash and cash equivalents 75 75
Accounts Receivable, after Allowance for Credit Loss, Current 1,597 1,487
Prepaid expenses 191 131
Other 130 121
Assets, Current, Total 3,573 2,614
Intangibles and Other Assets:    
Goodwill 5,065 5,052
Brands 5,015 4,846
Operating lease right-of-use assets 620 618
Property and equipment, net 395 382
Deferred income tax assets 140 140
Other 483 512
Assets, Noncurrent, Total 13,116 12,787
Total assets 16,689 15,401
Current Liabilities:    
Accounts payable, accrued expenses and other 2,074 1,979
Current maturities of long-term debt [1] 538 39
Current portion of deferred revenues 543 502
Liabilities, Current, Total 4,491 3,722
Long-term debt 10,626 9,157
Operating lease liabilities 798 808
Deferred revenues 1,241 1,132
Deferred income tax liabilities 357 401
Other 989 998
Liabilities, Total 20,119 17,748
Commitments and contingencies – see Note 13
Redeemable Noncontrolling Interests 20 0
Equity (Deficit):    
Common stock, $0.01 par value; 10,000,000,000 authorized shares, 244,611,310 outstanding as of September 30, 2024 and 253,488,288 outstanding as of December 31, 2023 3 3
Treasury stock, at cost; 91,048,652 shares as of September 30, 2024 and 80,807,049 shares as of December 31, 2023 (10,514) (8,393)
Additional paid-in capital 11,072 10,968
Accumulated deficit (3,290) (4,207)
Accumulated other comprehensive loss (741) (731)
Total Hilton stockholders' deficit (3,470) (2,360)
Noncontrolling interests 20 13
Total deficit (3,450) (2,347)
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY (DEFICIT) 16,689 15,401
Management and franchise    
Intangibles and Other Assets:    
Management and franchise contracts, net 1,211 1,064
Other    
Intangibles and Other Assets:    
Management and franchise contracts, net 187 173
Guest Loyalty Program    
Current Liabilities:    
Current portion of liability for guest loyalty program 1,336 1,202
Liability for guest loyalty program $ 1,617 $ 1,530
[1] Represents current maturities of finance lease liabilities, borrowings of consolidated VIEs and the 5.375% Senior Notes due 2025 (the "May 2025 Senior Notes"). We believe that we have sufficient sources of liquidity and access to debt financing to address the current maturities of long-term debt at or prior to the respective maturity dates.
v3.24.3
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Allowance for credit losses $ 144 $ 131
Total current assets of variable interest entities 81 65
Total intangibles and other assets of variable interest entities 104 112
Total current liabilities of variable interest entities 56 50
Total liabilities of variable interest entities $ 128 $ 137
Common stock, par value (per share) $ 0.01 $ 0.01
Common stock, authorized shares 10,000,000,000 10,000,000,000
Common stock, outstanding shares 244,611,310 253,488,288
Treasury stock, shares 91,048,652 80,807,049
v3.24.3
Condensed Consolidated Statements of Operations - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenues $ 2,867 $ 2,673 $ 8,391 $ 7,626
Owned and leased hotels 288 301 833 849
Depreciation and amortization 37 40 107 114
General and administrative 101 96 318 298
Other expenses 26 26 93 80
Total expenses excluding reimbursable expenses 452 463 1,351 1,341
Other expenses from managed and franchised properties 1,790 1,557 5,164 4,460
Total expenses 2,242 2,020 6,515 5,801
Gain (Loss) on Disposition of Assets (2) 0 5 0
Operating income (loss) 623 653 1,881 1,825
Interest expense (140) (113) (412) (340)
Loss on foreign currency transactions (3) (7) (5) (13)
Loss on investments in unconsolidated affiliate 0 0 0 (92)
Other non-operating income (loss), net 11 15 (17) 38
Income before income taxes 491 548 1,447 1,418
Income tax expense (147) (169) (413) (417)
Net income 344 379 1,034 1,001
Net loss (income) attributable to redeemable and nonredeemable noncontrolling interests 0 (2) (4) (7)
Net income attributable to Hilton stockholders $ 344 $ 377 $ 1,030 $ 994
Basic EPS:        
Earnings (loss) per share, basic (USD per share) $ 1.40 $ 1.45 $ 4.13 $ 3.77
Diluted EPS:        
Earnings (loss) per share, diluted (USD per share) 1.38 1.44 4.09 3.74
Cash dividends declared per share $ 0.15 $ 0.15 $ 0.45 $ 0.45
Total revenues excluding reimbursable revenues        
Revenues $ 1,240 $ 1,167 $ 3,550 $ 3,263
Franchise and licensing fees        
Revenues 698 643 1,958 1,769
Base and other management fees        
Revenues 88 81 287 247
Incentive management fees        
Revenues 66 63 204 197
Owned and leased hotels        
Revenues 330 335 922 924
Other revenues        
Revenues 58 45 179 126
Other revenues from managed and franchised properties        
Revenues $ 1,627 $ 1,506 $ 4,841 $ 4,363
v3.24.3
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Statement of Comprehensive Income [Abstract]        
Net income (loss) $ 344 $ 379 $ 1,034 $ 1,001
Other Comprehensive Income (Loss), Net of Tax [Abstract]        
Currency translation adjustment, net of tax 54 (31) 15 (33)
Pension liability adjustment, net of tax 2 2 6 6
Cash flow hedge adjustment, net of tax (32) 4 (30) 4
Total other comprehensive income (loss) 24 (25) (9) (23)
Comprehensive income 368 354 1,025 978
Comprehensive loss (income) attributable to redeemable and nonredeemable noncontrolling interests (2) (2) (5) (6)
Comprehensive income attributable to Hilton stockholders $ 366 $ 352 $ 1,020 $ 972
v3.24.3
Condensed Consolidated Statement of Comprehensive Income (Loss) (Parentheticals) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Statement of Comprehensive Income [Abstract]        
Currency translation adjustment, tax benefit (expense) [1] $ 0 $ (2) $ 3 $ (3)
Pension liability adjustment, tax expense (1) (1) (2) (2)
Cash flow hedge adjustment, tax benefit (expense) $ 11 $ (1) $ 10 $ (1)
[1] Amount was less than $1 million.
v3.24.3
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Millions
9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Operating Activities:    
Net income (loss) $ 1,034 $ 1,001
Adjustments to reconcile net income to net cash provided by operating activities:    
Amortization of contract acquisition costs 37 32
Depreciation and amortization 107 114
Gain on sales of assets, net (5) 0
Loss on foreign currency transactions 5 13
Loss on investments in unconsolidated affiliate 0 92
Share-based compensation expense 140 133
Deferred income taxes (31) (38)
Contract acquisition costs, net of refunds (87) (164)
Increase (Decrease) in Deferred Revenue 150 140
Working capital changes and other (140) (46)
Net cash provided by operating activities 1,431 1,481
Investing Activities:    
Capital expenditures for property and equipment (48) (109)
Cash paid for acquisitions, net of cash acquired (236) 0
Issuance of financing receivables (15) (8)
Proceeds from asset dispositions 8 0
Settlements of undesignated derivative financial instruments 0 (28)
Capitalized software costs (71) (68)
Investments in unconsolidated affiliates (5) (15)
Net cash used in investing activities (367) (228)
Financing Activities:    
Borrowings 2,283 3
Repayment of debt (315) (40)
Debt issuance costs (30) (9)
Dividends paid (113) (120)
Repurchases of common stock (2,127) (1,595)
Share-based compensation tax withholdings (72) (53)
Proceeds from share-based compensation 57 32
Settlements of interest rate swap with financing component 43 38
Net cash used in financing activities (274) (1,744)
Effect of exchange rate changes on cash, restricted cash and cash equivalents (10) (16)
Net increase (decrease) in cash, restricted cash and cash equivalents 780 (507)
Cash, restricted cash and cash equivalents, beginning of period 875 1,286
Cash, restricted cash and cash equivalents, end of period 1,655 779
Guest Loyalty Program    
Financing Activities:    
Increase (Decrease) in Contract with Customer, Liability $ 221 $ 204
v3.24.3
Organization and Basis of Presentation
9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Basis of Presentation Organization, Basis of Presentation and Summary of Significant Accounting Policies
Organization

Hilton Worldwide Holdings Inc. (the "Parent," or together with its subsidiaries, "Hilton," "we," "us," "our" or the "Company"), a Delaware corporation, is one of the largest global hospitality companies and is engaged in managing, franchising, owning and leasing hotels and resorts, and licensing its intellectual property ("IP"), including brand names, trademarks and service marks.

Basis of Presentation

The accompanying condensed consolidated financial statements for the three and nine months ended September 30, 2024 and 2023 have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") and are unaudited. We have condensed or omitted certain disclosures normally included in annual financial statements presented in accordance with GAAP; however, we believe the disclosures made are adequate to prevent the information presented from being misleading. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and, accordingly, ultimate results could differ from those estimates. Additionally, interim results are not necessarily indicative of full year performance. In our opinion, the accompanying condensed consolidated financial statements reflect all adjustments, including normal recurring items, considered necessary for a fair presentation of the interim periods. All material intercompany transactions have been eliminated in consolidation.

Summary of Significant Accounting Policies

Other than the policies listed below, there have been no material changes to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Acquisitions

We make certain judgments to determine whether a transaction should be accounted for as a business combination or an asset acquisition. These judgments include the assessment of the inputs, processes and outputs associated with an acquired set of activities and whether the fair value of total assets acquired is concentrated to a single identifiable asset or group of similar assets. We account for a transaction as a business combination when the assets acquired include inputs and one or more substantive processes that, together, significantly contribute to the ability to create outputs and the total fair value of the assets acquired are not concentrated to a single identifiable asset or group of similar assets. Otherwise, we account for the transaction as an asset acquisition.

We account for acquisitions that meet the definition of a business combination using the acquisition method of accounting whereby the identifiable assets acquired and liabilities assumed, as well as any noncontrolling interests in the acquired business, are recorded at their estimated fair values at the acquisition date, with any excess purchase price over the fair value of the net assets acquired recorded as goodwill. We expense transaction costs related to business combinations as incurred. We record the net assets and results of operations of an acquired entity in our condensed consolidated financial statements from the acquisition date.

In determining the fair values of assets acquired and liabilities assumed in a business combination, we use various recognized valuation methods including present value modeling and referenced market values, where available. Further, we make assumptions within certain valuation methods including discount rates and timing of future cash flows. Valuations are performed by external valuation professionals with skills and qualifications under management's supervision. We believe the estimated fair values assigned to the assets acquired and liabilities assumed are based on assumptions that market participants would use. However, such assumptions are inherently uncertain and actual results may differ from those estimates.
Acquisitions that do not meet the definition of a business combination are accounted for as asset acquisitions. We allocate the cost of the acquisition, including direct and incremental transaction costs, to the individual assets acquired and liabilities assumed based on their relative fair values. We do not recognize any goodwill in an asset acquisition.

Redeemable Noncontrolling Interests

Noncontrolling interests with redemption features that are not solely within our control are considered redeemable noncontrolling interests. The redeemable noncontrolling interests are a component of temporary equity and are reported between liabilities and equity (deficit) in our condensed consolidated balance sheet. At each reporting period, the redeemable noncontrolling interests are recognized at the higher of (i) the initial carrying amount, adjusted for accumulated earnings (losses) and distributions, or (ii) the redemption value as of the balance sheet date. We include both the earnings (losses) for the period attributable to redeemable noncontrolling interests and any adjustment to the carrying value of redeemable noncontrolling interests as a result of a change in the redemption value in net income attributable to redeemable and nonredeemable noncontrolling interests in our condensed consolidated statement of operations.
v3.24.3
Acquisitions
9 Months Ended
Sep. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
Graduate by Hilton

In May 2024, we completed the acquisition of the Graduate brand for a total purchase price of $210 million, $200 million of which we paid in cash upon closing. The remaining $10 million was not reflected in the amount of cash consideration paid in our condensed consolidated statement of cash flows for the nine months ended September 30, 2024 and was included in accounts payable, accrued expenses and other in our condensed consolidated balance sheet as of September 30, 2024. The remaining amount will be paid upon the satisfaction of certain conditions by the seller which are expected to occur within the next 12 months. We accounted for the transaction as an asset acquisition. On the date of the acquisition, we added 32 existing properties located in the U.S. and United Kingdom ("U.K.") to our franchise portfolio.

We allocated the cost of the acquisition, including transaction costs, to the assets acquired on a relative fair value basis. As a result, we recorded an indefinite-lived brand intangible asset of approximately $122 million and franchise contract intangible assets of approximately $91 million. The franchise contract intangible assets will be amortized over an estimated useful life of 15 years to depreciation and amortization expenses in our condensed consolidated statements of operations over their respective terms.

The results of operations related to the Graduate brand, which did not have a material impact on our operating results for the three and nine months ended September 30, 2024, were included in the condensed consolidated financial statements for the period from the date of acquisition to September 30, 2024.

NoMad

In April 2024, we acquired a controlling financial interest in Sydell Hotels & Resorts, LLC and Sydell Holding Company UK Ltd (collectively, the "Sydell Group"), which owns the NoMad brand. We accounted for the transaction as a business combination and recognized the fair value of an indefinite-lived brand intangible asset of approximately $45 million and management contract intangible assets, with an aggregate fair value of approximately $11 million. The management contract intangible assets will be amortized over a weighted average estimated useful life of approximately 14 years to depreciation and amortization expenses in our condensed consolidated statements of operations over their respective terms.

We measured the net assets acquired at fair value as of the date of acquisition. The fair values of the respective net assets acquired were determined by management with assistance from external valuation specialists. We developed our estimate of the fair value of the brand intangible asset and contract intangible assets by applying the multi-period excess earnings method. The multi-period excess earnings method uses unobservable inputs for projected cash flows, including projected financial results and a discount rate, which are considered Level 3 inputs within the fair value measurement valuation hierarchy.

Our redeemable noncontrolling interests relate to our interest in the Sydell Group. The Sydell Group's governing documents contain put options that give the noncontrolling interest holders the right to sell their equity interests to us beginning in the second quarter of 2030, as well as call options that give us the right to purchase the remaining equity interests beginning in the second quarter of 2032. The exercise price of the put and call options is based on a multiple of the Sydell Group's earnings as of the date that such option would be exercised. The redeemable noncontrolling interests were recorded at a fair value of $22 million as of the acquisition date.
The results of operations of the Sydell Group were included in the condensed consolidated financial statements for the period from the date of acquisition to September 30, 2024. The acquisition of a controlling financial interest in the Sydell Group did not have a material impact on the Company's condensed consolidated financial statements for the three and nine months ended September 30, 2024, and, as such, historical and pro forma results are not disclosed
v3.24.3
Revenues from Contracts with Customers
9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Revenues from Contracts with Customers Revenues from Contracts with Customers
Contract Liabilities

The following table summarizes the activity of our contract liabilities, which are classified as components of current and long-term deferred revenues, during the nine months ended September 30, 2024:

(in millions)
Balance as of December 31, 2023
$1,521 
Cash received in advance and not recognized as revenue
585 
Revenue recognized(1)
(310)
Other(2)
(95)
Balance as of September 30, 2024
$1,701 
____________
(1)Primarily related to Hilton Honors, our guest loyalty program, including co-branded credit card arrangements.
(2)Primarily represents the changes in estimated transaction prices for our performance obligations related to the issuance of Hilton Honors points, which had no effect on revenues.

Performance Obligations

As of September 30, 2024, deferred revenues for unsatisfied performance obligations consisted of: (i) $916 million related to Hilton Honors that will be recognized as revenue over approximately the next two years; (ii) $768 million related to advance consideration received from hotel owners for application, initiation and other fees and system implementation fees; and (iii) $17 million related to other obligations. These performance obligations are recognized as revenue as discussed in Note 2: "Basis of Presentation and Summary of Significant Accounting Policies" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
v3.24.3
Consolidated Variable Interest Entities
9 Months Ended
Sep. 30, 2024
Consolidated Variable Interest Entities Disclosure [Abstract]  
Consolidated Variable Interest Entities Consolidated Variable Interest Entities
As of September 30, 2024 and December 31, 2023, we consolidated two variable interest entities ("VIEs") that each lease one hotel property, both of which are located in Japan, and for which the assets are only available to settle the obligations of the respective entities and the liabilities of the respective entities are non-recourse to us. We consolidated these VIEs since we are the primary beneficiary, having the power to direct the activities that most significantly affect their economic performance. Additionally, we have the obligation to absorb losses and the right to receive benefits that could be significant to each of the VIEs individually.

Our condensed consolidated balance sheets include the assets and liabilities of these entities, including the effect of foreign currency translation, which primarily comprised the following:

September 30,December 31,
20242023
(in millions)
Cash and cash equivalents$65 $46 
Accounts receivable, net12 17 
Property and equipment, net35 37 
Deferred income tax assets26 32 
Other non-current assets43 43 
Accounts payable, accrued expenses and other38 29 
Long-term debt(1)(2)
80 95 
____________
(1)Includes finance lease liabilities of $74 million and $86 million as of September 30, 2024 and December 31, 2023, respectively.
(2)Includes current maturities of $17 million and $19 million as of September 30, 2024 and December 31, 2023, respectively.
v3.24.3
Loss on Investments in Unconsolidated Affiliate
9 Months Ended
Sep. 30, 2024
Equity Method Investments and Joint Ventures [Abstract]  
Loss on Investments in Unconsolidated Affiliate Loss on Investments in Unconsolidated Affiliate
We provide equity and debt financing to certain unconsolidated affiliates with an objective of supporting the growth of our network. The assets relating to these investments are classified as other current assets or other non-current assets in our condensed consolidated balance sheets based on the expected maturity of the respective investment, if applicable.

In March 2023, as a result of the rise in market-based interest rates, one of our third-party unconsolidated affiliates (the "Fund"), which has underlying investments in certain hotels that we manage or franchise, failed to comply with certain requirements of its debt agreements. As a result, we determined that: (i) our investment in the Fund was fully impaired and (ii) short-term subordinated financing receivables due to us from the Fund were uncollectible. As such, we recognized an other-than-temporary impairment loss on our investment of $44 million and credit losses of $48 million to fully reserve the financing receivables, such that their net carrying values were zero. These losses were recognized in loss on investments in unconsolidated affiliate in our condensed consolidated statement of operations for the nine months ended September 30, 2023.
v3.24.3
Debt
9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Debt Debt
Long-term debt balances, including obligations for finance leases, and associated interest rates and maturities as of September 30, 2024, were as follows:

September 30,December 31,
20242023
(in millions)
Senior secured term loan facility due 2028
$— $1,000 
Senior secured term loan facility with a rate of 6.60%, due 2030
3,119 2,119 
Senior notes with a rate of 5.375%, due 2025(1)
500 500 
Senior notes with a rate of 4.875%, due 2027(1)
600 600 
Senior notes with a rate of 5.750%, due 2028(1)
500 500 
Senior notes with a rate of 5.875%, due 2029(1)
550 — 
Senior notes with a rate of 3.750%, due 2029(1)
800 800 
Senior notes with a rate of 4.875%, due 2030(1)
1,000 1,000 
Senior notes with a rate of 4.000%, due 2031(1)
1,100 1,100 
Senior notes with a rate of 3.625%, due 2032(1)
1,500 1,500 
Senior notes with a rate of 6.125%, due 2032(1)
450 — 
Senior notes with a rate of 5.875%, due 2033(1)
1,000 — 
Finance lease liabilities with a weighted average rate of 6.04%, due 2024 to 2030(2)
129 139 
Other debt of consolidated VIEs with a weighted average rate of 1.58%, due 2024 to 2026(2)
11,254 9,267 
Less: unamortized deferred financing costs and discounts
(90)(71)
Less: current maturities of long-term debt(3)
(538)(39)
$10,626 $9,157 
____________
(1)These notes are collectively referred to as the Senior Notes and are jointly and severally guaranteed on a senior unsecured basis by the Parent and substantially all of its direct and indirect wholly owned domestic restricted subsidiaries, other than Hilton Domestic Operating Company Inc. ("HOC"), an indirect wholly owned subsidiary of the Parent and the issuer of all of the series of Senior Notes.
(2)Long-term debt of our consolidated VIEs is included in finance lease liabilities and other debt of consolidated VIEs, as applicable. Refer to Note 4: "Consolidated Variable Interest Entities" for additional information.
(3)Represents current maturities of finance lease liabilities, borrowings of consolidated VIEs and the 5.375% Senior Notes due 2025 (the "May 2025 Senior Notes"). We believe that we have sufficient sources of liquidity and access to debt financing to address the current maturities of long-term debt at or prior to the respective maturity dates.

Our senior secured credit facilities consist of a senior secured revolving credit facility (the "Revolving Credit Facility") and a senior secured term loan facility (the "Term Loans"). The obligations under our senior secured credit facilities are unconditionally and irrevocably guaranteed by the Parent and substantially all of its direct and indirect wholly owned domestic restricted subsidiaries, other than HOC, the named borrower under the senior secured credit facilities.

In June 2024, we amended the credit agreement governing our Term Loans pursuant to which $1.0 billion of outstanding Term Loans due June 2028 were replaced with $1.0 billion of incremental Term Loans due November 2030, aligning their maturity with the outstanding $2.1 billion tranche of Term Loans due November 2030. Additionally, the entire balance of the Term Loans was repriced with an interest rate of the Secured Overnight Financing Rate ("SOFR") plus 1.75% (collectively, the
"June 2024 Amendment"). In connection with the June 2024 Amendment, we incurred $3 million of debt issuance costs, which were recognized in other non-operating income (loss), net in our condensed consolidated statements of operations for the nine months ended September 30, 2024.

In March 2024, we borrowed and subsequently repaid $200 million under the Revolving Credit Facility. No borrowings were outstanding under the Revolving Credit Facility as of September 30, 2024, which had an available borrowing capacity of $1,913 million after considering $87 million of outstanding letters of credit.

In September 2024, we issued $1 billion aggregate principal amount of 5.875% Senior Notes due 2033 (the "2033 Senior Notes" or "September Senior Notes issuance") and incurred an aggregate $15 million of debt issuance costs which were recognized as a reduction to the outstanding debt balance in our condensed consolidated balance sheet and will be amortized to interest expense through the maturity date of the 2033 Senior Notes. Interest on the 2033 Senior Notes is payable semi-annually in arrears on March 15 and September 15 of each year, beginning March 15, 2025.

In March 2024, we issued $550 million aggregate principal amount of 5.875% Senior Notes due 2029 (the "5.875% 2029 Senior Notes") and $450 million aggregate principal amount of 6.125% Senior Notes due 2032 (the "6.125% 2032 Senior Notes") (collectively, the "March Senior Notes issuance") and incurred an aggregate $15 million of debt issuance costs which were recognized as a reduction to the outstanding debt balance in our condensed consolidated balance sheet and will be amortized to interest expense through the respective maturity dates of the 5.875% 2029 Senior Notes and the 6.125% 2032 Senior Notes. Interest on the 5.875% 2029 Senior Notes and the 6.125% 2032 Senior Notes is payable semi-annually in arrears on April 1 and October 1 of each year, beginning October 1, 2024. We used a portion of the net proceeds from the March Senior Notes issuance to repay $200 million borrowed under our Revolving Credit Facility earlier in March 2024.
v3.24.3
Fair Value Measurements
9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The fair values of certain financial instruments and the hierarchy level we used to estimate the fair values are shown below:

September 30, 2024
Hierarchy Level
Carrying Value(1)
Level 1Level 2Level 3
(in millions)
Assets:
Interest rate swap$41 $— $41 $— 
Liabilities:
Long-term debt(2)
11,119 7,787 — 3,111 

December 31, 2023
Hierarchy Level
Carrying Value(1)
Level 1Level 2Level 3
(in millions)
Assets:
Interest rate swap$75 $— $75 $— 
Liabilities:
Long-term debt(2)
9,119 5,631 — 3,129 
____________
(1)The fair values of cash equivalents and restricted cash equivalents approximate their carrying values due to their short-term maturities. The fair values of all other financial instruments not included in these tables are estimated to be equal to their carrying values.
(2)The carrying values and fair values exclude the deduction for unamortized deferred financing costs and any applicable discounts, as well as all finance lease liabilities and other debt of consolidated VIEs; refer to Note 6: "Debt" for additional information.

We measured our interest rate swap at fair value, which was determined using a discounted cash flow analysis that reflects the contractual terms of the interest rate swap, including the period to maturity, and uses observable market-based inputs of similar instruments, including interest rate curves, as applicable.

During the nine months ended September 30, 2024, we measured the net assets acquired in the acquisition of the Sydell Group at fair value on a non-recurring basis; see Note 2: "Acquisitions" for additional information.
v3.24.3
Income Taxes
9 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
At the end of each quarter, we estimate the effective income tax rate expected to be applied for the full year. The effective income tax rate is determined by the level and composition of income (loss) before income taxes, which is subject to federal, state, local and foreign income taxes.
v3.24.3
Share-Based Compensation
9 Months Ended
Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Share-Based Compensation Share-Based Compensation
Our share-based compensation primarily consists of awards that we grant to eligible employees under the Hilton 2017 Omnibus Incentive Plan (the "2017 Plan") and includes time-vesting restricted stock units ("RSUs"), nonqualified stock options ("options") and performance-vesting RSUs ("performance shares"). We recognized share-based compensation expense of $44 million and $48 million during the three months ended September 30, 2024 and 2023, respectively, and $140 million and $133 million during the nine months ended September 30, 2024 and 2023, respectively, which included amounts reimbursed by hotel owners.

RSUs

During the nine months ended September 30, 2024, we granted 473,000 RSUs with a weighted average grant date fair value per share of $203.98, which vest in equal annual installments over two or three years from the date of grant.

Options

During the nine months ended September 30, 2024, we granted 264,000 options with a weighted average exercise price per share of $203.95, which vest in equal annual installments over three years from the date of grant and terminate 10 years from the date of grant or earlier if the individual’s service terminates under certain circumstances.

The weighted average grant date fair value per share of the options granted during the nine months ended September 30, 2024 was $71.25, which was determined using the Black-Scholes-Merton option-pricing model with the following weighted average assumptions:

Expected volatility(1)
27.94 %
Dividend yield(2)
0.33 %
Risk-free rate(3)
4.17 %
Expected term (in years)(4)
6.0
____________
(1)Estimated using a blended approach of historical and implied volatility. Historical volatility is based on the historical movement of Hilton's stock price for a period that corresponds to the expected terms of the options.
(2)Estimated based on our quarterly dividend and the three-month average stock price at the date of each grant.
(3)Based on the yields of U.S. Department of Treasury instruments with similar expected terms of the options at the date of each grant.
(4)Estimated using the midpoint of the vesting periods and the contractual terms of the options as we do not have sufficient historical share option exercise data to estimate the terms of our option grants.

Performance Shares

During the nine months ended September 30, 2024, we granted 185,000 performance shares with a weighted average grant date fair value per share of $203.95, which vest three years from the date of grant based on the projected achievement of various performance measures.

As of September 30, 2024, we determined that all of the performance measures for all outstanding performance shares granted in 2022, 2023 and 2024 were probable of achievement, with the average of the applicable achievement factors estimated to be between the target and maximum achievement percentages for the performance shares granted in 2022 and 2023 and at the target achievement percentage for the performance shares granted in 2024.
v3.24.3
Earnings (Loss) Per Share
9 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
Earnings (Loss) Per Share Earnings Per Share
The following table presents the calculation of basic and diluted earnings per share ("EPS"):

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
(in millions, except per share amounts)
Basic EPS:
Numerator:
Net income attributable to Hilton stockholders
$344 $377 $1,030 $994 
Denominator:
Weighted average shares outstanding246 260 249 264 
Basic EPS$1.40 $1.45 $4.13 $3.77 
Diluted EPS:
Numerator:
Net income attributable to Hilton stockholders
$344 $377 $1,030 $994 
Denominator:
Weighted average shares outstanding(1)
249 262 252 266 
Diluted EPS$1.38 $1.44 $4.09 $3.74 
____________
(1)Amounts for all periods include less than 1 million shares related to share-based compensation that were excluded from the calculations of diluted EPS because their effect would have been anti-dilutive under the treasury stock method.
v3.24.3
Noncontrolling Interests, Stockholders' Equity (Deficit) and Accumulated Other Comprehensive Loss
9 Months Ended
Sep. 30, 2024
Stockholders' Equity Note [Abstract]  
Noncontrolling Interests, Stockholders' Equity (Deficit) and Accumulated Other Comprehensive Loss Noncontrolling Interests, Stockholders' Equity (Deficit) and Accumulated Other Comprehensive Loss
The following tables present the changes in the redeemable and nonredeemable noncontrolling interests and the components of stockholders' equity (deficit) attributable to Hilton stockholders:

Three months ended September 30, 2024
Redeemable Noncontrolling InterestsTreasury StockAdditional
Paid-in
Capital
Accumulated DeficitAccumulated
Other
Comprehensive
Loss
Common StockNoncontrolling
Interests
Total Deficit
SharesAmount
(in millions)
Balance as of June 30, 2024$21 247.8 $$(9,781)$11,022 $(3,597)$(763)$17 $(3,099)
Net income (loss)
(1)— — — — 344 — 345 
Other comprehensive income
— — — — — — 22 24 
Dividends
— — — — — (37)— — (37)
Repurchases of common stock
— (3.3)— (733)— — — — (733)
Share-based compensation
— 0.1 — — 50 — — — 50 
Balance as of September 30, 2024$20 244.6 $$(10,514)$11,072 $(3,290)$(741)$20 $(3,450)

Three months ended September 30, 2023
Treasury StockAdditional
Paid-in
Capital
Accumulated DeficitAccumulated
Other
Comprehensive
Loss
Common StockNoncontrolling
Interests
Total Deficit
SharesAmount
(in millions)
Balance as of June 30, 2023262.3 $$(6,956)$10,879 $(4,654)$(703)$$(1,423)
Net income— — — — 377 — 379 
Other comprehensive loss
— — — — — (25)— (25)
Dividends— — — — (39)— — (39)
Repurchases of common stock
(4.5)— (691)— — — — (691)
Share-based compensation
0.1 — — 46 — — — 46 
Balance as of September 30, 2023257.9 $$(7,647)$10,925 $(4,316)$(728)$10 $(1,753)
Nine Months Ended September 30, 2024
Redeemable Noncontrolling InterestsTreasury StockAdditional
Paid-in
Capital
Accumulated DeficitAccumulated
Other
Comprehensive
Loss
Common StockNoncontrolling
Interests
Total Deficit
SharesAmount
(in millions)
Balance as of December 31, 2023$— 253.5 $$(8,393)$10,968 $(4,207)$(731)$13 $(2,347)
Acquisition date fair value of redeemable noncontrolling interests22 — — — — — — — — 
Net income (loss)
(2)— — — — 1,030 — 1,036 
Other comprehensive income (loss)
— — — — — — (10)(9)
Dividends
— — — — — (113)— — (113)
Repurchases of common stock
— (10.2)— (2,131)— — — — (2,131)
Share-based compensation
— 1.3 — 10 104 — — — 114 
Balance as of September 30, 2024$20 244.6 $$(10,514)$11,072 $(3,290)$(741)$20 $(3,450)

Nine Months Ended September 30, 2023
Treasury StockAdditional
Paid-in
Capital
Accumulated DeficitAccumulated
Other
Comprehensive
Loss
Common StockNoncontrolling
Interests
Total Deficit
SharesAmount
(in millions)
Balance as of December 31, 2022267.9 $$(6,040)$10,831 $(5,190)$(706)$$(1,098)
Net income— — — — 994 — 1,001 
Other comprehensive loss
— — — — — (22)(1)(23)
Dividends— — — — (120)— — (120)
Repurchases of common stock
(11.0)— (1,615)— — — — (1,615)
Share-based compensation
1.0 — 94 — — — 102 
Balance as of September 30, 2023257.9 $$(7,647)$10,925 $(4,316)$(728)$10 $(1,753)
The changes in the components of accumulated other comprehensive loss, net of taxes, were as follows:

Currency Translation Adjustment(1)
Pension Liability Adjustment(2)
Cash Flow Hedge Adjustment(3)
Total
(in millions)
Balance as of December 31, 2023$(539)$(262)$70 $(731)
Other comprehensive income (loss) before reclassifications
13 (1)20 
Amounts reclassified from accumulated other comprehensive loss
(38)(30)
Net other comprehensive income (loss)
14 (30)(10)
Balance as of September 30, 2024$(525)$(256)$40 $(741)

Currency Translation Adjustment(1)
Pension Liability Adjustment(2)
Cash Flow Hedge Adjustment(3)
Total
(in millions)
Balance as of December 31, 2022$(548)$(259)$101 $(706)
Other comprehensive income (loss) before reclassifications
(32)— 31 (1)
Amounts reclassified from accumulated other comprehensive loss
— (27)(21)
Net other comprehensive income (loss)
(32)(22)
Balance as of September 30, 2023$(580)$(253)$105 $(728)
____________
(1)Includes net investment hedge gains and intra-entity foreign currency transactions that are of a long-term investment nature. Amount reclassified during the nine months ended September 30, 2024 relates to the liquidation of an investment in a foreign entity and was recognized in loss on foreign currency transactions in our condensed consolidated statement of operations.
(2)Amounts reclassified relate to the amortization of prior service cost and amortization of net loss and were recognized in other non-operating income (loss), net in our condensed consolidated statements of operations.
(3)Amounts reclassified were the result of hedging instruments, primarily comprising interest rate swaps, inclusive of interest rate swaps that were dedesignated in prior periods, with related amounts recognized in interest expense in our condensed consolidated statements of operations. Amounts reclassified also related to foreign currency forward contracts that hedge our foreign currency denominated fees, with related amounts recognized in various revenue line items, as applicable, in our condensed consolidated statements of operations.
v3.24.3
Business Segments
9 Months Ended
Sep. 30, 2024
Segment Reporting [Abstract]  
Business Segments Business Segments
We are a hospitality company with operations organized in two distinct operating segments: (i) management and franchise and (ii) ownership, each of which is reported as a segment based on (a) delivering a similar set of products and services and
(b) being managed separately given its distinct economic characteristics.

The management and franchise segment includes all of the hotels we manage for third-party owners, as well as all franchised hotels that license our IP and where we provide other contracted services, but the day-to-day services of the hotels are operated or managed by someone other than us. Revenues from this segment include: (i) management and franchise fees charged to third-party hotel owners; (ii) licensing fees from our strategic partners, including co-branded credit card providers and third-party hotels that are not managed or franchised that use our booking channels and related programs ("strategic partner hotels"), and Hilton Grand Vacations Inc. ("HGV"); and (iii) fees for managing the hotels in our ownership segment. The ownership segment primarily derives revenues from nightly hotel room sales, food and beverage sales and other services at our consolidated owned and leased hotels.

The performance of our operating segments is evaluated primarily on operating income (loss), without allocating amortization of contract acquisition costs, other revenues and other expenses, other revenues and other expenses from managed and franchised properties, depreciation and amortization expenses, general and administrative expenses, other operating income (loss) items, which may include impairment losses and gains (losses) on sales of assets, or equity in earnings (losses) from unconsolidated affiliates. Our chief operating decision maker does not use assets by operating segment when assessing performance or making operating segment resource allocations.
The following table presents revenues for our reportable segments, reconciled to consolidated amounts:

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
(in millions)
Franchise and licensing fees$704 $647 $1,974 $1,782 
Base and other management fees(1)
103 94 330 283 
Incentive management fees66 63 204 197 
Management and franchise873 804 2,508 2,262 
Ownership330 335 922 924 
Segment revenues1,203 1,139 3,430 3,186 
Amortization of contract acquisition costs(12)(11)(37)(32)
Other revenues58 45 179 126 
Other revenues from managed and franchised properties
1,627 1,506 4,841 4,363 
Intersegment fees elimination(1)
(9)(6)(22)(17)
Total revenues$2,867 $2,673 $8,391 $7,626 
____________
(1)Includes management, royalty and IP fees charged to consolidated hotels in our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations.

The following table presents operating income for each of our reportable segments, reconciled to consolidated income before income taxes:

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
(in millions)
Management and franchise(1)
$873 $804 $2,508 $2,262 
Ownership(1)
33 28 67 58 
Segment operating income906 832 2,575 2,320 
Amortization of contract acquisition costs(12)(11)(37)(32)
Other revenues, less other expenses32 19 86 46 
Net other expenses from managed and franchised properties
(163)(51)(323)(97)
Depreciation and amortization expenses(37)(40)(107)(114)
General and administrative expenses(101)(96)(318)(298)
Gain (loss) on sales of assets, net
(2)— — 
Operating income623 653 1,881 1,825 
Interest expense(140)(113)(412)(340)
Loss on foreign currency transactions(3)(7)(5)(13)
Loss on investments in unconsolidated affiliate— — — (92)
Other non-operating income (loss), net11 15 (17)38 
Income before income taxes$491 $548 $1,447 $1,418 
____________
(1)Includes management, royalty and IP fees charged to consolidated hotels in our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations.
v3.24.3
Commitments and Contingencies
9 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
We include performance clauses in certain of our management contracts, however, most of these clauses do not require us to fund shortfalls, but instead allow for termination of the contract if specified operating performance levels are not achieved. In limited cases, we are obligated to fund performance shortfalls and our obligations under these guarantees in future periods are dependent on the operating performance level of the related hotel over the remaining term of the performance guarantee for that
particular hotel. As of September 30, 2024, we had performance guarantees with expirations ranging from 2025 to 2043 and possible cash outlays totaling $14 million.

We also have extended debt guarantees and provided letters of credit to owners of certain hotels that we currently or in the future will manage or franchise. During the nine months ended September 30, 2024, we recognized losses of $50 million in other non-operating loss, net in our condensed consolidated statement of operations for debt guarantees extended to certain hotels that we manage that have failed to comply with the requirements of their respective debt agreements. We paid $77 million during the nine months ended September 30, 2024 related to debt guarantees. Our debt guarantees and letters of credit as of September 30, 2024 had expirations ranging from 2025 to 2033 and remaining possible cash outlays totaling $49 million.

The performance and debt guarantees create variable interests in the ownership entities of the related hotels, of which we are not the primary beneficiary.

We receive Hilton Honors and program fees from managed and franchised properties that we are contractually required to use to operate our Hilton Honors program, marketing, sales and brands programs and other shared services on behalf of hotel owners. If we collect amounts in excess of amounts expended, we have a commitment to spend these amounts on the related programs.

We are involved in various claims and lawsuits arising in the ordinary course of business, some of which include claims for substantial sums. While the ultimate results of claims and litigation cannot be predicted with certainty, we expect that the ultimate resolution of all pending or threatened claims and litigation as of September 30, 2024 will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.
v3.24.3
Supplemental Disclosures of Cash Flow Information
9 Months Ended
Sep. 30, 2024
Supplemental Cash Flow Elements [Abstract]  
Supplemental Disclosures of Cash Flow Information Supplemental Disclosures of Cash Flow Information
Cash interest paid included within operating activities in our condensed consolidated statements of cash flows was $388 million and $345 million during the nine months ended September 30, 2024 and 2023, respectively. These amounts exclude $43 million and $38 million of cash receipts for the nine months ended September 30, 2024 and 2023, respectively, related to settlements of our interest rate swap with a financing component, which are separately disclosed within financing activities in our condensed consolidated statements of cash flows.

Income tax payments, net of refunds received, were $399 million and $349 million for the nine months ended September 30, 2024 and 2023, respectively.
v3.24.3
Pay vs Performance Disclosure - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Pay vs Performance Disclosure        
Net Income (Loss) $ 344 $ 377 $ 1,030 $ 994
v3.24.3
Insider Trading Arrangements
3 Months Ended
Sep. 30, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.3
Organization, Consolidation and Presentation of Financial Statements (Policies)
9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Business Combinations Policy
Acquisitions

We make certain judgments to determine whether a transaction should be accounted for as a business combination or an asset acquisition. These judgments include the assessment of the inputs, processes and outputs associated with an acquired set of activities and whether the fair value of total assets acquired is concentrated to a single identifiable asset or group of similar assets. We account for a transaction as a business combination when the assets acquired include inputs and one or more substantive processes that, together, significantly contribute to the ability to create outputs and the total fair value of the assets acquired are not concentrated to a single identifiable asset or group of similar assets. Otherwise, we account for the transaction as an asset acquisition.

We account for acquisitions that meet the definition of a business combination using the acquisition method of accounting whereby the identifiable assets acquired and liabilities assumed, as well as any noncontrolling interests in the acquired business, are recorded at their estimated fair values at the acquisition date, with any excess purchase price over the fair value of the net assets acquired recorded as goodwill. We expense transaction costs related to business combinations as incurred. We record the net assets and results of operations of an acquired entity in our condensed consolidated financial statements from the acquisition date.

In determining the fair values of assets acquired and liabilities assumed in a business combination, we use various recognized valuation methods including present value modeling and referenced market values, where available. Further, we make assumptions within certain valuation methods including discount rates and timing of future cash flows. Valuations are performed by external valuation professionals with skills and qualifications under management's supervision. We believe the estimated fair values assigned to the assets acquired and liabilities assumed are based on assumptions that market participants would use. However, such assumptions are inherently uncertain and actual results may differ from those estimates.
Acquisitions that do not meet the definition of a business combination are accounted for as asset acquisitions. We allocate the cost of the acquisition, including direct and incremental transaction costs, to the individual assets acquired and liabilities assumed based on their relative fair values. We do not recognize any goodwill in an asset acquisition.
Redeemable Noncontrolling Interests
Redeemable Noncontrolling Interests

Noncontrolling interests with redemption features that are not solely within our control are considered redeemable noncontrolling interests. The redeemable noncontrolling interests are a component of temporary equity and are reported between liabilities and equity (deficit) in our condensed consolidated balance sheet. At each reporting period, the redeemable noncontrolling interests are recognized at the higher of (i) the initial carrying amount, adjusted for accumulated earnings (losses) and distributions, or (ii) the redemption value as of the balance sheet date. We include both the earnings (losses) for the period attributable to redeemable noncontrolling interests and any adjustment to the carrying value of redeemable noncontrolling interests as a result of a change in the redemption value in net income attributable to redeemable and nonredeemable noncontrolling interests in our condensed consolidated statement of operations.
v3.24.3
Revenues from Contracts with Customers (Tables)
9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Contract Liabilities
The following table summarizes the activity of our contract liabilities, which are classified as components of current and long-term deferred revenues, during the nine months ended September 30, 2024:

(in millions)
Balance as of December 31, 2023
$1,521 
Cash received in advance and not recognized as revenue
585 
Revenue recognized(1)
(310)
Other(2)
(95)
Balance as of September 30, 2024
$1,701 
____________
(1)Primarily related to Hilton Honors, our guest loyalty program, including co-branded credit card arrangements.
(2)Primarily represents the changes in estimated transaction prices for our performance obligations related to the issuance of Hilton Honors points, which had no effect on revenues.
v3.24.3
Consolidated Variable Interest Entities (Tables)
9 Months Ended
Sep. 30, 2024
Consolidated Variable Interest Entities Disclosure [Abstract]  
Schedule of Variable Interest Entities
Our condensed consolidated balance sheets include the assets and liabilities of these entities, including the effect of foreign currency translation, which primarily comprised the following:

September 30,December 31,
20242023
(in millions)
Cash and cash equivalents$65 $46 
Accounts receivable, net12 17 
Property and equipment, net35 37 
Deferred income tax assets26 32 
Other non-current assets43 43 
Accounts payable, accrued expenses and other38 29 
Long-term debt(1)(2)
80 95 
____________
(1)Includes finance lease liabilities of $74 million and $86 million as of September 30, 2024 and December 31, 2023, respectively.
(2)Includes current maturities of $17 million and $19 million as of September 30, 2024 and December 31, 2023, respectively.
v3.24.3
Debt (Tables)
9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Long-term Debt
Long-term debt balances, including obligations for finance leases, and associated interest rates and maturities as of September 30, 2024, were as follows:

September 30,December 31,
20242023
(in millions)
Senior secured term loan facility due 2028
$— $1,000 
Senior secured term loan facility with a rate of 6.60%, due 2030
3,119 2,119 
Senior notes with a rate of 5.375%, due 2025(1)