UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2021~~2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-36243

Hilton Worldwide Holdings Inc.

(Exact name of registrant as specified in its charter)

Delaware

27-4384691

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

7930 Jones Branch Drive, Suite 1100, McLean, VA

22102

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code: (703) 883-1000

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value per share

HLT

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange

Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant's common stock, par value $0.01 per share, as of October ~~20, 2021~~21, 2022 was ~~278,721,682.~~270,456,017.

HILTON WORLDWIDE HOLDINGS INC.

FORM 10-Q TABLE OF CONTENTS


		Page No.
PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements	2
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1816
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3026
Item 4.	Controls and Procedures	3027

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	3228
Item 1A.	Risk Factors	3228
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3228
Item 3.	Defaults Upon Senior Securities	3228
Item 4.	Mine Safety Disclosures	3228
Item 5.	Other Information	3229
Item 6.	Exhibits	3329
	Signatures	3431

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

HILTON WORLDWIDE HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share data)


		September 30,		December 31,			September 30,		December 31,
		2021		2020			2022		2021
		(unaudited)					(unaudited)
ASSETS	ASSETS					ASSETS
Current Assets:	Current Assets:					Current Assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,288	$	3,218	Cash and cash equivalents	$	1,282	$	1,427
Restricted cash and cash equivalents	Restricted cash and cash equivalents	99		45		Restricted cash and cash equivalents	80		85
Accounts receivable, net of allowance for credit losses of $130 and $132		1,012		771
Accounts receivable, net of allowance for credit losses of $124 and $126						Accounts receivable, net of allowance for credit losses of $124 and $126	1,278		1,068
Prepaid expenses	Prepaid expenses	124		70		Prepaid expenses	139		89
Other	Other	171		98		Other	197		202
Total current assets (variable interest entities – $31 and $53)		2,694		4,202
Total current assets (variable interest entities – $28 and $30)						Total current assets (variable interest entities – $28 and $30)	2,976		2,871
Intangibles and Other Assets:	Intangibles and Other Assets:					Intangibles and Other Assets:
Goodwill	Goodwill	5,078		5,095		Goodwill	4,990		5,071
Brands	Brands	4,890		4,904		Brands	4,814		4,883
Management and franchise contracts, net	Management and franchise contracts, net	730		653		Management and franchise contracts, net	874		758
Other intangible assets, net	Other intangible assets, net	208		266		Other intangible assets, net	158		194
Operating lease right-of-use assets	Operating lease right-of-use assets	719		772		Operating lease right-of-use assets	624		694
Property and equipment, net	Property and equipment, net	303		346		Property and equipment, net	254		305
Deferred income tax assets	Deferred income tax assets	244		194		Deferred income tax assets	213		213
Other	Other	448		323		Other	605		452
Total intangibles and other assets (variable interest entities – $181 and $199)		12,620		12,553
Total intangibles and other assets (variable interest entities – $141 and $184)						Total intangibles and other assets (variable interest entities – $141 and $184)	12,532		12,570
TOTAL ASSETS	TOTAL ASSETS	$	15,314	$	16,755	TOTAL ASSETS	$	15,508	$	15,441
LIABILITIES AND EQUITY (DEFICIT)	LIABILITIES AND EQUITY (DEFICIT)					LIABILITIES AND EQUITY (DEFICIT)
Current Liabilities:	Current Liabilities:					Current Liabilities:
Accounts payable, accrued expenses and other	Accounts payable, accrued expenses and other	$	1,433	$	1,302	Accounts payable, accrued expenses and other	$	1,728	$	1,568
Current maturities of long-term debt	Current maturities of long-term debt	54		56		Current maturities of long-term debt	39		54
Current portion of deferred revenues	Current portion of deferred revenues	298		370		Current portion of deferred revenues	266		350
Current portion of liability for guest loyalty program	Current portion of liability for guest loyalty program	837		703		Current portion of liability for guest loyalty program	1,332		1,047
Total current liabilities (variable interest entities – $52 and $57)		2,622		2,431
Total current liabilities (variable interest entities – $39 and $50)						Total current liabilities (variable interest entities – $39 and $50)	3,365		3,019
Long-term debt	Long-term debt	8,713		10,431		Long-term debt	8,692		8,712
Operating lease liabilities	Operating lease liabilities	899		971		Operating lease liabilities	786		870
Deferred revenues	Deferred revenues	790		1,004		Deferred revenues	845		896
Deferred income tax liabilities	Deferred income tax liabilities	718		649		Deferred income tax liabilities	794		700
Liability for guest loyalty program	Liability for guest loyalty program	1,739		1,766		Liability for guest loyalty program	1,251		1,317
Other	Other	961		989		Other	689		746
Total liabilities (variable interest entities – $217 and $248)		16,442		18,241
Total liabilities (variable interest entities – $174 and $212)						Total liabilities (variable interest entities – $174 and $212)	16,422		16,260
Commitments and contingencies – see Note 12	Commitments and contingencies – see Note 12	0		0		Commitments and contingencies – see Note 12
Equity (Deficit):	Equity (Deficit):					Equity (Deficit):
Preferred stock, $0.01 par value; 3,000,000,000 authorized shares, none issued or outstanding as of September 30, 2021 and December 31, 2020		—		—
Common stock, $0.01 par value; 10,000,000,000 authorized shares, 331,639,032 issued and 278,718,682 outstanding as of September 30, 2021 and 330,511,254 issued and 277,590,904 outstanding as of December 31, 2020		3		3
Treasury stock, at cost; 52,920,350 shares as of September 30, 2021 and December 31, 2020		(4,447)		(4,453)
Preferred stock, $0.01 par value; 3,000,000,000 authorized shares, none issued or outstanding as of September 30, 2022 and December 31, 2021						Preferred stock, $0.01 par value; 3,000,000,000 authorized shares, none issued or outstanding as of September 30, 2022 and December 31, 2021	—		—
Common stock, $0.01 par value; 10,000,000,000 authorized shares, 332,944,066 issued and 271,541,523 outstanding as of September 30, 2022 and 332,011,359 issued and 279,091,009 outstanding as of December 31, 2021						Common stock, $0.01 par value; 10,000,000,000 authorized shares, 332,944,066 issued and 271,541,523 outstanding as of September 30, 2022 and 332,011,359 issued and 279,091,009 outstanding as of December 31, 2021	3		3
Treasury stock, at cost; 61,402,543 shares as of September 30, 2022 and 52,920,350 shares as of December 31, 2021						Treasury stock, at cost; 61,402,543 shares as of September 30, 2022 and 52,920,350 shares as of December 31, 2021	(5,545)		(4,443)
Additional paid-in capital	Additional paid-in capital	10,654		10,552		Additional paid-in capital	10,791		10,720
Accumulated deficit	Accumulated deficit	(6,469)		(6,732)		Accumulated deficit	(5,477)		(6,322)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(869)		(860)		Accumulated other comprehensive loss	(685)		(779)
Total Hilton stockholders' deficit	Total Hilton stockholders' deficit	(1,128)		(1,490)		Total Hilton stockholders' deficit	(913)		(821)
Noncontrolling interests	Noncontrolling interests	—		4		Noncontrolling interests	(1)		2
Total deficit	Total deficit	(1,128)		(1,486)		Total deficit	(914)		(819)
TOTAL LIABILITIES AND EQUITY (DEFICIT)	TOTAL LIABILITIES AND EQUITY (DEFICIT)	$	15,314	$	16,755	TOTAL LIABILITIES AND EQUITY (DEFICIT)	$	15,508	$	15,441

See notes to condensed consolidated financial statements.

HILTON WORLDWIDE HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

(unaudited)


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
		September 30,				September 30,					September 30,				September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Revenues	Revenues									Revenues
Franchise and licensing fees	Franchise and licensing fees	$	451	$	241	$	1,062	$	712	Franchise and licensing fees	$	573	$	451	$	1,531	$	1,062
Base and other management fees	Base and other management fees	49		24		116		92		Base and other management fees	76		49		206		116
Incentive management fees	Incentive management fees	26		7		60		25		Incentive management fees	52		26		132		60
Owned and leased hotels	Owned and leased hotels	199		94		376		335		Owned and leased hotels	295		199		727		376
Other revenues	Other revenues	18		19		56		52		Other revenues	28		18		71		56
		743		385		1,670		1,216			1,024		743		2,667		1,670
Other revenues from managed and franchised properties	Other revenues from managed and franchised properties	1,006		548		2,282		2,201		Other revenues from managed and franchised properties	1,344		1,006		3,662		2,282
Total revenues	Total revenues	1,749		933		3,952		3,417		Total revenues	2,368		1,749		6,329		3,952

Expenses	Expenses									Expenses
Owned and leased hotels	Owned and leased hotels	200		144		452		478		Owned and leased hotels	263		200		705		452
Depreciation and amortization	Depreciation and amortization	46		90		143		269		Depreciation and amortization	39		46		123		143
General and administrative	General and administrative	107		66		302		189		General and administrative	93		107		287		302
Reorganization costs		—		—		—		38
Impairment losses		—		9		—		136
Other expenses	Other expenses	12		21		31		48		Other expenses	13		12		35		31
		365		330		928		1,158			408		365		1,150		928
Other expenses from managed and franchised properties	Other expenses from managed and franchised properties	944		592		2,339		2,482		Other expenses from managed and franchised properties	1,337		944		3,589		2,339
Total expenses	Total expenses	1,309		922		3,267		3,640		Total expenses	1,745		1,309		4,739		3,267

Loss on sale of assets, net	Loss on sale of assets, net	(8)		—		(8)		—		Loss on sale of assets, net	—		(8)		—		(8)

Operating income (loss)		432		11		677		(223)
Operating income										Operating income	623		432		1,590		677

Interest expense	Interest expense	(98)		(116)		(302)		(316)		Interest expense	(106)		(98)		(295)		(302)
Gain (loss) on foreign currency transactions		—		(12)		1		(16)
Gain on foreign currency transactions										Gain on foreign currency transactions	—		—		4		1
Loss on debt extinguishment	Loss on debt extinguishment	—		—		(69)		—		Loss on debt extinguishment	—		—		—		(69)
Other non-operating income (loss), net		6		3		16		(20)
Other non-operating income, net										Other non-operating income, net	10		6		32		16

Income (loss) before income taxes		340		(114)		323		(575)
Income before income taxes										Income before income taxes	527		340		1,331		323

Income tax benefit (expense)		(100)		33		(64)		80
Income tax expense										Income tax expense	(181)		(100)		(407)		(64)

Net income (loss)		240		(81)		259		(495)
Net income										Net income	346		240		924		259
Net loss attributable to noncontrolling interests	Net loss attributable to noncontrolling interests	1		2		4		4		Net loss attributable to noncontrolling interests	1		1		3		4
Net income (loss) attributable to Hilton stockholders		$	241	$	(79)	$	263	$	(491)
Net income attributable to Hilton stockholders										Net income attributable to Hilton stockholders	$	347	$	241	$	927	$	263

Earnings (loss) per share:
Earnings per share:										Earnings per share:
Basic	Basic	$	0.86	$	(0.29)	$	0.94	$	(1.77)	Basic	$	1.27	$	0.86	$	3.35	$	0.94
Diluted	Diluted	$	0.86	$	(0.29)	$	0.94	$	(1.77)	Diluted	$	1.26	$	0.86	$	3.32	$	0.94

Cash dividends declared per share	Cash dividends declared per share	$	—	$	—	$	—	$	0.15	Cash dividends declared per share	$	0.15	$	—	$	0.30	$	—

See notes to condensed consolidated financial statements.

HILTON WORLDWIDE HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions)

(unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
Net income (loss) $ 240 $ (81) $ 259 $ (495)
Other comprehensive income (loss), net of tax benefit (expense):
Currency translation adjustment, net of tax of $(2), $(11), $(4) and $(2) (5) 25 (26) 21
Pension liability adjustment, net of tax of $(1), $(1), $(2) and $(2) 2 2 6 5
Cash flow hedge adjustment, net of tax of $—, $(1), $(4) and $13 — 1 11 (39)
Total other comprehensive income (loss) (3) 28 (9) (13)
Comprehensive income (loss) 237 (53) 250 (508)
Comprehensive loss attributable to noncontrolling interests 1 2 4 4
Comprehensive income (loss) attributable to Hilton stockholders $ 238 $ (51) $ 254 $ (504)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net income	$	346	$	240	$	924	$	259
Other comprehensive income (loss), net of tax benefit (expense):
Currency translation adjustment, net of tax of $12, $(2), $18 and $(4)	(22)		(5)		(47)		(26)
Pension liability adjustment, net of tax of $—(1), $(1), $(1) and $(2)	1		2		4		6
Cash flow hedge adjustment, net of tax of $(17), $—, $(46) and $(4)	50		—		137		11
Total other comprehensive income (loss)	29		(3)		94		(9)

Comprehensive income	375		237		1,018		250
Comprehensive loss attributable to noncontrolling interests	1		1		3		4
Comprehensive income attributable to Hilton stockholders	$	376	$	238	$	1,021	$	254

____________

(1)Amount was less than $1 million.

See notes to condensed consolidated financial statements.

HILTON WORLDWIDE HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)


		Nine Months Ended					Nine Months Ended
		September 30,					September 30,
		2021		2020			2022		2021
Operating Activities:	Operating Activities:					Operating Activities:
Net income (loss)		$	259	$	(495)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Net income						Net income	$	924	$	259
Adjustments to reconcile net income to net cash provided by (used in) operating activities:						Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization of contract acquisition costs	Amortization of contract acquisition costs	23		22		Amortization of contract acquisition costs	28		23
Depreciation and amortization		143		269
Impairment losses		—		136
Loss (gain) on foreign currency transactions		(1)		16
Depreciation and amortization expenses						Depreciation and amortization expenses	123		143
Gain on foreign currency transactions						Gain on foreign currency transactions	(4)		(1)
Share-based compensation expense	Share-based compensation expense	144		37		Share-based compensation expense	126		144
Deferred income taxes	Deferred income taxes	6		(142)		Deferred income taxes	54		6
Contract acquisition costs		(160)		(37)
Change in deferred revenues		(286)		496
Change in liability for guest loyalty program		107		413
Contract acquisition costs, net of refunds						Contract acquisition costs, net of refunds	(61)		(160)
Working capital changes and other	Working capital changes and other	(257)		131		Working capital changes and other	9		(436)
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	(22)		846		Net cash provided by (used in) operating activities	1,199		(22)
Investing Activities:	Investing Activities:					Investing Activities:
Capital expenditures for property and equipment	Capital expenditures for property and equipment	(17)		(38)		Capital expenditures for property and equipment	(19)		(17)
Issuance of other financing receivables						Issuance of other financing receivables	(46)		(3)
Undesignated derivative financial instruments						Undesignated derivative financial instruments	65		(13)
Capitalized software costs	Capitalized software costs	(28)		(38)		Capitalized software costs	(43)		(28)
Investments in unconsolidated affiliates						Investments in unconsolidated affiliates	(53)		—
Other	Other	11		(13)		Other	(2)		27
Net cash used in investing activities	Net cash used in investing activities	(34)		(89)		Net cash used in investing activities	(98)		(34)
Financing Activities:	Financing Activities:					Financing Activities:
Borrowings	Borrowings	1,505		2,690		Borrowings	23		1,505
Repayment of debt	Repayment of debt	(3,221)		(214)		Repayment of debt	(35)		(3,221)
Debt issuance costs and redemption premium	Debt issuance costs and redemption premium	(76)		(14)		Debt issuance costs and redemption premium	—		(76)
Dividends paid	Dividends paid	—		(42)		Dividends paid	(82)		—
Repurchases of common stock	Repurchases of common stock	—		(296)		Repurchases of common stock	(1,092)		—
Share-based compensation tax withholdings and other		(22)		(36)
Other		—		(1)
Net cash provided by (used in) financing activities		(1,814)		2,087
Share-based compensation tax withholdings						Share-based compensation tax withholdings	(56)		(48)
Proceeds from share-based compensation						Proceeds from share-based compensation	16		26
Settlements of interest rate swap with financing component						Settlements of interest rate swap with financing component	(4)		—
Net cash used in financing activities						Net cash used in financing activities	(1,230)		(1,814)

Effect of exchange rate changes on cash, restricted cash and cash equivalents	Effect of exchange rate changes on cash, restricted cash and cash equivalents	(6)		(6)		Effect of exchange rate changes on cash, restricted cash and cash equivalents	(21)		(6)
Net increase (decrease) in cash, restricted cash and cash equivalents		(1,876)		2,838
Net decrease in cash, restricted cash and cash equivalents						Net decrease in cash, restricted cash and cash equivalents	(150)		(1,876)
Cash, restricted cash and cash equivalents, beginning of period	Cash, restricted cash and cash equivalents, beginning of period	3,263		630		Cash, restricted cash and cash equivalents, beginning of period	1,512		3,263
Cash, restricted cash and cash equivalents, end of period	Cash, restricted cash and cash equivalents, end of period	$	1,387	$	3,468	Cash, restricted cash and cash equivalents, end of period	$	1,362	$	1,387

Supplemental Disclosures:	Supplemental Disclosures:					Supplemental Disclosures:
Cash paid during the period:	Cash paid during the period:					Cash paid during the period:
Interest	Interest	$	254	$	276	Interest	$	264	$	254
Income taxes, net of refunds	Income taxes, net of refunds	79		67		Income taxes, net of refunds	253		79

See notes to condensed consolidated financial statements.

HILTON WORLDWIDE HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1: Organization and Basis of Presentation

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 hospitality companies in the world and is engaged in managing, franchising, owning and leasing hotels and resorts, and licensing its ~~brands and~~ intellectual property ("IP")., including brand names, trademarks and service marks. As of September 30, ~~2021,~~2022, we managed, franchised, owned or leased ~~6,758~~7,061 hotels and resorts, including timeshare properties, totaling ~~1,061,686~~1,111,147 rooms in ~~122~~123 countries and territories.

Basis of Presentation

The accompanying condensed consolidated financial statements for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 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 but that are not required for interim reporting purposes. Although 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, ~~2020.~~2021.

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 particular, the ~~novel~~ coronavirus ("COVID-19") pandemic (the "pandemic") had ~~a material~~an adverse impact on certain of our results for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021; however, our results experienced significant recovery during the three and nine months ended September 30, 2022 when compared to ~~periods~~ prior ~~to the onset of the pandemic in early 2020.~~year periods. As such, ~~this~~these interim ~~period,~~periods, as well as upcoming periods, ~~are unlikely to~~may not be comparable to periods prior to the onset of the pandemic or to other periods affected by the pandemic, and are not indicative of future performance. Management has made estimates and judgments in light of these circumstances. 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.

Note 2: 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, ~~2021:~~2022:


	(in millions)
Balance as of December 31, ~~2020~~2021	$	~~1,312~~1,166
Cash received in advance and not recognized as revenue	99329
Revenue recognized(1)(2)	~~(284)~~(380)
Other~~(2)~~(3)	~~(81)~~(64)
Balance as of September 30, ~~2021~~2022	$	~~1,046~~1,051

____________

(1)~~Includes $245 million~~Primarily related to Hilton Honors, our guest loyalty ~~program.~~ program, including co-branded credit card arrangements.

(2)Revenue recognized during the three months ended September 30, ~~2021~~2022 was ~~$170~~$139 million. Revenue recognized during the three and nine months ended September 30, 2022 included a net increase in revenue of $7 million ~~including $34~~and $4 million, respectively, for ~~performance obligations that were satisfied~~Hilton Honors points redeemed in prior periods, as a result of a change to the estimated breakage of Hilton Honors points for which point expirations have been temporarily suspended. ~~During the three and nine months ended September 30, 2020, revenue recognized was $54 million and $164 million, respectively.~~

~~(2)~~(3)Primarily represents changes in estimated transaction prices for our performance obligations related to ~~points issued under~~the issuance of Hilton Honors points, which had no effect on revenues.

~~Hilton Honors Points Pre-Sale~~

In April 2020, we pre-sold Hilton Honors points to American Express for $1.0 billion in cash (the "Honors Points Pre-Sale"). American Express and their respective designees may use the points in connection with Hilton Honors co-branded credit

cards and for promotions, rewards and incentive programs or certain other activities that they may establish or engage in from time to time. Upon receipt of the cash, we recognized $636 million in deferred revenues and the remainder in liability for guest loyalty program; see below for additional information on the revenue recognition of the related deferred revenues.

Performance Obligations

As of September 30, ~~2021,~~2022, we had deferred revenues for unsatisfied performance obligations consisting of: (i) ~~$188~~$352 million related to Hilton Honors that will be recognized as revenue ~~when the points are redeemed, which we estimate will occur~~ over approximately the next two years; (ii) $236 million related to co-branded credit card arrangements, primarily from the Honors Points Pre-Sale, of which a portion will be recognized as revenue when points are awarded with the remaining portion recognized as revenue when the points are redeemed; and (iii) $622$669 million related to application, initiation and other ~~fees that is expected~~fees; and (iii) $30 million related to beother obligations. These performance obligations are recognized as revenue ~~over~~as discussed in Note 2: "Basis of Presentation and Summary of Significant Accounting Policies" in our Annual Report on Form 10-K for the ~~terms of the related contracts.~~fiscal year ended December 31, 2021.

Note 3: Consolidated Variable Interest Entities

As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, we consolidated 2two variable interest entities ("VIEs") that each lease aone hotel property. 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. The assets of our consolidated VIEs are only available to settle the obligations of the respective entities, and the liabilities of the consolidated VIEs are non-recourse to us.

Our condensed consolidated balance sheets include the assets and liabilities of these entities, which primarily comprised the following:


		September 30,		December 31,			September 30,		December 31,
		2021		2020			2022		2021
		(in millions)					(in millions)
Cash and cash equivalents	Cash and cash equivalents	$	17	$	40	Cash and cash equivalents	$	20	$	18
Property and equipment, net	Property and equipment, net	63		76		Property and equipment, net	42		60
Deferred income tax assets	Deferred income tax assets	57		57		Deferred income tax assets	49		62
Other non-current assets	Other non-current assets	61		66		Other non-current assets	49		62
Accounts payable, accrued expenses and other	Accounts payable, accrued expenses and other	18		27		Accounts payable, accrued expenses and other	15		15
Long-term debt(1)	Long-term debt(1)	181		203		Long-term debt(1)	145		179
Other long-term liabilities	Other long-term liabilities	17		17		Other long-term liabilities	14		16

____________

(1)Includes finance lease liabilities of ~~$159~~$109 million and ~~$184~~$153 million as of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. As

During the nine months ended September 30, 2022, our consolidated VIEs borrowed a net 2.7 billion JPY (equivalent to $19 million as of September 30, 2022), with a weighted average interest rate of 1.22 percent as of September 30, 2022 and maturity dates ranging from May 2023 to February 2029; these borrowings are included in current maturities of long-term debt and long-term debt in our condensed consolidated balance sheet as of September 30, 2022.

As of December 31, 2021, ~~the~~one of our consolidated VIEs had ~~revolving credit facilities with borrowing capacities totaling 4.5 billion Japanese yen~~drawn 500 million JPY (equivalent to ~~$40 million), with 500~~$4 million Japanese yen (equivalent to $5 million) drawn under these facilities, resulting in an available borrowing capacity totaling 4.0 billion Japanese yen (equivalent to $35 million). There were 0 amounts drawn under these facilities as of December 31, ~~2020. See~~ ~~Note 5: "Debt" for additional information.~~2021) under a revolving credit facility, which was fully repaid by July 2022.

Note 4: Finite-Lived Intangible Assets

Our finite-lived intangible assets consist of management and franchise contracts and other intangible assets. Management and franchise contracts, net were as follows:


		September 30, 2021							September 30, 2022
		Gross Carrying Value		Accumulated Amortization		Net Carrying Value			Gross Carrying Value		Accumulated Amortization		Net Carrying Value
		(in millions)							(in millions)
Management contracts recorded at Merger(1)	Management contracts recorded at Merger(1)	$	311	$	(271)	$	40	Management contracts recorded at Merger(1)	$	283	$	(265)	$	18
Contract acquisition costs	Contract acquisition costs	741		(163)		578		Contract acquisition costs	936		(195)		741
Development commissions and other	Development commissions and other	138		(26)		112		Development commissions and other	145		(30)		115
		$	1,190	$	(460)	$	730		$	1,364	$	(490)	$	874


		December 31, 2020							December 31, 2021
		Gross Carrying Value		Accumulated Amortization		Net Carrying Value			Gross Carrying Value		Accumulated Amortization		Net Carrying Value
		(in millions)							(in millions)
Management contracts recorded at Merger(1)	Management contracts recorded at Merger(1)	$	317	$	(261)	$	56	Management contracts recorded at Merger(1)	$	310	$	(275)	$	35
Contract acquisition costs~~(2)~~	Contract acquisition costs~~(2)~~	632		(144)		488		Contract acquisition costs~~(2)~~	780		(170)		610
Development commissions and other	Development commissions and other	132		(23)		109		Development commissions and other	140		(27)		113
		$	1,081	$	(428)	$	653		$	1,230	$	(472)	$	758

____________

(1)Represents intangible assets that were initially recorded at ~~their~~ fair value as part of the ~~October~~ 2007 transaction whereby we became a wholly owned subsidiary of affiliates of Blackstone Inc. (the "Merger").

~~(2)~~During the three and nine months ended September 30, 2020, we recognized $6 million and $15 million, respectively, of impairment losses related to our contract acquisition costs included in our condensed consolidated statements of operations.

Amortization of our finite-lived intangible assets was as follows:


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
		September 30,				September 30,					September 30,				September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(in millions)									(in millions)
Recognized in depreciation and amortization expense(1)		$	32	$	76	$	103	$	227
Recognized in depreciation and amortization expenses(1)										Recognized in depreciation and amortization expenses(1)	$	27	$	32	$	88	$	103
Recognized as a reduction of franchise and licensing fees and base and other management fees	Recognized as a reduction of franchise and licensing fees and base and other management fees	9		7		23		22		Recognized as a reduction of franchise and licensing fees and base and other management fees	10		9		28		23

____________

(1)Includes amortization expense associated with assets that were initially recorded at fair value at the time of the Merger of $11 million ~~and $47 million~~ for both the three months ended September 30, 2022 and 2021 and ~~2020, respectively,~~$34 million and $35 ~~million and $143~~ million for the nine months ended September 30, 2022 and 2021, ~~and 2020, respectively, associated with assets that were initially recorded at their fair value at the time of the Merger, some of which fully amortized during 2020.~~respectively.

Note 5: Debt

Long-term debt balances, including obligations for finance leases, and associated interest rates and maturities as of September 30, ~~2021,~~2022, were as follows:

September 30, December 31,
2021 2020
(in millions)
Senior secured revolving credit facility, due 2024 $ — $ 1,690
Senior secured term loan facility with a rate of 1.84%, due 2026 2,619 2,619
Senior notes with a rate of 5.375%, due 2025 500 500
Senior notes with a rate of 5.125%, due 2026 — 1,500
Senior notes with a rate of 4.875%, due 2027 600 600
Senior notes with a rate of 5.750%, due 2028 500 500
Senior notes with a rate of 3.750%, due 2029 800 800
Senior notes with a rate of 4.875%, due 2030 1,000 1,000
Senior notes with a rate of 4.000%, due 2031 1,100 1,100
Senior notes with a rate of 3.625%, due 2032 1,500 —
Finance lease liabilities with a weighted average rate of 5.89%, due 2021 to 2030 216 252
Other debt of consolidated VIEs with a weighted average rate of 2.69%, due 2022 and 2026 22 19
8,857 10,580
Less: unamortized deferred financing costs and discount (90) (93)
Less: current maturities of long-term debt(1)
(54) (56)
$ 8,713 $ 10,431


	September 30,		December 31,
	2022		2021
	(in millions)
Senior secured term loan facility with a rate of 4.83%, due 2026	$	2,619	$	2,619
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 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
Finance lease liabilities with a weighted average rate of 5.85%, due 2022 to 2030	153		208
Other debt of consolidated VIEs with a weighted average rate of 1.21%, due 2023 to 2029(2)	36		26
	8,808		8,853
Less: unamortized deferred financing costs and discount	(77)		(87)
Less: current maturities of long-term debt(3)	(39)		(54)
	$	8,692	$	8,712

____________

(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., an indirect wholly owned subsidiary of the Parent and the issuer of all of the series of Senior Notes.

(2)Refer to Note 3: "Consolidated Variable Interest Entities" for additional information on the debt of our consolidated VIEs.

(3)Represents current maturities of finance lease liabilities and ~~as of September 30, 2021, the outstanding~~ borrowings ~~under the revolving credit facility~~ of a consolidated VIE.

Our senior secured credit facilities consist of a $1.75 billion senior secured revolving credit facility (the "Revolving Credit Facility") and a senior secured term loan facility (the "Term Loan"). The obligations of 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. ~~During the nine months ended September 30, 2021, we fully repaid the $1,690 million outstanding debt balance on the Revolving Credit Facility.~~ As of September 30, ~~2021,~~2022, we had $60 million of letters of credit outstanding onunder the Revolving Credit Facility, resulting in an available borrowing capacity of $1,690 million.

In February 2021, we issued $1.5 billion aggregate principal amount of 3.625% Senior Notes due 2032 (the "2032 Senior Notes") and incurred $21 million of debt issuance costs. Interest on the 2032 Senior Notes is payable semi-annually in arrears on February 15 and August 15 of each year, beginning August 15, 2021. We used the net proceeds from the issuance, together with available cash, to redeem all $1.5 billion in aggregate principal amount of our outstanding 5.125% Senior Notes due 2026 (the "2026 Senior Notes"), plus accrued and unpaid interest. In connection with the redemption, we paid a redemption premium of $55 million and accelerated the recognition of the unamortized deferred financing costs related to the 2026 Senior Notes of $14 million, which were both included in loss on debt extinguishment in our condensed consolidated statement of operations for the nine months ended September 30, 2021.

In August 2021, one of our consolidated VIEs borrowed 500 million Japanese yen (equivalent to $5 million as of September 30, 2021) on its revolving credit facility, which has a maturity date of June 2022. See Note 3: "Consolidated Variable Interest Entities" for additional information.

The 5.375% Senior Notes due 2025 (the "2025 Senior Notes"), the 4.875% Senior Notes due 2027, the 5.750% Senior Notes due 2028 (the "2028 Senior Notes"), the 3.750% Senior Notes due 2029, the 4.875% Senior Notes due 2030, the 4.000% Senior Notes due 2031 and the 2032 Senior 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.

Note 6: 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, 2021									September 30, 2022
				Hierarchy Level									Hierarchy Level
		Carrying Value		Level 1		Level 2		Level 3			Carrying Value		Level 1		Level 2		Level 3
		(in millions)									(in millions)
Assets:	Assets:									Assets:
Cash equivalents	Cash equivalents	$	624	$	—	$	624	$	—	Cash equivalents	$	499	$	—	$	499	$	—
Interest rate swap(1)										Interest rate swap(1)	116		—		116		—
Liabilities:	Liabilities:									Liabilities:
Long-term debt(1)		8,529		6,171		—		2,601
Interest rate swaps		66		—		66		—
Long-term debt(2)										Long-term debt(2)	8,542		5,086		—		2,551


		December 31, 2020									December 31, 2021
				Hierarchy Level									Hierarchy Level
		Carrying Value		Level 1		Level 2		Level 3			Carrying Value		Level 1		Level 2		Level 3
		(in millions)									(in millions)
Assets:	Assets:									Assets:
Cash equivalents	Cash equivalents	$	2,270	$	—	$	2,270	$	—	Cash equivalents	$	622	$	—	$	622	$	—
Liabilities:	Liabilities:									Liabilities:
Long-term debt~~(1)~~(2)	Long-term debt~~(1)~~(2)	10,216		6,366		—		4,293		Long-term debt~~(1)~~(2)	8,532		6,180		—		2,599
Interest rate swaps(1)	Interest rate swaps(1)	82		—		82		—		Interest rate swaps(1)	41		—		41		—

____________

(1)Interest rate swaps are included in other non-current assets or other long-term liabilities in our condensed consolidated balance sheets depending on their value to us as of the balance sheet date. During the nine months ended September 30, 2022, one of the interest rate swaps that was outstanding as of December 31, 2021 matured. The remaining interest rate swap outstanding as of September 30, 2022 will mature in March 2026.

(2)The carrying values include the deduction for unamortized deferred financing costs and ~~discount.~~any applicable discounts. The carrying values and fair values exclude finance lease liabilities and other debt of consolidated VIEs.

We measure our interest rate swaps at fair value, which was determined using a discounted cash flow analysis that reflects the contractual terms of the interest rate swaps, including the period to maturity, and uses observable market-based inputs of similar instruments, including interest rate curves, as applicable. ~~Our interest rate swaps are included in other long-term liabilities in our condensed consolidated balance sheets.~~

The fair values of financial instruments not included in these tables are estimated to be equal to their carrying values as of September 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

Note 7: Income Taxes

~~The Company's income tax provision for interim reporting periods has historically been calculated by applying an~~At the end of each quarter, we estimate of the ~~annual~~ effective income tax rate expected to be applied for the full year to "ordinary" income (loss) for the interim reporting period, which is calculated as pre-tax income (loss) excluding unusual and infrequently occurring discrete items. For the nine months ended September 30, 2021, we calculated the income tax provision using a discreteyear. The effective income tax rate ~~method as if~~is determined by the ~~interim year to date period was an annual period. We determined that since normal changes in estimated "ordinary"~~level and composition of income (loss) ~~would result in disproportionate changes in the estimated annual effective~~before income ~~tax rate, the Company's historical method of calculating its income tax provision for interim reporting periods would not provide a reliable estimate for the nine months ended September 30, 2021.~~

~~In June 2021, the United Kingdom's ("U.K.") Finance Act 2021 (the "U.K. Finance Act") was enacted,~~taxes, which ~~included, among other items, an increase~~is subject to the U.K. corporate income tax rate from 19 percent to 25 percent. We remeasured our U.K. deferred tax assets and other tax liabilities to the new rate, resulting in a $30 million tax benefit recognized during the nine months ended September 30, 2021. Due to this remeasurement, our effective income tax rate on consolidated pre-tax income is lower than the combined U.S. statutory rate for the nine months ended September 30, 2021.

~~We file income tax returns, including returns for our subsidiaries, with~~ federal, state, local and foreign tax jurisdictions. We are under regular and recurring audit by the Internal Revenue Service ("IRS") and other taxing authorities on open tax positions. The timing of the resolution of tax audits is highly uncertain, as are the amounts, if any, that may ultimately be paid upon such resolution. Changes may result from the conclusion of ongoing audits, appeals or litigation in federal, state, local and foreign tax jurisdictions or from the resolution of various proceedings between the U.S. and foreign tax authorities. As of September 30, 2021, we remain subject to federal and state examinations of our income ~~tax returns for tax years from 2005 through 2020 and foreign examinations of our income tax returns for tax years from 1996 through 2020.~~taxes.

~~Our total unrecognized tax benefits as~~In August 2022, the Inflation Reduction Act of September 30, 2021 and December 31, 2020 were $438 million and $451 million, respectively. As of September 30, 2021 and December 31, 2020, we had accrued approximately $71 million and $65 million, respectively, for interest and penalties related to these unrecognized tax benefits. Included2022 (the "IRA") was signed into law in the balances of unrecognized tax benefits as of September 30, 2021 and December 31, 2020 were $401 million and $400 million, respectively, associated with positions that, if favorably resolved, would provideU.S. We do not expect the IRA to have a ~~benefit to~~material impact on our consolidated financial statements, including our annual estimated effective ~~income~~ tax rate.

In prior periods, we received 30-day Letters from the IRS and the Revenue Agents Reports ("RARs") for the 2006 through the 2013 tax years. We disagreed with several of the proposed adjustments in the RARs for those respective years and filed formal appeals protests with the IRS. The unsettled proposed adjustments sought by the IRS for these open audit periods would result in additional U.S. federal taxes owed of approximately $817 million, excluding interest and penalties and potential state income taxes. We disagree with the IRS's position on each of their assertions and are vigorously contesting them. However, based on continuing appeals process discussions with the IRS, we believe that it is more likely than not that we will not recognize the full benefit related to certain of the issues being appealed. Accordingly, as of September 30, 2021, we had recorded $86 million of unrecognized tax benefits related to these issues.

Note 8: Share-Based Compensation

~~Under~~We recognized share-based compensation expense of $42 million and $52 million during the three months ended September 30, 2022 and 2021, respectively, and $126 million and $144 million during the nine months ended September 30, 2022 and 2021, respectively, which included amounts reimbursed by hotel owners.

Our share-based compensation primarily consists of awards that we grant to eligible employees under the Hilton 2017 Omnibus Incentive Plan (the "2017 Plan")~~, we award~~ and includes time-vesting restricted stock units ("RSUs"), nonqualified stock options

("options") and performance-vesting RSUs ("performance shares") to our eligible employees. We recognized share-based compensation expense of $52 million and $25 million during the three months ended September 30, 2021 and 2020, respectively, and $144 million and $37 million during the nine months ended September 30, 2021 and 2020, respectively, which included amounts reimbursed by hotel owners. The expenses recognized during the three and nine months ended September 30, 2020 were net of the reversal of expenses recognized in prior periods as a result of the determination that the performance conditions of the performance shares that were originally awarded in 2018, 2019 and 2020 were no longer probable of achievement. Refer to "Performance Shares" below for additional information.

. As of September 30, ~~2021,~~2022, unrecognized compensation costs for unvested awards under the 2017 Plan were approximately ~~$157~~$141 million, which are expected to be recognized over a weighted-average period of 1.7 years on a straight-line basis.

RSUs

During the nine months ended September 30, ~~2021,~~2022, we granted ~~587,000~~507,000 RSUs with a weighted average grant date fair value per share of ~~$123.09,~~$150.58, which vest in equal annual installments over two or three years from the date of grant.

Options

During the nine months ended September 30, ~~2021,~~2022, we granted ~~361,000~~318,000 options with an exercise price per share of ~~$123.13,~~$150.67, 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 grant date fair value per share of the options granted during the nine months ended September 30, ~~2021~~2022 was ~~$41.15,~~$51.15, which was determined using the Black-Scholes-Merton option-pricing model with the following assumptions:


Expected volatility(1)	~~33.13~~33.28	%
Dividend yield(2)	—0.41	%
Risk-free rate(3)	~~0.92~~1.93	%
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 look back period that corresponds to the expected ~~life~~term of the option.

(2)~~We have historically paid regular quarterly cash dividends. However, in March 2020, we suspended~~Estimated based on the ~~declaration and payment of dividends as part of certain proactive measures we took to secure our liquidity position in response to the COVID-19 pandemic, and,~~expectation, at the ~~time~~date of grant, of the ~~grant, we could not estimate when the payment~~resumption of ~~dividends would resume.~~a quarterly $0.15 per share dividend, as well as our three-month average stock price.

(3)Based on the yields of U.S. Department of Treasury instruments with similar expected ~~lives.~~terms at the date of grant.

(4)Estimated using the ~~average~~midpoint of the vesting ~~periods~~period and the contractual term of the options.

Performance Shares

In December 2020, we modified our performance shares that were originally awarded in 2018, 2019 and 2020 in response to the COVID-19 pandemic and its negative impact on the hospitality industry and, ultimately, the Company's performance. The modifications were structured to reward for results achieved prior to the COVID-19 pandemic, retain senior business leaders and incentivize for the recovery efforts by utilizing metrics most meaningful in assessing our performance during our recovery from the adverse impact of the pandemic. Under the terms of the modified awards, a portion of the outstanding performance shares granted in 2019 were modified to vest based on performance prior to the pandemic and continued service, and the remaining portion of those performance shares, as well as the shares granted in 2020, were converted to performance shares that will vest based on different performance measures from those under the original award agreements. The modified terms did not change the vesting schedules of the original awards, and, as such, the performance shares that were originally awarded in 2018 vested in December 2020.

During the nine months ended September 30, ~~2021,~~2022, we granted ~~241,000~~216,000 performance shares with a grant date fair value per share of ~~$123.13.~~$150.67. We recognize compensation expense based on the total number of performance shares that are expected to vest as determined by the projected achievement of each of the performance ~~measures' achievement factors,~~measures, which are estimated each reporting period and range from 0zero percent to 200 percent, with 100 percent being the target. As of September 30, ~~2021,~~2022, we determined that all of the performance measures for ~~all of~~ the outstanding performance shares were probable of achievement, with the ~~applicable~~average of the achievement factors estimated to be between the target and maximum achievement ~~percentages.~~percentages for the performance shares granted in 2020 and 2021 and at target for the performance shares granted in 2022.

1110

Note 9: Earnings ~~(Loss)~~ Per Share

The following table presents the calculation of basic and diluted earnings ~~(loss)~~ per share ("EPS"):


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
		September 30,				September 30,					September 30,				September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(in millions, except per share amounts)									(in millions, except per share amounts)
Basic EPS:	Basic EPS:									Basic EPS:
Numerator:	Numerator:									Numerator:
Net income (loss) attributable to Hilton stockholders		$	241	$	(79)	$	263	$	(491)
Net income attributable to Hilton stockholders										Net income attributable to Hilton stockholders	$	347	$	241	$	927	$	263
Denominator:	Denominator:									Denominator:
Weighted average shares outstanding	Weighted average shares outstanding	279		277		278		277		Weighted average shares outstanding	273		279		277		278
Basic EPS	Basic EPS	$	0.86	$	(0.29)	$	0.94	$	(1.77)	Basic EPS	$	1.27	$	0.86	$	3.35	$	0.94

Diluted EPS:	Diluted EPS:									Diluted EPS:
Numerator:	Numerator:									Numerator:
Net income (loss) attributable to Hilton stockholders		$	241	$	(79)	$	263	$	(491)
Net income attributable to Hilton stockholders										Net income attributable to Hilton stockholders	$	347	$	241	$	927	$	263
Denominator:	Denominator:									Denominator:
Weighted average shares outstanding(1)	Weighted average shares outstanding(1)	281		277		281		277		Weighted average shares outstanding(1)	275		281		279		281
Diluted EPS~~(1)~~	Diluted EPS~~(1)~~	$	0.86	$	(0.29)	$	0.94	$	(1.77)	Diluted EPS~~(1)~~	$	1.26	$	0.86	$	3.32	$	0.94

____________

(1)Certain shares related to share-based compensation were excluded from the ~~calculation~~calculations of diluted EPS because their effect would have been anti-dilutive under the treasury stock method, including 1 million shares for both the three and nine months ended September 30, 2022, and less than 1 million shares for both the three and nine months ended September 30, 2021, and, as revised, 3 million shares for both the three and nine months ended September 30, 2020. The dilutive shares related to share-based compensation included in the previously reported weighted average shares outstanding of 279 million for both the three and nine months ended September 30, 2020 were revised in the current period presentation, as the previously reported dilutive shares were determined to be anti-dilutive as a result of the net loss attributable to Hilton stockholders reported during those periods. The result of the revision is an immaterial decrease in the previously reported diluted EPS for the three and nine months ended September 30, 2020 of $0.01.2021.

Note 10: Stockholders' Equity (Deficit) and Accumulated Other Comprehensive Loss

The following tables present the changes in the components of stockholders' equity (deficit):

Three Months Ended September 30, 2021
Equity (Deficit) Attributable to Hilton Stockholders
Treasury Stock Additional
Paid-in
Capital Accumulated Deficit Accumulated
Other
Comprehensive
Loss
Common Stock Noncontrolling
Interests
Shares Amount Total
(in millions)
Balance as of June 30, 2021 279 $ 3 $ (4,447) $ 10,603 $ (6,710) $ (866) $ 1 $ (1,416)
Net income (loss) — — — — 241 — (1) 240
Other comprehensive loss — — — — — (3) — (3)
Share-based compensation — — — 51 — — — 51
Balance as of September 30, 2021 279 $ 3 $ (4,447) $ 10,654 $ (6,469) $ (869) $ — $ (1,128)


	Three Months Ended September 30, 2022
	Equity (Deficit) Attributable to Hilton Stockholders
				Treasury Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss
	Common Stock											Noncontrolling Interests
	Shares	Amount												Total
	(in millions)
Balance as of June 30, 2022	275.5	$	3	$	(5,048)	$	10,753	$	(5,783)	$	(714)	$	—	$	(789)
Net income (loss)	—	—		—		—		347		—		(1)		346
Other comprehensive income	—	—		—		—		—		29		—		29
Dividends(1)	—	—		—		—		(41)		—		—		(41)
Repurchases of common stock(2)	(4.0)	—		(497)		—		—		—		—		(497)
Share-based compensation	—	—		—		38		—		—		—		38
Balance as of September 30, 2022	271.5	$	3	$	(5,545)	$	10,791	$	(5,477)	$	(685)	$	(1)	$	(914)


	Three Months Ended September 30, 2021
	Equity (Deficit) Attributable to Hilton Stockholders
				Treasury Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss
	Common Stock											Noncontrolling Interests
	Shares	Amount												Total
	(in millions)
Balance as of June 30, 2021	278.7	$	3	$	(4,447)	$	10,603	$	(6,710)	$	(866)	$	1	$	(1,416)
Net income (loss)	—	—		—		—		241		—		(1)		240
Other comprehensive loss	—	—		—		—		—		(3)		—		(3)
Share-based compensation	—	—		—		51		—		—		—		51
Balance as of September 30, 2021	278.7	$	3	$	(4,447)	$	10,654	$	(6,469)	$	(869)	$	—	$	(1,128)

1211

Three Months Ended September 30, 2020
Equity (Deficit) Attributable to Hilton Stockholders
Treasury Stock Additional
Paid-in
Capital Accumulated Deficit Accumulated
Other
Comprehensive
Loss
Common Stock Noncontrolling
Interests
Shares Amount Total
(in millions)
Balance as of June 30, 2020 277 $ 3 $ (4,457) $ 10,465 $ (6,429) $ (881) $ 8 $ (1,291)
Net loss — — — — (79) — (2) (81)
Other comprehensive income — — — — — 28 — 28
Share-based compensation — — — 26 — — — 26
Distributions — — — — — — (1) (1)
Balance as of September 30, 2020 277 $ 3 $ (4,457) $ 10,491 $ (6,508) $ (853) $ 5 $ (1,319)


	Nine Months Ended September 30, 2022
	Equity (Deficit) Attributable to Hilton Stockholders
				Treasury Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss
	Common Stock											Noncontrolling Interests
	Shares	Amount												Total
	(in millions)
Balance as of December 31, 2021	279.1	$	3	$	(4,443)	$	10,720	$	(6,322)	$	(779)	$	2	$	(819)
Net income (loss)	—	—		—		—		927		—		(3)		924
Other comprehensive income	—	—		—		—		—		94		—		94
Dividends(1)	—	—		—		—		(82)		—		—		(82)
Repurchases of common stock(2)	(8.5)	—		(1,107)		—		—		—		—		(1,107)
Share-based compensation	0.9	—		5		71		—		—		—		76
Balance as of September 30, 2022	271.5	$	3	$	(5,545)	$	10,791	$	(5,477)	$	(685)	$	(1)	$	(914)

Nine Months Ended September 30, 2021
Equity (Deficit) Attributable to Hilton Stockholders
Treasury Stock Additional
Paid-in
Capital Accumulated Deficit Accumulated
Other
Comprehensive
Loss
Common Stock Noncontrolling
Interests
Shares Amount Total
(in millions)
Balance as of December 31, 2020 278 $ 3 $ (4,453) $ 10,552 $ (6,732) $ (860) $ 4 $ (1,486)
Net income (loss) — — — — 263 — (4) 259
Other comprehensive loss — — — — — (9) — (9)
Share-based compensation 1 — 6 102 — — — 108
Balance as of September 30, 2021 279 $ 3 $ (4,447) $ 10,654 $ (6,469) $ (869) $ — $ (1,128)

Nine Months Ended September 30, 2020
Equity (Deficit) Attributable to Hilton Stockholders
Treasury Stock Additional
Paid-in
Capital Accumulated Deficit Accumulated
Other
Comprehensive
Loss
Common Stock Noncontrolling
Interests
Shares Amount Total
(in millions)
Balance as of December 31, 2019 279 $ 3 $ (4,169) $ 10,489 $ (5,965) $ (840) $ 10 $ (472)
Net loss — — — — (491) — (4) (495)
Other comprehensive loss — — — — — (13) — (13)
Dividends(1)
— — — — (42) — — (42)
Repurchases of common stock(1)
(3) — (279) — — — — (279)
Share-based compensation 1 — (9) 2 — — — (7)
Distributions — — — — — — (1) (1)
Cumulative effect of the adoption of ASU 2016-13(2)
— — — — (10) — — (10)
Balance as of September 30, 2020 277 $ 3 $ (4,457) $ 10,491 $ (6,508) $ (853) $ 5 $ (1,319)


	Nine Months Ended September 30, 2021
	Equity (Deficit) Attributable to Hilton Stockholders
				Treasury Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss
	Common Stock											Noncontrolling Interests
	Shares	Amount												Total
	(in millions)
Balance as of December 31, 2020	277.6	$	3	$	(4,453)	$	10,552	$	(6,732)	$	(860)	$	4	$	(1,486)
Net income (loss)	—	—		—		—		263		—		(4)		259
Other comprehensive loss	—	—		—		—		—		(9)		—		(9)
Share-based compensation	1.1	—		6		102		—		—		—		108
Balance as of September 30, 2021	278.7	$	3	$	(4,447)	$	10,654	$	(6,469)	$	(869)	$	—	$	(1,128)

____________

(1)~~In March 2020,~~During the three months ended June 30, 2022, we ~~suspended share repurchases and the declaration~~resumed payment of regular quarterly cash dividends.

(2)~~Relates to Accounting Standards Update No. 2016-13 ("ASU 2016-13"),~~ ~~Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~,~~that was adopted on January 1, 2020.~~During the three months ended March 31, 2022, we resumed share repurchases under our previously authorized stock repurchase program.

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, 2020 $ (511) $ (289) $ (60) $ (860)
Other comprehensive loss before reclassifications (32) (2) (4) (38)
Amounts reclassified from accumulated other comprehensive loss 6 8 15 29
Net current period other comprehensive income (loss) (26) 6 11 (9)
Balance as of September 30, 2021 $ (537) $ (283) $ (49) $ (869)


	Currency Translation Adjustment(1)		Pension Liability Adjustment(2)		Cash Flow Hedge Adjustment(3)		Total
	(in millions)
Balance as of December 31, 2021	$	(540)	$	(210)	$	(29)	$	(779)
Other comprehensive income (loss) before reclassifications	(48)		(2)		121		71
Amounts reclassified from accumulated other comprehensive loss	1		6		16		23
Net current period other comprehensive income (loss)	(47)		4		137		94
Balance as of September 30, 2022	$	(587)	$	(206)	$	108	$	(685)

Currency Translation Adjustment(1)
Pension Liability Adjustment(2)
Cash Flow Hedge Adjustment(3)
Total
(in millions)
Balance as of December 31, 2019 $ (549) $ (269) $ (22) $ (840)
Other comprehensive income (loss) before reclassifications 16 (3) (35) (22)
Amounts reclassified from accumulated other comprehensive loss 5 8 (4) 9
Net current period other comprehensive income (loss) 21 5 (39) (13)
Balance as of September 30, 2020 $ (528) $ (264) $ (61) $ (853)


	Currency Translation Adjustment(1)		Pension Liability Adjustment(2)		Cash Flow Hedge Adjustment(3)		Total
	(in millions)
Balance as of December 31, 2020	$	(511)	$	(289)	$	(60)	$	(860)
Other comprehensive loss before reclassifications	(32)		(2)		(4)		(38)
Amounts reclassified from accumulated other comprehensive loss	6		8		15		29
Net current period other comprehensive income (loss)	(26)		6		11		(9)
Balance as of September 30, 2021	$	(537)	$	(283)	$	(49)	$	(869)

____________

(1)Includes net investment hedge gains and intra-entity foreign currency transactions that are of a long-term investment nature. Amounts reclassified during the nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 relate to the liquidation of investments in foreign entities and were recognized in gain on foreign currency transactions and loss on sale of assets, net, ~~and loss on foreign currency transactions,~~ respectively, in our condensed consolidated statements of operations.

(2)Amounts reclassified ~~related~~relate to the amortization of prior service cost ~~(credit)~~ 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 ~~are~~were the result of hedging instruments, including: (a) interest rate swaps, inclusive of interest rate swaps that were dedesignated, ~~and subsequently settled,~~ with related amounts recognized in interest expense in our condensed consolidated statements of operations and (b) forward contracts that hedge our foreign currency denominated fees, with related amounts recognized in ~~franchise and licensing fees, base and other management fees and other revenues from managed and franchised properties~~various revenue line items, as applicable, in our condensed consolidated statements of operations.

Note 11: Business Segments

We are a hospitality company with operations organized in 2two distinct operating segments: (i) management and franchise and (ii) ~~ownership. These segments are~~ownership, each of which is reported as a segment based on: (a) delivering a similar set of products and services and

(b) being managed ~~and reported~~ separately ~~because of their~~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 ~~brands~~IP and where we provide other ~~prescribed~~contracted services to third-party owners, but ~~where~~ the day-to-day services of the hotels are operated or managed by someone other than us. This segment ~~also earns~~generates its revenue from: (i) management and franchise fees charged to third-party owners; (ii) licensing fees from Hilton Grand Vacations Inc. ("HGV") and strategic partnerships, including co-branded credit card arrangements, for the right to use ~~certain Hilton marks~~our IP; and ~~IP, as well as~~(iii) fees for managing ~~properties~~hotels in our ownership segment. As of September 30, ~~2021,~~2022, this segment included ~~735~~759 managed hotels and ~~5,905~~6,175 franchised hotels consisting of ~~1,033,282~~1,080,454 total rooms. As a result of the COVID-19 pandemic, during the nine months ended September 30, 2021 and 2020, the operations of certain hotels in our management and franchise segment were suspended for some period of time. As of September 30, 2021, all but 87 of these hotels were open.

As of September 30, ~~2021,~~2022, our ownership segment included 5954 properties totaling ~~19,056~~18,151 rooms. The segment comprised 5146 hotels that we leased, 1one hotel owned by a consolidated non-wholly owned entity, 2two hotels that were each leased by a consolidated VIE and 5five hotels owned or leased by unconsolidated affiliates. ~~In March 2020, as~~As a result of the ~~COVID-19~~ pandemic, ~~certain hotels in our ownership segment began suspending operations; however, as~~the operations of ~~September 30, 2021, with the exception of 1 hotel owned by an unconsolidated affiliate, which reopened in October 2021, all of the~~approximately 15 hotels in our ownership segment were ~~open.~~

~~During 2020, we recognized impairment losses in our condensed consolidated statements~~suspended for some period of ~~operations related to certain hotel properties in our ownership segment under operating and finance leases, which included $51 million of operating lease~~

~~right-of-use ("ROU") assets and $46 million of other intangible assets, net~~time during the nine months ended September 30, ~~2020 and,~~2021, while no hotels in our ownership segment suspended operations as a result of the pandemic during the ~~three and~~ nine months ended September 30, ~~2020, $3 million and $24 million of property and equipment, net, respectively, of which $2 million and $4 million related to finance lease ROU assets, respectively.~~2022.

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, ~~other revenues, other~~depreciation and amortization expenses or general and administrative expenses.

The following table presents revenues for our reportable segments, reconciled to consolidated amounts:


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
		September 30,				September 30,					September 30,				September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(in millions)									(in millions)
Franchise and licensing fees	Franchise and licensing fees	$	455	$	244	$	1,072	$	720	Franchise and licensing fees	$	578	$	455	$	1,544	$	1,072
Base and other management fees(1)	Base and other management fees(1)	57		30		135		108		Base and other management fees(1)	88		57		235		135
Incentive management fees	Incentive management fees	26		7		60		25		Incentive management fees	52		26		132		60
Management and franchise	Management and franchise	538		281		1,267		853		Management and franchise	718		538		1,911		1,267
Ownership	Ownership	199		94		376		335		Ownership	295		199		727		376
Segment revenues	Segment revenues	737		375		1,643		1,188		Segment revenues	1,013		737		2,638		1,643
Amortization of contract acquisition costs	Amortization of contract acquisition costs	(9)		(7)		(23)		(22)		Amortization of contract acquisition costs	(10)		(9)		(28)		(23)
Other revenues	Other revenues	18		19		56		52		Other revenues	28		18		71		56
Direct reimbursements from managed and franchised properties(2)	Direct reimbursements from managed and franchised properties(2)	446		244		998		1,185		Direct reimbursements from managed and franchised properties(2)	643		446		1,764		998
Indirect reimbursements from managed and franchised properties(2)	Indirect reimbursements from managed and franchised properties(2)	560		304		1,284		1,016		Indirect reimbursements from managed and franchised properties(2)	701		560		1,898		1,284
Intersegment fees elimination(1)	Intersegment fees elimination(1)	(3)		(2)		(6)		(2)		Intersegment fees elimination(1)	(7)		(3)		(14)		(6)
Total revenues	Total revenues	$	1,749	$	933	$	3,952	$	3,417	Total revenues	$	2,368	$	1,749	$	6,329	$	3,952

____________

(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.

(2)Included in other revenues from managed and franchised properties in our condensed consolidated statements of operations.

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


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
		September 30,				September 30,					September 30,				September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(in millions)									(in millions)
Management and franchise(1)	Management and franchise(1)	$	538	$	281	$	1,267	$	853	Management and franchise(1)	$	718	$	538	$	1,911	$	1,267
Ownership(1)	Ownership(1)	(4)		(52)		(82)		(145)		Ownership(1)	25		(4)		8		(82)
Segment operating income	Segment operating income	534		229		1,185		708		Segment operating income	743		534		1,919		1,185
Amortization of contract acquisition costs	Amortization of contract acquisition costs	(9)		(7)		(23)		(22)		Amortization of contract acquisition costs	(10)		(9)		(28)		(23)
Other revenues, less other expenses	Other revenues, less other expenses	6		(2)		25		4		Other revenues, less other expenses	15		6		36		25
Net other revenues (expenses) from managed and franchised properties	Net other revenues (expenses) from managed and franchised properties	62		(44)		(57)		(281)		Net other revenues (expenses) from managed and franchised properties	7		62		73		(57)
Depreciation and amortization expenses	Depreciation and amortization expenses	(46)		(90)		(143)		(269)		Depreciation and amortization expenses	(39)		(46)		(123)		(143)
General and administrative expenses	General and administrative expenses	(107)		(66)		(302)		(189)		General and administrative expenses	(93)		(107)		(287)		(302)
Reorganization costs		—		—		—		(38)
Impairment losses		—		(9)		—		(136)
Loss on sale of assets, net	Loss on sale of assets, net	(8)		—		(8)		—		Loss on sale of assets, net	—		(8)		—		(8)
Operating income (loss)		432		11		677		(223)
Operating income										Operating income	623		432		1,590		677
Interest expense	Interest expense	(98)		(116)		(302)		(316)		Interest expense	(106)		(98)		(295)		(302)
Gain (loss) on foreign currency transactions		—		(12)		1		(16)
Gain on foreign currency transactions										Gain on foreign currency transactions	—		—		4		1
Loss on debt extinguishment	Loss on debt extinguishment	—		—		(69)		—		Loss on debt extinguishment	—		—		—		(69)
Other non-operating income (loss), net		6		3		16		(20)
Income (loss) before income taxes		$	340	$	(114)	$	323	$	(575)
Other non-operating income, net										Other non-operating income, net	10		6		32		16
Income before income taxes										Income before income taxes	$	527	$	340	$	1,331	$	323

____________

Note 12: Commitments and Contingencies

We provide performance guarantees to certain owners of hotels that we operate under management contracts. Most of these guarantees do not require us to fund shortfalls, but allow for termination of the contract, if specified operating performance levels are not achieved. However, in limited cases, we are obligated to fund performance shortfalls, creating variable interests in the ownership entities of the hotels, of which we are not the primary beneficiary. As of September 30, ~~2021,~~2022, we had 6

performance guarantees with expirations ranging from ~~2023~~2025 to 2043 and ~~possible~~potential cash outlays totaling ~~approximately $20~~$8 million. 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. We have included the impact of the COVID-19 pandemic on these hotels in our expectations of their future operating performance and, as of September 30, 2021 and December 31, 2020, we accrued current liabilities of $2 million and $7 million, respectively,guarantee for ~~our performance guarantees. We may enter into new contracts containing performance guarantees in the future, which could increase our possible cash outlays.~~that particular hotel.

As of September 30, ~~2021,~~2022, we ~~guaranteed a $10~~had extended debt guarantees and letters of credit with expirations ranging from 2023 to 2031 and potential cash outlays totaling $124 million ~~loan, which matures in 2023, for 2~~to owners of certain hotels that we ~~franchise. Additionally, we have an agreement with~~will in the ~~owner of a hotel that we~~future or do currently manage to finance capital expenditures at the hotel, contingent on certain criteria imposed on the owner. As of September 30, 2021, we had remaining possible cash outlays related to this agreement of approximately $10 million; however, we cannot currently estimate the timing of the payments or ~~if they will be made at all, since we will not be obligated to fund such capital expenditures if certain terms of the agreement are not met.~~

In June 2021, Hilton provided 2 letters of credit totaling $26 million to the owner of a hotel that we will manage to satisfy debt service reserve requirements for their debt with a third party. Each letter of credit will expire at the earlier of the date at which it is fully drawn or 2031.franchise.

We receive fees from managed and franchised properties that we are contractually required to use to operate our marketing, sales and ~~brand~~brands programs on behalf of our hotel ~~owners, which are based on the underlying hotel's sales or usage. As a result of the adverse impact of the COVID-19 pandemic on our hotels' sales and, ultimately, the program fees~~owners. If we ~~earn, our costs to operate these programs have outpaced the fees received, which, as of September 30, 2021, resulted in $13 million of~~collect amounts ~~expended and recognized on behalf of these~~

~~programs exceeding the amounts collected. As of December 31, 2020, we had collected and recognized an aggregate of $5 million~~ in excess of amounts expended, ~~across all~~we have a commitment to spend these amounts on the related programs. As of September 30, 2022, amounts collected on behalf of these programs exceeded the amounts expended, and, as of December 31, 2021, amounts expended on behalf of these programs exceeded the amounts collected.

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, ~~2021~~2022 will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

1715

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020.~~2021.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements include, but are not limited to, statements related to our expectations regarding the ~~impact~~recovery of the travel and ~~recovery~~hospitality industry from the ~~COVID-19~~ pandemic, the performance of our business, our financial results, our liquidity and capital resources and other non-historical statements. In some cases, you can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "could," "seeks," "projects," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties including, among others, risks inherent to the hospitality industry, macroeconomic factors beyond our control, such as inflation, changes in interest rates and challenges due to labor shortages and supply chain disruptions, risks related to the impact of the ~~COVID-19~~ pandemic, including as a result of new strains and variants of the virus and uncertainty of the acceptance and continued effectiveness of the COVID-19 vaccines, ~~and their effectiveness,~~ competition for hotel guests and management and franchise contracts, risks related to doing business with third-party hotel owners, performance of our information technology systems, growth of reservation channels outside of our system, risks of doing business outside of the U.S., risks associated with the Russian invasion of Ukraine and our indebtedness. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include, but are not limited to, those described under "Part I—Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020.~~2021 and under "Part II—Item 1A. Risk Factors" of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Quarterly Report on Form 10-Q. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

~~COVID-19 Pandemic~~

The COVID-19 pandemic has significantly impacted the global economy and strained the hospitality industry since the beginning of 2020. Our Asia Pacific region began experiencing the effects of the COVID-19 pandemic in January 2020, while the pronounced negative results and suspensions of hotel operations in the Americas and Europe, Middle East and Africa ("EMEA") regions did not begin until mid-March 2020. Since the beginning of the pandemic, the pervasiveness and severity of travel restrictions and stay-at-home directives have varied by country and state, fluctuating based on a number of factors, including: (i) COVID-19 infection surges and contractions; (ii) the emergence of new strains and variants of the virus; and (iii) the distribution of COVID-19 vaccinations, which commenced in late 2020. The pandemic had a material adverse impact on our results for the three and nine months ended September 30, 2021 and 2020 when compared to periods prior to the onset of the pandemic, and although all periods were significantly impacted by the pandemic, none of these periods are considered comparable, and no periods affected by the pandemic are expected to be comparable to future periods. Although we have observed signs of economic recovery, we are still unable to predict the time required for a widespread sustainable economic recovery to take hold on a global scale. Accordingly, given the ongoing nature of the pandemic, the ultimate impact that it will have on the Company’s business, financial performance and results of operations remains uncertain.

Although certain restrictions have been reinstated with the spread of new variants of the virus, the broader distribution of COVID-19 vaccinations in early 2021 and the overall easing of travel and other restrictions have generated renewed interest in travel and tourism activities in many markets around the globe. However, the continued spreading of COVID-19 and its related variants could result in travel and other restrictions being implemented or reinstated in the affected areas, where our hotels may be located, in future periods.

While the restrictions and the reduction in travel resulted in the suspensions of operations at certain hotels throughout 2020, and the operations of approximately 335 hotels were suspended for some period of time during the nine months ended September 30, 2021, reopenings have significantly outpaced suspensions during 2021, and only 69 hotels remained suspended as of October 20, 2021. We expect nearly all of our hotel properties that were suspended for some period of time as a result of the pandemic to be open by the end of 2021.

Overview

Our Business

Hilton is one of the largest hospitality companies in the world, with ~~6,758~~7,061 properties comprising ~~1,061,686~~1,111,147 rooms in ~~122~~123 countries and territories as of September 30, ~~2021.~~2022. Our premier brand portfolio includes: our luxury ~~and lifestyle~~ hotel brands, Waldorf Astoria Hotels & Resorts, LXR Hotels & Resorts and Conrad Hotels & ~~Resorts,~~Resorts; our emerging lifestyle hotel brands, Canopy by Hilton, Tempo by Hilton and Motto by Hilton; our full service hotel brands, Signia by Hilton, Hilton Hotels & Resorts, Curio Collection by Hilton, DoubleTree by Hilton and Tapestry Collection ~~by Hilton and Embassy Suites~~ by Hilton; our focused service hotel brands, Hilton Garden Inn, Hampton by Hilton and Tru by Hilton; our all-suites hotel brands, Embassy Suites by Hilton, Homewood Suites by Hilton and Home2 Suites by Hilton; and our timeshare brand, Hilton Grand Vacations. As of September 30, ~~2021,~~2022, we had ~~123~~146 million members in our award-winning guest loyalty program, Hilton ~~Honors.~~Honors, a 19 percent increase from September 30, 2021.

Segments and Regions

We analyze our operations and business by both operating segments and geographic regions. Our operations consist of two reportable segments that are based on similar products orand services: (i) management and franchise and (ii) ownership. The management and franchise segment provides services, including hotel management and ~~the~~ licensing of our ~~brands and~~ IP. This segment generates its revenue from: (i) management and franchise fees charged to third-party hotel owners; (ii) licensing fees from HGV and strategic partnerships, including co-branded credit card arrangements, for the right to use ~~certain Hilton marks and~~our IP; and (iii) fees for managing ~~properties~~hotels in our ownership segment. As a manager of hotels, we typically are responsible for supervising or operating the ~~property~~hotel in exchange for management fees. As a franchisor of hotels, we charge franchise fees in exchange for the use of one of our brand names and related commercial services, such as our reservation ~~systems,~~system, marketing and information technology services, while a third party manages or operates such franchised hotels. The ownership segment primarily derives ~~earnings~~revenues from providing nightly hotel room sales, food and beverage sales and other services at our consolidated owned and leased hotels.

Geographically, we conduct business through three distinct geographic regions: (i) the Americas; (ii) ~~EMEA;~~Europe, Middle East and Africa ("EMEA"); and (iii) Asia Pacific. The Americas region includes North America, South America and Central

America, including all Caribbean nations. Although the U.S., which represented 7169 percent of our system-wide hotel rooms as of September 30, ~~2021,~~2022, is included in the Americas region, it is often analyzed separately and apart from the Americas region and, as such, it is presented separately within the analysis herein. The EMEA region includes Europe, which represents the western-most peninsula of Eurasia stretching from Iceland in the west to Russia in the east, and the Middle East and Africa ("MEA"), which represents the Middle East region and all African nations, including the Indian Ocean island nations. Europe and MEA are often analyzed separately and, as such, are presented separately within the analysis herein. The Asia Pacific region includes the eastern and southeastern nations of Asia, as well as India, Australia, New Zealand and the Pacific Island nations.

System Growth and Development Pipeline

Our strategic objectives include the continued expansion of our global ~~footprint and~~hotel network, as well as of our fee-based business. As we enter into new management and franchise contracts, we expand our business with minimal or no capital investment by us as the manager or franchisor, since the capital required to build and maintain hotels is typically provided by the third-party owner of the hotel with whom we contract to provide management services or license our ~~brand names and~~ IP. Prior to approving the addition of new ~~properties~~hotels to our management and franchise development pipeline, we evaluate the economic viability of the ~~property~~hotel based on its geographic location, the credit quality of the third-party owner and other factors. By increasing the number of management and franchise contracts with third-party owners, over time we expect to increase revenues, overall return on invested capital and cash available to support our business ~~needs.~~needs; see further discussion on our cash management policy in "—Liquidity and Capital Resources." While these objectives have not changed as a result of the ~~COVID-19~~ pandemic, the current economic environment has posed certain challenges to the execution of our strategy, which have included and may continue to include delays in openings and new development.

~~During~~We are focused on the ~~nine months ended September 30, 2021, we added 320 hotels, consisting~~growth of ~~over 51,000 rooms, to~~ our ~~system, contributing to nearly 42,100 net additional~~business by expanding our global hotel ~~rooms. As of September 30, 2021, we had more than 2,620 hotels in~~network through our development pipeline, which represents hotels that we expect to add to our system in the ~~future, representing 404,000~~future. The following table summarizes our development activity:


	As of and for the
	Nine Months Ended
	September 30, 2022
	Hotels	Rooms(1)
Hotel system
Openings	247	40,500
Net additions(2)	211	33,200

Development pipeline(3)
Additions	509	65,700
Count as of period end(4)	2,812	415,700

____________

(1)Rounded to the nearest hundred.

(2)Represents room additions, net of rooms removed from our system, during the period. Contributed to net unit growth from September 30, 2021 of 4.5 percent.

(3)Hotels in our system are under ~~construction or approved for~~ development throughout ~~114~~112 countries and territories, including 2729 countries and territories where we do not currently have any existing hotels.

(4)In our development pipeline, as of September 30, 2022, 204,200 of the rooms were under construction and 242,600 of the rooms were located outside of the U.S. Nearly all of the rooms in ~~the~~our development pipeline are within our management and franchise segment. ~~Additionally, of the rooms in the development pipeline, 249,000 rooms were located outside the U.S., and 204,000 rooms were under construction.~~ We do not consider any individual development project to be material to us.

~~Brexit~~Recent Developments

~~In June 2016,~~COVID-19 Pandemic

The pandemic significantly impacted the ~~U.K. held a referendum~~global economy and strained the hospitality industry beginning in ~~which voters approved an exit from~~2020. Since the European Union ("E.U.") (commonly referred to as "Brexit"). In December 2020, the U.K. and the E.U. reached a new bilateral trade and cooperation deal governing their future relationship (the "EU-UK Trade and Cooperation Agreement"), which was fully implemented from May 1, 2021. In addition, while the EU-UK Trade and Cooperation Agreement provides clarity in respectbeginning of the ~~intended future relationship between~~pandemic, the ~~U.K.~~pervasiveness and ~~the E.U.~~severity of travel restrictions and ~~some detailed matters of trade~~stay-at-home directives varied by country and cooperation, it remains unclear what general long-term economic, financial, trade and legal implications the U.K. withdrawal from the E.U. will have and how it will ultimately affect our business. While our resultsstate; however, as of ~~and~~September 30, 2022, most of the countries we operate in had completely lifted or eased restrictions. While the pandemic negatively affected certain of our results for the three and nine months ended September 30, 2022 and 2021, we have experienced strong signs of economic recovery since early 2021 with comparable system-wide RevPAR in the third quarter of 2022 exceeding levels of performance achieved in the same period in 2019. Although all periods were impacted by the pandemic, none of these periods are considered comparable, and no periods affected by the pandemic are expected to be comparable to future periods. The continued spreading of COVID-19 and its related variants could result in travel and other

restrictions being reinstated or demand for our hotel properties being reduced in the affected areas in the future, yielding negative effects on our operations.

Russian Invasion of Ukraine

In February 2022, Russia commenced a military invasion of Ukraine. While this has affected our operations in Ukraine and Russia, our financial results for the nine months ended September 30, 2022 were not materially affected by ~~Brexit specifically, we will~~this conflict, as hotels in these countries represented less than 1 percent of our total managed and franchised hotels as of September 30, 2022 and, for all periods presented and the year ended December 31, 2021, contributed less than 1 percent of total management and franchise fee revenues. We continue to ~~monitor~~prioritize the ~~potential impact~~safety and security of ~~Brexit on~~ our employees and the guests of these hotels and, in March 2022, we took the following actions in response to this crisis:

•pledged to donate up to 1 million room nights across EMEA to support Ukrainian refugees and humanitarian relief efforts, in partnership with American Express, #HospitalityHelps and our community of owners;

•closed our corporate office in Moscow while ensuring continued work and pay for impacted employees;

•suspended all new development activity in Russia;

•pledged to donate any Hilton profits from business operations in ~~future periods.~~Russia to the humanitarian relief efforts for Ukraine; and

•contributed funds through our Hilton Global Foundation to World Central Kitchen and Project Hope to further assist with humanitarian aid.

Key Business and Financial Metrics Used by Management

Comparable Hotels

We define our comparable hotels as those that: (i) were active and operating in our system for at least one full calendar year as of the end of the current period, and open January 1st of the previous year; (ii) have not undergone a change in brand or ownership type during the current or comparable periods reported; and (iii) have not sustained substantial property damage, business interruption, undergone large-scale capital projects or for which comparable results were not available. Of the ~~6,699~~6,988 hotels in our system as of September 30, ~~2021, 5,572~~2022, 5,847 hotels were classified as comparable hotels. Our ~~1,127~~1,141 non-comparable hotels as of September 30, 2022 included 66260 hotels, or less than ~~one~~four percent of the total hotels in our system, that were removed from the comparable group during the last twelve months because they have sustained substantial property damage, business interruption, ~~underwent~~undergone large-scale capital projects or comparable results were otherwise not available.

When considering business interruption in the context of our definition of comparable hotels, no hotel that had completely or partially suspended operations on a temporary basis at any time as a result of the ~~COVID-19~~ pandemic was excluded from the definition of comparable hotels on that basis alone. Despite these temporary suspensions of hotel operations, we believe that including these hotels within our hotel operating statistics of occupancy, average daily rate ("ADR") and revenue per available room ("RevPAR"), if they would have otherwise been included, reflects the underlying results of our business for the three and nine months ended September 30, ~~2021~~2022 and ~~2020.~~2021.

Occupancy

Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel or group of hotels for a given period. Occupancy measures the utilization of our hotels' available capacity. Management uses occupancy to gauge demand at a specific hotel or group of hotels in a given period. Occupancy levels also help us determine achievable ADR pricing levels as demand for hotel rooms increases or decreases.

ADR

ADR represents hotel room revenue divided by the total number of room nights sold for a given period. ADR measures the average room price attained by a hotel, and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in the industry, and

we use ADR to assess pricing levels that we are able to generate by type of customer, as changes in rates charged to customers have different effects on overall revenues and incremental profitability than changes in occupancy, as described above.

RevPAR

RevPAR is calculated by dividing hotel room revenue by the total number of room nights available to guests for a given period. We consider RevPAR to be a meaningful indicator of our performance as it provides a metric correlated to two primary and key drivers of operations at a hotel or group of hotels, as previously described: occupancy and ADR. RevPAR is also a useful indicator in measuring performance over comparable periods for comparable hotels.

References to ~~RevPAR,~~occupancy, ADR and ~~occupancy~~RevPAR are presented on a comparable basis, based on the comparable hotels as of September 30, ~~2021,~~2022, and references to ~~RevPAR~~ADR and ~~ADR~~RevPAR are presented on a currency neutral basis, unless otherwise noted. As such, comparisons of these hotel operating statistics for the three and nine months ended September 30, 2022 and 2021 ~~and 2020~~or 2019, use the foreign currency exchange rates used to translate the results of the Company's foreign operations within its unaudited condensed consolidated financial statements for the three and nine months ended September 30, ~~2021, respectively, and for the three months ended September 30, 2021 and 2019, use the~~

~~exchange rates used to translate the results of the Company's foreign operations within its financial statements for the three months ended September 30, 2021.~~2022, respectively.

EBITDA and Adjusted EBITDA

EBITDA reflects net income (loss), excluding interest expense, a provision for income tax benefit (expense) and depreciation and ~~amortization.~~amortization expenses. Adjusted EBITDA is calculated as EBITDA, as previously defined, further adjusted to exclude certain items, including gains, losses, revenues and expenses in connection with: (i) asset dispositions for both consolidated and unconsolidated ~~equity~~ investments; (ii) foreign currency transactions; (iii) debt restructurings and retirements; (iv) furniture, fixtures and equipment ("FF&E") replacement reserves required under certain lease agreements; (v) share-based compensation; (vi) reorganization, severance, relocation and other expenses; (vii) non-cash impairment; (viii) amortization of contract acquisition costs; (ix) the net effect of reimbursable costs included in other revenues and other expenses from managed and franchised properties; and (x) other items.

We believe that EBITDA and Adjusted EBITDA provide useful information to investors about us and our financial condition and results of operations for the following reasons: (i) these measures are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions and (ii) these measures are frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in our industry. Additionally, these measures exclude certain items that can vary widely across different industries and among competitors within our industry. For instance, interest expense and income taxes are dependent on company specifics, including, among other things, capital structure and operating jurisdictions, respectively, and, therefore, could vary significantly across companies. Depreciation and amortization expenses, as well as amortization of contract acquisition costs, are dependent upon company policies, including the method of acquiring and depreciating assets and the useful lives that are ~~used.~~used for accounting purposes. For Adjusted EBITDA, we also exclude items such as: (i) FF&E replacement reserves for leased hotels to be consistent with the treatment of capital expenditures for property and equipment, where itdepreciation of such capitalized assets is ~~capitalized~~reported within depreciation and ~~depreciated over the life of the FF&E;~~amortization expenses; (ii) share-based compensation, as this could vary widely among companies due to the different plans in place and the usage of them; (iii) the net effect of our cost reimbursement revenues and reimbursed expenses, as we contractually do not operate the related programs to generate a profit over the terms of the respective contracts; and (iv) other items, such as amounts related to debt restructurings and debt retirements and reorganization and related severance costs, that are not core to our operations and are not reflective of our operating performance.

EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be considered as alternatives, either in isolation or as a substitute, for net income (loss) or other measures of financial performance or liquidity, including cash flows, derived in accordance with GAAP. Further, EBITDA and Adjusted EBITDA have limitations as analytical tools, ~~and should not be considered as other methods of analyzing our results as reported under GAAP. Some of these limitations are:~~including:

•EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

•EBITDA and Adjusted EBITDA do not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;

•EBITDA and Adjusted EBITDA do not reflect income tax expenses or the cash requirements to pay our taxes;

•EBITDA and Adjusted EBITDA do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;

•EBITDA and Adjusted EBITDA do not reflect the effect on earnings or changes resulting from matters that we consider not to be indicative of our future operations;

•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; and

•other companies in our industry may calculate EBITDA and Adjusted EBITDA differently, limiting their usefulness as comparative measures.

Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as discretionary cash available to us to reinvest in the growth of our business or as measures of cash that will be available to us to meet our obligations.

Results of Operations

The hotel operating statistics by region for our system-wide comparable hotels were as follows:


		Three Months Ended			Change			Nine Months Ended			Change				Three Months Ended			Change			Nine Months Ended			Change
		September 30, 2021			2021 vs. 2020			September 30, 2021			2021 vs. 2020				September 30, 2022			2022 vs. 2021			September 30, 2022			2022 vs. 2021
U.S.	U.S.													U.S.
Occupancy	Occupancy	67.9		%	23.4	%	pts.	59.9		%	17.7	%	pts.	Occupancy	74.5		%	6.0	%	pts.	70.5		%	10.3	%	pts.
ADR	ADR	$	146.89		34.2	%		$	130.26		7.0	%		ADR	$	163.32		12.1	%		$	157.50		22.1	%
RevPAR	RevPAR	$	99.71		104.9	%		$	78.00		51.9	%		RevPAR	$	121.71		22.0	%		$	111.09		42.9	%

Americas (excluding U.S.)	Americas (excluding U.S.)													Americas (excluding U.S.)
Occupancy	Occupancy	54.4		%	30.1	%	pts.	40.7		%	12.1	%	pts.	Occupancy	71.4		%	17.6	%	pts.	63.0		%	23.1	%	pts.
ADR	ADR	$	116.18		19.9	%		$	108.63		(3.1)	%		ADR	$	147.08		31.2	%		$	138.05		31.4	%
RevPAR	RevPAR	$	63.15		168.3	%		$	44.25		38.0	%		RevPAR	$	104.99		74.2	%		$	87.04		107.7	%

Europe	Europe													Europe
Occupancy	Occupancy	59.3		%	27.7	%	pts.	37.0		%	6.8	%	pts.	Occupancy	77.4		%	18.5	%	pts.	65.9		%	29.4	%	pts.
ADR	ADR	$	132.23		28.9	%		$	115.89		1.0	%		ADR	$	159.10		45.9	%		$	147.18		51.5	%
RevPAR	RevPAR	$	78.42		142.3	%		$	42.92		23.8	%		RevPAR	$	123.15		91.7	%		$	97.02		173.2	%

MEA	MEA													MEA
Occupancy	Occupancy	52.9		%	27.8	%	pts.	48.1		%	15.0	%	pts.	Occupancy	63.9		%	11.7	%	pts.	63.9		%	17.2	%	pts.
ADR	ADR	$	120.92		(0.4)	%		$	125.50		—	%		ADR	$	128.39		18.7	%		$	146.86		28.3	%
RevPAR	RevPAR	$	63.94		110.1	%		$	60.40		45.2	%		RevPAR	$	82.10		45.2	%		$	93.83		75.5	%

Asia Pacific	Asia Pacific													Asia Pacific
Occupancy	Occupancy	49.5		%	(4.8)	%	pts.	49.8		%	9.5	%	pts.	Occupancy	63.6		%	13.7	%	pts.	52.3		%	2.5	%	pts.
ADR	ADR	$	102.67		15.4	%		$	99.95		3.1	%		ADR	$	104.50		14.9	%		$	102.22		11.3	%
RevPAR	RevPAR	$	50.86		5.2	%		$	49.81		27.5	%		RevPAR	$	66.46		46.3	%		$	53.46		16.8	%

System-wide	System-wide													System-wide
Occupancy	Occupancy	64.3		%	21.5	%	pts.	55.7		%	15.6	%	pts.	Occupancy	73.2		%	8.7	%	pts.	67.6		%	11.9	%	pts.
ADR	ADR	$	140.57		32.2	%		$	125.93		6.2	%		ADR	$	155.86		14.5	%		$	150.86		23.2	%
RevPAR	RevPAR	$	90.39		98.7	%		$	70.15		47.6	%		RevPAR	$	114.04		29.9	%		$	102.02		49.6	%

~~During~~We experienced significant improvement in our results during the three and nine months ended September 30, 2022 compared to the same periods in 2021 with the ~~COVID-19~~continued recovery of the travel and hospitality industry from the pandemic ~~continued to negatively impact our business~~ and ~~our hotel operating statistics. However,~~the rebound of cross-border international travel. All regions showed improvement in RevPAR, occupancy and ADR during the three and nine months ended September 30, ~~2021, we~~2022 as compared to the same periods in 2021. Although ADR was the primary driver of the increase in RevPAR during the periods, the occupancy increase experienced ~~significant improvement~~during the United States summer

months continued beyond the Labor Day holiday, demonstrating continued recovery in ~~our results, due to an upward trend in~~business transient and group meeting travel, ~~and tourism with the easing of many COVID-19 restrictions and the more expansive distribution of COVID-19 vaccinations. Further,~~ in addition to ~~all regions showing improvement~~sustained leisure demand.

The three months ended September 30, 2022 was the first period, since the beginning of the pandemic, that system-wide RevPAR on a comparable and currency neutral basis exceeded system-wide RevPAR for the same period in ~~RevPAR during~~2019. For the three months ended September 30, ~~2021~~2022, as compared to the same period in 2020, almost all regions showed sequential improvement in RevPAR during the period from the three months ended June 30, 2021. While the recoveries of the Europe and Americas Non-US regions were outpaced by other regions in prior periods during 2021, the easing of travel restrictions, and, for Europe, a more expansive vaccination program, accelerated their recovery during the three months ended September 30, 2021, resulting in improved operating statistics more consistent with system-wide results. In Asia Pacific, stronger prior year results and a fluctuating recovery due to prolonged COVID-19 and travel restrictions in certain countries, particularly China, Australia and New Zealand, resulted in a more muted increase in RevPAR in the quarter when compared to the other regions.

Further, as a result of the pandemic, certain hotels suspended operations at various times throughout 2020, but the majority of those hotels were reopened by 2021. In line with our recovery, although some hotels did suspend operations during the nine months ended September 30, 2021, reopenings significantly outpaced suspensions. As such, the operations of only approximately 335 hotels, primarily located in the U.S. and Europe, were suspended for some period of time during the nine months ended September 30, 2021, as compared to approximately 1,270 hotels during the nine months ended September 30, 2020. Ninety-nine percent of our global hotel properties were open as of September 30, 2021. Additionally, while most properties, including those that reopened following suspensions of their operations, experienced significantly lower occupancy during 2020 and early 2021 as compared to periods prior to the onset of the pandemic, system-wide occupancy has steadily improved during the year. Further, our system-wide RevPAR and ADR for the three months ended September 30, 2021 was

~~down 18.8 percent and 2.5 percent, respectively,~~ compared to the same period in 2019 on a comparable and currency neutral ~~basis.~~basis, our system-wide RevPAR was up 5.0 percent due to an increase in ADR of 10.9 percent, partially offset by a decrease in occupancy of 4.1 percentage points. For the nine months ended September 30, 2022, as compared to the same period in 2019 on a comparable and currency neutral basis, RevPAR was down 4.0 percent due to a decrease in occupancy of 7.2 percentage points, partially offset by an increase in ADR of 6.2 percent. All regions showed improvement in ADR during both the three and nine months ended September 30, 2022 when compared to the same periods in 2019 with the exception of Asia Pacific as a result of continued lockdowns in China limiting demand.

The table below provides a reconciliation of net income ~~(loss)~~ to EBITDA and Adjusted EBITDA:


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
		September 30,				September 30,					September 30,				September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
		(in millions)									(in millions)
Net income (loss)		$	240	$	(81)	$	259	$	(495)
Net income										Net income	$	346	$	240	$	924	$	259
Interest expense	Interest expense	98		116		302		316		Interest expense	106		98		295		302
Income tax expense (benefit)		100		(33)		64		(80)
Income tax expense										Income tax expense	181		100		407		64
Depreciation and amortization expenses	Depreciation and amortization expenses	46		90		143		269		Depreciation and amortization expenses	39		46		123		143
EBITDA	EBITDA	484		92		768		10		EBITDA	672		484		1,749		768
Loss on sale of assets, net	Loss on sale of assets, net	8		—		8		—		Loss on sale of assets, net	—		8		—		8
Loss (gain) on foreign currency transactions		—		12		(1)		16
Gain on foreign currency transactions										Gain on foreign currency transactions	—		—		(4)		(1)
Loss on debt extinguishment	Loss on debt extinguishment	—		—		69		—		Loss on debt extinguishment	—		—		—		69
FF&E replacement reserves	FF&E replacement reserves	15		18		30		39		FF&E replacement reserves	13		15		40		30
Share-based compensation expense	Share-based compensation expense	52		25		144		37		Share-based compensation expense	42		52		126		144
Reorganization costs		—		—		—		38
Impairment losses		—		9		—		136
Amortization of contract acquisition costs	Amortization of contract acquisition costs	9		7		23		22		Amortization of contract acquisition costs	10		9		28		23
Net other expenses (revenues) from managed and franchised properties	Net other expenses (revenues) from managed and franchised properties	(62)		44		57		281		Net other expenses (revenues) from managed and franchised properties	(7)		(62)		(73)		57
Other adjustments(1)	Other adjustments(1)	13		17		19		59		Other adjustments(1)	2		13		(7)		19
Adjusted EBITDA	Adjusted EBITDA	$	519	$	224	$	1,117	$	638	Adjusted EBITDA	$	732	$	519	$	1,859	$	1,117

____________

(1)~~The~~Amount for the nine months ended September 30, 2022 primarily includes a gain related to investments in unconsolidated affiliates. Amounts for the three and nine months ended September 30, 2021 ~~and 2020~~ include costs recognized for certain legal settlements. ~~The nine months ended September 30, 2020 also includes losses related to the disposal of an investment and the settlement of a debt guarantee for a franchised hotel.~~ All periods include severance ~~not related to the reorganization activities undertaken in response to the COVID-19 pandemic~~ and other items.

Revenues


		Three Months Ended				Percent	Nine Months Ended				Percent		Three Months Ended				Percent	Nine Months Ended				Percent
		September 30,				Change	September 30,				Change		September 30,				Change	September 30,				Change
		2021		2020		2021 vs. 2020	2021		2020		2021 vs. 2020		2022		2021		2022 vs. 2021	2022		2021		2022 vs. 2021
		(in millions)					(in millions)						(in millions)					(in millions)
Franchise and licensing fees	Franchise and licensing fees	$	451	$	241	87.1	$	1,062	$	712	49.2	Franchise and licensing fees	$	573	$	451	27.1	$	1,531	$	1,062	44.2

Base and other management fees	Base and other management fees	$	49	$	24	NM(1)	$	116	$	92	26.1	Base and other management fees	$	76	$	49	55.1	$	206	$	116	77.6
Incentive management fees	Incentive management fees	26		7		NM(1)	60		25		NM(1)	Incentive management fees	52		26		100.0	132		60		NM(1)
Total management fees	Total management fees	$	75	$	31	NM(1)	$	176	$	117	50.4	Total management fees	$	128	$	75	70.7	$	338	$	176	92.0

____________

(1)Fluctuation in terms of percentage change is not meaningful.

~~The COVID-19 pandemic began to significantly impact our franchise~~During the three and licensing fees and total management fees in March 2020. However, during 2021, we are experiencing increases in fees recognized, as compared to fees recognized during the same periods in 2020, driven by an upward trend in travel and tourism resulting from increased desire to travel by our customers, as COVID-19 vaccinations were distributed more broadly and COVID-19 restrictions eased in many areas. Additionally, there were decreases in the number of hotels that had suspended operations as a result of the pandemic during the respective periods, with approximately 1,235 managed and franchised hotels with suspended operations for some period of time during the nine months ended September 30, ~~2020, compared~~2022, revenue recognized from fees increased primarily as a result of improved demand for travel and tourism, including the ability and desire of our customers to ~~approximately 320 managed and franchised hotels during~~travel, due to the ~~nine months ended September 30, 2021. As~~ongoing recovery that began in early 2021 from the negative impacts of ~~September 30, 2021, all but 87 of these hotels had reopened.~~the pandemic.

~~For~~Accordingly, on a comparable basis, franchise and management fees increased for the three months ended September 30, ~~2021,~~2022 as a result of increases in RevPAR ~~increased 93.8~~of 21.7 percent and 62.2 percent at our comparable franchised ~~properties~~ and ~~119.2 percent~~managed properties,

respectively. These increases in RevPAR at our comparable franchised and managed properties ~~as a~~were the result of increased occupancy of ~~22.3~~6.0 percentage points and ~~18.6~~16.9 percentage points, respectively, and increased ADR of ~~30.7~~11.9 percent and ~~38.7~~21.4 percent, respectively. For the nine months ended September 30, ~~2021,~~2022, on a comparable basis, franchise and management fees increased as a result of increases in RevPAR ~~increased 51.5~~of 40.7 percent and 82.5 percent at our comparable franchised and managed properties, ~~and 36.2 percent~~respectively. These increases in RevPAR at our

comparable franchised and managed properties ~~as a~~were the result of increased occupancy of ~~17.3~~10.2 percentage points and ~~10.6~~16.8 percentage points, respectively, and increased ADR of ~~7.5~~20.3 percent and ~~3.1~~30.9 percent, respectively.

Further, as new hotels are part of our system for full periods, we expect such hotels to increase our franchise and management fees during the periods. Including new development and ownership type transfers, from January 1, ~~2020~~2021 to September 30, ~~2021,~~2022, we added ~~650~~over 570 managed and franchised properties on a net basis, providing an additional ~~91,000~~89,600 rooms to our management and franchise ~~segment. As new hotels were part of our system for full periods and were part of~~segment, which also contributed to the ~~recovery from the negative impact of the COVID-19 pandemic, such hotels increased our~~increases in franchise and management ~~fees during the periods, and we expect this trend to continue in future periods.~~fees.

Additionally, licensing ~~and other~~ fees increased ~~$33~~$32 million and ~~$61~~$103 million during the three and nine months ended September 30, ~~2021,~~2022, respectively, primarily due to increases in ~~licensing~~ fees ~~from~~from: (i) our strategic partnerships, which resulted from new cardholder acquisitions and increased cardholder spend under our co-branded credit card arrangements, and (ii) HGV, which ~~were the result of~~resulted from increased ~~co-branded credit cardholder spend and~~ timeshare revenues, ~~respectively,~~ both ~~resulting from~~driven by the rise in travel and tourism, ~~during the periods.~~as well as increased overall consumer spending.

Incentive management fees increased during the periods as they are based on hotels' operating profits, which have improved from the prior year as a result of increased demand ~~at our properties.~~in line with the recovery from the pandemic and flow through of improved topline results to managed hotel profits.

Three Months Ended Percent Nine Months Ended Percent
September 30, Change September 30, Change
2021 2020 2021 vs. 2020 2021 2020 2021 vs. 2020
(in millions) (in millions)
Owned and leased hotels $ 199 $ 94
NM(1)
$ 376 $ 335 12.2

~~____________~~

~~(1)Fluctuation in terms of percentage change is not meaningful.~~


	Three Months Ended				Percent	Nine Months Ended				Percent
	September 30,				Change	September 30,				Change
	2022		2021		2022 vs. 2021	2022		2021		2022 vs. 2021
	(in millions)					(in millions)
Owned and leased hotel revenues	$	295	$	199	48.2	$	727	$	376	93.4

The ~~increases~~increase in owned and leased hotel revenues during the three ~~and nine~~ months ended September 30, 2021 were primarily attributable to increases in revenues from our comparable owned and leased hotels, particularly as a result of the ongoing recovery from the COVID-19 pandemic. Further, although the operations of approximately 15 and 35 of our owned and leased hotels were suspended for some period of time during the nine months ended September 30, 2021 and 2020, respectively, as a result of the COVID-19 pandemic, all of these hotels were reopened before the three months ended September 30, 2021, with no additional suspensions during the period.

~~The increase during the three months ended September 30, 2021~~2022 was primarily ~~attributable~~due to ~~an $84 million and $20~~a $128 million increase, on a currency neutral basis, from our comparable ~~and non-comparable~~ owned and leased hotels, ~~respectively. with no significant impact from~~which was partially offset by a $32 million decrease as a result of unfavorable fluctuations in foreign currency exchange rates. The increase from our comparable owned and leased hotels was primarily the result of increased RevPAR of 151.1 percent, due to increases in occupancy and ADR of 25.2 percentage points and 23.0 percent, respectively.

~~The increase during the nine months ended September 30, 2021 included an $11 million increase as a result of favorable fluctuations in foreign currency exchange rates and, on a~~ currency neutral ~~basis, a $34 million~~ increase ~~from our comparable owned and leased hotels, only partially offset by a $4 million decrease from our non-comparable owned and leased hotels. The increase~~in revenues from our comparable owned and leased hotels was the result of increased RevPAR of ~~9.8~~121.3 percent, ~~primarily~~ due to ~~increased~~increases in occupancy of ~~3.4~~27.4 percentage points ~~partially offset by decreased~~and ADR of ~~2.6~~36.6 percent, ~~as well as a $22 million increase~~reflective of the ongoing recovery that began in ~~COVID-19 relief subsidies~~2021 from ~~international governments. The decrease~~the pandemic and has been particularly strong during 2022 in ~~revenues~~Europe where the majority of our owned and leased properties are located. Revenues from our non-comparable owned and leased hotels ~~included a $10 million decrease,~~were flat on a currency neutral basis as the increase in revenues that resulted from increased RevPAR at these hotels was offset by a $15 million decrease from properties ~~that~~which were sold or for which the lease agreements were terminated ~~with most of the properties transferring to our management and franchise segment~~ during ~~2021 and 2020. The increase in revenues from the remaining non-comparable owned and leased hotels included a $7 million increase in COVID-19 relief subsidies from international governments.~~

Three Months Ended Percent Nine Months Ended Percent
September 30, Change September 30, Change
2021 2020 2021 vs. 2020 2021 2020 2021 vs. 2020
(in millions) (in millions)
Other revenues $ 18 $ 19 (5.3) $ 56 $ 52 7.7

For the nine months ended September 30, 2021, other revenues increased primarily due to increased revenue from our purchasing operations related to improving hotel demand resulting from the rise in travel and tourism during the period.

~~Operating Expenses~~

The increase in owned and leased hotel ~~expenses~~revenues during the three months ended September 30, 2021 was primarily related to our comparable owned and leased hotels and reflects the increase in occupancy during the period, as discussed in "—Revenues," which drove increased food and beverage expenses and certain operating costs of the hotels.

~~The decrease for~~ the nine months ended September 30, ~~2021~~2022 included ~~decreases~~increases of ~~$34~~$384 million and ~~$15~~$20 million, on a currency neutral basis, from our comparable and non-comparable owned and leased hotels, respectively, which were partially offset by a ~~$23~~$53 million ~~increase~~decrease as a result of unfavorable fluctuations in foreign currency exchange rates. ~~Despite the~~The currency neutral increase in ~~occupancy during the period,~~revenues from our comparable owned and leased hotels ~~had decreases~~was primarily the result of increased RevPAR of 207.3 percent, due to increases in ~~certain operating expenses, as well as expenses~~occupancy of 31.9 percentage points and ADR of 40.6 percent, reflective of the ongoing recovery from the pandemic, and was net of a $29 million decrease in COVID-19 relief subsidies from international governments. The currency neutral increase in revenues from our non-comparable owned and leased hotels, which also benefited from an increase in RevPAR, was partially offset by a $25 million decrease from properties which were sold or for which the lease agreements were terminated during 2021.


	Three Months Ended				Percent	Nine Months Ended				Percent
	September 30,				Change	September 30,				Change
	2022		2021		2022 vs. 2021	2022		2021		2022 vs. 2021
	(in millions)					(in millions)
Other revenues	$	28	$	18	55.6	$	71	$	56	26.8

The increases in other revenues were primarily due to increased revenues from our purchasing operations related to ~~FF&E replacement reserves~~improved hotel demand resulting from the rise in travel and tourism during both the three and nine months ended September 30, 2022.

Operating Expenses


	Three Months Ended				Percent	Nine Months Ended				Percent
	September 30,				Change	September 30,				Change
	2022		2021		2022 vs. 2021	2022		2021		2022 vs. 2021
	(in millions)					(in millions)
Owned and leased hotel expenses	$	263	$	200	31.5	$	705	$	452	56.0

The increase in owned and leased hotel expenses during the three months ended September 30, 2022 was primarily due to ~~reduced required FF&E spending during the period at~~a $94 million increase, on a currency neutral basis, from our comparable owned and leased ~~properties. Additionally,~~hotels, which was partially offset by a $31 million decrease as a result of favorable fluctuations in foreign currency exchange rates, while expenses from our non-comparable owned and leased hotels were flat on a net basis. The increase in owned and leased hotel expenses during the nine months ended September 30, 2022 included ~~an $11~~$294 million and $15 million of increases, on a currency neutral basis, from our comparable and non-comparable owned and leased hotels, respectively, which were partially offset by a $56 million decrease ~~due to~~as a result of favorable fluctuations in foreign currency exchange rates. The currency neutral increases in expenses from our non-comparable owned and leased hotels during the three and nine months ended September 30, 2022 were net of $10 million and $21 million currency neutral decreases, respectively, from properties ~~being~~which were sold or for which the lease agreements were terminated ~~with most of the properties transferring to our management and franchise segment~~ during ~~2021 and 2020.~~2021.

Three Months Ended Percent Nine Months Ended Percent
September 30, Change September 30, Change
2021 2020 2021 vs. 2020 2021 2020 2021 vs. 2020
(in millions) (in millions)
Depreciation and amortization expenses $ 46 $ 90 (48.9) $ 143 $ 269 (46.8)
General and administrative expenses 107 66 62.1 302 189 59.8
Reorganization costs — —
NM(1)
— 38 (100.0)
Impairment losses — 9 (100.0) — 136 (100.0)
Other expenses 12 21 (42.9) 31 48 (35.4)
Our owned and leased hotels had currency neutral increases in certain operating expenses as a result of increased occupancy during the three and nine months ended September 30, 2022, including variable rent costs, which are generally based on a percentage of hotel revenues or profits, which increased in line with the recovery from the pandemic, as well as increased expenses related to FF&E replacement reserves, which are generally computed as a percentage of hotel revenues.


	Three Months Ended				Percent	Nine Months Ended				Percent
	September 30,				Change	September 30,				Change
	2022		2021		2022 vs. 2021	2022		2021		2022 vs. 2021
	(in millions)					(in millions)
Depreciation and amortization expenses	$	39	$	46	(15.2)	$	123	$	143	(14.0)
General and administrative expenses	93		107		(13.1)	287		302		(5.0)
Other expenses	13		12		8.3	35		31		12.9

The decreases in depreciation and amortization expenses were primarily due to decreases in amortization expense, driven by the full amortization of certain software project costs between the periods.

The decreases in general and administrative expenses were primarily due to continued cost control, as well as costs recognized during the three and nine months ended September 30, 2021 for certain legal settlements, for which no such expenses were recognized during 2022.

The increases in other expenses were primarily due to higher volume in our purchasing operations related to improved hotel demand.

Non-operating Income and Expenses


	Three Months Ended				Percent	Nine Months Ended				Percent
	September 30,				Change	September 30,				Change
	2022		2021		2022 vs. 2021	2022		2021		2022 vs. 2021
	(in millions)					(in millions)
Interest expense	$	(106)	$	(98)	8.2	$	(295)	$	(302)	(2.3)
Gain on foreign currency transactions	—		—		NM(1)	4		1		NM(1)
Loss on debt extinguishment	—		—		NM(1)	—		(69)		(100.0)
Other non-operating income, net	10		6		66.7	32		16		100.0
Income tax expense	(181)		(100)		81.0	(407)		(64)		NM(1)

____________

(1)Fluctuation in terms of percentage change is not meaningful.

The decreases in depreciation and amortization expenses were due to decreases in amortization expenses, primarily resulting from certain management and franchise contract intangible assets that were recorded at the Merger becoming fully amortized during 2020, as well as a result of certain software project costs becoming fully amortized.

The increases in general and administrative expenses were primarily due to increased share-based compensation expense as a result of expenses recognized during the three and nine months ended September 30, 2021 for all of the outstanding performance shares, which were probable of achievement as of September 30, 2021, while the expenses recognized during the three and nine months ended September 30, 2020 were net of the reversal of expenses recognized in prior periods as a result of the determination that the performance conditions of the performance shares that were originally awarded in 2018, 2019 and 2020 were no longer probable of achievement. See Note 8: "Share-Based Compensation" in our unaudited condensed consolidated financial statements for additional information. Also contributing to the increase for the three and nine months ended September 30, 2021 was an increase in payroll expenses, primarily resulting from our corporate workforce that was retained during 2021 after completion of our reorganization activities, of which a significant portion was on reduced pay or furlough for a six month period during the nine months ended September 30, 2020.

During the nine months ended September 30, 2020, we recognized reorganization costs related to activities undertaken in response to the COVID-19 pandemic, primarily relating to reductions in our workforce and associated costs.

During the three and nine months ended September 30, 2020, we recognized impairment losses of $3 million and $24 million for property and equipment, respectively, including $2 million and $4 million, respectively, for finance lease ROU assets. During the nine months ended September 30, 2020, we also recognized impairment losses of $51 million and $46 million for operating lease ROU assets and other intangible assets, respectively. All of these impairment losses were related to our leased hotel properties. Additionally, during the three and nine months ended September 30, 2020, we recognized impairment losses of $6 million and $15 million related to management contract acquisition costs. These impairment losses

2523

were due to a decline in results and expected future performance at the related hotels as a result of the COVID-19 pandemic, as well as actual and expected early terminations of the related management contracts.

Other expenses decreased primarily as a result of expenses related to the settlement of a dispute with an owner of a managed hotel that were recognized during the three and nine months ended September 30, 2020 and, during the nine months ended September 30, 2021, as a result of expenses related to performance guarantees that were recognized during 2020.

~~Non-operating Income and Expenses~~

Three Months Ended Percent Nine Months Ended Percent
September 30, Change September 30, Change
2021 2020 2021 vs. 2020 2021 2020 2021 vs. 2020
(in millions) (in millions)
Interest expense $ (98) $ (116) (15.5) $ (302) $ (316) (4.4)
Gain (loss) on foreign currency transactions — (12) (100.0) 1 (16)
NM(1)
Loss on debt extinguishment — —
NM(1)
(69) —
NM(1)
Other non-operating income (loss), net 6 3
NM(1)
16 (20)
NM(1)
Income tax benefit (expense) (100) 33
NM(1)
(64) 80
NM(1)

~~____________~~

~~(1)Fluctuation in terms of percentage change is not meaningful.~~

The ~~decreases~~changes in interest expense during the three and nine months ended September 30, 2022 included increases related to the interest rate increase on the variable rate Term Loan during the periods, as well as the amortization of previously dedesignated interest rate swaps. Additionally, the decrease for the nine months ended September 30, 2022 included a decrease related to our Revolving Credit Facility, which was partially drawn during the nine months ended September 30, 2021, ~~included the decreases~~but was fully repaid as of June 30, 2021, as well a decrease resulting from the ~~issuances~~February 2021 issuance of new senior unsecured notes and the use of such proceeds for ~~extinguishments~~the redemption of ~~existing~~previously outstanding senior unsecured notes, ~~in December 2020 and February 2021,~~ which reduced the weighted average interest ~~rates~~rate on our outstanding senior unsecured notes. Additionally, we repaid the entire outstanding balance on the Revolving Credit Facility as of June 30, 2021, while it was fully drawn for the period from March 2020 to December 2020. For the nine months ended September 30, 2021, our variable interest expense also decreased due to declines in the variable interest rate on our Term Loan; however, the decrease in interest expense during the nine months ended September 30, 2021 was partially offset by an increase due to the issuances of the 2025 Senior Notes and the 2028 Senior Notes in April 2020. See Note 5: "Debt" in our unaudited condensed consolidated financial statements for additional information on the interest rates on our indebtedness.

The gains and losses on foreign currency transactions primarily included the impact of changes in foreign currency exchange rates on certain intercompany financing arrangements, including short-term cross-currency intercompany ~~loans. The changes were the result of various currencies, but primarily the Australian dollar~~loans, and for the three and nine months ended September 30, 2020, the euro. Additionally, during the three and nine months ended September 30, 2020, we recognized losses related to the liquidation of investmentsother transactions denominated in foreign ~~entities that were reclassified out of accumulated other comprehensive loss.~~currencies.

Loss on debt extinguishment ~~for the nine months ended September 30, 2021~~ related to the February 2021 redemption of ~~the 2026 Senior Notes~~senior unsecured notes and included a redemption premium of $55 million and the accelerated recognition of unamortized deferred financing costs on ~~the 2026 Senior Notes~~those senior unsecured notes of $14 million. ~~See Note 5: "Debt" in our unaudited condensed consolidated financial statements for additional information.~~

~~The change~~Other non-operating income, net consists of interest income, equity in earnings (losses) from unconsolidated affiliates, certain components of net periodic pension cost or credit related to our employee defined benefit pension plans and other non-operating gains and losses. Other non-operating income, ~~(loss),~~ net ~~primarily resulted from losses related to the disposal of an investment and the settlement of a debt guarantee~~ for ~~a franchised hotel recognized during~~ the nine months ended September 30, ~~2020.~~2022 included an $11 million gain resulting from the remeasurement of certain investments in unconsolidated affiliates.

The increases in income tax expense during the three and nine months ended September 30, ~~2021~~2022 were primarily attributable to the ~~increase~~increases in income before income ~~taxes. Additionally,~~taxes, as well as losses in certain foreign entities where we do not expect to recognize a tax benefit. Further, during the nine months ended September 30, 2021, ~~the increase in expense was partially offset by~~we recognized benefits ~~recognized~~ as a result of the change in tax rate changes and increased tax benefits recognized for net operating losses generated in 2021 in certain foreign jurisdictions. For additional information, see Note 7: "Income Taxes" in our unaudited condensed consolidated financial statements.implemented as part of the United Kingdom's Finance Act 2021.

Segment Results

Refer to Note 11: "Business Segments" in our unaudited condensed consolidated financial statements for reconciliations of revenues for our reportable segments to consolidated ~~amounts~~total revenues and of segment operating income to consolidated income ~~(loss)~~ before income taxes.

Refer to "—Revenues" for further discussion of the increases in revenues from our managed and franchised properties, which are correlated to our management and franchise segment revenues and segment operating income. Refer to "—Revenues" and "—Operating Expenses" for further discussion of the ~~changes~~increases in revenues and operating expenses at our owned and leased hotels, which are correlated with our ownership segment revenues and segment operating ~~losses.~~income.

Liquidity and Capital Resources

Overview

As of September 30, ~~2021,~~2022, we had total cash and cash equivalents of ~~$1,387~~$1,362 million, including ~~$99~~$80 million of restricted cash and cash ~~equivalents, increasing $260 million from June 30, 2021, primarily driven by cash flows from operations during the three months ended September 30, 2021.~~equivalents. The majority of our restricted cash and cash equivalents ~~are~~is related to cash collateral and cash held for FF&E reserves.

In response to the global crisis resulting from the COVID-19 pandemic, in addition to the actions we took to prioritize the safety and security of our guests, employees and owners and support our communities, we took certain proactive measures in 2020 to help our business withstand this uncertain time. This included securing our liquidity position to be able to meet our obligations for the foreseeable future, including issuing senior notes, drawing down on the full capacity of our Revolving Credit Facility and consummating the Honors Points Pre-Sale. Further, in February 2021, we issued the 2032 Senior Notes to continue to extend debt maturities and reduce our cost of debt by repaying the 2026 Senior Notes. Based on our continued recovery and expectations of the foreseeable demands on our available cash and our liquidity in future periods, we fully repaid the $1.7 billion outstanding debt balance on the Revolving Credit Facility during the nine months ended September 30, 2021.

Our known short-term liquidity requirements primarily consist of funds necessary to pay for operating and other expenditures, ~~including~~including: (i) costs associated with the management and franchising of hotels; (ii) costs, other than compensation and rent that are noted separately, associated with the operations of owned and leased hotels, including, but not limited to, utilities and operating supplies; (iii) corporate ~~expenses,~~expenses; (iv) payroll and compensation ~~costs,~~costs; (v) taxes and compliance ~~costs,~~costs; (vi) scheduled debt maturities and interest payments on our outstanding ~~indebtedness,~~indebtedness; (vii) lease payments under our finance and operating leases; (viii) committed contract acquisition ~~costs~~costs; (ix) dividends as declared; (x) share repurchases; and

(xi) capital expenditures for required renovations and maintenance at the hotels within our ownership segment. While our accounts receivable balance as of September 30, 2021 is somewhat less than periods prior to the start of the pandemic, we are generally experiencing slower payment of certain fees due to us, and have considered these payment trends in developing our estimates of expected future credit losses. During the second and third quarter of 2021, we experienced relative improvement with respect to the timing of customer payments and overall cash flow from operations, particularly in comparison to periods impacted by the pandemic in 2020.

Our known long-term liquidity requirements primarily consist of funds necessary to pay ~~for~~for: (i) scheduled debt maturities and interest payments on our outstanding indebtedness; (ii) lease payments under our finance and operating leases; (iii) committed contract acquisition costs; (iv) capital improvements to the hotels within our ownership ~~segment,~~segment; (v) corporate capital and information technology expenditures; (vi) dividends as declared; (vii) share repurchases; and (viii) commitments to

owners in our management and franchise segment made in the normal course of business for which we are reimbursed by these owners through program fees to operate our marketing, sales and ~~corporate capital and information technology expenditures. We formally suspended~~brands programs. There were no material changes to our contractual obligations from what we previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

In March 2022, we resumed share repurchases, which we had previously suspended in ~~March 2020, given the economic environment and our efforts~~an effort to preserve cash ~~and no share repurchases have been made since then. However,~~during the pandemic. Since they were resumed, as of September 30, 2022, we had repurchased approximately 8.5 million shares of our common stock ~~repurchase program remains authorized by the board~~for $1,107 million. As of ~~directors, with~~September 30, 2022, approximately ~~$2.2~~$1.1 billion ~~remaining~~remained available for share repurchases under our $5.5 billion stock repurchase program. In June 2022, we resumed payment of regular quarterly cash dividends, which we had also previously suspended in an effort to preserve cash during the program, and we may resume share repurchases in the future at any time, depending on market conditions, our capital needs and other factors. Additionally, we suspended dividend payments in 2020, but we expect that both share repurchases and dividend payments will be reinstated in future periods and result in uses of liquidity.pandemic.

~~Although~~In circumstances where we have the ~~COVID-19 pandemic has caused us~~opportunity to ~~temporarily change~~support our ~~cash management strategy,~~strategic objective of growing our global hotel network, we may provide performance or debt guarantees or loan commitments, as necessary, for hotels that we currently or plan to manage or franchise, as applicable, as well as letters of credit that support hotel financing or other obligations of hotel owners. See Note 12: "Commitments and Contingencies" in our unaudited condensed consolidated financial statements for additional information on our commitments that were outstanding as of September 30, 2022.

We have a long-term investment policy that is focused on the preservation of capital and maximizing the return on new and existing investments and returning available capital to stockholders through dividends and share ~~repurchases, which we expect to reimplement at some time in the future.~~repurchases. Within the framework of our investment policy, we currently intend to continue to finance our business activities primarily with cash on our balance sheet as of September 30, ~~2021,~~2022, cash generated from our operations and, as needed, the use of the available capacity of our Revolving Credit Facility. Additionally, we have continued access to debt markets and expect to be able to obtain financing as a source of liquidity as required and to extend maturities of existing borrowings, if necessary.

After considering our approach to liquidity and our available sources of cash, we believe that our cash position and sources of liquidity will meet anticipated requirements for operating and other expenditures, including corporate expenses, payroll and ~~related benefits,~~other compensation costs, taxes and compliance costs and other commitments for the foreseeable future based on current conditions. The objectives of our cash management policy are to maintain the availability of liquidity while minimizing operational costs.

We may from time to time issue or incur or increase our capacity to incur new debt and/or purchase our outstanding debt through underwritten offerings, open market transactions, privately negotiated transactions or otherwise. Issuances or incurrence of new debt (or an increase in our capacity to incur new debt) and/or purchases or ~~retirement~~retirements of outstanding debt, if

any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Sources and Uses of Our Cash and Cash Equivalents

The following table summarizes our net cash flows:


		Nine Months Ended				Percent		Nine Months Ended				Percent
		September 30,				Change		September 30,				Change
		2021		2020		2021 vs. 2020		2022		2021		2022 vs. 2021
		(in millions)						(in millions)
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	$	(22)	$	846	NM(1)	Net cash provided by (used in) operating activities	$	1,199	$	(22)	NM(1)
Net cash used in investing activities	Net cash used in investing activities	(34)		(89)		(61.8)	Net cash used in investing activities	(98)		(34)		NM(1)
Net cash provided by (used in) financing activities		(1,814)		2,087		NM(1)
Net cash used in financing activities							Net cash used in financing activities	(1,230)		(1,814)		(32.2)

____________

(1)Fluctuation in terms of percentage change is not meaningful.

Operating Activities

As we recover from the negative impacts of the pandemic and our system-wide RevPAR increases, we are returning to a position ~~particularly during the three months ended September 30, 2021,~~ where cash flows are being generated from our ~~operations.~~

~~During~~operations, which for the nine months ended September 30, ~~2021, the change in cash flows from operating activities~~2022 was primarily attributable to the $1.0 billion of cash received in connection with the Honors Points Pre-Sale during the nine months ended September 30, 2020. Excluding the impact of this transaction, cash flows from operating activities increased during the nine months ended September 30, 2021

primarily due to the increase in cash inflows generated from our management and franchise segment, largely as a result of anthe increase in RevPAR at our comparable managed and franchised ~~RevPAR~~properties of ~~48.2 percent due to the recovery from the COVID-19 pandemic. This increase~~48.1 percent. Additionally, there was ~~only partially offset by~~ a ~~$123~~$99 million ~~increase~~decrease in payments of contract acquisition costs based on the timing of certain strategic hotel developments

supporting our net unit growth. The increase in cash provided by operating activities was partially offset by a $174 million increase in cash paid for income taxes.

In April 2020, we pre-sold Hilton Honors points to American Express and, before the end of the second quarter of 2022, all of those points had been used by American Express. As such, American Express resumed purchasing Hilton Honors points with cash in connection with a co-branded credit card arrangement with them, which ~~reflects~~also contributed to the increase in our ~~strategic investment~~operating cash flows during the period. We expect American Express to continue to purchase points with cash under the co-branded credit card arrangement in ~~growing our system by adding hotels to our management and franchise segment.~~future periods.

Investing Activities

Net cash used in investing activities ~~primarily related to~~included capitalized software costs that were related to various systems initiatives for the benefit of both our hotel owners and our overall corporate operations, ~~and to~~as well as capital expenditures for property and equipment related to our corporate facilities and the renovation of certain hotels in our ownership segment. ~~Beginning~~Net cash used in ~~March 2020,~~investing activities was partially offset by the net cash inflows resulting from our undesignated derivative financial instruments that we ~~took steps~~have in place to ~~temporarily reduce such expenditures~~hedge against changes in ~~response~~foreign currency exchange rates, primarily as a result of the British pound depreciating against the United States dollar during the nine months ended September 30, 2022. Additionally, during the nine months ended September 30, 2022, we provided equity and debt financing to unconsolidated affiliates and owners of certain hotels that we will in the ~~COVID-19 pandemic and have continued~~future or do currently manage or franchise to ~~deliberately govern investment spending through 2021; however, we expect such costs to continue to increase in future periods, aligned to~~support our ~~recovery from the pandemic.~~strategic objectives.

Financing Activities

~~The change~~Net cash used in ~~cash flows from~~ financing activities ~~was primarily attributable to our Revolving Credit Facility, which we fully drew down~~ during the nine months ended September 30, ~~2020 in response~~2022 primarily related to the ~~COVID-19 pandemic, resulting~~return of capital to shareholders, including share repurchases, which resumed in ~~net~~March 2022, and quarterly dividend payments, which resumed in June 2022, after both programs were suspended in 2020. Net cash ~~inflows of $1.5 billion, while we fully repaid the $1.7 billion outstanding debt balance~~used in financing activities during the nine months ended September 30, ~~2021. Additionally, during~~2021 primarily comprised the ~~nine months ended September 30, 2020, we had a net additional $1.0~~full repayment of the $1.69 billion outstanding debt balance on our Revolving Credit Facility, as well as the debt issuance costs and redemption premium associated with the issuance of new senior unsecured notes ~~borrowings, as compared to~~and the ~~nine months ended September 30, 2021. Further, cash outflows decreased $338 million as a result~~use of ~~decreases in share repurchases and dividend payments, as both programs remained suspended after their suspension was initiated in March 2020.~~such proceeds for the redemption of previously outstanding senior unsecured notes.

Debt and Borrowing Capacity

As of September 30, ~~2021,~~2022, our total indebtedness, excluding the deduction for unamortized deferred financing costs and discount, was approximately ~~$8.9 billion.~~$8.8 billion, and we had $60 million of letters of credit outstanding under our Revolving Credit Facility. For additional information on our total indebtedness, ~~including financing transactions executed during the nine months ended September 30, 2021,~~ availability under our Revolving Credit Facility and guarantees on our debt, refer to Note 5: "Debt" in our unaudited condensed consolidated financial statements.

If we are unable to generate sufficient cash ~~flows~~flow from operations in the future to service our debt, we may be required to reduce capital expenditures or issue additional equity securities. However, we do not have any material indebtedness outstanding that matures prior to May 2025. Our ability to make scheduled principal payments and to pay interest on our debt depends on our future operating performance, which is subject to general conditions in or affecting the hospitality industry that may be beyond our control. ~~The COVID-19~~Although the pandemic negatively impacted our cash flows from operations as compared to periods prior to the onset of the pandemic, ~~and will continue~~we are returning to ~~do so for an indeterminate period of time. During 2020,~~a position where we ~~took precautions to secure~~are generating cash flows from our core operations as reflected in our cash ~~position, as discussed above, and, with our business recovering~~flows provided by operating activities during the current year, we were able to repay outstanding debt borrowings on our Revolving Credit facility and we expect to be able to meet our current obligations. Furthermore, we do not have any material indebtedness outstanding that matures prior to May 2025.

~~Contractual Obligations~~

~~During~~ the nine months ended September 30, 2021, we issued the 2032 Senior Notes, redeemed the 2026 Senior Notes and fully repaid the $1.7 billion outstanding debt balance on our Revolving Credit Facility. Otherwise, there were no material changes to our contractual obligations from what we previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

~~Summarized Guarantor Financial Information~~

HOC is the issuer of the Senior Notes and is 100 percent owned directly by Hilton Worldwide Parent LLC ("HWP"), which, in turn, is 100 percent owned directly by the Parent. The Senior Notes are guaranteed jointly and severally on a senior unsecured basis by the Parent, HWP and substantially all of the Parent's direct and indirect wholly owned domestic restricted subsidiaries, except for HOC (together, the "Guarantors"). The indentures that govern the Senior Notes provide that any subsidiary of the Company that provides a guarantee of our senior secured credit facilities will guarantee the Senior Notes. As of September 30, 2021, none of our foreign subsidiaries or domestic subsidiaries owned by foreign subsidiaries or our non-wholly owned subsidiaries guaranteed the Senior Notes.

The guarantees are full and unconditional, subject to certain customary release provisions. The indentures that govern the Senior Notes provide that any Guarantor may be released from its guarantee so long as: (i) the subsidiary is sold or sells all of its assets; (ii) the subsidiary is released from its guarantee under our senior secured credit facilities; (iii) the subsidiary is declared "unrestricted" for covenant purposes; or (iv) the requirements for legal defeasance or covenant defeasance or to discharge the indenture have been satisfied, in each case in compliance with applicable provisions of the indentures.

Neither HOC nor any of the Guarantors has any reporting obligation under the Exchange Act in respect of the Senior Notes; however, we are supplementally providing the information set forth below. The following tables present summarized financial information for HOC, along with the Parent and all other Guarantors, on a combined basis:


	~~As of~~ ~~September 30, 2021~~
	~~(in millions)~~
~~ASSETS~~
~~Total current assets~~	$	~~1,014~~
~~Intangible assets, net~~	~~8,793~~
~~Total intangibles and other assets~~	~~9,293~~
~~TOTAL ASSETS~~	~~10,307~~

~~LIABILITIES AND EQUITY (DEFICIT)~~
~~Total current liabilities~~	~~2,053~~
~~Long-term debt~~	~~8,537~~
~~Total liabilities~~	~~14,250~~
~~Total Hilton stockholders' deficit~~	~~(3,943)~~
~~TOTAL LIABILITIES AND EQUITY (DEFICIT)~~	~~10,307~~


	~~Nine Months Ended September 30, 2021~~
	~~(in millions)~~
~~Revenues~~
~~Revenues~~	$	~~1,057~~
~~Other revenues from managed and franchised properties~~	~~1,969~~
~~Total revenues~~	$	~~3,026~~

~~Expenses~~
~~Expenses~~	$	~~330~~
~~Other expenses from managed and franchised properties~~	~~2,054~~
~~Total expenses~~	$	~~2,384~~

~~Operating income~~	$	~~645~~
~~Interest expense~~	~~(290)~~
~~Income tax expense~~	~~(70)~~
~~Net income~~	~~224~~
~~Net income attributable to Hilton stockholders~~	~~224~~

2022.

Critical Accounting ~~Policies and~~ Estimates

The preparation of our unaudited condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect reported amounts and related disclosures. We have discussed the ~~policies~~estimates and ~~estimates~~assumptions that we believe are critical ~~and require the use~~because they involve a higher degree of ~~complex~~ judgment in their application and are based on information that is inherently uncertain in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020,~~2021, and, during the nine months ended September 30, ~~2021,~~2022, there were no material changes to those critical accounting estimates that were previously disclosed.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk primarily from changes in interest rates and foreign currency exchange rates. These rate changes may affect future income, cash flows and the fair value of the Company, its assets and its liabilities. In certain situations, we may seek to reduce volatility associated with changes in interest rates and foreign currency exchange rates by entering into derivative financial instruments intended to provide a hedge against a portion of the risks associated with such

volatility. We continue to have exposure to such risks to the extent they are not hedged. We enter into derivative financial instruments to the extent they meet the objectives described above, and we do not use derivatives for speculative purposes. Our exposure to market risk has not materially changed from what was previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020;~~2021; however, given the impact that the ~~COVID-19~~ pandemic, ~~has~~the Russian invasion of Ukraine and rising inflation and interest rates have had on the global economy, we continue to monitor our exposure to market risk and have adjusted, and will continue to adjust, our hedge portfolios accordingly.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

The Company maintains a set of disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission ("SEC") rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. The design of any disclosure controls and procedures is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. In accordance with Rule 13a-15(b) of the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this Quarterly Report on Form 10-Q, were effective to provide

reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

3127

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are involved in various claims and lawsuits arising in the ordinary course of business, some of which include claims for substantial sums, including proceedings involving tort and other general liability claims, employee claims, consumer protection claims and claims related to our management of certain ~~hotel properties.~~hotels. We recognize a liability when we believe the loss is probable and can be reasonably estimated. Most occurrences involving liability, claims of negligence and employees are covered by ~~insurance~~policies that we hold with solvent insurance carriers. The ultimate results of claims and litigation cannot be predicted with certainty. We believe we have adequate reserves against such matters. We currently believe that the ultimate outcome of such lawsuits and proceedings will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position, results of operations or cash flows. However, depending on the amount and timing, an unfavorable resolution of some or all of these matters could materially affect our future results of operations in a particular period.

Item 1A. Risk Factors

~~See~~For a discussion of our potential risks and uncertainties, see the risk factors previously disclosed under "Part I—Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020.~~2021 and under "Part II—Item 1A. Risk Factors" of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Unregistered Sales of Securities

None.

(b) Use of Proceeds

None.

The following table sets forth information regarding our purchases of shares of our common stock during the three months ended September 30, 2022:


	Total Number of Shares Purchased	Average Price Paid per Share(1)		Total Number of Shares Purchased as Part of Publicly Announced Program(2)	Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program(2) (in millions)
July 1, 2022 to July 31, 2022	1,487,994	$	115.95	1,487,994	$	1,454
August 1, 2022 to August 31, 2022	1,253,607	133.05		1,253,607	1,287
September 1, 2022 to September 30, 2022	1,238,072	127.23		1,238,072	1,129
Total	3,979,673	124.85		3,979,673

____________

(1)Includes commissions paid.

(2)Our stock repurchase program, which was initially announced in February 2017 and subsequently increased in November 2017, February 2019 and March 2020, allows for the repurchase of up to a total of $5.5 billion of our common stock. Under this publicly announced program, we are authorized to repurchase shares through open market purchases, privately-negotiated transactions or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act. The repurchase program does not have an expiration date and may be suspended or discontinued at any time.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits


Exhibit Number						Exhibit Description
3.1						Certificate of Incorporation of Hilton Worldwide Holdings Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on December 17, 2013).
3.2						Certificate of Amendment to Certificate of Incorporation of Hilton Worldwide Holdings Inc. effective as of January 3, 2017 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on January 4, 2017).
3.3						Amended and Restated By-Laws of Hilton Worldwide Holdings Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on August 2, 2019).
4.1						Fifth Supplemental Indenture with respect to the 4.875% Senior Notes due 2027 (the “2027 Notes”), dated as of May 13, 2022, among the subsidiary guarantors listed therein and Wilmington Trust, National Association, as trustee.
4.2						Sixth Supplemental Indenture with respect to the 2027 Notes, dated as of August 24, 2022, among the subsidiary guarantors listed therein and Wilmington Trust, National Association, as trustee.
4.3						Fourth Supplemental Indenture with respect to the 4.875% Senior Notes due 2030 (the “2030 Notes”), dated as of May 13, 2022, among the subsidiary guarantors listed therein and Wilmington Trust, National Association, as trustee.
4.4						Fifth Supplemental Indenture with respect to the 2030 Notes, dated as of August 24, 2022, among the subsidiary guarantors listed therein and Wilmington Trust, National Association, as trustee.
4.5						First Supplemental Indenture with respect to the 5.375% Senior Notes due 2025 (the “2025 Notes”) and the 5.750% Senior Notes due 2028 (the “2028 Notes”), dated as of May 13, 2022, among the subsidiary guarantors listed therein and Wilmington Trust, National Association, as trustee.
4.6						Second Supplemental Indenture with respect to the 2025 Notes and the 2028 Notes, dated as of August 24, 2022, among the subsidiary guarantors listed therein and Wilmington Trust, National Association, as trustee.
4.7						First Supplemental Indenture with respect to the 3.750% Senior Notes due 2029 (the “2029 Notes”) and the 4.000% Senior Notes due 2031 (the “2031 Notes”), dated as of May 13, 2022, among the subsidiary guarantors listed therein and Wilmington Trust, National Association, as trustee.
4.8						Second Supplemental Indenture with respect to the 2029 Notes and the 2031 Notes, dated as of August 24, 2022, among the subsidiary guarantors listed therein and Wilmington Trust, National Association, as trustee.
4.9						First Supplemental Indenture with respect to the 3.625% Senior Notes due 2032 (the “2032 Notes”), dated as of May 13, 2022, among the subsidiary guarantors listed therein and Wilmington Trust, National Association, as trustee.
4.10						Second Supplemental Indenture with respect to the 2032 Notes, dated as of August 24, 2022, among the subsidiary guarantors listed therein and Wilmington Trust, National Association, as trustee.
10.1						Amendment No. 7, dated as of October 21, 2021, to the Credit Agreement, dated as of October 25, 2013 (as amended by Amendment No. 1 to the Credit Agreement dated as of August 18, 2016, as further amended by Amendment No. 2 to the Credit Agreement dated as of November 21, 2016, as further amended by Amendment No. 3 to the Credit Agreement dated as of March 16, 2017, as further amended by Amendment No. 4 to the Credit Agreement dated as of April 19, 2018, as further amended by Amendment No. 5 to the Credit Agreement dated as of June 5,Hilton 2019 and as further amended by Amendment No. 6 to the Credit Agreement dated as of June 21, 2019), between Hilton Domestic Operating Company Inc. and Deutsche Bank AG New York Branch as administrative agent.Employee Stock Purchase Plan.
10.2						Form of Deferred Share Unit Agreement for non-employee directors.
31.1						Certificate of Christopher J. Nassetta, President and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2						Certificate of Kevin J. Jacobs, Chief Financial Officer and President, Global Development, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1						Certificate of Christopher J. Nassetta, President and Chief Executive Officer, pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2						Certificate of Kevin J. Jacobs, Chief Financial Officer and President, Global Development, pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).


Exhibit Number						Exhibit Description
101.INS						Inline XBRL Instance Document - this instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH						Inline XBRL Taxonomy Extension Schema Document.
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document).

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

3330

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


HILTON WORLDWIDE HOLDINGS INC.

By:						/s/ Christopher J. Nassetta
Name:						Christopher J. Nassetta
Title:						President and Chief Executive Officer

By:						/s/ Kevin J. Jacobs
Name:						Kevin J. Jacobs
Title:						Chief Financial Officer and President, Global Development

Date: October ~~27, 2021~~26, 2022

3431


	Three Months Ended September 30, 2020
	Equity (Deficit) Attributable to Hilton Stockholders
				Treasury Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss
	Common Stock											Noncontrolling Interests
	Shares	Amount												Total
	(in millions)
Balance as of June 30, 2020	277	$	3	$	(4,457)	$	10,465	$	(6,429)	$	(881)	$	8	$	(1,291)
Net loss	—	—		—		—		(79)		—		(2)		(81)
Other comprehensive income	—	—		—		—		—		28		—		28
Share-based compensation	—	—		—		26		—		—		—		26
Distributions	—	—		—		—		—		—		(1)		(1)
Balance as of September 30, 2020	277	$	3	$	(4,457)	$	10,491	$	(6,508)	$	(853)	$	5	$	(1,319)


	Nine Months Ended September 30, 2020
	Equity (Deficit) Attributable to Hilton Stockholders
				Treasury Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss
	Common Stock											Noncontrolling Interests
	Shares	Amount												Total
	(in millions)
Balance as of December 31, 2019	279	$	3	$	(4,169)	$	10,489	$	(5,965)	$	(840)	$	10	$	(472)
Net loss	—	—		—		—		(491)		—		(4)		(495)
Other comprehensive loss	—	—		—		—		—		(13)		—		(13)
Dividends(1)	—	—		—		—		(42)		—		—		(42)
Repurchases of common stock(1)	(3)	—		(279)		—		—		—		—		(279)
Share-based compensation	1	—		(9)		2		—		—		—		(7)
Distributions	—	—		—		—		—		—		(1)		(1)
Cumulative effect of the adoption of ASU 2016-13(2)	—	—		—		—		(10)		—		—		(10)
Balance as of September 30, 2020	277	$	3	$	(4,457)	$	10,491	$	(6,508)	$	(853)	$	5	$	(1,319)