Condensed Consolidating Guarantor Financial Information | Condensed Consolidating Guarantor Financial Information In October 2013, Hilton Worldwide Finance LLC and Hilton Worldwide Finance Corp. (the "HWF Issuers"), entities that are 100 percent owned by Hilton Worldwide Parent LLC ("HWP"), which is 100 percent owned by the Parent, issued the 2021 Senior Notes. In September 2016, Hilton Domestic Operating Company Inc. ("HOC"), an entity incorporated in July 2016 that is 100 percent owned by Hilton Worldwide Finance LLC and is a guarantor of the 2021 Senior Notes, 2025 Senior Notes and 2027 Senior Notes, assumed the 2024 Senior Notes that were issued in August 2016 by escrow issuers. In March 2017, the HWF Issuers, which are guarantors of the 2024 Senior Notes, issued the 2025 Senior Notes and 2027 Senior Notes, and used the net proceeds and available cash to repay in full the 2021 Senior Notes. The 2024 Senior Notes, 2025 Senior Notes and 2027 Senior Notes are collectively referred to as the Senior Notes. The HWF Issuers and HOC are collectively referred to as the Subsidiary Issuers. The Senior Notes are guaranteed jointly and severally on a senior unsecured basis by HWP, the Parent and certain of the Parent's 100 percent owned domestic restricted subsidiaries that are themselves not issuers of the applicable series of Senior Notes (together, the "Guarantors''). The indentures that govern the Senior Notes provide that any subsidiary of the Company that provides a guarantee of the Senior Secured Credit Facility will guarantee the Senior Notes. As of June 30, 2017 , none of our foreign subsidiaries or U.S. subsidiaries owned by foreign subsidiaries or conducting foreign operations or our non-wholly owned subsidiaries guarantee the Senior Notes (collectively, the "Non-Guarantors"). In September 2016, certain employees, assets and liabilities of a guarantor subsidiary were transferred into HOC. This transfer was considered to be a transfer of assets rather than a transfer of a business. Accordingly, we have separately presented HOC as a subsidiary issuer in our condensed consolidating financial information prospectively from the date of the transfer. In connection with the spin-offs, certain entities that were previously guarantors of the 2021 Senior Notes and 2024 Senior Notes were released and no longer guaranteed these senior notes. The condensed consolidating financial information presents the financial information based on the composition of the Guarantors and Non-Guarantors as of June 30, 2017 . 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 guaranty under the Senior Secured Credit Facility; (iii) the subsidiary is declared "unrestricted" for covenant purposes; (iv) the subsidiary is merged with or into the applicable Subsidiary Issuers or another Guarantor or the Guarantor liquidates after transferring all of its assets to the applicable Subsidiary Issuers or another Guarantor; or (v) 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. The following schedules present the condensed consolidating financial information as of June 30, 2017 and December 31, 2016 , and for the three and six months ended June 30, 2017 and 2016 , for the Parent, HWF Issuers, HOC, Guarantors and Non-Guarantors. June 30, 2017 Parent HWF Issuers HOC Guarantors Non-Guarantors Eliminations Total (in millions) ASSETS Current Assets: Cash and cash equivalents $ — $ — $ 3 $ 11 $ 770 $ — $ 784 Restricted cash and cash equivalents — — 87 10 28 — 125 Accounts receivable, net — — 11 620 290 — 921 Intercompany receivables — — — — 40 (40 ) — Prepaid expenses — — 6 45 73 (1 ) 123 Income taxes receivable — — — 27 — (27 ) — Other — — 1 4 41 — 46 Total current assets — — 108 717 1,242 (68 ) 1,999 Intangibles and Other Assets: Investments in subsidiaries 1,506 6,911 8,097 1,506 — (18,020 ) — Goodwill — — — 3,824 1,340 — 5,164 Brands — — — 4,404 468 — 4,872 Management and franchise contracts, net — — — 677 253 — 930 Other intangible assets, net — — 1 281 150 — 432 Property and equipment, net — — 13 61 264 — 338 Deferred income tax assets 9 4 166 — 87 (184 ) 82 Other — 10 32 218 192 — 452 Total intangibles and other assets 1,515 6,925 8,309 10,971 2,754 (18,204 ) 12,270 TOTAL ASSETS $ 1,515 $ 6,925 $ 8,417 $ 11,688 $ 3,996 $ (18,272 ) $ 14,269 LIABILITIES AND EQUITY Current Liabilities: Accounts payable, accrued expenses and other $ — $ 23 $ 204 $ 1,193 $ 460 $ (1 ) $ 1,879 Intercompany payables — — 40 — — (40 ) — Current maturities of long-term debt — 32 — — 16 — 48 Income taxes payable — — — 5 84 (27 ) 62 Total current liabilities — 55 244 1,198 560 (68 ) 1,989 Long-term debt — 5,349 982 — 241 — 6,572 Deferred revenues — — — 99 — — 99 Deferred income tax liabilities — — — 1,857 — (184 ) 1,673 Liability for guest loyalty program — — — 884 — — 884 Other — 15 280 526 716 — 1,537 Total liabilities — 5,419 1,506 4,564 1,517 (252 ) 12,754 Equity: Total Hilton stockholders' equity 1,515 1,506 6,911 7,124 2,479 (18,020 ) 1,515 Noncontrolling interests — — — — — — — Total equity 1,515 1,506 6,911 7,124 2,479 (18,020 ) 1,515 TOTAL LIABILITIES AND EQUITY $ 1,515 $ 6,925 $ 8,417 $ 11,688 $ 3,996 $ (18,272 ) $ 14,269 December 31, 2016 Parent HWF Issuers HOC Guarantors Non-Guarantors Eliminations Total (in millions) ASSETS Current Assets: Cash and cash equivalents $ — $ — $ 3 $ 22 $ 1,037 $ — $ 1,062 Restricted cash and cash equivalents — — 87 9 25 — 121 Accounts receivable, net — — 7 484 264 — 755 Intercompany receivables — — — — 42 (42 ) — Prepaid expenses — — 6 21 65 (3 ) 89 Income taxes receivable — — — 30 — (17 ) 13 Other — — 1 5 33 — 39 Current assets of discontinued operations — — — — 1,502 (24 ) 1,478 Total current assets — — 104 571 2,968 (86 ) 3,557 Intangibles and Other Assets: Investments in subsidiaries 5,889 11,300 12,583 5,889 — (35,661 ) — Goodwill — — — 3,824 1,394 — 5,218 Brands — — — 4,404 444 — 4,848 Management and franchise contracts, net — — — 716 247 — 963 Other intangible assets, net — — 1 296 150 — 447 Property and equipment, net — — 12 62 267 — 341 Deferred income tax assets 10 2 167 — 82 (179 ) 82 Other — 12 30 213 153 — 408 Non-current assets of discontinued operations — — — 12 10,345 (10 ) 10,347 Total intangibles and other assets 5,899 11,314 12,793 15,416 13,082 (35,850 ) 22,654 TOTAL ASSETS $ 5,899 $ 11,314 $ 12,897 $ 15,987 $ 16,050 $ (35,936 ) $ 26,211 LIABILITIES AND EQUITY Current Liabilities: Accounts payable, accrued expenses and other $ — $ 26 $ 293 $ 1,091 $ 414 $ (3 ) $ 1,821 Intercompany payables — — 42 — — (42 ) — Current maturities of long-term debt — 26 — — 7 — 33 Income taxes payable — — — — 73 (17 ) 56 Current liabilities of discontinued operations — — — 77 721 (24 ) 774 Total current liabilities — 52 335 1,168 1,215 (86 ) 2,684 Long-term debt — 5,361 981 — 241 — 6,583 Deferred revenues — — — 42 — — 42 Deferred income tax liabilities — — — 1,919 38 (179 ) 1,778 Liability for guest loyalty program — — — 889 — — 889 Other — 12 277 490 713 — 1,492 Non-current liabilities of discontinued operations — — 4 — 6,900 (10 ) 6,894 Total liabilities — 5,425 1,597 4,508 9,107 (275 ) 20,362 Equity: Total Hilton stockholders' equity 5,899 5,889 11,300 11,479 6,993 (35,661 ) 5,899 Noncontrolling interests — — — — (50 ) — (50 ) Total equity 5,899 5,889 11,300 11,479 6,943 (35,661 ) 5,849 TOTAL LIABILITIES AND EQUITY $ 5,899 $ 11,314 $ 12,897 $ 15,987 $ 16,050 $ (35,936 ) $ 26,211 Three Months Ended June 30, 2017 Parent HWF Issuers HOC Guarantors Non-Guarantors Eliminations Total (in millions) Revenues Franchise fees $ — $ — $ 49 $ 296 $ 32 $ (5 ) $ 372 Base and other management fees — — — 53 32 — 85 Incentive management fees — — — 21 35 — 56 Owned and leased hotels — — — — 377 — 377 Other revenues — — 2 16 2 — 20 — — 51 386 478 (5 ) 910 Other revenues from managed and franchised properties — — 41 1,229 166 — 1,436 Total revenues — — 92 1,615 644 (5 ) 2,346 Expenses Owned and leased hotels — — — — 330 — 330 Depreciation and amortization — — 2 61 24 — 87 General and administrative — — 92 (2 ) 27 — 117 Other expenses — — 3 9 4 (5 ) 11 — — 97 68 385 (5 ) 545 Other expenses from managed and franchised properties — — 41 1,229 166 — 1,436 Total expenses — — 138 1,297 551 (5 ) 1,981 Operating income (loss) — — (46 ) 318 93 — 365 Interest expense — (60 ) (26 ) — (14 ) — (100 ) Gain (loss) on foreign currency transactions — — 2 53 (50 ) — 5 Other non-operating income, net — — 2 3 — — 5 Income (loss) from continuing operations before income taxes and equity in earnings from subsidiaries — (60 ) (68 ) 374 29 — 275 Income tax benefit (expense) — 24 25 (147 ) (10 ) — (108 ) Income (loss) from continuing operations before equity in earnings from subsidiaries — (36 ) (43 ) 227 19 — 167 Equity in earnings from subsidiaries 166 202 245 166 — (779 ) — Net income 166 166 202 393 19 (779 ) 167 Net income attributable to noncontrolling interests — — — — (1 ) — (1 ) Net income attributable to Hilton stockholders $ 166 $ 166 $ 202 $ 393 $ 18 $ (779 ) $ 166 Comprehensive income $ 217 $ 161 $ 201 $ 394 $ 76 $ (830 ) $ 219 Comprehensive income attributable to noncontrolling interests — — — — (2 ) — (2 ) Comprehensive income attributable to Hilton stockholders $ 217 $ 161 $ 201 $ 394 $ 74 $ (830 ) $ 217 Three Months Ended June 30, 2016 Parent HWF Issuers Guarantors Non-Guarantors Eliminations Total (in millions) Revenues Franchise fees $ — $ — $ 284 $ 29 $ (2 ) $ 311 Base and other management fees — — 33 27 — 60 Incentive management fees — — 3 30 — 33 Owned and leased hotels — — — 398 — 398 Other revenues — — 14 4 — 18 — — 334 488 (2 ) 820 Other revenues from managed and franchised properties — — 993 137 — 1,130 Total revenues — — 1,327 625 (2 ) 1,950 Expenses Owned and leased hotels — — — 349 — 349 Depreciation and amortization — — 68 23 — 91 General and administrative — — 66 31 — 97 Other expenses — — 8 5 (2 ) 11 — — 142 408 (2 ) 548 Other expenses from managed and franchised properties — — 993 137 — 1,130 Total expenses — — 1,135 545 (2 ) 1,678 Gain on sales of assets, net — — — 1 — 1 Operating income — — 192 81 — 273 Interest expense — (67 ) (20 ) (12 ) — (99 ) Gain (loss) on foreign currency transactions — — (69 ) 55 — (14 ) Other non-operating income (loss), net — — 4 (1 ) — 3 Income (loss) from continuing operations before income taxes and equity in earnings from subsidiaries — (67 ) 107 123 — 163 Income tax benefit (expense) — 25 (42 ) (46 ) — (63 ) Income (loss) from continuing operations before equity in earnings from subsidiaries — (42 ) 65 77 — 100 Equity in earnings from subsidiaries 96 138 73 — (307 ) — Income from continuing operations, net of taxes 96 96 138 77 (307 ) 100 Income from discontinued operations, net of taxes 143 143 143 134 (419 ) 144 Net income 239 239 281 211 (726 ) 244 Net income attributable to noncontrolling interests — — — (5 ) — (5 ) Net income attributable to Hilton stockholders $ 239 $ 239 $ 281 $ 206 $ (726 ) $ 239 Comprehensive income $ 187 $ 239 $ 251 $ 189 $ (674 ) $ 192 Comprehensive income attributable to noncontrolling interests — — — (5 ) — (5 ) Comprehensive income attributable to Hilton stockholders $ 187 $ 239 $ 251 $ 184 $ (674 ) $ 187 Six Months Ended June 30, 2017 Parent HWF Issuers HOC Guarantors Non-Guarantors Eliminations Total (in millions) Revenues Franchise fees $ — $ — $ 68 $ 551 $ 56 $ (9 ) $ 666 Base and other management fees — — — 103 65 — 168 Incentive management fees — — — 43 65 — 108 Owned and leased hotels — — — — 677 — 677 Other revenues — — 22 29 6 — 57 — — 90 726 869 (9 ) 1,676 Other revenues from managed and franchised properties — — 86 2,449 296 — 2,831 Total revenues — — 176 3,175 1,165 (9 ) 4,507 Expenses Owned and leased hotels — — — — 602 — 602 Depreciation and amortization — — 3 125 48 — 176 General and administrative — — 171 — 51 — 222 Other expenses — — 15 16 12 (9 ) 34 — — 189 141 713 (9 ) 1,034 Other expenses from managed and franchised properties — — 86 2,449 296 — 2,831 Total expenses — — 275 2,590 1,009 (9 ) 3,865 Operating income (loss) — — (99 ) 585 156 — 642 Interest expense — (123 ) (54 ) — (27 ) — (204 ) Gain (loss) on foreign currency transactions — — 13 74 (86 ) — 1 Loss on debt extinguishment — (60 ) — — — — (60 ) Other non-operating income (loss), net — (3 ) 3 4 2 — 6 Income (loss) from continuing operations before income taxes and equity in earnings from subsidiaries — (186 ) (137 ) 663 45 — 385 Income tax benefit (expense) — 73 52 (255 ) (13 ) — (143 ) Income (loss) from continuing operations before equity in earnings from subsidiaries — (113 ) (85 ) 408 32 — 242 Equity in earnings from subsidiaries 240 353 438 240 — (1,271 ) — Net income 240 240 353 648 32 (1,271 ) 242 Net income attributable to noncontrolling interests — — — — (2 ) — (2 ) Net income attributable to Hilton stockholders $ 240 $ 240 $ 353 $ 648 $ 30 $ (1,271 ) $ 240 Comprehensive income $ 311 $ 233 $ 356 $ 649 $ 106 $ (1,342 ) $ 313 Comprehensive income attributable to noncontrolling interests — — — — (2 ) — (2 ) Comprehensive income attributable to Hilton stockholders $ 311 $ 233 $ 356 $ 649 $ 104 $ (1,342 ) $ 311 Six Months Ended June 30, 2016 Parent HWF Issuers Guarantors Non-Guarantors Eliminations Total (in millions) Revenues Franchise fees $ — $ — $ 518 $ 51 $ (5 ) $ 564 Base and other management fees — — 65 55 — 120 Incentive management fees — — 11 58 — 69 Owned and leased hotels — — — 717 — 717 Other revenues — — 28 7 — 35 — — 622 888 (5 ) 1,505 Other revenues from managed and franchised properties — — 1,917 254 — 2,171 Total revenues — — 2,539 1,142 (5 ) 3,676 Expenses Owned and leased hotels — — — 656 — 656 Depreciation and amortization — — 136 47 — 183 Impairment loss — — — 15 — 15 General and administrative — — 123 57 — 180 Other expenses — — 17 17 (5 ) 29 — — 276 792 (5 ) 1,063 Other expenses from managed and franchised properties — — 1,917 254 — 2,171 Total expenses — — 2,193 1,046 (5 ) 3,234 Gain on sales of assets, net — — — 1 — 1 Operating income — — 346 97 — 443 Interest expense — (134 ) (31 ) (24 ) — (189 ) Gain (loss) on foreign currency transactions — — (64 ) 38 — (26 ) Other non-operating income (loss), net — — 6 (1 ) — 5 Income (loss) from continuing operations before income taxes and equity in earnings from subsidiaries — (134 ) 257 110 — 233 Income tax benefit (expense) 192 51 (142 ) (43 ) — 58 Income (loss) from continuing operations before equity in earnings from subsidiaries 192 (83 ) 115 67 — 291 Equity in earnings from subsidiaries 96 179 64 — (339 ) — Income from continuing operations, net of taxes 288 96 179 67 (339 ) 291 Income from discontinued operations, net of taxes 260 260 260 240 (757 ) 263 Net income 548 356 439 307 (1,096 ) 554 Net income attributable to noncontrolling interests — — — (6 ) — (6 ) Net income attributable to Hilton stockholders $ 548 $ 356 $ 439 $ 301 $ (1,096 ) $ 548 Comprehensive income $ 506 $ 350 $ 400 $ 308 $ (1,054 ) $ 510 Comprehensive income attributable to noncontrolling interests — — — (4 ) — (4 ) Comprehensive income attributable to Hilton stockholders $ 506 $ 350 $ 400 $ 304 $ (1,054 ) $ 506 Six Months Ended June 30, 2017 Parent HWF Issuers HOC Guarantors Non-Guarantors Eliminations Total (in millions) Operating Activities: Net cash provided by (used in) operating activities $ — $ (69 ) $ (58 ) $ 395 $ 108 $ — $ 376 Investing Activities: Capital expenditures for property and equipment — — (3 ) (3 ) (12 ) — (18 ) Contract acquisition costs — — — (17 ) (15 ) — (32 ) Capitalized software costs — — — (29 ) — — (29 ) Other — (13 ) — (5 ) 3 (3 ) (18 ) Net cash used in investing activities — (13 ) (3 ) (54 ) (24 ) (3 ) (97 ) Financing Activities: Borrowings — 1,823 — — — — 1,823 Repayment of debt — (1,832 ) — — (4 ) — (1,836 ) Debt issuance costs and redemption premium — (68 ) — — — — (68 ) Repayment of intercompany borrowings — — (3 ) — — 3 — Intercompany transfers 450 159 92 (351 ) (350 ) — — Dividends paid (98 ) — — — — — (98 ) Cash transferred in spin-offs of Park and HGV — — — — (501 ) — (501 ) Repurchases of common stock (352 ) — — — — — (352 ) Distributions to noncontrolling interests — — — — (1 ) — (1 ) Tax withholdings on share-based compensation — — (28 ) — — — (28 ) Net cash provided by (used in) financing activities — 82 61 (351 ) (856 ) 3 (1,061 ) Effect of exchange rate changes on cash, restricted cash and cash equivalents — — — — 7 — 7 Net decrease in cash, restricted cash and cash equivalents — — — (10 ) (765 ) — (775 ) Cash, restricted cash and cash equivalents from continuing operations, beginning of period — — 90 31 1,062 — 1,183 Cash, restricted cash and cash equivalents from discontinued operations, beginning of period — — — — 501 — 501 Cash, restricted cash and cash equivalents, beginning of period — — 90 31 1,563 — 1,684 Cash, restricted cash and cash equivalents, end of period $ — $ — $ 90 $ 21 $ 798 $ — $ 909 Six Months Ended June 30, 2016 Parent HWF Issuers Guarantors Non-Guarantors Eliminations Total (in millions) Operating Activities: Net cash provided by (used in) operating activities $ — $ — $ (133 ) $ 861 $ (54 ) $ 674 Investing Activities: Capital expenditures for property and equipment — — (1 ) (168 ) — (169 ) Proceeds from asset dispositions — — — 1 — 1 Contract acquisition costs — — (16 ) (2 ) — (18 ) Capitalized software costs — — (32 ) (3 ) — (35 ) Other — — (18 ) 3 — (15 ) Net cash used in investing activities — — (67 ) (169 ) — (236 ) Financing Activities: Repayment of debt — — — (64 ) — (64 ) Intercompany transfers 138 — 214 (352 ) — — Dividends paid (138 ) — — — — (138 ) Intercompany dividends — — — (54 ) 54 — Distributions to noncontrolling interests — — — (4 ) — (4 ) Tax withholdings on share-based compensation — — (13 ) — — (13 ) Net cash provided by (used in) financing activities — — 201 (474 ) 54 (219 ) Effect of exchange rate changes on cash, restricted cash and cash equivalents — — — 6 — 6 Net increase in cash, restricted cash and cash equivalents — — 1 224 — 225 Cash, restricted cash and cash equivalents from continuing operations, beginning of period — — 109 524 — 633 Cash, restricted cash and cash equivalents from discontinued operations, beginning of period — — — 223 — 223 Cash, restricted cash and cash equivalents, beginning of period — — 109 747 — 856 Cash, restricted cash and cash equivalents from continuing operations, end of period — — 110 608 — 718 Cash, restricted cash and cash equivalents from discontinued operations, end of period — — — 363 — 363 Cash, restricted cash and cash equivalents, end of period $ — $ — $ 110 $ 971 $ — $ 1,081 |