Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 21, 2023 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-36243 | |
Entity Registrant Name | Hilton Worldwide Holdings Inc. | |
Entity incorporation, sate or country code | DE | |
Entity Tax Identification Number | 27-4384691 | |
Entity Address, Address Line One | 7930 Jones Branch Drive | |
Entity Address, Address Line Two | Suite 1100 | |
Entity Address, City or Town | McLean | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 22102 | |
City Area Code | 703 | |
Local Phone Number | 883-1000 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | HLT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity common stock shares outstanding | 264,626,535 | |
Entity Central Index Key | 0001585689 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | |
Current Assets: | |||
Cash and cash equivalents | $ 901 | $ 1,209 | |
Restricted cash and cash equivalents | 77 | 77 | |
Accounts receivable, net of allowance for credit losses of $121 and $117 | 1,298 | 1,327 | |
Prepaid expenses | 158 | 105 | |
Other | 127 | 152 | |
Total current assets (variable interest entities – $46 and $43) | 2,561 | 2,870 | |
Intangibles and Other Assets: | |||
Goodwill | 5,041 | 5,032 | |
Brands | 4,841 | 4,840 | |
Operating lease right-of-use assets | 661 | 662 | |
Property and equipment, net | 287 | 280 | |
Deferred income tax assets | 204 | 204 | |
Other | 495 | 576 | |
Total intangibles and other assets (variable interest entities – $145 and $152) | 12,650 | 12,642 | |
Total assets | 15,211 | 15,512 | |
Current Liabilities: | |||
Accounts payable, accrued expenses and other | 1,704 | 1,790 | |
Current maturities of long-term debt | [1] | 35 | 39 |
Current portion of deferred revenues | 444 | 433 | |
Total current liabilities (variable interest entities – $41 and $45) | 3,390 | 3,372 | |
Long-term debt | 8,706 | 8,708 | |
Operating lease liabilities | 831 | 832 | |
Deferred revenues | 992 | 986 | |
Deferred income tax liabilities | 715 | 735 | |
Other | 684 | 692 | |
Total liabilities (variable interest entities – $176 and $188) | 16,624 | 16,610 | |
Commitments and contingencies – see Note 12 | |||
Equity (Deficit): | |||
Common stock, $0.01 par value; 10,000,000,000 authorized shares, 265,439,134 outstanding as of March 31, 2023 and 267,860,301 outstanding as of December 31, 2022 | 3 | 3 | |
Treasury stock, at cost; 68,402,352 shares as of March 31, 2023 and 65,217,085 shares as of December 31, 2022 | (6,489) | (6,040) | |
Additional paid-in capital | 10,815 | 10,831 | |
Accumulated deficit | (5,025) | (5,190) | |
Accumulated other comprehensive loss | (724) | (706) | |
Total Hilton stockholders' deficit | (1,420) | (1,102) | |
Noncontrolling interests | 7 | 4 | |
Total deficit | (1,413) | (1,098) | |
TOTAL LIABILITIES AND EQUITY (DEFICIT) | 15,211 | 15,512 | |
Management and franchise | |||
Intangibles and Other Assets: | |||
Management and franchise contracts, net | 960 | 887 | |
Other | |||
Intangibles and Other Assets: | |||
Management and franchise contracts, net | 161 | 161 | |
Variable Interest Entity, Primary Beneficiary | |||
Current Assets: | |||
Cash and cash equivalents | 32 | 29 | |
Intangibles and Other Assets: | |||
Property and equipment, net | 43 | 45 | |
Deferred income tax assets | 48 | 52 | |
Other | 54 | 55 | |
Current Liabilities: | |||
Accounts payable, accrued expenses and other | 22 | 21 | |
Current maturities of long-term debt | 18 | 22 | |
Guest Loyalty Program | |||
Current Liabilities: | |||
Current portion of liability for guest loyalty program | 1,207 | 1,110 | |
Liability for guest loyalty program | $ 1,306 | $ 1,285 | |
[1]Represents current maturities of finance lease liabilities and borrowings of consolidated VIEs. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 10,000,000,000 | 10,000,000,000 |
Common stock, outstanding shares | 265,439,134 | 267,860,301 |
Treasury stock, shares | 68,402,352 | 65,217,085 |
Allowance for credit losses | $ 121 | $ 117 |
Total current assets of variable interest entities | 46 | 43 |
Total intangibles and other assets of variable interest entities | 145 | 152 |
Total current liabilities of variable interest entities | 41 | 45 |
Total liabilities of variable interest entities | $ 176 | $ 188 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues | $ 2,293 | $ 1,721 |
Owned and leased hotels | 251 | 185 |
Depreciation and amortization | 37 | 44 |
General and administrative | 91 | 91 |
Other expenses | 21 | 11 |
Total expenses excluding reimbursable expenses | 400 | 331 |
Other expenses from managed and franchised properties | 1,395 | 1,021 |
Total expenses | 1,795 | 1,352 |
Operating income (loss) | 498 | 369 |
Interest expense | (116) | (90) |
Loss on foreign currency transactions | 0 | (4) |
Loss on investments in unconsolidated affiliate | (92) | 0 |
Other non-operating income (loss), net | 12 | 16 |
Income before income taxes | 302 | 291 |
Income tax expense | (93) | (80) |
Net income | 209 | 211 |
Net loss (income) attributable to noncontrolling interests | (3) | 1 |
Net income attributable to Hilton stockholders | $ 206 | $ 212 |
Basic EPS: | ||
Earnings (loss) per share, basic (USD per share) | $ 0.77 | $ 0.76 |
Diluted EPS: | ||
Earnings (loss) per share, diluted (USD per share) | 0.77 | 0.75 |
Cash dividends declared per share | $ 0.15 | $ 0 |
Total revenues excluding reimbursable revenues | ||
Revenues | $ 936 | $ 670 |
Franchise and licensing fees | ||
Revenues | 508 | 413 |
Base and other management fees | ||
Revenues | 80 | 55 |
Incentive management fees | ||
Revenues | 65 | 34 |
Owned and leased hotels | ||
Revenues | 248 | 150 |
Other revenues | ||
Revenues | 35 | 18 |
Other revenues from managed and franchised properties | ||
Revenues | $ 1,357 | $ 1,051 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 209 | $ 211 |
Other comprehensive income (loss), net of tax benefit (expense): | ||
Currency translation adjustment, net of tax | (6) | (2) |
Pension liability adjustment, net of tax | (2) | (1) |
Cash flow hedge adjustment, net of tax | (14) | 60 |
Total other comprehensive income (loss) | (18) | 59 |
Comprehensive income | 191 | 270 |
Comprehensive loss (income) attributable to noncontrolling interests | (3) | 1 |
Comprehensive income attributable to Hilton stockholders | $ 188 | $ 271 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Comprehensive Income (Loss) (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Statement of Comprehensive Income [Abstract] | |||
Currency translation adjustment, tax benefit (expense) | $ (3) | $ 0 | [1] |
Pension liability adjustment, tax expense (less than) | (1) | 0 | [1] |
Cash flow hedge adjustment, tax benefit (expense) | $ 4 | $ (20) | |
[1]Amount was less than $1 million. |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating Activities: | ||
Net income (loss) | $ 209 | $ 211 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 37 | 44 |
Loss on foreign currency transactions | 0 | 4 |
Loss on investments in unconsolidated affiliate | 92 | 0 |
Share-based compensation expense | 33 | 37 |
Deferred income taxes | (20) | (3) |
Contract acquisition costs, net of refunds | (105) | (15) |
Working capital changes and other | 74 | (91) |
Net cash provided by operating activities | 330 | 195 |
Investing Activities: | ||
Capital expenditures for property and equipment | (44) | (4) |
Issuance of financing receivables | 8 | 0 |
Undesignated derivative financial instruments | 12 | (12) |
Capitalized software costs | (19) | (10) |
Investments in unconsolidated affiliates | (2) | (20) |
Other | 0 | (4) |
Net cash used in investing activities | (85) | (26) |
Financing Activities: | ||
Borrowings | 0 | 18 |
Repayment of debt | (12) | (13) |
Debt issuance costs | 9 | 0 |
Dividends paid | (41) | 0 |
Repurchases of common stock | (450) | (121) |
Share-based compensation tax withholdings | 51 | 55 |
Proceeds from share-based compensation | 5 | 4 |
Settlements of interest rate swap with financing component | 11 | 0 |
Net cash used in financing activities | (547) | (167) |
Effect of exchange rate changes on cash, restricted cash and cash equivalents | (6) | (4) |
Net decrease in cash, restricted cash and cash equivalents | (308) | (2) |
Cash, restricted cash and cash equivalents, beginning of period | 1,286 | 1,512 |
Cash, restricted cash and cash equivalents, end of period | 978 | 1,510 |
Supplemental Disclosures: | ||
Interest | 90 | 78 |
Income tax refunds, net of payments | (25) | (44) |
Recognized as a reduction of franchise and licensing fees and base and other management fees | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization of contract acquisition costs | $ 10 | $ 8 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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 intellectual property ("IP"), including brand names, trademarks and service marks. As of March 31, 2023, we managed, franchised, owned or leased 7,215 hotels and resorts, including timeshare properties, totaling 1,133,277 rooms in 122 countries and territories. Basis of Presentation The accompanying condensed consolidated financial statements for the three months ended March 31, 2023 and 2022 have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") and are unaudited. We have condensed or omitted certain disclosures normally included in annual financial statements presented in accordance with GAAP but that are not required for interim reporting purposes. Although we believe the disclosures made are adequate to prevent the information presented from being misleading, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. |
Revenues from Contracts with Cu
Revenues from Contracts with Customers | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenues from Contracts with Customers | Contract Liabilities The following table summarizes the activity of our contract liabilities, which are classified as components of current and long-term deferred revenues, during the three months ended March 31, 2023: (in millions) Balance as of December 31, 2022 $ 1,331 Cash received in advance and not recognized as revenue 148 Revenue recognized (1) (40) Other (2) (88) Balance as of March 31, 2023 $ 1,351 ____________ (1) Primarily related to Hilton Honors, our guest loyalty program, including co-branded credit card arrangements. (2) Represents the changes in estimated transaction prices for our performance obligations related to the issuance of Hilton Honors points, which had no effect on revenues. Performance Obligations As of March 31, 2023, we had deferred revenues for unsatisfied performance obligations consisting of: (i) $644 million related to Hilton Honors that will be recognized as revenue over approximately the next two years; (ii) $684 million related to advance consideration received from hotel owners for application, initiation and other fees and certain indirect reimbursements; and (iii) $23 million related to other obligations. These performance obligations are recognized as revenue as discussed in Note 2: "Basis of Presentation and Summary of Significant Accounting Policies" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. |
Consolidated Variable Interest
Consolidated Variable Interest Entities | 3 Months Ended |
Mar. 31, 2023 | |
Consolidated Variable Interest Entities Disclosure [Abstract] | |
Consolidated Variable Interest Entities | As of March 31, 2023 and December 31, 2022, we consolidated two variable interest entities ("VIEs") that each lease one hotel property, both of which are located in Japan. We consolidate these VIEs since we are the primary beneficiary, having the power to direct the activities that most significantly affect their economic performance. Additionally, we have the obligation to absorb losses and the right to receive benefits that could be significant to each of the VIEs individually. The assets of our consolidated VIEs are only available to settle the obligations of the respective entities, and the liabilities of the consolidated VIEs are non-recourse to us. Our condensed consolidated balance sheets include the assets and liabilities of these entities, including the effect of foreign currency translation, which primarily comprised the following: March 31, December 31, 2023 2022 (in millions) Cash and cash equivalents $ 32 $ 29 Property and equipment, net 43 45 Deferred income tax assets 48 52 Other non-current assets 54 55 Accounts payable, accrued expenses and other 22 21 Long-term debt (1)(2) 142 152 ____________ (1) Includes finance lease liabilities of $106 million and $115 million as of March 31, 2023 and December 31, 2022, respectively. |
Loss on Investments in Unconsol
Loss on Investments in Unconsolidated Affiliate | 3 Months Ended |
Mar. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Loss on Investments in Unconsolidated Affiliate | We strategically provide equity and debt financing to certain unconsolidated affiliates with an objective of supporting the growth of our network. The assets relating to these investments are classified as other current assets or other non-current assets in our condensed consolidated balance sheets based on the expected maturity of the respective investment.In the current period, as a result of the continued rise in interest rates, one of our third-party unconsolidated affiliates (the "Fund"), which has underlying investments in hotels that we currently or in the future will manage or franchise, failed to comply with certain requirements of its debt agreements. As a result, as of March 31, 2023, we determined that: (i) our investment in the Fund was fully impaired and (ii) subordinated financing receivables due to us from the Fund within twelve months or less were uncollectible. As such, we recognized an other-than-temporary impairment loss on our investment of $44 million and credit losses of $48 million to fully reserve the financing receivables, such that their net carrying values were zero as of March 31, 2023. These losses were recognized in loss on investments in unconsolidated affiliate in our condensed consolidated statement of operations for the three months ended March 31, 2023. See Note 6: "Fair Value Measurements" for additional information. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Long-term debt balances, including obligations for finance leases, and associated interest rates and maturities as of March 31, 2023, were as follows: March 31, December 31, 2023 2022 (in millions) Senior secured term loan facility with a rate of 6.64%, due 2026 $ 2,619 $ 2,619 Senior notes with a rate of 5.375%, due 2025 (1) 500 500 Senior notes with a rate of 4.875%, due 2027 (1) 600 600 Senior notes with a rate of 5.750%, due 2028 (1) 500 500 Senior notes with a rate of 3.750%, due 2029 (1) 800 800 Senior notes with a rate of 4.875%, due 2030 (1) 1,000 1,000 Senior notes with a rate of 4.000%, due 2031 (1) 1,100 1,100 Senior notes with a rate of 3.625%, due 2032 (1) 1,500 1,500 Finance lease liabilities with a weighted average rate of 5.96%, due 2023 to 2030 (2) 156 164 Other debt of consolidated VIEs with a weighted average rate of 1.12%, due 2024 to 2029 (2) 36 37 8,811 8,820 Less: unamortized deferred financing costs and discount (70) (73) Less: current maturities of long-term debt (3) (35) (39) $ 8,706 $ 8,708 ____________ (1) These notes are collectively referred to as the Senior Notes and are jointly and severally guaranteed on a senior unsecured basis by the Parent and substantially all of its direct and indirect wholly owned domestic restricted subsidiaries, other than Hilton Domestic Operating Company Inc. ("HOC"), an indirect wholly owned subsidiary of the Parent and the issuer of all of the series of Senior Notes. (2) Long-term debt of our consolidated VIEs included in finance lease liabilities and other debt of consolidated VIEs as applicable; refer to Note 3: "Consolidated Variable Interest Entities" for additional information. (3) Represents current maturities of finance lease liabilities and borrowings of consolidated VIEs. Our senior secured credit facilities consist of a senior secured revolving credit facility (the "Revolving Credit Facility") and a senior secured term loan facility (the "Term Loan"). The obligations of our senior secured credit facilities are unconditionally and irrevocably guaranteed by the Parent and substantially all of its direct and indirect wholly owned domestic restricted subsidiaries, except for HOC, the named borrower on the senior secured credit facilities. In January 2023, we amended the credit agreement governing our Revolving Credit Facility to increase the borrowing capacity from $1.75 billion to $2.0 billion, $250 million of which is available in the form of letters of credit, and, based on the terms of the agreement, we expect the extended maturity date to be January 2028. In connection with this amendment, we incurred $9 million of debt issuance costs, which were recognized in other non-current assets in our condensed consolidated balance sheet. As of March 31, 2023, there were no borrowings outstanding and $60 million of letters of credit outstanding under the Revolving Credit Facility, resulting in an available borrowing capacity of $1,940 million. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | The fair values of certain financial instruments and the hierarchy level we used to estimate the fair values are shown below: March 31, 2023 Hierarchy Level Carrying Value (1) Level 1 Level 2 Level 3 (in millions) Assets: Interest rate swap $ 86 $ — $ 86 $ — Liabilities: Long-term debt (2) 8,619 5,503 — 2,619 December 31, 2022 Hierarchy Level Carrying Value (1) Level 1 Level 2 Level 3 (in millions) Assets: Interest rate swap $ 108 $ — $ 108 $ — Liabilities: Long-term debt (2) 8,619 5,292 — 2,616 ____________ (1) The fair values of cash equivalents and restricted cash equivalents approximate their carrying values due to their short-term maturities. The fair values of all other financial instruments not included in these tables are estimated to be equal to their carrying values. (2) The carrying values and fair values exclude the deduction for unamortized deferred financing costs and any applicable discounts, as well as all finance lease liabilities and other debt of consolidated VIEs; refer to Note 5: "Debt" for additional information. We measure our interest rate swap at fair value, which is determined using a discounted cash flow analysis that reflects the contractual terms of the interest rate swap, including the period to maturity, and uses observable market-based inputs of similar instruments, including interest rate curves, as applicable. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | At the end of each quarter, we estimate the effective income tax rate expected to be applied for the full year. The effective income tax rate is determined by the level and composition of income (loss) before income taxes, which is subject to federal, state, local and foreign income taxes. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | We recognized share-based compensation expense of $33 million and $37 million during the three months ended March 31, 2023 and 2022, respectively, which included amounts reimbursed by hotel owners. Our share-based compensation primarily consists of awards that we grant to eligible employees under the Hilton 2017 Omnibus Incentive Plan (the "2017 Plan") and includes time-vesting restricted stock units ("RSUs"), nonqualified stock options ("options") and performance-vesting RSUs ("performance shares"). As of March 31, 2023, unrecognized compensation costs for unvested awards under the 2017 Plan were approximately $233 million, which are expected to be recognized over a weighted-average period of 1.9 years on a straight-line basis. RSUs During the three months ended March 31, 2023, we granted 588,000 RSUs with a grant date fair value per share of $146.19, which vest in equal annual installments over two Options During the three months ended March 31, 2023, we granted 333,000 options with an exercise price per share of $146.19, which vest in equal annual installments over three years from the date of grant and terminate 10 years from the date of grant or earlier if the individual’s service terminates under certain circumstances. The grant date fair value per share of the options granted during the three months ended March 31, 2023 was $52.32, which was determined using the Black-Scholes-Merton option-pricing model with the following assumptions: Expected volatility (1) 30.16 % Dividend yield (2) 0.43 % Risk-free rate (3) 4.01 % Expected term (in years) (4) 6.0 ____________ (1) Estimated using a blended approach of historical and implied volatility. Historical volatility is based on the historical movement of Hilton's stock price for a period that corresponds to the expected term of the options. (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 terms at the date of grant. (4) Estimated using the midpoint of the vesting period and the contractual term of the options. Performance Shares During the three months ended March 31, 2023, we granted 238,000 performance shares with a grant date fair value per share of $146.19. We recognize compensation expense based on the total number of performance shares that are expected to vest three years from the date of grant, as determined by the projected achievement of each of the performance measures, which are estimated each reporting period and range from zero percent to 200 percent, with 100 percent being the target. As of March 31, 2023, we determined that all of the performance measures for the outstanding performance shares were probable of achievement, with the average of the applicable achievement factors estimated to be between the target and maximum achievement percentages for the performance shares granted in 2021 and 2022 and at the target achievement percentage for the performance shares granted in 2023. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | The following table presents the calculation of basic and diluted earnings per share ("EPS"): Three Months Ended March 31, 2023 2022 (in millions, except per share amounts) Basic EPS: Numerator: Net income attributable to Hilton stockholders $ 206 $ 212 Denominator: Weighted average shares outstanding 266 279 Basic EPS $ 0.77 $ 0.76 Diluted EPS: Numerator: Net income attributable to Hilton stockholders $ 206 $ 212 Denominator: Weighted average shares outstanding (1) 269 282 Diluted EPS $ 0.77 $ 0.75 ____________ (1) Certain shares related to share-based compensation were excluded from the calculation of diluted EPS because their effect would have been anti-dilutive under the treasury stock method, including less than 1 million shares for each of the three months ended March 31, 2023 and 2022. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) and Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity (Deficit) and Accumulated Other Comprehensive Loss | The following tables present the changes in the components of stockholders' equity (deficit): Three Months Ended March 31, 2023 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, 2022 267.9 $ 3 $ (6,040) $ 10,831 $ (5,190) $ (706) $ 4 $ (1,098) Net income — — — — 206 — 3 209 Other comprehensive income — — — — — (18) — (18) Dividends (1) — — — — (41) — — (41) Repurchases of common stock (2) (3.2) — (449) — — — — (449) Share-based compensation 0.7 — — (16) — — — (16) Balance as of March 31, 2023 265.4 $ 3 $ (6,489) $ 10,815 $ (5,025) $ (724) $ 7 $ (1,413) Three Months Ended March 31, 2022 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, 2021 279.1 $ 3 $ (4,443) $ 10,720 $ (6,322) $ (779) $ 2 $ (819) Net income (loss) — — — — 212 — (1) 211 Other comprehensive income — — — — — 59 — 59 Repurchases of common stock (2) (0.9) — (130) — — — — (130) Share-based compensation 0.8 — — (18) — — — (18) Balance as of March 31, 2022 279.0 $ 3 $ (4,573) $ 10,702 $ (6,110) $ (720) $ 1 $ (697) ____________ (1) During the three months ended June 30, 2022, we resumed payment of regular quarterly cash dividends. (2) During the three months ended March 31, 2022, we resumed share repurchases under our previously authorized stock repurchase program. Beginning January 1, 2023, amount includes excise tax as imposed by the Inflation Reduction Act of 2022. 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, 2022 $ (548) $ (259) $ 101 $ (706) Other comprehensive loss before reclassifications (6) — (11) (17) Amounts reclassified from accumulated other comprehensive loss — 2 (3) (1) Net current period other comprehensive income (loss) (6) 2 (14) (18) Balance as of March 31, 2023 $ (554) $ (257) $ 87 $ (724) Currency Translation Adjustment (1) Pension Liability Adjustment (2) Cash Flow Hedge Adjustment (3) Total (in millions) Balance as of December 31, 2021 $ (540) $ (210) $ (29) $ (779) Other comprehensive income (loss) before reclassifications (3) (1) 55 51 Amounts reclassified from accumulated other comprehensive loss 1 2 5 8 Net current period other comprehensive income (loss) (2) 1 60 59 Balance as of March 31, 2022 $ (542) $ (209) $ 31 $ (720) ____________ (1) Includes net investment hedge gains and intra-entity foreign currency transactions that are of a long-term investment nature. Amount reclassified during the three months ended March 31, 2022 relates to the liquidation of an investment in a foreign entity and was recognized in loss on foreign currency transactions in our condensed consolidated statement of operations. (2) Amounts reclassified relate to the amortization of prior service cost and amortization of net loss and were recognized in other non-operating income, net in our condensed consolidated statements of operations. (3) Amounts reclassified were the result of hedging instruments, including: (a) interest rate swaps, inclusive of interest rate swaps that were dedesignated, with related amounts recognized in interest expense in our condensed consolidated statements of operations and (b) forward contracts that hedge our foreign currency denominated fees, with related amounts recognized in various revenue line items, as applicable, in our condensed consolidated statements of operations. |
Business Segments
Business Segments | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Business Segments | We are a hospitality company with operations organized in two distinct operating segments: (i) management and franchise and (ii) ownership, each of which is reported as a segment based on (a) delivering a similar set of products and services and (b) being managed separately given its distinct economic characteristics. The management and franchise segment includes all of the hotels we manage for third-party owners, as well as all franchised hotels that license our IP and where we provide other contracted services to third-party owners, but the day-to-day services of the hotels are operated or managed by someone other than us. Revenues from this segment include: (i) management and franchise fees charged to third-party hotel owners; (ii) licensing fees from our strategic partners, including co-branded credit card providers, and Hilton Grand Vacations Inc. ("HGV") for the right to use our IP; and (iii) fees for managing hotels in our ownership segment. As of March 31, 2023, this segment included 774 managed hotels and 6,308 franchised hotels consisting of 1,101,539 total rooms. As of March 31, 2023, our ownership segment included 51 hotels totaling 17,485 rooms. The segment comprised 44 hotels that we leased, two hotels that were each leased by a consolidated VIE and five hotels owned or leased by unconsolidated affiliates. The performance of our operating segments is evaluated primarily on operating income (loss), without allocating amortization of contract acquisition costs, other revenues and other expenses, other revenues and other expenses from managed and franchised properties, depreciation and amortization expenses or general and administrative expenses, and does not include equity in earnings (losses) from unconsolidated affiliates. Our chief operating decision maker does not use assets by operating segment when assessing performance or making operating segment resource allocations. The following table presents revenues for our reportable segments, reconciled to consolidated amounts: Three Months Ended March 31, 2023 2022 (in millions) Franchise and licensing fees $ 513 $ 417 Base and other management fees (1) 89 61 Incentive management fees 65 34 Management and franchise 667 512 Ownership 248 150 Segment revenues 915 662 Amortization of contract acquisition costs (10) (8) Other revenues 35 18 Direct reimbursements from managed and franchised properties (2) 712 511 Indirect reimbursements from managed and franchised properties (2) 645 540 Intersegment fees elimination (1) (4) (2) Total revenues $ 2,293 $ 1,721 ____________ (1) Includes management, royalty and IP fees charged to consolidated hotels in our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations. (2) Included in other revenues from managed and franchised properties in our condensed consolidated statements of operations. The following table presents operating income (loss) for each of our reportable segments, reconciled to consolidated income before income taxes: Three Months Ended March 31, 2023 2022 (in millions) Management and franchise (1) $ 667 $ 512 Ownership (1) (7) (37) Segment operating income 660 475 Amortization of contract acquisition costs (10) (8) Other revenues, less other expenses 14 7 Net other revenues (expenses) from managed and franchised properties (38) 30 Depreciation and amortization expenses (37) (44) General and administrative expenses (91) (91) Operating income 498 369 Interest expense (116) (90) Loss on foreign currency transactions — (4) Loss on investments in unconsolidated affiliate (92) — Other non-operating income, net 12 16 Income before income taxes $ 302 $ 291 ____________ (1) Includes management, royalty and IP fees charged to consolidated hotels in our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | In limited cases, we provide performance guarantees to certain owners of hotels that we operate under management contracts that obligate us to fund performance shortfalls if specified operating performance levels are not achieved. As of March 31, 2023, we had performance guarantees with expirations ranging from 2025 to 2043 and possible cash outlays totaling approximately $7 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 for that particular hotel. Additionally, as of March 31, 2023, we had extended debt guarantees and letters of credit with expirations ranging from 2023 to 2031 and possible cash outlays totaling $124 million to owners of certain hotels that we currently or in the future will manage or franchise. These guarantees create variable interests in the ownership entities of the hotels, of which we are not the primary beneficiary. We receive fees from managed and franchised properties that we are contractually required to use to operate our marketing, sales and brands programs on behalf of hotel owners. If we collect amounts in excess of amounts expended, we have a commitment to spend these amounts on the related programs. As of March 31, 2023 and December 31, 2022, the amounts expended on behalf of these programs exceeded the amounts collected. We are involved in various claims and lawsuits arising in the ordinary course of business, some of which include claims for substantial sums. While the ultimate results of claims and litigation cannot be predicted with certainty, we expect that the ultimate resolution of all pending or threatened claims and litigation as of March 31, 2023 will not have a material adverse effect on our consolidated financial position, results of operations or cash flows. |
Revenues from Contracts with _2
Revenues from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Contract Liabilities | The following table summarizes the activity of our contract liabilities, which are classified as components of current and long-term deferred revenues, during the three months ended March 31, 2023: (in millions) Balance as of December 31, 2022 $ 1,331 Cash received in advance and not recognized as revenue 148 Revenue recognized (1) (40) Other (2) (88) Balance as of March 31, 2023 $ 1,351 ____________ (1) Primarily related to Hilton Honors, our guest loyalty program, including co-branded credit card arrangements. (2) Represents the changes in estimated transaction prices for our performance obligations related to the issuance of Hilton Honors points, which had no effect on revenues. |
Consolidated Variable Interes_2
Consolidated Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Consolidated Variable Interest Entities Disclosure [Abstract] | |
Schedule of Variable Interest Entities | Our condensed consolidated balance sheets include the assets and liabilities of these entities, including the effect of foreign currency translation, which primarily comprised the following: March 31, December 31, 2023 2022 (in millions) Cash and cash equivalents $ 32 $ 29 Property and equipment, net 43 45 Deferred income tax assets 48 52 Other non-current assets 54 55 Accounts payable, accrued expenses and other 22 21 Long-term debt (1)(2) 142 152 ____________ (1) Includes finance lease liabilities of $106 million and $115 million as of March 31, 2023 and December 31, 2022, respectively. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term debt balances, including obligations for finance leases, and associated interest rates and maturities as of March 31, 2023, were as follows: March 31, December 31, 2023 2022 (in millions) Senior secured term loan facility with a rate of 6.64%, due 2026 $ 2,619 $ 2,619 Senior notes with a rate of 5.375%, due 2025 (1) 500 500 Senior notes with a rate of 4.875%, due 2027 (1) 600 600 Senior notes with a rate of 5.750%, due 2028 (1) 500 500 Senior notes with a rate of 3.750%, due 2029 (1) 800 800 Senior notes with a rate of 4.875%, due 2030 (1) 1,000 1,000 Senior notes with a rate of 4.000%, due 2031 (1) 1,100 1,100 Senior notes with a rate of 3.625%, due 2032 (1) 1,500 1,500 Finance lease liabilities with a weighted average rate of 5.96%, due 2023 to 2030 (2) 156 164 Other debt of consolidated VIEs with a weighted average rate of 1.12%, due 2024 to 2029 (2) 36 37 8,811 8,820 Less: unamortized deferred financing costs and discount (70) (73) Less: current maturities of long-term debt (3) (35) (39) $ 8,706 $ 8,708 ____________ (1) These notes are collectively referred to as the Senior Notes and are jointly and severally guaranteed on a senior unsecured basis by the Parent and substantially all of its direct and indirect wholly owned domestic restricted subsidiaries, other than Hilton Domestic Operating Company Inc. ("HOC"), an indirect wholly owned subsidiary of the Parent and the issuer of all of the series of Senior Notes. (2) Long-term debt of our consolidated VIEs included in finance lease liabilities and other debt of consolidated VIEs as applicable; refer to Note 3: "Consolidated Variable Interest Entities" for additional information. (3) Represents current maturities of finance lease liabilities and borrowings of consolidated VIEs. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements - Recurring and Disclosure | The fair values of certain financial instruments and the hierarchy level we used to estimate the fair values are shown below: March 31, 2023 Hierarchy Level Carrying Value (1) Level 1 Level 2 Level 3 (in millions) Assets: Interest rate swap $ 86 $ — $ 86 $ — Liabilities: Long-term debt (2) 8,619 5,503 — 2,619 December 31, 2022 Hierarchy Level Carrying Value (1) Level 1 Level 2 Level 3 (in millions) Assets: Interest rate swap $ 108 $ — $ 108 $ — Liabilities: Long-term debt (2) 8,619 5,292 — 2,616 ____________ (1) The fair values of cash equivalents and restricted cash equivalents approximate their carrying values due to their short-term maturities. The fair values of all other financial instruments not included in these tables are estimated to be equal to their carrying values. (2) The carrying values and fair values exclude the deduction for unamortized deferred financing costs and any applicable discounts, as well as all finance lease liabilities and other debt of consolidated VIEs; refer to Note 5: "Debt" for additional information. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Options Valuation Assumptions | The grant date fair value per share of the options granted during the three months ended March 31, 2023 was $52.32, which was determined using the Black-Scholes-Merton option-pricing model with the following assumptions: Expected volatility (1) 30.16 % Dividend yield (2) 0.43 % Risk-free rate (3) 4.01 % Expected term (in years) (4) 6.0 ____________ (1) Estimated using a blended approach of historical and implied volatility. Historical volatility is based on the historical movement of Hilton's stock price for a period that corresponds to the expected term of the options. (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 terms at the date of grant. (4) Estimated using the midpoint of the vesting period and the contractual term of the options. |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings (Loss) Per Share | The following table presents the calculation of basic and diluted earnings per share ("EPS"): Three Months Ended March 31, 2023 2022 (in millions, except per share amounts) Basic EPS: Numerator: Net income attributable to Hilton stockholders $ 206 $ 212 Denominator: Weighted average shares outstanding 266 279 Basic EPS $ 0.77 $ 0.76 Diluted EPS: Numerator: Net income attributable to Hilton stockholders $ 206 $ 212 Denominator: Weighted average shares outstanding (1) 269 282 Diluted EPS $ 0.77 $ 0.75 ____________ (1) Certain shares related to share-based compensation were excluded from the calculation of diluted EPS because their effect would have been anti-dilutive under the treasury stock method, including less than 1 million shares for each of the three months ended March 31, 2023 and 2022. |
Stockholders' Equity (Deficit_2
Stockholders' Equity (Deficit) and Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023 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, 2022 267.9 $ 3 $ (6,040) $ 10,831 $ (5,190) $ (706) $ 4 $ (1,098) Net income — — — — 206 — 3 209 Other comprehensive income — — — — — (18) — (18) Dividends (1) — — — — (41) — — (41) Repurchases of common stock (2) (3.2) — (449) — — — — (449) Share-based compensation 0.7 — — (16) — — — (16) Balance as of March 31, 2023 265.4 $ 3 $ (6,489) $ 10,815 $ (5,025) $ (724) $ 7 $ (1,413) Three Months Ended March 31, 2022 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, 2021 279.1 $ 3 $ (4,443) $ 10,720 $ (6,322) $ (779) $ 2 $ (819) Net income (loss) — — — — 212 — (1) 211 Other comprehensive income — — — — — 59 — 59 Repurchases of common stock (2) (0.9) — (130) — — — — (130) Share-based compensation 0.8 — — (18) — — — (18) Balance as of March 31, 2022 279.0 $ 3 $ (4,573) $ 10,702 $ (6,110) $ (720) $ 1 $ (697) ____________ (1) During the three months ended June 30, 2022, we resumed payment of regular quarterly cash dividends. (2) During the three months ended March 31, 2022, we resumed share repurchases under our previously authorized stock repurchase program. Beginning January 1, 2023, amount includes excise tax as imposed by the Inflation Reduction Act of 2022. |
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, 2022 $ (548) $ (259) $ 101 $ (706) Other comprehensive loss before reclassifications (6) — (11) (17) Amounts reclassified from accumulated other comprehensive loss — 2 (3) (1) Net current period other comprehensive income (loss) (6) 2 (14) (18) Balance as of March 31, 2023 $ (554) $ (257) $ 87 $ (724) Currency Translation Adjustment (1) Pension Liability Adjustment (2) Cash Flow Hedge Adjustment (3) Total (in millions) Balance as of December 31, 2021 $ (540) $ (210) $ (29) $ (779) Other comprehensive income (loss) before reclassifications (3) (1) 55 51 Amounts reclassified from accumulated other comprehensive loss 1 2 5 8 Net current period other comprehensive income (loss) (2) 1 60 59 Balance as of March 31, 2022 $ (542) $ (209) $ 31 $ (720) ____________ (1) Includes net investment hedge gains and intra-entity foreign currency transactions that are of a long-term investment nature. Amount reclassified during the three months ended March 31, 2022 relates to the liquidation of an investment in a foreign entity and was recognized in loss on foreign currency transactions in our condensed consolidated statement of operations. (2) Amounts reclassified relate to the amortization of prior service cost and amortization of net loss and were recognized in other non-operating income, net in our condensed consolidated statements of operations. (3) Amounts reclassified were the result of hedging instruments, including: (a) interest rate swaps, inclusive of interest rate swaps that were dedesignated, with related amounts recognized in interest expense in our condensed consolidated statements of operations and (b) forward contracts that hedge our foreign currency denominated fees, with related amounts recognized in various revenue line items, as applicable, in our condensed consolidated statements of operations. |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023 2022 (in millions) Franchise and licensing fees $ 513 $ 417 Base and other management fees (1) 89 61 Incentive management fees 65 34 Management and franchise 667 512 Ownership 248 150 Segment revenues 915 662 Amortization of contract acquisition costs (10) (8) Other revenues 35 18 Direct reimbursements from managed and franchised properties (2) 712 511 Indirect reimbursements from managed and franchised properties (2) 645 540 Intersegment fees elimination (1) (4) (2) Total revenues $ 2,293 $ 1,721 ____________ (1) Includes management, royalty and IP fees charged to consolidated hotels in our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations. (2) Included in other revenues from managed and franchised properties in our condensed consolidated statements of operations. |
Reconciliation of Segment Operating Income to Income (Loss) Before Income Taxes | The following table presents operating income (loss) for each of our reportable segments, reconciled to consolidated income before income taxes: Three Months Ended March 31, 2023 2022 (in millions) Management and franchise (1) $ 667 $ 512 Ownership (1) (7) (37) Segment operating income 660 475 Amortization of contract acquisition costs (10) (8) Other revenues, less other expenses 14 7 Net other revenues (expenses) from managed and franchised properties (38) 30 Depreciation and amortization expenses (37) (44) General and administrative expenses (91) (91) Operating income 498 369 Interest expense (116) (90) Loss on foreign currency transactions — (4) Loss on investments in unconsolidated affiliate (92) — Other non-operating income, net 12 16 Income before income taxes $ 302 $ 291 ____________ (1) Includes management, royalty and IP fees charged to consolidated hotels in our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) | Mar. 31, 2023 Hotel Room Country |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of hotels and resorts | Hotel | 7,215 |
Number of hotel and resort rooms | Room | 1,133,277 |
Number of countries and territories | Country | 122 |
Revenues from Contracts with _3
Revenues from Contracts with Customers - Contract Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | ||
Revenue from Contract with Customer [Abstract] | |||
Contract liabilities balance | $ 1,351 | $ 1,331 | |
Cash received in advance not recognized as revenue | 148 | ||
Revenue recognized | [1] | 40 | |
Other | [2] | $ 88 | |
[1]Primarily related to Hilton Honors, our guest loyalty program, including co-branded credit card arrangements.[2]Represents the changes in estimated transaction prices for our performance obligations related to the issuance of Hilton Honors points, which had no effect on revenues |
Revenues from Contracts with _4
Revenues from Contracts with Customers - Additional Information (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 USD ($) | ||
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized | $ 40 | [1] |
Guest loyalty program revenues | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 644 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Explanation | two years | |
Application, initiation and other fees | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 684 | |
Co-branded credit card arrangement performance obligations | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 23 | |
[1]Primarily related to Hilton Honors, our guest loyalty program, including co-branded credit card arrangements. |
Consolidated Variable Interes_3
Consolidated Variable Interest Entities - Schedule of Consolidated Variable Interest Entities (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | |
Variable Interest Entity [Line Items] | |||
Cash and cash equivalents | $ 901 | $ 1,209 | |
Property and equipment, net | 287 | 280 | |
Deferred income tax assets | 204 | 204 | |
Other non-current assets | 495 | 576 | |
Accounts payable, accrued expenses and other | 1,704 | 1,790 | |
Current maturities of long-term debt | [1] | 35 | 39 |
Variable Interest Entity, Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Cash and cash equivalents | 32 | 29 | |
Property and equipment, net | 43 | 45 | |
Deferred income tax assets | 48 | 52 | |
Other non-current assets | 54 | 55 | |
Accounts payable, accrued expenses and other | 22 | 21 | |
Long-term debt | [2],[3] | 142 | 152 |
Finance lease liabilities | 106 | 115 | |
Current maturities of long-term debt | $ 18 | $ 22 | |
[1]Represents current maturities of finance lease liabilities and borrowings of consolidated VIEs.[2]Includes current maturities of $18 million and $22 million as of March 31, 2023 and December 31, 2022, respectively[3]Includes finance lease liabilities of $106 million and $115 million as of March 31, 2023 and December 31, 2022, respectively. |
Consolidated Variable Interes_4
Consolidated Variable Interest Entities - Additional Information (Details) - Hotel | Mar. 31, 2023 | Dec. 31, 2022 |
Consolidated Variable Interest Entities Disclosure [Abstract] | ||
Number of consolidated variable interest entities | 2 | 2 |
Loss on Investments in Uncons_2
Loss on Investments in Unconsolidated Affiliate (Details) - Unconsolidated Affiliate $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Schedule of Equity Method Investments [Line Items] | |
Other-than-temporary impairment loss | $ 44 |
Credit losses | $ 48 |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 8,811 | $ 8,820 | |
Unamortized deferred financing costs and discount | (70) | (73) | |
Current maturities of long-term debt | [1] | (35) | (39) |
Long-term debt | 8,706 | 8,708 | |
Variable Interest Entity, Primary Beneficiary | |||
Debt Instrument [Line Items] | |||
Current maturities of long-term debt | (18) | (22) | |
Senior secured term loan facility | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 2,619 | 2,619 | |
Debt instrument, interest rate, stated percentage | 6.64% | ||
Senior notes due 2025 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [2] | $ 500 | 500 |
Debt instrument, interest rate, stated percentage | 5.375% | ||
Senior notes due 2027 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [2] | $ 600 | 600 |
Debt instrument, interest rate, stated percentage | 4.875% | ||
Senior Notes due 2028 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [2] | $ 500 | 500 |
Debt instrument, interest rate, stated percentage | 5.75% | ||
Senior notes due 2029 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [2] | $ 800 | 800 |
Debt instrument, interest rate, stated percentage | 3.75% | ||
Senior notes due 2030 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [2] | $ 1,000 | 1,000 |
Debt instrument, interest rate, stated percentage | 4.875% | ||
Senior Notes due 2031 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [2] | $ 1,100 | 1,100 |
Debt instrument, interest rate, stated percentage | 4% | ||
Senior Notes due 2032 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [2] | $ 1,500 | 1,500 |
Debt instrument, interest rate, stated percentage | 3.625% | ||
Other debt of consolidated VIEs | |||
Debt Instrument [Line Items] | |||
Debt, weighted average interest rate | 1.12% | ||
Other debt of consolidated VIEs | Variable Interest Entity, Primary Beneficiary | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [3] | $ 36 | 37 |
Finance lease liabilities [member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | [3] | $ 156 | $ 164 |
Debt, weighted average interest rate | 5.96% | ||
[1]Represents current maturities of finance lease liabilities and borrowings of consolidated VIEs.[2]These notes are collectively referred to as the Senior Notes and are jointly and severally guaranteed on a senior unsecured basis by the Parent and substantially all of its direct and indirect wholly owned domestic restricted subsidiaries, other than Hilton Domestic Operating Company Inc. ("HOC"), an indirect wholly owned subsidiary of the Parent and the issuer of all of the series of Senior Notes.[3]Long-term debt of our consolidated VIEs included in finance lease liabilities and other debt of consolidated VIEs as applicable; refer to Note 3: "Consolidated Variable Interest Entities" for additional information |
Debt - Additional Information (
Debt - Additional Information (Details) - Senior secured revolving credit facility - USD ($) $ in Millions | Mar. 31, 2023 | Jan. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | |||
Revolving credit facility, maximum borrowing capacity | $ 2,000 | $ 1,750 | |
Letters of credit outstanding | $ 60 | 250 | |
Debt issuance costs | $ 9 | ||
Revolving credit facility, remaining borrowing capacity | $ 1,940 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring & Disclosure (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | ||
Unconsolidated Affiliate | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Other-than-temporary impairment loss | $ 44 | ||
Carrying Value(1) | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Interest rate swaps, assets | [1] | 86 | $ 108 |
Carrying Value(1) | Long-term debt excluding finance lease liabilities and other debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | [1],[2] | 8,619 | 8,619 |
Level 1 | Long-term debt excluding finance lease liabilities and other debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | [2] | 5,503 | 5,292 |
Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Interest rate swaps, assets | 86 | 108 | |
Level 3 | Long-term debt excluding finance lease liabilities and other debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | [2] | $ 2,619 | $ 2,616 |
[1]The fair values of cash equivalents and restricted cash equivalents approximate their carrying values due to their short-term maturities. The fair values of all other financial instruments not included in these tables are estimated to be equal to their carrying values.[2]The carrying values and fair values exclude the deduction for unamortized deferred financing costs and any applicable discounts, as well as all finance lease liabilities and other debt of consolidated VIEs; refer to Note 5: "Debt" for additional information. |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Stock Options Valuation Assumptions (Details) - Employee stock option | 3 Months Ended | |
Mar. 31, 2023 $ / shares Rate | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options, grants in period, grant date fair value | $ / shares | $ 52.32 | |
Expected volatility | 30.16% | [1] |
Dividend yield | 0.43% | [2] |
Risk-free rate | 4.01% | [3] |
Expected term (in years) | 6 years | [4] |
[1]Estimated using a blended approach of historical and implied volatility. Historical volatility is based on the historical movement of Hilton's stock price for a period that corresponds to the expected term of the options.[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 terms at the date of grant.[4]Estimated using the midpoint of the vesting period 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 | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense (benefit) | $ 33 | $ 37 |
Unrecognized compensation costs related to unvested awards | $ 233 | |
Unrecognized compensation costs related to unvested awards, weighted-average period | 1 year 10 months 24 days | |
Restricted stock units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (shares) | 588,000 | |
Weighted average grant date fair value, granted (USD per share) | $ 146.19 | |
Employee stock option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Options granted in period (shares) | 333,000 | |
Options granted in period, weighted average exercise price (USD per share) | $ 146.19 | |
Options, expiration period | 10 years | |
Performance shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (shares) | 238,000 | |
Weighted average grant date fair value, granted (USD per share) | $ 146.19 | |
Vesting period | 3 years | |
Minimum achievement percentage | Performance shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting rights, percentage | 0% | |
Maximum achievement percentage | Performance shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting rights, percentage | 200% | |
Target achievement percentage | Performance shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting rights, percentage | 100% | |
Minimum | Restricted stock units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 2 years | |
Maximum | Restricted stock units (RSUs) | ||
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 | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Basic EPS: | |||
Net income attributable to Hilton stockholders | $ 206 | $ 212 | |
Weighted average shares outstanding, basic (shares) | 266 | 279 | |
Earnings (loss) per share, basic (USD per share) | $ 0.77 | $ 0.76 | |
Diluted EPS: | |||
Net income attributable to Hilton stockholders | $ 206 | $ 212 | |
Weighted average shares outstanding, diluted (shares) | [1] | 269 | 282 |
Earnings (loss) per share, diluted (USD per share) | $ 0.77 | $ 0.75 | |
Antidilutive shares (less than) | [1] | 1 | 1 |
Antidilutive shares | [1] | 1 | 1 |
[1]Certain shares related to share-based compensation were excluded from the calculation of diluted EPS because their effect would have been anti-dilutive under the treasury stock method, including less than 1 million shares for each of the three months ended March 31, 2023 and 2022. |
Stockholders' Equity (Deficit_3
Stockholders' Equity (Deficit) and Accumulated Other Comprehensive Loss - Schedule of Stockholders' Equity (Deficit) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Class of Stock [Line Items] | |||
Beginning balance, shares | 267,860,301 | ||
Beginning balance, equity attributable to Hilton stockholders | $ (1,102) | ||
Beginning balance, equity attributable to noncontrolling interest | (4) | ||
Beginning balance, equity | (1,098) | $ (819) | |
Net income (loss) attributable to Hilton stockholders | 206 | 212 | |
Net loss (income) attributable to noncontrolling interests | 3 | (1) | |
Net income (loss) | 209 | 211 | |
Other comprehensive income (loss) | (18) | 59 | |
Repurchases of common stock | [1] | (449) | (130) |
Increase (decrease) in stockholders’ equity from share-based compensation | $ (16) | (18) | |
Ending balance, shares | 265,439,134 | ||
Ending balance, equity attributable to Hilton stockholders | $ (1,420) | ||
Ending balance, equity attributable to noncontrolling interest | (7) | ||
Ending balance, equity | (1,413) | $ (697) | |
Dividends | [2] | $ (41) | |
Common Stock | |||
Class of Stock [Line Items] | |||
Beginning balance, shares | 267,900,000 | 279,100,000 | |
Beginning balance, equity attributable to Hilton stockholders | $ 3 | $ 3 | |
Repurchases of common stock (shares) | [1] | (3,200,000) | (900,000) |
Share-based compensation (shares) | 700,000 | 800,000 | |
Ending balance, shares | 265,400,000 | 279,000,000 | |
Ending balance, equity attributable to Hilton stockholders | $ 3 | $ 3 | |
Treasury Stock, Common | |||
Class of Stock [Line Items] | |||
Beginning balance, equity attributable to Hilton stockholders | (6,040) | (4,443) | |
Repurchases of common stock | [1] | (449) | (130) |
Increase (decrease) in stockholders’ equity from share-based compensation | 0 | 0 | |
Ending balance, equity attributable to Hilton stockholders | (6,489) | (4,573) | |
Additional Paid-in Capital | |||
Class of Stock [Line Items] | |||
Beginning balance, equity attributable to Hilton stockholders | 10,831 | 10,720 | |
Increase (decrease) in stockholders’ equity from share-based compensation | (16) | (18) | |
Ending balance, equity attributable to Hilton stockholders | 10,815 | 10,702 | |
Accumulated Deficit | |||
Class of Stock [Line Items] | |||
Beginning balance, equity attributable to Hilton stockholders | (5,190) | (6,322) | |
Net income (loss) attributable to Hilton stockholders | 206 | 212 | |
Ending balance, equity attributable to Hilton stockholders | (5,025) | (6,110) | |
Dividends | [2] | (41) | |
Accumulated Other Comprehensive Loss | |||
Class of Stock [Line Items] | |||
Beginning balance, equity attributable to Hilton stockholders | (706) | (779) | |
Ending balance, equity attributable to Hilton stockholders | (724) | (720) | |
Other comprehensive income (loss) attributable to Hilton stockholders | (18) | 59 | |
Noncontrolling Interests | |||
Class of Stock [Line Items] | |||
Beginning balance, equity attributable to noncontrolling interest | 4 | 2 | |
Net loss (income) attributable to noncontrolling interests | (3) | 1 | |
Ending balance, equity attributable to noncontrolling interest | $ 7 | $ 1 | |
[1]During the three months ended March 31, 2022, we resumed share repurchases under our previously authorized stock repurchase program. Beginning January 1, 2023, amount includes excise tax as imposed by the Inflation Reduction Act of 2022.[2]During the three months ended June 30, 2022, we resumed payment of regular quarterly cash dividends. |
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 | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | $ (706) | ||
Ending balance | (724) | ||
Currency translation adjustment | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | [1] | (548) | $ (540) |
Other comprehensive income (loss) before reclassifications | [1] | (6) | (3) |
Amounts reclassified from accumulated other comprehensive loss | [1] | 0 | 1 |
Net current period other comprehensive income (loss) | [1] | (6) | (2) |
Ending balance | [1] | (554) | (542) |
Pension liability adjustment | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | [2] | (259) | (210) |
Other comprehensive income (loss) before reclassifications | [2] | 0 | (1) |
Amounts reclassified from accumulated other comprehensive loss | [2] | 2 | 2 |
Net current period other comprehensive income (loss) | [2] | 2 | 1 |
Ending balance | [2] | (257) | (209) |
Cash flow hedge adjustment | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | [3] | 101 | (29) |
Other comprehensive income (loss) before reclassifications | [3] | (11) | 55 |
Amounts reclassified from accumulated other comprehensive loss | [3] | (3) | 5 |
Net current period other comprehensive income (loss) | [3] | (14) | 60 |
Ending balance | [3] | 87 | 31 |
Accumulated Other Comprehensive Loss | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | (706) | (779) | |
Other comprehensive income (loss) before reclassifications | (17) | 51 | |
Amounts reclassified from accumulated other comprehensive loss | (1) | 8 | |
Net current period other comprehensive income (loss) | (18) | 59 | |
Ending balance | $ (724) | $ (720) | |
[1]Includes net investment hedge gains and intra-entity foreign currency transactions that are of a long-term investment nature. Amount reclassified during the three months ended March 31, 2022 relates to the liquidation of an investment in a foreign entity and was recognized in loss on foreign currency transactions in our condensed consolidated statement of operations.[2]Amounts reclassified relate to the amortization of prior service cost and amortization of net loss and were recognized in other non-operating income, net in our condensed consolidated statements of operations.[3]Amounts reclassified were the result of hedging instruments, including: (a) interest rate swaps, inclusive of interest rate swaps that were dedesignated, with related amounts recognized in interest expense in our condensed consolidated statements of operations and (b) forward contracts that hedge our foreign currency denominated fees, with related amounts recognized in various revenue line items, as applicable, in our condensed consolidated statements of operations |
Business Segments - Segment Inf
Business Segments - Segment Information (Details) | 3 Months Ended |
Mar. 31, 2023 Hotel Room Segment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | Segment | 2 |
Ownership | |
Segment Reporting Information [Line Items] | |
Number of owned and leased hotel properties | 51 |
Number of owned and leased hotel rooms | Room | 17,485 |
Number of wholly owned and leased hotels | 44 |
Number of hotels leased by consolidated VIEs | 2 |
Number of hotels owned or leased by unconsolidated affiliates | 5 |
Management and Franchise | |
Segment Reporting Information [Line Items] | |
Number of managed hotels | 774 |
Number of franchised hotels | 6,308 |
Number of managed and franchised hotel rooms | Room | 1,101,539 |
Business Segments - Reconciliat
Business Segments - Reconciliation of Revenue from Segment Amounts to Consolidated Amounts (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | $ 2,293 | $ 1,721 | |
Amortization of contract acquisition costs | (10) | (8) | |
Ownership | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | 248 | 150 | |
Management and Franchise | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | 667 | 512 | |
Segment revenues | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | 915 | 662 | |
Intersegment eliminations | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | [1] | 4 | 2 |
Franchise and licensing fees | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | 508 | 413 | |
Franchise and licensing fees | Management and Franchise | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | 513 | 417 | |
Base and other management fees | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | 80 | 55 | |
Base and other management fees | Management and Franchise | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | [1] | 89 | 61 |
Incentive management fees | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | 65 | 34 | |
Incentive management fees | Management and Franchise | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | 65 | 34 | |
Other revenues | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | 35 | 18 | |
Direct reimbursements from managed and franchised properties | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | [2] | 712 | 511 |
Indirect reimbursements from managed and franchised properties | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | [2] | $ 645 | $ 540 |
[1]Includes management, royalty and IP fees charged to consolidated hotels in our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations.[2]Included in other revenues from managed and franchised properties in our condensed consolidated statements of operations. |
Business Segments - Reconcili_2
Business Segments - Reconciliation of Segment Operating Income to Loss Before Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Operating income (loss) | $ 498 | $ 369 | |
Amortization of contract acquisition costs | (10) | (8) | |
Other revenues, less other expenses | 14 | 7 | |
Net other revenues (expenses) from managed and franchised properties | (38) | 30 | |
Depreciation and amortization expenses | (37) | (44) | |
General and administrative expenses | (91) | (91) | |
Interest expense | (116) | (90) | |
Loss on foreign currency transactions | 0 | (4) | |
Loss on investments in unconsolidated affiliate | (92) | 0 | |
Other non-operating income (loss), net | 12 | 16 | |
Income (loss) before income taxes | 302 | 291 | |
Ownership | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Operating income (loss) | [1] | (7) | (37) |
Management and Franchise | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Operating income (loss) | [1] | 667 | 512 |
Segment operating income | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Operating income (loss) | $ 660 | $ 475 | |
[1]Includes management, royalty and IP fees charged to consolidated hotels in our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations. |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Performance guarantees | |
Commitments and Contingencies [Line Items] | |
Guarantees, possible cash outlays | $ 7 |
Guarantees, expiration | 2025 to 2043 |
Debt guarantee | |
Commitments and Contingencies [Line Items] | |
Guarantees, possible cash outlays | $ 124 |
Guarantees, expiration | 2023 to 2031 |