Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Oct. 29, 2020 | |
Entity Information [Line Items] | |||
Document Type | 10-Q | ||
Document Quarterly Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Sep. 30, 2020 | ||
Entity File Number | 001-36243 | ||
Entity Registrant Name | Hilton Worldwide Holdings Inc. | ||
Entity incorporation, sate or country code | DE | ||
Entity Tax Identification Number | 27-4384691 | ||
Entity Address, Address Line One | 7930 Jones Branch Drive | ||
Entity Address, Address Line Two | Suite 1100 | ||
Entity Address, City or Town | McLean | ||
Entity Address, State or Province | VA | ||
Entity Address, Postal Zip Code | 22102 | ||
City Area Code | 703 | ||
Local Phone Number | 883-1000 | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | ||
Trading Symbol | HLT | ||
Security Exchange Name | NYSE | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Small Business | false | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity common stock shares outstanding | 277,446,309 | ||
Entity Central Index Key | 0001585689 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | Q3 | ||
Amendment Flag | false | ||
Entity Shell Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | |
Current Assets: | |||
Cash and cash equivalents | $ 3,405 | $ 538 | |
Restricted cash and cash equivalents | 63 | 92 | |
Accounts receivable, net of allowance for credit losses | 890 | 1,261 | |
Prepaid expenses | 113 | 130 | |
Other | 113 | 72 | |
Total current assets | 4,584 | 2,093 | |
Intangibles and Other Assets: | |||
Goodwill | 5,169 | 5,159 | |
Brands | 4,884 | 4,877 | |
Management and franchise contracts, net | 652 | 780 | |
Other intangible assets, net | 287 | 421 | |
Operating lease right-of-use assets | 769 | 867 | |
Property and equipment, net | 349 | 380 | |
Deferred income tax assets | 120 | 100 | |
Other | 315 | 280 | |
Total intangibles and other assets | 12,545 | 12,864 | |
Total assets | 17,129 | 14,957 | |
Current Liabilities: | |||
Accounts payable, accrued expenses and other | 1,387 | 1,703 | |
Current maturities of long-term debt | [1] | 51 | 37 |
Current portion of deferred revenues | 245 | 332 | |
Total current liabilities | 2,299 | 2,871 | |
Long-term debt | 10,439 | 7,956 | |
Operating lease liabilities | 954 | 1,037 | |
Deferred income tax liabilities | 658 | 795 | |
Deferred revenues | 1,410 | 827 | |
Other | 1,031 | 883 | |
Total liabilities | 18,448 | 15,429 | |
Commitments and contingencies | |||
Equity (Deficit): | |||
Preferred stock | 0 | 0 | |
Common stock | 3 | 3 | |
Treasury stock, at cost | (4,457) | (4,169) | |
Additional paid-in capital | 10,491 | 10,489 | |
Accumulated deficit | (6,508) | (5,965) | |
Accumulated other comprehensive loss | (853) | (840) | |
Total Hilton stockholders' deficit | (1,324) | (482) | |
Noncontrolling interests | 5 | 10 | |
Total deficit | (1,319) | (472) | |
Total liabilities and equity (deficit) | 17,129 | 14,957 | |
Consolidated VIEs [member] | |||
Current Assets: | |||
Cash and cash equivalents | 39 | 81 | |
Total current assets | 55 | 100 | |
Intangibles and Other Assets: | |||
Property and equipment, net | 76 | 69 | |
Deferred income tax assets | 53 | 48 | |
Other | 64 | 61 | |
Total intangibles and other assets | 193 | 179 | |
Current Liabilities: | |||
Accounts payable, accrued expenses and other | 30 | 49 | |
Total current liabilities | 55 | 64 | |
Other | 16 | 17 | |
Total liabilities | 245 | 260 | |
Guest Loyalty Program [member] | |||
Current Liabilities: | |||
Liabilities from contracts with customers, current | 616 | 799 | |
Liabilities from contracts with customers | $ 1,657 | $ 1,060 | |
[1] | Represents current maturities of finance lease liabilities. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Allowance for credit losses | $ 100 | $ 44 |
Preferred stock, par value (per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares | 3,000,000,000 | 3,000,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value (per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 10,000,000,000 | 10,000,000,000 |
Common stock, issued shares | 330,350,372 | 333,159,770 |
Common stock, outstanding shares | 277,430,022 | 278,985,125 |
Treasury stock, shares | 52,920,350 | 54,174,645 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Operations Statement - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues | $ 933 | $ 2,395 | $ 3,417 | $ 7,083 |
Depreciation and amortization | 90 | 86 | 269 | 256 |
General and administrative | 66 | 107 | 189 | 327 |
Reorganization costs | 0 | 0 | 38 | 0 |
Impairment losses | 9 | 0 | 136 | 0 |
Other expenses | 21 | 11 | 48 | 46 |
Total expenses excluding reimbursable expenses | 330 | 514 | 1,158 | 1,571 |
Total expenses | 922 | 1,957 | 3,640 | 5,855 |
Gain on sale of assets, net | 0 | 81 | 0 | 81 |
Operating income (loss) | 11 | 519 | (223) | 1,309 |
Interest expense | (116) | (105) | (316) | (304) |
Gain (loss) on foreign currency transactions | (12) | 7 | (16) | 4 |
Other non-operating income (loss), net | 3 | 0 | (20) | (8) |
Income (loss) before income taxes | (114) | 421 | (575) | 1,001 |
Income tax benefit (expense) | 33 | (131) | 80 | (291) |
Net income (loss) | (81) | 290 | (495) | 710 |
Net loss (income) attributable to noncontrolling interests | 2 | (2) | 4 | (4) |
Net income (loss) attributable to Hilton stockholders | $ (79) | $ 288 | $ (491) | $ 706 |
Earnings (Loss) Per Share, Basic [Abstract] | ||||
Basic EPS | $ (0.29) | $ 1.01 | $ (1.77) | $ 2.44 |
Earnings (Loss) Per Share, Diluted [Abstract] | ||||
Diluted EPS | (0.28) | 1 | (1.76) | 2.42 |
Cash dividends declared per share | $ 0 | $ 0.15 | $ 0.15 | $ 0.45 |
Franchise and licensing fees [member] | ||||
Revenues | $ 241 | $ 443 | $ 712 | $ 1,269 |
Base and other management fees [member] | ||||
Revenues | 24 | 80 | 92 | 249 |
Incentive management fees [member] | ||||
Revenues | 7 | 54 | 25 | 167 |
Owned and leased hotels [member] | ||||
Revenues | 94 | 361 | 335 | 1,060 |
Expenses | 144 | 310 | 478 | 942 |
Other revenues | ||||
Revenues | 19 | 23 | 52 | 75 |
Total revenues excluding reimbursable revenues [member] | ||||
Revenues | 385 | 961 | 1,216 | 2,820 |
Other revenues from managed and franchised properties [member] | ||||
Revenues | 548 | 1,434 | 2,201 | 4,263 |
Other expenses from managed and franchised properties [member] | ||||
Expenses | $ 592 | $ 1,443 | $ 2,482 | $ 4,284 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (81) | $ 290 | $ (495) | $ 710 |
Other comprehensive income (loss), net of tax benefit (expense) | ||||
Currency translation adjustment | 25 | (35) | 21 | (23) |
Pension liability adjustment | (2) | (1) | (5) | (5) |
Cash flow hedge adjustment | 1 | (8) | (39) | (48) |
Total other comprehensive income (loss) | 28 | (42) | (13) | (66) |
Comprehensive income (loss) | (53) | 248 | (508) | 644 |
Comprehensive loss (income) attributable to noncontrolling interests | 2 | (2) | 4 | (4) |
Comprehensive income (loss) attributable to Hilton stockholders | (51) | 246 | (504) | 640 |
Currency translation adjustment, tax benefit (expense) | (11) | 7 | (2) | 8 |
Pension liability adjustment, tax expense | (1) | 0 | (2) | (1) |
Cash flow hedge adjustment, tax benefit (expense) | $ (1) | $ 3 | $ 13 | $ 16 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | ||
Operating Activities: | |||
Net income (loss) | $ (495) | $ 710 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Amortization of contract acquisition costs | 22 | 21 | |
Depreciation and amortization | 269 | 256 | |
Impairment losses | 136 | 0 | |
Gain on sale of assets, net | 0 | 81 | |
Loss (gain) on foreign currency transactions | 16 | (4) | |
Share-based compensation | 37 | 123 | |
Deferred income taxes | (142) | 22 | |
Contract acquisition costs | (37) | (49) | |
Change in deferred revenues | 496 | (52) | |
Change in liabilities from contracts with customers | [1],[2] | 741 | |
Working capital changes and other | 131 | 112 | |
Net cash provided by operating activities | 846 | 1,182 | |
Investing Activities: | |||
Capital expenditures for property and equipment | (38) | (66) | |
Proceeds from asset disposition | 0 | 120 | |
Capitalized software costs | (38) | (79) | |
Other | (13) | (22) | |
Net cash used in investing activities | (89) | (47) | |
Financing Activities: | |||
Borrowings | 2,690 | 1,795 | |
Repayment of debt | (214) | (1,327) | |
Debt issuance costs | 14 | 29 | |
Dividends paid | (42) | (130) | |
Repurchases of common stock | (296) | (1,086) | |
Share-based compensation tax withholdings and other | (36) | (31) | |
Other | (1) | 0 | |
Net cash provided by (used in) financing activities | 2,087 | (808) | |
Effect of exchange rate changes on cash, restricted cash and cash equivalents | (6) | (2) | |
Net increase in cash, restricted cash and cash equivalents | 2,838 | 325 | |
Cash, restricted cash and cash equivalents, beginning of period | 630 | 484 | |
Cash, restricted cash and cash equivalents, end of period | 3,468 | 809 | |
Supplemental Disclosures: | |||
Interest | 276 | 248 | |
Income taxes, net of refunds | 67 | 238 | |
Guest Loyalty Program [member] | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Change in liabilities from contracts with customers | $ 413 | $ 124 | |
[1] | As a result of the Hilton Honors points pre-sale to American Express, we recorded $636Â million of deferred revenues; see below for additional information. | ||
[2] | Primarily related to Hilton Honors, our guest loyalty program, which included revenue recognized of $65 million. |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | 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"). As of September 30, 2020, we managed, franchised, owned or leased 6,333 hotels and resorts, including timeshare properties, totaling 998,282 rooms in 118 countries and territories. Basis of Presentation The accompanying condensed consolidated financial statements for the three and nine months ended September 30, 2020 and 2019 have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") and are unaudited. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP. 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, 2019. 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 had a material adverse impact on our results for the three and nine months ended September 30, 2020, and we expect it to continue to have a material adverse impact on our results for an indeterminate length of time. Management is making estimates and judgments in light of these circumstances, and this interim period, as well as upcoming periods, are unlikely to be comparable to past performance or indicative of future performance. In our opinion, the accompanying condensed consolidated financial statements reflect all adjustments, including normal recurring items, considered necessary for a fair presentation of the interim periods. All material intercompany transactions have been eliminated in consolidation. Reorganization We recognized $38 million of reorganization costs in our condensed consolidated statement of operations during the nine months ended September 30, 2020 related to organizational changes, including reductions in our workforce and the associated costs, as part of our efforts to reduce future costs for our corporate operations in response to the COVID-19 pandemic. As of September 30, 2020, $15 million of such reorganization costs were included in accounts payable, accrued expenses and other in our condensed consolidated balance sheet. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2016-13 ("ASU 2016-13"), Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which significantly changes how entities account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. On January 1, 2020, we adopted ASU 2016-13, and subsequent ASUs issued to clarify its application, on a prospective basis, and recognized a $10 million cumulative adjustment, net of taxes, in accumulated deficit. By applying ASU 2016-13 at the adoption date, the presentation of credit losses for periods prior to January 1, 2020 remains unchanged and in accordance with Receivables (Topic 310 ). As a result of the adoption, we consider forecasted business conditions, in addition to current business conditions and historical collection activity, in calculating our allowance for credit losses on our financial instruments. The cumulative adjustment to accumulated deficit that we recognized upon adoption of this ASU did not include the impact of the COVID-19 pandemic as a forecasted business condition. However, during the nine months ended September 30, 2020, we revised our expected credit loss rates from those used at adoption, primarily for our accounts receivable balances, in light of business conditions in the current environment. In particular, we considered the expected impact on our hotel owners' and customers' |
Disposal
Disposal | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal | Disposal In September 2019, we completed the sale of the Hilton Odawara Resort & Spa ("Hilton Odawara") for a price of 13 billion Japanese yen (equivalent to $122 million as of the closing date) and subsequently entered into a 30-year management contract with the purchaser of the hotel. As a result of the sale, we recognized a pre-tax gain of $81 million included in gain on sale of assets, net in our condensed consolidated statements of operations for the three and nine months ended September 30, 2019. |
Revenues from Contracts with Cu
Revenues from Contracts with Customers | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenues from Contracts with Customers | Revenues from Contracts with Customers Contract Liabilities The following table summarizes the activity of our contract liabilities, which are classified as a component of current and long-term deferred revenues, during the nine months ended September 30, 2020: (in millions) Balance as of December 31, 2019 $ 1,041 Cash received in advance and not recognized as revenue (1)(2) 741 Revenue recognized (1)(3) (164) Other (4) (12) Balance as of September 30, 2020 $ 1,606 ____________ (1) Primarily related to Hilton Honors, our guest loyalty program, which included revenue recognized of $65 million. (2) As a result of the Hilton Honors points pre-sale to American Express, we recorded $636 million of deferred revenues; see below for additional information. (3) During the three months ended September 30, 2020 and 2019, revenue recognized was $54 million and $62 million, respectively, and during the nine months ended September 30, 2019, revenue recognized was $197 million. (4) Represents changes in estimated transaction prices for our performance obligations related to points issued under Hilton Honors, which had no effect on revenues. In April 2020, we pre-sold Hilton Honors points to American Express for $1.0 billion in cash (the "Honors Points Pre-Sale"), of which $636 million was recorded in deferred revenues and the remainder was recorded in liability for guest loyalty program in our condensed consolidated balance sheet. 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 as they may establish or engage in from time to time. We recognize revenue from licensing fees related to these Hilton Honors points when American Express issues the points to customers and other revenues from managed and franchised properties when customers redeem the Hilton Honors points. Performance Obligations As of September 30, 2020, we had deferred revenues for unsatisfied performance obligations consisting of: (i) $444 million related to Hilton Honors that will be recognized as revenues when the points are redeemed, which we estimate will occur over approximately the next two to three years; (ii) $504 million related to the Honors Points Pre-Sale of which a portion will be recognized as revenue when points are awarded, with the remaining portion recognized as revenues when the points are redeemed; and (iii) $658 million related to application, initiation and licensing fees that is expected to be recognized as revenues over the terms of the related contracts. |
Consolidated Variable Interest
Consolidated Variable Interest Entities | 9 Months Ended |
Sep. 30, 2020 | |
Consolidated Variable Interest Entities Disclosure [Abstract] | |
Consolidated Variable Interest Entities | Consolidated Variable Interest Entities As of September 30, 2020 and December 31, 2019, we consolidated two variable interest entities ("VIEs") that lease hotel properties. 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 their losses and the right to receive benefits that could be significant to them. The assets of our consolidated VIEs are only available to settle the obligations of the respective entities. Our condensed consolidated balance sheets included the assets and liabilities of these entities, which primarily comprised the following: September 30, December 31, 2020 2019 (in millions) Cash and cash equivalents $ 39 $ 81 Property and equipment, net 76 69 Deferred income tax assets 53 48 Other non-current assets 64 61 Accounts payable, accrued expenses and other 30 49 Long-term debt (1) 199 194 Other long-term liabilities 16 17 ____________ (1) Includes finance lease liabilities of $181 million and $177 million as of September 30, 2020 and December 31, 2019, respectively. To provide financial flexibility in response to the business disruption caused by the COVID-19 pandemic, each of our consolidated VIEs entered into revolving credit facilities during the nine months ended September 30, 2020. These revolving credit facilities have borrowing capacities totaling 2.75 billion Japanese yen and 2 billion Japanese yen (equivalent to $26 million and $19 million, respectively, as of September 30, 2020), and mature in June 2021 and August 2021, respectively. As of September 30, 2020, no amounts have been drawn under these revolving credit facilities. We did not provide any financial or other support to any consolidated VIEs that we were not previously contractually required to provide during the nine months ended September 30, 2020 and 2019, and we are not aware of any future obligations to do so. |
Finite-Lived Intangible Assets
Finite-Lived Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite-Lived Intangible Assets | Finite-Lived Intangible Assets Finite-lived intangible assets were as follows: September 30, 2020 Gross Carrying Value Accumulated Amortization Net Carrying Value (in millions) Management and franchise contracts: Management and franchise contracts recorded at Merger (1) $ 2,164 $ (2,096) $ 68 Contract acquisition costs (2) 613 (137) 476 Development commissions and other 130 (22) 108 $ 2,907 $ (2,255) $ 652 Other intangible assets: Leases (1)(3) $ 150 $ (90) $ 60 Capitalized software costs 640 (478) 162 Hilton Honors (1) 339 (274) 65 $ 1,129 $ (842) $ 287 December 31, 2019 Gross Carrying Value Accumulated Amortization Net Carrying Value (in millions) Management and franchise contracts: Management and franchise contracts recorded at Merger (1) $ 2,163 $ (1,974) $ 189 Contract acquisition costs 604 (121) 483 Development commissions and other 127 (19) 108 $ 2,894 $ (2,114) $ 780 Other intangible assets: Leases (1) $ 290 $ (176) $ 114 Capitalized software costs 625 (399) 226 Hilton Honors (1) 338 (257) 81 Other (1) 34 (34) — $ 1,287 $ (866) $ 421 ____________ (1) Represents intangible assets that were initially recorded at their fair value as part of the October 24, 2007 transaction whereby we became a wholly owned subsidiary of affiliates of The Blackstone Group Inc. (the "Merger"). (2) During the three and nine months ended September 30, 2020, we recognized impairment losses of $6 million and $15 million, respectively, which in total reduced the gross carrying value and accumulated amortization of contract acquisition co sts by $18 million and $3 million, respectively. (3) During the nine months ended September 30, 2020, we recognized impairment losses of $46 million, which in total reduced the gross carrying value and accumulated amortization of our leases intangible assets by $138 million and $92 million , respectively. See Note 8: "Fair Value Measurements" for additional information. Amortization of our finite-lived intangible assets was as follows: Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 (in millions) Recognized in depreciation and amortization expense (1) $ 76 $ 71 $ 227 $ 212 Recognized as a reduction of franchise and licensing fees and base and other management fees 7 7 22 21 ____________ (1) Includes amortization expense of $47 million and $50 million for the three months ended September 30, 2020 and 2019, respectively, and $143 million and $152 million for the nine months ended September 30, 2020 and 2019, respectively, associated with assets that were initially recorded at their fair value at the time of the Merger. We estimate future amortization of our finite-lived intangible assets as of September 30, 2020 to be as follows: Recognized in Depreciation and Amortization Expense Recognized as a Reduction of Franchise and Licensing Fees and Base and Other Management Fees Year (in millions) 2020 (remaining) $ 48 $ 7 2021 127 28 2022 92 26 2023 58 26 2024 9 25 Thereafter 129 364 $ 463 $ 476 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt balances, including obligations for finance leases, and associated interest rates and maturities as of September 30, 2020, were as follows: September 30, December 31, 2020 2019 (in millions) Senior secured revolving credit facility with a weighted average rate of 1.15%, due 2024 $ 1,690 $ 195 Senior secured term loan facility with a rate of 1.90%, due 2026 2,619 2,619 Senior notes with a rate of 4.250%, due 2024 1,000 1,000 Senior notes with a rate of 4.625%, due 2025 900 900 Senior notes with a rate of 5.375%, due 2025 500 — Senior notes with a rate of 5.125%, due 2026 1,500 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 — Senior notes with a rate of 4.875%, due 2030 1,000 1,000 Finance lease liabilities with a weighted average rate of 5.81%, due 2020 to 2030 250 245 Other debt with a rate of 3.08%, due 2026 18 17 10,577 8,076 Less: unamortized deferred financing costs and discount (87) (83) Less: current maturities of long-term debt (1) (51) (37) $ 10,439 $ 7,956 ____________ (1) Represents current maturities of finance lease liabilities. 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 Loans"). 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 subsidiaries. In March 2020, as a precautionary measure in order to increase our cash position and preserve financial flexibility in light of uncertainty in the global markets resulting from the COVID-19 pandemic, we fully drew down on our Revolving Credit Facility. As of September 30, 2020, in addition to our outstanding debt balance of $1.69 billion under our Revolving Credit Facility, we also had $60 million of letters of credit outstanding under the Revolving Credit Facility. In April 2020, we issued $500 million aggregate principal amount of 5.375% Senior Notes due 2025 (the "5.375% 2025 Senior Notes") and $500 million aggregate principal amount of 5.750% Senior Notes due 2028 (the "2028 Senior Notes") and incurred $14 million of debt issuance costs. Interest on the 5.375% 2025 Senior Notes and the 2028 Senior Notes is payable semi-annually in arrears on May 1 and November 1 of each year, beginning November 1, 2020. The 4.250% Senior Notes due 2024, the 4.625% Senior Notes due 2025, the 5.375% 2025 Senior Notes, the 5.125% Senior Notes due 2026, the 4.875% Senior Notes due 2027, the 2028 Senior Notes and the 4.875% Senior Notes due 2030 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 subsidiaries, other than Hilton Domestic Operating Company Inc. ("HOC"), a wholly owned subsidiary of the Parent, which is the issuer of each of the series of Senior Notes. The contractual maturities of our long-term debt as of September 30, 2020 were as follows: Year (in millions) 2020 (remaining) $ 10 2021 49 2022 28 2023 22 2024 2,713 Thereafter 7,755 $ 10,577 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Estimates of the fair values of our financial instruments and nonfinancial assets were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop the estimated fair values. The fair values of certain financial instruments and the hierarchy level we used to estimate the fair values are shown below: September 30, 2020 Hierarchy Level Carrying Value Level 1 Level 2 Level 3 (in millions) Assets: Cash equivalents $ 2,848 $ — $ 2,848 $ — Restricted cash equivalents 9 — 9 — Liabilities: Long-term debt (1) 10,222 6,156 — 4,224 Interest rate swaps 88 — 88 — December 31, 2019 Hierarchy Level Carrying Value Level 1 Level 2 Level 3 (in millions) Assets: Cash equivalents $ 117 $ — $ 117 $ — Restricted cash equivalents 32 — 32 — Liabilities: Long-term debt (1) 7,731 5,230 — 2,834 Interest rate swaps 37 — 37 — ____________ (1) The carrying values include unamortized deferred financing costs and discount. The carrying values and fair values exclude finance lease liabilities and other debt. 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. Our nonfinancial assets that were measured at fair value on a non-recurring basis during the nine months ended September 30, 2020, and for which we recorded impairment losses, were related to certain hotel properties under operating and finance leases in our ownership segment. See Note 6: "Finite-Lived Intangible Assets" and Note 9: "Leases" for additional information on the impairment losses related to our leased properties. The fair values, which were determined using significant Level 3 unobservable inputs, were as follows: (in millions) Other intangible assets, net (1) $ — Operating lease right-of-use assets (1) 34 Property and equipment, net (1) 4 ____________ (1) Amounts were measured at March 31, 2020, except for $10 million of operating lease right-of-use ("ROU") assets, which were remeasured at June 30, 2020. Additionally, certain of these assets were fully impaired at March 31, 2020, June 30, 2020 and September 30, 2020. We recognized impairment losses during the six months ended June 30, 2020 related to certain hotel properties under operating and finance leases. During the three months ended September 30, 2020, the short-term expected results for certain leased hotels declined from estimates used in the assessment of recoverability at June 30, 2020, generally due to extensions of government restrictions and additional visibility into expected hotel customer engagement at such properties. As a result, further analysis of the recoverability of the carrying value of the assets related to leased hotel properties was necessary at September 30, 2020. We assessed recoverability of the assets included in the table above using estimates of undiscounted net cash flows, and concluded that the carrying values of the assets were not fully recoverable. We then estimated the fair value of these assets using discounted cash flow analyses, which included an estimate of the impact of the COVID-19 pandemic on each leased property based on the expected recovery term. The stabilized growth rates after recovery and discount rates used for the fair value of the assets reflect the risk profile of the underlying cash flows and the individual markets where the assets are located, and are not necessarily indicative of our hotel portfolio as a whole. Estimations of stabilized growth rates after the recovery period ranged from 1.7 percent to 4.8 percent, and discount rates ranged from 7.0 percent to 12.0 percent, with the weighted average, based on relative impairment losses, for both inputs being at the lower end of each of the ranges. As a result of these non-recurring fair value measurements, we recognized impairment losses of $3 million and $121 million during the three and nine months ended September 30, 2020, respectively. The fair values of financial instruments not included in these tables are estimated to be equal to their carrying values as of September 30, 2020 and December 31, 2019. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Lessee Disclosure [Abstract] | |
Leases | Leases We lease hotel properties, land, corporate office space and equipment used at hotels and corporate offices, with our most significant lease liabilities related to hotel properties. As of September 30, 2020, we leased 49 hotels under operating leases and six hotels under finance leases, two of which were the liabilities of consolidated VIEs and were non-recourse to us. Our hotel leases expire at various dates, with varying renewal and termination options. During the nine months ended September 30, 2020, we recognized $51 million of impairment losses related to certain operating lease ROU assets, and during the three and nine months ended September 30, 2020, we recognized $3 million and $24 million of impairment losses related to property and equipment, respectively, including $2 million and $4 million of finance lease ROU assets, respectively. All of these impairment losses were included in impairment losses in our condensed consolidated statements of operations; see Note 8: "Fair Value Measurements" for additional information. Supplemental cash flow information related to leases was as follows: Nine Months Ended September 30, 2020 2019 (in millions) ROU assets obtained in exchange for lease liabilities in non-cash transactions: Operating leases $ 32 $ 21 Finance leases 16 59 Our future minimum lease payments as of September 30, 2020 were as follows: Operating Finance Year (in millions) 2020 (remaining) $ 76 $ 23 2021 174 51 2022 148 40 2023 133 32 2024 112 31 Thereafter 796 139 Total minimum lease payments 1,439 316 Less: imputed interest (316) (66) Total lease liabilities $ 1,123 $ 250 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes At the end of each quarter, we estimate the effective income tax rate expected to be applied for the full year to ordinary income, which excludes discrete items. Discrete items that were recognized during the nine months ended September 30, 2020 included impairment losses and the vesting of certain share-based compensation awards, which provided us with tax benefits. The effective income tax rate for the full year is determined by the level and composition of income (loss) before income taxes, excluding discrete items as discussed above, which is subject to federal, state, local and foreign income taxes. The Company's forecast includes losses for the full year in many foreign jurisdictions. For certain foreign jurisdictions, we expect to have net operating losses ("NOLs"), which we expect to be utilized in future periods. However, as future utilization of NOLs reduces foreign taxes paid, we expect U.S. foreign tax credits to be reduced, thereby reducing or eliminating the tax benefit of the NOLs on a global basis. Because of the reduced global tax benefit of NOLs in these specific jurisdictions, our effective income tax rate estimate is lower than the combined U.S. statutory rate. Due to forecasted losses before income taxes for the full year, the Company is forecasting an overall tax benefit. 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, 2020, we remain subject to federal and state examinations of our income tax returns for tax years from 2005 through 2019 and foreign examinations of our income tax returns for tax years from 1996 through 2019. Our total unrecognized tax benefits as of September 30, 2020 and December 31, 2019 were $432 million and $395 million, respectively. As of September 30, 2020 and December 31, 2019, we had accrued approximately $64 million and $52 million, respectively, for interest and penalties related to these unrecognized tax benefits. Included in the balances of unrecognized tax benefits as of September 30, 2020 and December 31, 2019 were $393 million and $380 million, respectively, associated with positions that, if favorably resolved, would provide a benefit to our 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 and filed formal appeals protests with the IRS. The unsettled proposed adjustments sought by the IRS for the tax years with open audits 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 intend to vigorously contest 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, 2020, we had recorded $76 million of unrecognized tax benefits related to these issues. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation As part of the Hilton 2017 Omnibus Incentive Plan (the "2017 Plan"), we award time-vesting restricted stock units and restricted stock (collectively, "RSUs"), nonqualified stock options ("options") and performance-vesting RSUs ("performance shares") to our eligible employees. We recognized share-based compensation expense of $25 million and $42 million during the three months ended September 30, 2020 and 2019, respectively, and $37 million and $123 million during the nine months ended September 30, 2020 and 2019, respectively, which included amounts reimbursed by hotel owners in all periods. 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 certain share-based compensation awards were no longer probable of achievement, as described in further detail below. As of September 30, 2020, unrecognized compensation costs for unvested awards under the 2017 Plan were approximately $87 million, which are expected to be recognized over a weighted-average period of 1.9 years on a straight-line basis. As of September 30, 2020, there were 12,980,000 shares of common stock available for future issuance under the 2017 Plan, plus any shares subject to awards outstanding under the 2013 Omnibus Incentive Plan, which will become available for issuance under the 2017 Plan if such outstanding awards expire or are terminated or are canceled or forfeited. RSUs During the nine months ended September 30, 2020, we granted 907,000 RSUs with a weighted average grant date fair value per share of $93.43, which generally vest in equal annual installments over two Options During the nine months ended September 30, 2020, we granted 755,000 options with a weighted average exercise price per share of $93.33, which vest over three years from the date of grant in equal annual installments and terminate 10 years from the date of grant or earlier if the individual’s service terminates under certain circumstances. The weighted average grant date fair value per share of the options granted during the nine months ended September 30, 2020 was $21.47, which was determined using the Black-Scholes-Merton option-pricing model with the following assumptions: Expected volatility (1) 23.69 % Dividend yield (2) 0.55 % Risk-free rate (3) 0.96 % Expected term (in years) (4) 6.0 ____________ (1) Estimated using historical movement of Hilton's stock price. (2) Estimated based on the quarterly dividend and the three-month average stock price at the date of grant. (3) Based on the yields of U.S. Department of Treasury instruments with similar expected lives. (4) Estimated using the average of the vesting periods and the contractual term of the options. As of September 30, 2020, 1,889,000 options were exercisable. Performance Shares During the nine months ended September 30, 2020, we granted 347,000 performance shares with a weighted average grant date fair value per share of $93.33. The performance shares are settled at the end of the three |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | 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 September 30, September 30, 2020 2019 2020 2019 (in millions, except per share amounts) Basic EPS: Numerator: Net income (loss) attributable to Hilton stockholders $ (79) $ 288 $ (491) $ 706 Denominator: Weighted average shares outstanding 277 285 277 289 Basic EPS $ (0.29) $ 1.01 $ (1.77) $ 2.44 Diluted EPS: Numerator: Net income (loss) attributable to Hilton stockholders $ (79) $ 288 $ (491) $ 706 Denominator: Weighted average shares outstanding (1) 279 288 279 292 Diluted EPS $ (0.28) $ 1.00 $ (1.76) $ 2.42 ____________ (1) Approximately 1 million share-based compensation awards were excluded from the computation of diluted EPS for the three and nine months ended September 30, 2020 and 2019 because their effect would have been anti-dilutive under the treasury stock method. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) and Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity (Deficit) and Accumulated Other Comprehensive Loss | 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, 2020 Equity (Deficit) Attributable to Hilton Stockholders Treasury Stock Additional Accumulated Deficit Accumulated Common Stock Noncontrolling 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) Three Months Ended September 30, 2019 Equity (Deficit) Attributable to Hilton Stockholders Treasury Stock Additional Accumulated Deficit Accumulated Common Stock Noncontrolling Shares Amount Total (in millions) Balance as of June 30, 2019 288 $ 3 $ (3,304) $ 10,419 $ (6,342) $ (806) $ 7 $ (23) Net income — — — — 288 — 2 290 Other comprehensive loss — — — — — (42) — (42) Dividends — — — — (43) — — (43) Repurchases of common stock (5) — (422) — — — — (422) Share-based compensation — — — 41 — — — 41 Balance as of September 30, 2019 283 $ 3 $ (3,726) $ 10,460 $ (6,097) $ (848) $ 9 $ (199) Nine Months Ended September 30, 2020 Equity (Deficit) Attributable to Hilton Stockholders Treasury Stock Additional Accumulated Deficit Accumulated Common Stock Noncontrolling 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 — — — — (42) — — (42) Repurchases of common stock (3) — (279) — — — — (279) Share-based compensation 1 — (9) 2 — — — (7) Distributions — — — — — — (1) (1) Cumulative effect of the adoption of ASU 2016-13 — — — — (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, 2019 Equity (Deficit) Attributable to Hilton Stockholders Treasury Stock Additional Accumulated Deficit Accumulated Common Stock Noncontrolling Shares Amount Total (in millions) Balance as of December 31, 2018 295 $ 3 $ (2,625) $ 10,372 $ (6,417) $ (782) $ 7 $ 558 Net income — — — — 706 — 4 710 Other comprehensive loss — — — — — (66) — (66) Dividends — — — — (130) — — (130) Repurchases of common stock (13) — (1,101) — — — — (1,101) Share-based compensation 1 — — 88 — — — 88 Cumulative effect of the adoption of ASU 2016-02 — — — — (256) — — (256) Deconsolidation of a VIE — — — — — — (2) (2) Balance as of September 30, 2019 283 $ 3 $ (3,726) $ 10,460 $ (6,097) $ (848) $ 9 $ (199) In March 2020, we suspended share repurchases and the payment of dividends. The stock repurchase program remains authorized by the board of directors, and we may resume share repurchases in the future at any time, depending on market conditions, our capital needs and other factors. 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, 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, 2018 $ (545) $ (260) $ 23 $ (782) Other comprehensive loss before reclassifications (24) (1) (40) (65) Amounts reclassified from accumulated other comprehensive loss 1 6 (8) (1) Net current period other comprehensive income (loss) (23) 5 (48) (66) Balance as of September 30, 2019 $ (568) $ (255) $ (25) $ (848) ____________ (1) Includes net investment hedges and intra-entity foreign currency transactions that are of a long-term investment nature. Amounts reclassified related to the liquidation of investments in foreign entities and were recognized net of taxes in gain (loss) on foreign currency transactions in our condensed consolidated statements of operations. (2) Amounts reclassified related to the amortization of prior service cost and amortization of net loss and were recognized net of taxes in other non-operating income (loss), net in our condensed consolidated statements of operations. (3) Amounts reclassified related to interest rate swaps and forward contracts that hedge our foreign currency denominated fees and were recognized net of taxes in interest expense and franchise and licensing fees, base and other management fees and other revenues from managed and franchised properties, respectively, in our condensed consolidated statements of operations. |
Business Segments
Business Segments | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments We are a hospitality company with operations organized in two distinct operating segments: (i) management and franchise and (ii) ownership. These segments are managed and reported separately because of their 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 use our brands, but are operated or managed by someone other than us. This segment also earns licensing fees from Hilton Grand Vacations Inc. ("HGV") and strategic partnerships for the right to use certain Hilton marks and IP, as well as fees for managing properties in our ownership segment. As of September 30, 2020, this segment included 700 managed hotels and 5,516 franchised hotels consisting of 969,546 total rooms. As a result of the COVID-19 pandemic, approximately 1,235 hotels in our management and franchise segment had temporarily suspended operations at some point in time during the nine months ended September 30, 2020, largely beginning in mid-March. Of these hotels, all but approximately 200 had reopened as of September 30, 2020. As of September 30, 2020, our ownership segment included 62 properties totaling 19,780 rooms. As a result of the COVID-19 pandemic, approximately 35 hotels in our ownership segment had temporarily suspended operations at some point in time during the nine months ended September 30, 2020, largely beginning in mid-March, of which all had reopened as of September 30, 2020. The segment comprised 54 hotels that we wholly owned or leased, one hotel owned by a consolidated non-wholly owned entity, two hotels leased by consolidated VIEs and five hotels owned or leased by unconsolidated affiliates. The performance of our operating segments is evaluated primarily on operating income (loss), without allocating other revenues and 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 September 30, September 30, 2020 2019 2020 2019 (in millions) Franchise and licensing fees $ 244 $ 447 $ 720 $ 1,277 Base and other management fees (1) 30 95 108 293 Incentive management fees 7 54 25 167 Management and franchise 281 596 853 1,737 Ownership 94 361 335 1,060 Segment revenues 375 957 1,188 2,797 Amortization of contract acquisition costs (7) (7) (22) (21) Other revenues 19 23 52 75 Direct reimbursements from managed and franchised properties (2) 244 770 1,185 2,334 Indirect reimbursements from managed and franchised properties (2) 304 664 1,016 1,929 Intersegment fees elimination (1) (2) (12) (2) (31) Total revenues $ 933 $ 2,395 $ 3,417 $ 7,083 ____________ (1) Includes management, royalty and IP fees charged to 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 our reportable segments, reconciled to consolidated income (loss) before income taxes: Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 (in millions) Management and franchise (1) $ 281 $ 596 $ 853 $ 1,737 Ownership (1) (52) 39 (145) 87 Segment operating income 229 635 708 1,824 Amortization of contract acquisition costs (7) (7) (22) (21) Other revenues, less other expenses (2) 12 4 29 Net other expenses from managed and franchised properties (44) (9) (281) (21) Depreciation and amortization (90) (86) (269) (256) General and administrative expenses (66) (107) (189) (327) Reorganization costs — — (38) — Impairment losses (9) — (136) — Gain on sale of assets, net — 81 — 81 Operating income (loss) 11 519 (223) 1,309 Interest expense (116) (105) (316) (304) Gain (loss) on foreign currency transactions (12) 7 (16) 4 Other non-operating income (loss), net 3 — (20) (8) Income (loss) before income taxes $ (114) $ 421 $ (575) $ 1,001 ____________ (1) Includes management, royalty and IP fees charged to our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations. The following table presents total assets for our reportable segments, reconciled to consolidated amounts: September 30, December 31, 2020 2019 (in millions) Management and franchise $ 11,088 $ 11,455 Ownership 1,359 1,610 Corporate and other 4,682 1,892 $ 17,129 $ 14,957 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We provide performance guarantees to certain owners of hotels that we operate under management contracts. Most of these guarantees allow us to terminate the contract, rather than fund shortfalls, 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, 2020, we had four performance guarantees, with expirations ranging from 2023 to 2039, and possible cash outlays totaling approximately $18 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, 2020 and December 31, 2019, we accrued current liabilities of $7 million and $3 million, respectively, for our performance guarantees. We may enter into new contracts containing performance guarantees in the future, which could increase our possible cash outlays. We hold interests in VIEs, for which we are not the primary beneficiary, that have entered into loan agreements with third parties. Under the terms of our contractual arrangements with certain of these VIEs, we may provide financial support to such entities under specified circumstances, including default of such a VIE under a third-party loan agreement, and may have the option to acquire a controlling financial interest in such an entity at a predetermined amount. In a circumstance that we provide financial support or exercise our option to acquire an additional interest in a VIE, we may be required to reassess whether we are the primary beneficiary of the VIE. If we determine that we are the primary beneficiary of the VIE, we would be required to consolidate the total assets, liabilities and results of operations of the VIE, which may be material upon consolidation. As of September 30, 2020, we guaranteed one loan for two hotels that we will franchise for $10 million. Additionally, we have entered into an agreement with the owner of a hotel that we manage to finance capital expenditures at the hotel. As of September 30, 2020, 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. We receive fees from managed and franchised properties to operate our marketing, sales and brand programs on behalf of hotel owners. As of September 30, 2020 and December 31, 2019, we had collected an aggregate of $113 million and $350 million in excess of amounts expended, respectively, across all programs. We are involved in various claims and lawsuits arising in the ordinary course of business, some of which include claims for substantial sums. While the ultimate results of claims and litigation cannot be predicted with certainty, we expect that the ultimate resolution of all pending or threatened claims and litigation as of September 30, 2020 will not have a material adverse effect on our consolidated financial position, results of operations or cash flows. |
Recently Issued Accounting Pr_2
Recently Issued Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2016-13 ("ASU 2016-13"), Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which significantly changes how entities account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. On January 1, 2020, we adopted ASU 2016-13, and subsequent ASUs issued to clarify its application, on a prospective basis, and recognized a $10 million cumulative adjustment, net of taxes, in accumulated deficit. By applying ASU 2016-13 at the adoption date, the presentation of credit losses for periods prior to January 1, 2020 remains unchanged and in accordance with Receivables (Topic 310 ). As a result of the adoption, we consider forecasted business conditions, in addition to current business conditions and historical collection activity, in calculating our allowance for credit losses on our financial instruments. The cumulative adjustment to accumulated deficit that we recognized upon adoption of this ASU did not include the impact of the COVID-19 pandemic as a forecasted business condition. However, during the nine months ended September 30, 2020, we revised our expected credit loss rates from those used at adoption, primarily for our accounts receivable balances, in light of business conditions in the current environment. In particular, we considered the expected impact on our hotel owners' and customers' |
Revenues from Contracts with _2
Revenues from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Contract Liabilities | The following table summarizes the activity of our contract liabilities, which are classified as a component of current and long-term deferred revenues, during the nine months ended September 30, 2020: (in millions) Balance as of December 31, 2019 $ 1,041 Cash received in advance and not recognized as revenue (1)(2) 741 Revenue recognized (1)(3) (164) Other (4) (12) Balance as of September 30, 2020 $ 1,606 ____________ (1) Primarily related to Hilton Honors, our guest loyalty program, which included revenue recognized of $65 million. (2) As a result of the Hilton Honors points pre-sale to American Express, we recorded $636 million of deferred revenues; see below for additional information. (3) During the three months ended September 30, 2020 and 2019, revenue recognized was $54 million and $62 million, respectively, and during the nine months ended September 30, 2019, revenue recognized was $197 million. (4) Represents changes in estimated transaction prices for our performance obligations related to points issued under Hilton Honors, which had no effect on revenues. |
Consolidated Variable Interes_2
Consolidated Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Consolidated Variable Interest Entities Disclosure [Abstract] | |
Schedule of Variable Interest Entities | Our condensed consolidated balance sheets included the assets and liabilities of these entities, which primarily comprised the following: September 30, December 31, 2020 2019 (in millions) Cash and cash equivalents $ 39 $ 81 Property and equipment, net 76 69 Deferred income tax assets 53 48 Other non-current assets 64 61 Accounts payable, accrued expenses and other 30 49 Long-term debt (1) 199 194 Other long-term liabilities 16 17 ____________ (1) Includes finance lease liabilities of $181 million and $177 million as of September 30, 2020 and December 31, 2019, respectively. |
Finite-Lived Intangible Assets
Finite-Lived Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Finite-lived intangible assets were as follows: September 30, 2020 Gross Carrying Value Accumulated Amortization Net Carrying Value (in millions) Management and franchise contracts: Management and franchise contracts recorded at Merger (1) $ 2,164 $ (2,096) $ 68 Contract acquisition costs (2) 613 (137) 476 Development commissions and other 130 (22) 108 $ 2,907 $ (2,255) $ 652 Other intangible assets: Leases (1)(3) $ 150 $ (90) $ 60 Capitalized software costs 640 (478) 162 Hilton Honors (1) 339 (274) 65 $ 1,129 $ (842) $ 287 December 31, 2019 Gross Carrying Value Accumulated Amortization Net Carrying Value (in millions) Management and franchise contracts: Management and franchise contracts recorded at Merger (1) $ 2,163 $ (1,974) $ 189 Contract acquisition costs 604 (121) 483 Development commissions and other 127 (19) 108 $ 2,894 $ (2,114) $ 780 Other intangible assets: Leases (1) $ 290 $ (176) $ 114 Capitalized software costs 625 (399) 226 Hilton Honors (1) 338 (257) 81 Other (1) 34 (34) — $ 1,287 $ (866) $ 421 ____________ (1) Represents intangible assets that were initially recorded at their fair value as part of the October 24, 2007 transaction whereby we became a wholly owned subsidiary of affiliates of The Blackstone Group Inc. (the "Merger"). (2) During the three and nine months ended September 30, 2020, we recognized impairment losses of $6 million and $15 million, respectively, which in total reduced the gross carrying value and accumulated amortization of contract acquisition co sts by $18 million and $3 million, respectively. (3) During the nine months ended September 30, 2020, we recognized impairment losses of $46 million, which in total reduced the gross carrying value and accumulated amortization of our leases intangible assets by $138 million and $92 million , respectively. See Note 8: "Fair Value Measurements" for additional information. |
Amortization of Finite-Lived Intangible Assets | Amortization of our finite-lived intangible assets was as follows: Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 (in millions) Recognized in depreciation and amortization expense (1) $ 76 $ 71 $ 227 $ 212 Recognized as a reduction of franchise and licensing fees and base and other management fees 7 7 22 21 ____________ (1) Includes amortization expense of $47 million and $50 million for the three months ended September 30, 2020 and 2019, respectively, and $143 million and $152 million for the nine months ended September 30, 2020 and 2019, respectively, associated with assets that were initially recorded at their fair value at the time of the Merger. |
Schedule of Future Amortization Expense of Finite-Lived Intangible Assets | We estimate future amortization of our finite-lived intangible assets as of September 30, 2020 to be as follows: Recognized in Depreciation and Amortization Expense Recognized as a Reduction of Franchise and Licensing Fees and Base and Other Management Fees Year (in millions) 2020 (remaining) $ 48 $ 7 2021 127 28 2022 92 26 2023 58 26 2024 9 25 Thereafter 129 364 $ 463 $ 476 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term debt balances, including obligations for finance leases, and associated interest rates and maturities as of September 30, 2020, were as follows: September 30, December 31, 2020 2019 (in millions) Senior secured revolving credit facility with a weighted average rate of 1.15%, due 2024 $ 1,690 $ 195 Senior secured term loan facility with a rate of 1.90%, due 2026 2,619 2,619 Senior notes with a rate of 4.250%, due 2024 1,000 1,000 Senior notes with a rate of 4.625%, due 2025 900 900 Senior notes with a rate of 5.375%, due 2025 500 — Senior notes with a rate of 5.125%, due 2026 1,500 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 — Senior notes with a rate of 4.875%, due 2030 1,000 1,000 Finance lease liabilities with a weighted average rate of 5.81%, due 2020 to 2030 250 245 Other debt with a rate of 3.08%, due 2026 18 17 10,577 8,076 Less: unamortized deferred financing costs and discount (87) (83) Less: current maturities of long-term debt (1) (51) (37) $ 10,439 $ 7,956 ____________ (1) Represents current maturities of finance lease liabilities. |
Debt Maturities | The contractual maturities of our long-term debt as of September 30, 2020 were as follows: Year (in millions) 2020 (remaining) $ 10 2021 49 2022 28 2023 22 2024 2,713 Thereafter 7,755 $ 10,577 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements - Recurring & Disclosure | The fair values of certain financial instruments and the hierarchy level we used to estimate the fair values are shown below: September 30, 2020 Hierarchy Level Carrying Value Level 1 Level 2 Level 3 (in millions) Assets: Cash equivalents $ 2,848 $ — $ 2,848 $ — Restricted cash equivalents 9 — 9 — Liabilities: Long-term debt (1) 10,222 6,156 — 4,224 Interest rate swaps 88 — 88 — December 31, 2019 Hierarchy Level Carrying Value Level 1 Level 2 Level 3 (in millions) Assets: Cash equivalents $ 117 $ — $ 117 $ — Restricted cash equivalents 32 — 32 — Liabilities: Long-term debt (1) 7,731 5,230 — 2,834 Interest rate swaps 37 — 37 — ____________ (1) The carrying values include unamortized deferred financing costs and discount. The carrying values and fair values exclude finance lease liabilities and other debt. |
Fair Value Measurements - Nonrecurring | Our nonfinancial assets that were measured at fair value on a non-recurring basis during the nine months ended September 30, 2020, and for which we recorded impairment losses, were related to certain hotel properties under operating and finance leases in our ownership segment. See Note 6: "Finite-Lived Intangible Assets" and Note 9: "Leases" for additional information on the impairment losses related to our leased properties. The fair values, which were determined using significant Level 3 unobservable inputs, were as follows: (in millions) Other intangible assets, net (1) $ — Operating lease right-of-use assets (1) 34 Property and equipment, net (1) 4 ____________ |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Lessee Disclosure [Abstract] | |
Supplemental cash flow information related to leases | Supplemental cash flow information related to leases was as follows: Nine Months Ended September 30, 2020 2019 (in millions) ROU assets obtained in exchange for lease liabilities in non-cash transactions: Operating leases $ 32 $ 21 Finance leases 16 59 |
Schedule of Future Minimum Lease Payments | Our future minimum lease payments as of September 30, 2020 were as follows: Operating Finance Year (in millions) 2020 (remaining) $ 76 $ 23 2021 174 51 2022 148 40 2023 133 32 2024 112 31 Thereafter 796 139 Total minimum lease payments 1,439 316 Less: imputed interest (316) (66) Total lease liabilities $ 1,123 $ 250 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Options Valuation Assumptions | The weighted average grant date fair value per share of the options granted during the nine months ended September 30, 2020 was $21.47, which was determined using the Black-Scholes-Merton option-pricing model with the following assumptions: Expected volatility (1) 23.69 % Dividend yield (2) 0.55 % Risk-free rate (3) 0.96 % Expected term (in years) (4) 6.0 ____________ (1) Estimated using historical movement of Hilton's stock price. (2) Estimated based on the quarterly dividend and the three-month average stock price at the date of grant. (3) Based on the yields of U.S. Department of Treasury instruments with similar expected lives. (4) Estimated using the average of the vesting periods and the contractual term of the options. |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Basic and Diluted 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 September 30, September 30, 2020 2019 2020 2019 (in millions, except per share amounts) Basic EPS: Numerator: Net income (loss) attributable to Hilton stockholders $ (79) $ 288 $ (491) $ 706 Denominator: Weighted average shares outstanding 277 285 277 289 Basic EPS $ (0.29) $ 1.01 $ (1.77) $ 2.44 Diluted EPS: Numerator: Net income (loss) attributable to Hilton stockholders $ (79) $ 288 $ (491) $ 706 Denominator: Weighted average shares outstanding (1) 279 288 279 292 Diluted EPS $ (0.28) $ 1.00 $ (1.76) $ 2.42 ____________ (1) Approximately 1 million share-based compensation awards were excluded from the computation of diluted EPS for the three and nine months ended September 30, 2020 and 2019 because their effect would have been anti-dilutive under the treasury stock method. |
Stockholders' Equity (Deficit_2
Stockholders' Equity (Deficit) and Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stockholders' Equity (Deficit) | The following tables present the changes in the components of stockholders' equity (deficit): Three Months Ended September 30, 2020 Equity (Deficit) Attributable to Hilton Stockholders Treasury Stock Additional Accumulated Deficit Accumulated Common Stock Noncontrolling 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) Three Months Ended September 30, 2019 Equity (Deficit) Attributable to Hilton Stockholders Treasury Stock Additional Accumulated Deficit Accumulated Common Stock Noncontrolling Shares Amount Total (in millions) Balance as of June 30, 2019 288 $ 3 $ (3,304) $ 10,419 $ (6,342) $ (806) $ 7 $ (23) Net income — — — — 288 — 2 290 Other comprehensive loss — — — — — (42) — (42) Dividends — — — — (43) — — (43) Repurchases of common stock (5) — (422) — — — — (422) Share-based compensation — — — 41 — — — 41 Balance as of September 30, 2019 283 $ 3 $ (3,726) $ 10,460 $ (6,097) $ (848) $ 9 $ (199) Nine Months Ended September 30, 2020 Equity (Deficit) Attributable to Hilton Stockholders Treasury Stock Additional Accumulated Deficit Accumulated Common Stock Noncontrolling 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 — — — — (42) — — (42) Repurchases of common stock (3) — (279) — — — — (279) Share-based compensation 1 — (9) 2 — — — (7) Distributions — — — — — — (1) (1) Cumulative effect of the adoption of ASU 2016-13 — — — — (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, 2019 Equity (Deficit) Attributable to Hilton Stockholders Treasury Stock Additional Accumulated Deficit Accumulated Common Stock Noncontrolling Shares Amount Total (in millions) Balance as of December 31, 2018 295 $ 3 $ (2,625) $ 10,372 $ (6,417) $ (782) $ 7 $ 558 Net income — — — — 706 — 4 710 Other comprehensive loss — — — — — (66) — (66) Dividends — — — — (130) — — (130) Repurchases of common stock (13) — (1,101) — — — — (1,101) Share-based compensation 1 — — 88 — — — 88 Cumulative effect of the adoption of ASU 2016-02 — — — — (256) — — (256) Deconsolidation of a VIE — — — — — — (2) (2) Balance as of September 30, 2019 283 $ 3 $ (3,726) $ 10,460 $ (6,097) $ (848) $ 9 $ (199) |
Schedule of Accumulated Other Comprehensive Loss | 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, 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, 2018 $ (545) $ (260) $ 23 $ (782) Other comprehensive loss before reclassifications (24) (1) (40) (65) Amounts reclassified from accumulated other comprehensive loss 1 6 (8) (1) Net current period other comprehensive income (loss) (23) 5 (48) (66) Balance as of September 30, 2019 $ (568) $ (255) $ (25) $ (848) ____________ (1) Includes net investment hedges and intra-entity foreign currency transactions that are of a long-term investment nature. Amounts reclassified related to the liquidation of investments in foreign entities and were recognized net of taxes in gain (loss) on foreign currency transactions in our condensed consolidated statements of operations. (2) Amounts reclassified related to the amortization of prior service cost and amortization of net loss and were recognized net of taxes in other non-operating income (loss), net in our condensed consolidated statements of operations. (3) Amounts reclassified related to interest rate swaps and forward contracts that hedge our foreign currency denominated fees and were recognized net of taxes in interest expense and franchise and licensing fees, base and other management fees and other revenues from managed and franchised properties, respectively, in our condensed consolidated statements of operations. |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segment Amounts to Consolidated Amounts | The following table presents revenues for our reportable segments, reconciled to consolidated amounts: Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 (in millions) Franchise and licensing fees $ 244 $ 447 $ 720 $ 1,277 Base and other management fees (1) 30 95 108 293 Incentive management fees 7 54 25 167 Management and franchise 281 596 853 1,737 Ownership 94 361 335 1,060 Segment revenues 375 957 1,188 2,797 Amortization of contract acquisition costs (7) (7) (22) (21) Other revenues 19 23 52 75 Direct reimbursements from managed and franchised properties (2) 244 770 1,185 2,334 Indirect reimbursements from managed and franchised properties (2) 304 664 1,016 1,929 Intersegment fees elimination (1) (2) (12) (2) (31) Total revenues $ 933 $ 2,395 $ 3,417 $ 7,083 ____________ (1) Includes management, royalty and IP fees charged to 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. |
Reconciliation of Segment Operating Income to Income (Loss) Before Income Taxes | The following table presents operating income (loss) for our reportable segments, reconciled to consolidated income (loss) before income taxes: Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 (in millions) Management and franchise (1) $ 281 $ 596 $ 853 $ 1,737 Ownership (1) (52) 39 (145) 87 Segment operating income 229 635 708 1,824 Amortization of contract acquisition costs (7) (7) (22) (21) Other revenues, less other expenses (2) 12 4 29 Net other expenses from managed and franchised properties (44) (9) (281) (21) Depreciation and amortization (90) (86) (269) (256) General and administrative expenses (66) (107) (189) (327) Reorganization costs — — (38) — Impairment losses (9) — (136) — Gain on sale of assets, net — 81 — 81 Operating income (loss) 11 519 (223) 1,309 Interest expense (116) (105) (316) (304) Gain (loss) on foreign currency transactions (12) 7 (16) 4 Other non-operating income (loss), net 3 — (20) (8) Income (loss) before income taxes $ (114) $ 421 $ (575) $ 1,001 ____________ (1) Includes management, royalty and IP fees charged to our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations. |
Schedule of Assets by Segment | The following table presents total assets for our reportable segments, reconciled to consolidated amounts: September 30, December 31, 2020 2019 (in millions) Management and franchise $ 11,088 $ 11,455 Ownership 1,359 1,610 Corporate and other 4,682 1,892 $ 17,129 $ 14,957 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($)HotelCountryRoom | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)HotelCountryRoom | Sep. 30, 2019USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Number of hotels and resorts | Hotel | 6,333 | 6,333 | ||
Number of hotel and resort rooms | Room | 998,282 | 998,282 | ||
Number of countries and territories | Country | 118 | 118 | ||
Reorganization costs | $ 0 | $ 0 | $ 38 | $ 0 |
Accrued reorganization costs | $ 15 | $ 15 |
Recently Issued Accounting Pr_3
Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of the adoption of a new ASU | $ 6,508 | $ 6,508 | $ 5,965 | |
Increase in allowance for credit losses | $ 30 | $ 45 | ||
Accounting Standards Update 2016-13 [Member] | Cumulative effect of the adoption of an ASU | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of the adoption of a new ASU | $ 10 |
Disposal (Details)
Disposal (Details) ¥ in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2019JPY (Â¥) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | |
Discontinued Operations and Disposal Groups [Abstract] | |||||
Sales price of an asset | $ 122 | ¥ 13,000 | |||
Gain on sale of assets, net | $ 0 | $ 81 | $ 0 | $ 81 |
Revenues from Contracts with _3
Revenues from Contracts with Customers - Contract Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Apr. 30, 2020 | Dec. 31, 2019 | |||
Revenue from Contract with Customer [Abstract] | ||||||||
Contract liabilities balance | $ 1,606 | $ 1,606 | $ 1,041 | |||||
Cash received in advance and not recognized as revenue | [1],[2] | 741 | ||||||
Revenue recognized | $ 54 | $ 62 | 164 | [2],[3] | $ 197 | |||
Other | [4] | 12 | ||||||
Revenue recognized from Hilton Honors | $ 65 | |||||||
Portion of proceeds from guest loyalty program points pre sale recorded as deferred revenues | $ 636 | |||||||
[1] | As a result of the Hilton Honors points pre-sale to American Express, we recorded $636Â million of deferred revenues; see below for additional information. | |||||||
[2] | Primarily related to Hilton Honors, our guest loyalty program, which included revenue recognized of $65 million. | |||||||
[3] | During the three months ended September 30, 2020 and 2019, revenue recognized was $54 million and $62 million, respectively, and during the nine months ended September 30, 2019, revenue recognized was $197 million. | |||||||
[4] | Represents changes in estimated transaction prices for our performance obligations related to points issued under Hilton Honors, which had no effect on revenues. |
Revenues from Contracts with _4
Revenues from Contracts with Customers - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Apr. 30, 2020 | ||
Revenue from Contract with Customer [Abstract] | ||||||
Revenue recognized | $ 54 | $ 62 | $ 164 | [1],[2] | $ 197 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Proceeds from guest loyalty program points pre-sale | $ 1,000 | |||||
Portion of proceeds from guest loyalty program points pre sale recorded as deferred revenues | $ 636 | |||||
Loyalty Program Revenues [Member] | ||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Remaining performance obligations | 444 | $ 444 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Explanation | two to three years | |||||
Application, initiation and licensing fees [Member] | ||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Remaining performance obligations | 658 | $ 658 | ||||
Guest loyalty program pre-sale performance obligations [member] | ||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Remaining performance obligations | $ 504 | $ 504 | ||||
[1] | During the three months ended September 30, 2020 and 2019, revenue recognized was $54 million and $62 million, respectively, and during the nine months ended September 30, 2019, revenue recognized was $197 million. | |||||
[2] | Primarily related to Hilton Honors, our guest loyalty program, which included revenue recognized of $65 million. |
Consolidated Variable Interes_3
Consolidated Variable Interest Entities - Schedule of Consolidated Variable Interest Entities (Details) $ in Millions | Sep. 30, 2020USD ($)Hotel | Dec. 31, 2019USD ($)Hotel | |
Variable Interest Entity [Line Items] | |||
Cash and cash equivalents | $ 3,405 | $ 538 | |
Property and equipment, net | 349 | 380 | |
Deferred income tax assets | 120 | 100 | |
Other non-current assets | 315 | 280 | |
Accounts payable, accrued expenses and other | 1,387 | 1,703 | |
Other long-term liabilities | 1,031 | $ 883 | |
Finance lease liabilities | $ 250 | ||
Number of consolidated variable interest entities | Hotel | 2 | 2 | |
Consolidated VIEs [member] | |||
Variable Interest Entity [Line Items] | |||
Cash and cash equivalents | $ 39 | $ 81 | |
Property and equipment, net | 76 | 69 | |
Deferred income tax assets | 53 | 48 | |
Other non-current assets | 64 | 61 | |
Accounts payable, accrued expenses and other | 30 | 49 | |
Long-term debt | [1] | 199 | 194 |
Other long-term liabilities | 16 | 17 | |
Finance lease liabilities | [1] | $ 181 | $ 177 |
[1] | Includes finance lease liabilities of $181 million and $177 million as of September 30, 2020 and December 31, 2019, respectively. |
Consolidated Variable Interes_4
Consolidated Variable Interest Entities - Additional Information (Details) ¥ in Millions, $ in Millions | Sep. 30, 2020JPY (¥)Hotel | Sep. 30, 2020USD ($)Hotel | Dec. 31, 2019USD ($)Hotel |
Variable Interest Entity [Line Items] | |||
Number of consolidated variable interest entities | Hotel | 2 | 2 | 2 |
Long-term debt, gross | $ 10,577 | $ 8,076 | |
VIE revolving credit facility [Member] | |||
Variable Interest Entity [Line Items] | |||
Long-term debt, gross | 0 | ||
VIE revolving credit facility signed June 2020 [Member] | |||
Variable Interest Entity [Line Items] | |||
Revolving credit facility, maximum borrowing capacity | ¥ 2,750 | 26 | |
VIE revolving credit facility signed September 2020 [Member] | |||
Variable Interest Entity [Line Items] | |||
Revolving credit facility, maximum borrowing capacity | ¥ 2,000 | $ 19 |
Finite-Lived Intangible Asset_2
Finite-Lived Intangible Assets - Schedule of Finite Lived Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | ||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Management and franchise contracts, gross | $ 2,907 | $ 2,907 | $ 2,894 | |||||
Other intangible assets, gross | 1,129 | 1,129 | 1,287 | |||||
Management and franchise contracts, accumulated amortization | (2,255) | (2,255) | (2,114) | |||||
Other intangible assets, accumulated amortization | (842) | (842) | (866) | |||||
Management and franchise contracts, net | 652 | 652 | 780 | |||||
Other intangible assets, net | 287 | 287 | 421 | |||||
Impairment losses | 9 | $ 0 | 136 | $ 0 | ||||
Other intangible assets, net [member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Gross carrying value of assets impaired | [1] | 138 | ||||||
Accumulated amortization of assets impaired | [1] | 92 | ||||||
Impairment losses | [1] | 46 | ||||||
Contract acquisition costs [member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Gross carrying value of assets impaired | [2] | 18 | ||||||
Accumulated amortization of assets impaired | [2] | 3 | ||||||
Impairment losses | [2] | 6 | 15 | |||||
Management and franchise contracts recorded at merger [member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Management and franchise contracts, gross | [3] | 2,164 | 2,164 | 2,163 | ||||
Management and franchise contracts, accumulated amortization | [3] | (2,096) | (2,096) | (1,974) | ||||
Management and franchise contracts, net | [3] | 68 | 68 | 189 | ||||
Contract acquisition costs [member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Management and franchise contracts, gross | 613 | [2] | 613 | [2] | 604 | |||
Management and franchise contracts, accumulated amortization | (137) | [2] | (137) | [2] | (121) | |||
Management and franchise contracts, net | 476 | [2] | 476 | [2] | 483 | |||
Development commissions and other [member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Management and franchise contracts, gross | 130 | 130 | 127 | |||||
Management and franchise contracts, accumulated amortization | (22) | (22) | (19) | |||||
Management and franchise contracts, net | 108 | 108 | 108 | |||||
Other intangible assets, net [member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Other intangible assets, gross | [3] | 150 | [1] | 150 | [1] | 290 | ||
Other intangible assets, accumulated amortization | [3] | (90) | [1] | (90) | [1] | (176) | ||
Other intangible assets, net | [3] | 60 | [1] | 60 | [1] | 114 | ||
Capitalized software costs [member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Other intangible assets, gross | 640 | 640 | 625 | |||||
Other intangible assets, accumulated amortization | (478) | (478) | (399) | |||||
Other intangible assets, net | 162 | 162 | 226 | |||||
Hilton Honors [member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Other intangible assets, gross | [3] | 339 | 339 | 338 | ||||
Other intangible assets, accumulated amortization | [3] | (274) | (274) | (257) | ||||
Other intangible assets, net | [3] | $ 65 | $ 65 | 81 | ||||
Other [member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Other intangible assets, gross | [3] | 34 | ||||||
Other intangible assets, accumulated amortization | [3] | (34) | ||||||
Other intangible assets, net | [3] | $ 0 | ||||||
[1] | During the nine months ended September 30, 2020, we recognized impairment losses of $46 million, which in total reduced the gross carrying value and accumulated amortization of our leases intangible assets by $138 million and $92 million , respectively. See Note 8: "Fair Value Measurements" for additional information. | |||||||
[2] | During the three and nine months ended September 30, 2020, we recognized impairment losses of $6 million and $15 million, respectively, which in total reduced the gross carrying value and accumulated amortization of contract acquisition co sts by $18 million and $3 million, respectively. | |||||||
[3] | Represents intangible assets that were initially recorded at their fair value as part of the October 24, 2007 transaction whereby we became a wholly owned subsidiary of affiliates of The Blackstone Group Inc. (the "Merger"). |
Finite-Lived Intangible Asset_3
Finite-Lived Intangible Assets - Amortization of Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Depreciation and amortization [member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | [1] | $ 76 | $ 71 | $ 227 | $ 212 |
Depreciation and amortization [member] | Intangible assets recorded at fair value at the time of the Merger [member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | [1] | 47 | 50 | 143 | 152 |
Franchise and licensing fees and base and other management fees [member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | $ 7 | $ 7 | $ 22 | $ 21 | |
[1] | Includes amortization expense of $47 million and $50 million for the three months ended September 30, 2020 and 2019, respectively, and $143 million and $152 million for the nine months ended September 30, 2020 and 2019, respectively, associated with assets that were initially recorded at their fair value at the time of the Merger. |
Finite-Lived Intangible Asset_4
Finite-Lived Intangible Assets - Schedule of Future Amortization (Details) $ in Millions | Sep. 30, 2020USD ($) |
Depreciation and amortization [member] | |
Finite-Lived Intangible Assets [Line Items] | |
2020 (remaining) | $ 48 |
2021 | 127 |
2022 | 92 |
2023 | 58 |
2024 | 9 |
Thereafter | 129 |
Finite-lived intangible assets, net | 463 |
Franchise and licensing fees and base and other management fees [member] | |
Finite-Lived Intangible Assets [Line Items] | |
2020 (remaining) | 7 |
2021 | 28 |
2022 | 26 |
2023 | 26 |
2024 | 25 |
Thereafter | 364 |
Finite-lived intangible assets, net | $ 476 |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 10,577 | $ 8,076 | |
Unamortized deferred financing costs and discount | (87) | (83) | |
Current maturities of long-term debt | [1] | (51) | (37) |
Long-term debt | 10,439 | 7,956 | |
Senior secured revolving credit facility [member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 1,690 | 195 | |
Debt, weighted average interest rate | 1.15% | ||
Senior secured term loan facility [member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 2,619 | 2,619 | |
Debt instrument, interest rate, stated percentage | 1.90% | ||
Senior notes due 2024 [member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 1,000 | 1,000 | |
Debt instrument, interest rate, stated percentage | 4.25% | ||
Senior notes due 2025 [member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 900 | 900 | |
Debt instrument, interest rate, stated percentage | 4.625% | ||
5.375% Senior notes due 2025 [member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 500 | 0 | |
Debt instrument, interest rate, stated percentage | 5.375% | ||
Senior notes due 2026 [member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 1,500 | 1,500 | |
Debt instrument, interest rate, stated percentage | 5.125% | ||
Senior notes due 2027 [member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 600 | 600 | |
Debt instrument, interest rate, stated percentage | 4.875% | ||
Senior Notes due 2028 [member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 500 | 0 | |
Debt instrument, interest rate, stated percentage | 5.75% | ||
Senior notes due 2030 [member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 1,000 | 1,000 | |
Debt instrument, interest rate, stated percentage | 4.875% | ||
Finance lease liabilities [member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 250 | 245 | |
Debt, weighted average interest rate | 5.81% | ||
Other debt [member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 18 | $ 17 | |
Debt instrument, interest rate, stated percentage | 3.08% | ||
[1] | Represents current maturities of finance lease liabilities. |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Apr. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 10,577 | $ 8,076 | |
Senior secured revolving credit facility [member] | |||
Debt Instrument [Line Items] | |||
Revolving credit facility, maximum borrowing capacity | 1,750 | ||
Long-term debt, gross | $ 1,690 | 195 | |
Senior notes due 2024 [member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 4.25% | ||
Long-term debt, gross | $ 1,000 | 1,000 | |
Senior notes due 2025 [member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 4.625% | ||
Long-term debt, gross | $ 900 | 900 | |
5.375% Senior notes due 2025 [member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 5.375% | ||
Long-term debt, gross | $ 500 | 0 | |
Debt Instrument, Face Amount | $ 500 | ||
Senior notes due 2026 [member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 5.125% | ||
Long-term debt, gross | $ 1,500 | 1,500 | |
Senior notes due 2027 [member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 4.875% | ||
Long-term debt, gross | $ 600 | 600 | |
Senior Notes due 2028 [member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 5.75% | ||
Long-term debt, gross | $ 500 | 0 | |
Debt Instrument, Face Amount | $ 500 | ||
Senior notes due 2030 [member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 4.875% | ||
Long-term debt, gross | $ 1,000 | $ 1,000 | |
Senior notes issued in April 2020 [Member] | |||
Debt Instrument [Line Items] | |||
Debt issuance costs | 14 | ||
Letter of Credit [Member] | Senior secured revolving credit facility [member] | |||
Debt Instrument [Line Items] | |||
Letters of credit outstanding | $ 60 |
Debt - Debt Maturities (Details
Debt - Debt Maturities (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
2020 (remaining) | $ 10 | |
2021 | 49 | |
2022 | 28 | |
2023 | 22 | |
2024 | 2,713 | |
Thereafter | 7,755 | |
Long-term debt, gross | $ 10,577 | $ 8,076 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring & Disclosure (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | |
Carrying value [member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash equivalents | $ 2,848 | $ 117 | |
Restricted cash equivalents | 9 | 32 | |
Long-term debt | [1] | 10,222 | 7,731 |
Interest rate swaps, liabilities | 88 | 37 | |
Level 1 [member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | [1] | 6,156 | 5,230 |
Level 2 [member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash equivalents | 2,848 | 117 | |
Restricted cash equivalents | 9 | 32 | |
Interest rate swaps, liabilities | 88 | 37 | |
Level 3 [member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | [1] | $ 4,224 | $ 2,834 |
[1] | The carrying values include unamortized deferred financing costs and discount. The carrying values and fair values exclude finance lease liabilities and other debt. |
Fair Value Measurements - Nonre
Fair Value Measurements - Nonrecurring (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Other intangible assets, net | $ 287 | $ 421 | ||||
Operating lease right-of-use assets | 769 | 867 | ||||
Property and equipment, net | $ 349 | $ 380 | ||||
Other intangible assets, net [member] | Fair value [member] | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Other intangible assets, net | [1] | $ 0 | ||||
Operating lease right-of-use assets [member] | Fair value [member] | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Operating lease right-of-use assets | $ 10 | 34 | [1] | |||
Property and equipment, net [member] | Fair value [member] | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Property and equipment, net | [1] | $ 4 | ||||
[1] | Amounts were measured at March 31, 2020, except for $10Â million of operating lease right-of-use ("ROU") assets, which were remeasured at June 30, 2020. Additionally, certain of these assets were fully impaired at March 31, 2020, June 30, 2020 and September 30, 2020. |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Impairment losses | $ 9 | $ 0 | $ 136 | $ 0 |
Other intangible assets, operating lease right-of-use assets and property and equipment [member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Impairment losses | $ 3 | $ 121 | ||
Growth rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fair value measurement technique | 1.7 percent to 4.8 percent | |||
Discount rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fair value measurement technique | 7.0 percent to 12.0 percent |
Leases Supplemental Cash Flow I
Leases Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Lessee Disclosure [Abstract] | ||
ROU assets obtained in exchange for lease liabilities in non-cash transactions: operating leases | $ 32 | $ 21 |
ROU assets obtained in exchange for lease liabilities in non-cash transactions: finance leases | $ 16 | $ 59 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) $ in Millions | Sep. 30, 2020USD ($) |
Lessee Disclosure [Abstract] | |
Operating leases, 2020 (remaining) | $ 76 |
Operating leases, 2021 | 174 |
Operating leases, 2022 | 148 |
Operating leases, 2023 | 133 |
Operating leases, 2024 | 112 |
Operating leases, thereafter | 796 |
Operating leases, total minimum lease payments | 1,439 |
Less: imputed interest, operating leases | (316) |
Operating lease liabilities | 1,123 |
Finance leases, 2020 (remaining) | 23 |
Finance leases, 2021 | 51 |
Finance leases, 2022 | 40 |
Finance leases, 2023 | 32 |
Finance leases, 2024 | 31 |
Finance leases, thereafter | 139 |
Finance leases, total minimum lease payments | 316 |
Less: imputed interest, finance leases | (66) |
Finance lease liabilities | $ 250 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($)Hotel | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)Hotel | Sep. 30, 2019USD ($) | |
Lessee Disclosure [Abstract] | ||||
Hotels under operating leases | Hotel | 49 | 49 | ||
Hotels under finance leases | Hotel | 6 | 6 | ||
Number of finance leases that were the liabilities of VIEs | Hotel | 2 | 2 | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment losses | $ 9 | $ 0 | $ 136 | $ 0 |
Operating lease right-of-use assets [member] | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment losses | 51 | |||
Finance lease right-of-use assets [member] | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment losses | 2 | 4 | ||
Property and equipment, net [member] | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Impairment losses | $ 3 | $ 24 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits | $ 432 | $ 395 |
Accrual for interest and penalties | 64 | 52 |
Unrecognized tax benefits that would provide benefit to effective tax rate | 393 | $ 380 |
Income tax examination, estimate of possible loss | 817 | |
Accrual related to IRS proposed additional tax owed | $ 76 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Stock Options Valuation Assumptions (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2020 | Sep. 30, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation costs related to unvested awards | $ 87 | ||
Unrecognized compensation costs related to unvested awards, weighted-average period | 1 year 10 months 24 days | ||
Shares of common stock reserved for future issuance | 12,980,000 | ||
Employee stock option [member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | [1] | 23.69% | |
Dividend yield | [2] | 0.55% | |
Risk-free rate | [3] | 0.96% | |
Expected term (in years) | [4] | 6 years | |
Vesting period | 3 years | ||
Options granted in period | 755,000 | ||
Options granted in period, weighted average exercise price | $ 93.33 | ||
Options, expiration period | 10 years | ||
Options, grants in period, grant date fair value | $ 21.47 | ||
Exercisable, in shares | 1,889,000 | ||
[1] | Estimated using historical movement of Hilton's stock price. | ||
[2] | Estimated based on the quarterly dividend and the three-month average stock price at the date of grant. | ||
[3] | Based on the yields of U.S. Department of Treasury instruments with similar expected lives. | ||
[4] | Estimated using the average of the vesting periods and the contractual term of the options. |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 25 | $ 42 | $ 37 | $ 123 |
Unrecognized compensation costs related to unvested awards | $ 87 | $ 87 | ||
Unrecognized compensation costs related to unvested awards, weighted-average period | 1 year 10 months 24 days | |||
Shares of common stock reserved for future issuance | 12,980,000 | 12,980,000 | ||
Restricted stock units (RSUs) [member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted | 907,000 | |||
Weighted average grant date fair value, granted | $ 93.43 | |||
Employee stock option [member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Options granted in period | 755,000 | |||
Options granted in period, weighted average exercise price | $ 93.33 | |||
Options, expiration period | 10 years | |||
Options, grants in period, grant date fair value | $ 21.47 | |||
Exercisable, in shares | 1,889,000 | 1,889,000 | ||
Performance shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted | 347,000 | |||
Vesting period | 3 years | |||
Weighted average grant date fair value, granted | $ 93.33 | |||
EBITDA CAGR [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Terms of performance shares | 50 percent of the awards subject to achievement based on the compound annual growth rate ("CAGR") of the Company's earnings before interest expense, income tax benefit (expense) and depreciation and amortization ("EBITDA"), adjusted to exclude certain items ("Adjusted EBITDA") | |||
Free cash flow CAGR [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Terms of performance shares | 50 percent of the awards subject to achievement based on the Company’s free cash flow per share CAGR | |||
Target achievement percentage [Member] | Performance shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting rights, percentage | 100.00% | |||
Maximum achievement percentage [Member] | Performance shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting rights, percentage | 200.00% | |||
Minimum [Member] | Restricted stock units (RSUs) [member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 2 years | |||
Maximum [Member] | Restricted stock units (RSUs) [member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |||
Basic EPS: | ||||||
Net income (loss) attributable to Hilton stockholders | $ (79) | $ 288 | $ (491) | $ 706 | ||
Weighted average shares outstanding | 277 | 285 | 277 | 289 | ||
Basic EPS | $ (0.29) | $ 1.01 | $ (1.77) | $ 2.44 | ||
Diluted EPS: | ||||||
Net income (loss) attributable to Hilton stockholders | $ (79) | $ 288 | $ (491) | $ 706 | ||
Weighted average shares outstanding | [1] | 279 | 288 | 279 | 292 | |
Diluted EPS | $ (0.28) | $ 1 | $ (1.76) | $ 2.42 | ||
Antidilutive securities excluded from the computation of diluted EPS | Approximately 1 million | [1] | Approximately 1 million | Approximately 1 million | Approximately 1 million | |
[1] | Approximately 1 million share-based compensation awards were excluded from the computation of diluted EPS for the three and nine months ended September 30, 2020 and 2019 because their effect would have been anti-dilutive under the treasury stock method. |
Stockholders' Equity (Deficit_3
Stockholders' Equity (Deficit) and Accumulated Other Comprehensive Loss - Schedule of Stockholders' Equity (Deficit) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Class of Stock [Line Items] | ||||||||||
Beginning balance, shares | 278,985,125 | |||||||||
Beginning balance | $ (1,291) | $ (23) | $ (472) | $ 558 | ||||||
Equity (deficit) attributable to Hilton stockholders | (1,324) | (1,324) | $ (482) | |||||||
Equity attributable to noncontrolling interests | (5) | (5) | (10) | |||||||
Net income (loss) attributable to Hilton stockholders | (79) | 288 | (491) | 706 | ||||||
Net income (loss) attributable to noncontrolling interests | (2) | 2 | (4) | 4 | ||||||
Net income (loss) | (81) | 290 | (495) | 710 | ||||||
Other comprehensive income (loss) | 28 | (42) | (13) | (66) | ||||||
Dividends | (43) | (42) | (130) | |||||||
Repurchases of common stock | (422) | (279) | (1,101) | |||||||
Increase (decrease) in stockholders’ equity from share-based compensation | 26 | 41 | (7) | 88 | ||||||
Distributions | (1) | (1) | ||||||||
Accumulated deficit | $ (6,508) | $ (6,508) | (5,965) | |||||||
Deconsolidation of a VIE | (2) | |||||||||
Ending balance, shares | 277,430,022 | 277,430,022 | ||||||||
Ending balance | $ (1,319) | $ (199) | $ (1,319) | $ (199) | ||||||
Accounting Standards Update 2016-13 [Member] | Cumulative effect of the adoption of an ASU | ||||||||||
Class of Stock [Line Items] | ||||||||||
Accumulated deficit | $ (10) | |||||||||
Accounting Standards Update 2016-02 [Member] | Cumulative effect of the adoption of an ASU | ||||||||||
Class of Stock [Line Items] | ||||||||||
Accumulated deficit | $ (256) | |||||||||
Common stock [member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Beginning balance, shares | 277,000,000 | 288,000,000 | 279,000,000 | 295,000,000 | ||||||
Equity (deficit) attributable to Hilton stockholders | $ 3 | $ 3 | $ 3 | $ 3 | $ 3 | 3 | $ 3 | $ 3 | ||
Repurchases of common stock, shares | (5,000,000) | (3,000,000) | (13,000,000) | |||||||
Share-based compensation, shares | 0 | 0 | 1,000,000 | 1,000,000 | ||||||
Ending balance, shares | 277,000,000 | 283,000,000 | 277,000,000 | 283,000,000 | ||||||
Treasury stock [member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Equity (deficit) attributable to Hilton stockholders | $ (4,457) | $ (3,726) | $ (4,457) | $ (3,726) | (4,457) | (4,169) | (3,304) | (2,625) | ||
Repurchases of common stock | (422) | (279) | (1,101) | |||||||
Increase (decrease) in treasury stock, excluding share repurchases | 0 | (9) | ||||||||
Additional paid-in capital [member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Equity (deficit) attributable to Hilton stockholders | 10,491 | 10,460 | 10,491 | 10,460 | 10,465 | 10,489 | 10,419 | 10,372 | ||
Share-based compensation | 26 | 41 | 2 | 88 | ||||||
Accumulated deficit [member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Equity (deficit) attributable to Hilton stockholders | (6,508) | (6,097) | (6,508) | (6,097) | (6,429) | (5,965) | (6,342) | (6,417) | ||
Net income (loss) attributable to Hilton stockholders | (79) | 288 | (491) | 706 | ||||||
Dividends | (43) | (42) | (130) | |||||||
Accumulated deficit [member] | Accounting Standards Update 2016-13 [Member] | Cumulative effect of the adoption of an ASU | ||||||||||
Class of Stock [Line Items] | ||||||||||
Accumulated deficit | $ (10) | |||||||||
Accumulated deficit [member] | Accounting Standards Update 2016-02 [Member] | Cumulative effect of the adoption of an ASU | ||||||||||
Class of Stock [Line Items] | ||||||||||
Accumulated deficit | $ (256) | |||||||||
Accumulated other comprehensive loss [member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Equity (deficit) attributable to Hilton stockholders | (853) | (848) | (853) | (848) | (881) | (840) | (806) | (782) | ||
Other comprehensive income (loss) attributable to Hilton stockholders | 28 | (42) | (13) | (66) | ||||||
Noncontrolling interests [member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Equity attributable to noncontrolling interests | 5 | 9 | 5 | 9 | $ 8 | $ 10 | $ 7 | $ 7 | ||
Net income (loss) attributable to noncontrolling interests | (2) | 2 | (4) | 4 | ||||||
Other comprehensive income (loss) attributable to noncontrolling interests | 0 | $ 0 | 0 | 0 | ||||||
Distributions | $ (1) | $ (1) | ||||||||
Deconsolidation of a VIE | $ (2) |
Stockholders' Equity (Deficit_4
Stockholders' Equity (Deficit) and Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | $ (840) | ||||
Ending balance | $ (853) | (853) | |||
Currency translation adjustment | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | [1] | (549) | $ (545) | ||
Other comprehensive loss before reclassifications | [1] | 16 | (24) | ||
Amounts reclassified from accumulated other comprehensive loss | [1] | 5 | 1 | ||
Net current period other comprehensive income (loss) | [1] | 21 | (23) | ||
Ending balance | [1] | (528) | $ (568) | (528) | (568) |
Pension liability adjustment | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | [2] | (269) | (260) | ||
Other comprehensive loss before reclassifications | [2] | (3) | (1) | ||
Amounts reclassified from accumulated other comprehensive loss | [2] | 8 | 6 | ||
Net current period other comprehensive income (loss) | [2] | 5 | 5 | ||
Ending balance | [2] | (264) | (255) | (264) | (255) |
Cash flow hedge adjustment | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | [3] | (22) | 23 | ||
Other comprehensive loss before reclassifications | [3] | (35) | (40) | ||
Amounts reclassified from accumulated other comprehensive loss | [3] | (4) | (8) | ||
Net current period other comprehensive income (loss) | [3] | (39) | (48) | ||
Ending balance | [3] | (61) | (25) | (61) | (25) |
Accumulated other comprehensive loss [member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | (840) | (782) | |||
Other comprehensive loss before reclassifications | (22) | (65) | |||
Amounts reclassified from accumulated other comprehensive loss | 9 | (1) | |||
Net current period other comprehensive income (loss) | 28 | (42) | (13) | (66) | |
Ending balance | $ (853) | $ (848) | $ (853) | $ (848) | |
[1] | Includes net investment hedges and intra-entity foreign currency transactions that are of a long-term investment nature. Amounts reclassified related to the liquidation of investments in foreign entities and were recognized net of taxes in gain (loss) on foreign currency transactions in our condensed consolidated statements of operations. | ||||
[2] | Amounts reclassified related to the amortization of prior service cost and amortization of net loss and were recognized net of taxes in other non-operating income (loss), net in our condensed consolidated statements of operations. | ||||
[3] | Amounts reclassified related to interest rate swaps and forward contracts that hedge our foreign currency denominated fees and were recognized net of taxes in interest expense and franchise and licensing fees, base and other management fees and other revenues from managed and franchised properties, respectively, in our condensed consolidated statements of operations. |
Business Segments - Hotel Prope
Business Segments - Hotel Properties by Segment (Details) | 9 Months Ended |
Sep. 30, 2020HotelRoomSegment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | Segment | 2 |
Management and franchise | |
Segment Reporting Information [Line Items] | |
Number of managed hotels | 700 |
Number of franchised hotels | 5,516 |
Number of managed and franchised hotel rooms | Room | 969,546 |
Number of hotels with suspended operations at some time during the period | 1,235 |
Number of hotels with suspended operations that had not reopened | (200) |
Ownership | |
Segment Reporting Information [Line Items] | |
Number of hotels with suspended operations at some time during the period | 35 |
Number of owned and leased hotel properties | 62 |
Number of owned and leased hotel rooms | Room | 19,780 |
Number of wholly owned and leased hotels | 54 |
Number of non-wholly owned hotels | 1 |
Number of hotels leased by consolidated VIEs | 2 |
Number of hotels owned or leased by unconsolidated affiliates | 5 |
Business Segments - Reconciliat
Business Segments - Reconciliation of Revenue from Segment Amounts to Consolidated Amounts (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenues | $ 933 | $ 2,395 | $ 3,417 | $ 7,083 | |
Amortization of contract acquisition costs | (7) | (7) | (22) | (21) | |
Franchise and licensing fees | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenues | 244 | 447 | 720 | 1,277 | |
Base and other management fees | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenues | [1] | 30 | 95 | 108 | 293 |
Incentive management fees | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenues | 7 | 54 | 25 | 167 | |
Management and franchise | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenues | 281 | 596 | 853 | 1,737 | |
Ownership | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenues | 94 | 361 | 335 | 1,060 | |
Segment revenues | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenues | 375 | 957 | 1,188 | 2,797 | |
Intersegment eliminations | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenues | [1] | (2) | (12) | (2) | (31) |
Other revenues | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenues | 19 | 23 | 52 | 75 | |
Direct reimbursements from managed and franchised properties | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenues | [2] | 244 | 770 | 1,185 | 2,334 |
Indirect reimbursements from managed and franchised properties | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenues | [2] | $ 304 | $ 664 | $ 1,016 | $ 1,929 |
[1] | Includes management, royalty and IP fees charged to 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. |
Business Segments - Reconcili_2
Business Segments - Reconciliation of Segment Operating Income to Income (Loss) Before Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Amortization of contract acquisition costs | $ (7) | $ (7) | $ (22) | $ (21) | |
Other revenues, less other expenses | (2) | 12 | 4 | 29 | |
Net other expenses from managed and franchised properties | (44) | (9) | (281) | (21) | |
Depreciation and amortization | (90) | (86) | (269) | (256) | |
General and administrative | (66) | (107) | (189) | (327) | |
Reorganization costs | 0 | 0 | 38 | 0 | |
Impairment losses | (9) | 0 | (136) | 0 | |
Gain on sale of assets, net | 0 | 81 | 0 | 81 | |
Operating income (loss) | 11 | 519 | (223) | 1,309 | |
Interest expense | (116) | (105) | (316) | (304) | |
Gain (loss) on foreign currency transactions | (12) | 7 | (16) | 4 | |
Other non-operating income (loss), net | 3 | 0 | (20) | (8) | |
Income (loss) before income taxes | (114) | 421 | (575) | 1,001 | |
Management and franchise | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Operating income (loss) | [1] | 281 | 596 | 853 | 1,737 |
Ownership | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Operating income (loss) | [1] | (52) | 39 | (145) | 87 |
Segment operating income | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Operating income (loss) | $ 229 | $ 635 | $ 708 | $ 1,824 | |
[1] | Includes management, royalty and IP fees charged to our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations. |
Business Segments - Schedule of
Business Segments - Schedule of Assets by Segment (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 17,129 | $ 14,957 |
Management and franchise | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 11,088 | 11,455 |
Ownership | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 1,359 | 1,610 |
Corporate and other [member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 4,682 | $ 1,892 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2020USD ($)ContractHotel | Dec. 31, 2019USD ($) | |
Commitments and Contingencies [Line Items] | ||
Current liabilities | $ 2,299 | $ 2,871 |
Marketing, sales, and brand program commitments | 113 | 350 |
Commitments to fund loans | ||
Commitments and Contingencies [Line Items] | ||
Commitment to fund loans | $ 10 | |
Performance guarantees | ||
Commitments and Contingencies [Line Items] | ||
Number of contracts with guarantees | Contract | 4 | |
Guarantees, expiration | 2023 to 2039 | |
Guarantees, possible cash outlays | $ 18 | |
Current liabilities | 7 | $ 3 |
Debt guarantee | ||
Commitments and Contingencies [Line Items] | ||
Guarantees, possible cash outlays | $ 10 | |
Number of debt guarantees | Contract | 1 | |
Number of hotels with debt guarantees | Hotel | 2 |