| Condensed Consolidating Guarantor Financial Information | Note 15: Condensed Consolidating Guarantor Financial
Information
In October 2013, Hilton Worldwide Finance LLC and Hilton Worldwide
Finance Corp. (the “HWF Issuers”), entities that are
100 percent owned by Hilton Worldwide Parent LLC
(“HWP”), which is 100 percent owned by the Parent,
issued the 2021 Senior Notes. In September 2016, Hilton Domestic
Operating Company Inc. (“HOC”), an entity incorporated
in July 2016 that is 100 percent owned by Hilton Worldwide Finance
LLC, assumed the 2024 Senior Notes that were issued in August 2016
by escrow issuers and is a guarantor of the 2021 Senior Notes, 2025
Senior Notes and 2027 Senior Notes. In March 2017, the HWF Issuers,
which are guarantors of the 2024 Seniors Notes, issued the 2025
Senior Notes and 2027 Senior Notes, and we used the net proceeds
and available cash to repay in full the 2021 Senior Notes. The 2024
Senior Notes, 2025 Senior Notes and 2027 Senior Notes are
collectively referred to as the Senior Notes and are all guaranteed
by HWP. The HWF Issuers and HOC are collectively referred to as the
Subsidiary Issuers.
The Senior Notes are guaranteed jointly and severally on a senior
unsecured basis by the Parent and certain of the Parent’s 100
percent owned domestic restricted subsidiaries that are themselves
not issuers of the applicable series of Senior Notes (together, the
“Guarantors”). The indentures that govern the Senior
Notes provide that any subsidiary of the Company that provides a
guarantee of the Senior Secured Credit Facility will guarantee the
Senior Notes. As of March 31, 2017, none of our foreign
subsidiaries or U.S. subsidiaries owned by foreign subsidiaries or
conducting foreign operations or our non-wholly owned subsidiaries
guarantee the Senior Notes (collectively, the
“Non-Guarantors”).
In September 2016, certain employees, assets and liabilities of a
guarantor subsidiary were transferred into HOC. This transfer was
considered to be a transfer of assets rather than a transfer of a
business. Accordingly, we have separately presented HOC as a
subsidiary issuer in our condensed consolidating financial
information prospectively from the date of the transfer.
In connection with the spin-offs, certain entities that were
previously guarantors of the 2021 Senior Notes and 2024 Senior
Notes were released and no longer guaranteed these senior notes.
The condensed consolidating financial information presents the
financial information based on the composition of the Guarantors
and Non-Guarantors as of March 31, 2017.
The guarantees are full and unconditional, subject to certain
customary release provisions. The indentures that govern the Senior
Notes provide that any Guarantor may be released from its guarantee
so long as: (i) the subsidiary is sold or sells all of its
assets; (ii) the subsidiary is released from its guaranty
under the Senior Secured Credit Facility; (iii) the subsidiary
is declared “unrestricted” for covenant purposes;
(iv) the subsidiary is merged with or into the applicable
Subsidiary Issuers or another Guarantor or the Guarantor liquidates
after transferring all of its assets to the applicable Subsidiary
Issuers or another Guarantor; or (v) the requirements for
legal defeasance or covenant defeasance or to discharge the
indenture have been satisfied, in each case in compliance with
applicable provisions of the indentures.
The following schedules present the condensed consolidating
financial information as of March 31, 2017 and
December 31, 2016, and for the three months ended
March 31, 2017 and 2016, for the Parent, HWF Issuers, HOC,
Guarantors and Non-Guarantors.
March 31, 2017
Parent HWF Issuers HOC Guarantors Non- Guarantors Eliminations Total
(in
millions)
ASSETS
Current Assets:
Cash and cash equivalents $ — $ — $ 3 $ 11 $ 848 $ — $ 862
Restricted cash and cash equivalents — — 87 10 27 — 124
Accounts receivable, net — — 11 644 256 — 911
Intercompany receivables — — — — 40 (40 ) —
Prepaid expenses — — 8 48 74 (1 ) 129
Other — — 1 5 37 — 43
Total current assets — — 110 718 1,282 (41 ) 2,069
Intangibles and Other Assets:
Investments in subsidiaries 1,588 6,975 8,127 1,588 — (18,278 ) —
Goodwill — — — 3,824 1,311 — 5,135
Brands — — — 4,405 451 — 4,856
Management and franchise contracts, net — — — 683 247 — 930
Other intangible assets, net — — 1 282 148 — 431
Property and equipment, net — — 11 61 269 — 341
Deferred income tax assets 10 4 174 — 82 (188 ) 82
Other — 11 31 235 166 — 443
Total intangibles and other assets 1,598 6,990 8,344 11,078 2,674 (18,466 ) 12,218
TOTAL ASSETS $ 1,598 $ 6,990 $ 8,454 $ 11,796 $ 3,956 $ (18,507 ) $ 14,287
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other $ — $ 6 $ 176 $ 1,195 $ 422 $ (1 ) $ 1,798
Intercompany payables — — 40 — — (40 ) —
Current maturities of long-term debt — 32 — — 9 — 41
Income taxes payable — — — 49 79 — 128
Total current liabilities — 38 216 1,244 510 (41 ) 1,967
Long-term debt — 5,357 982 — 249 — 6,588
Deferred revenues — — — 22 — — 22
Deferred income tax liabilities — — — 1,884 27 (188 ) 1,723
Liability for guest loyalty program — — — 898 — — 898
Other — 7 281 499 706 — 1,493
Total liabilities — 5,402 1,479 4,547 1,492 (229 ) 12,691
Equity:
Total Hilton stockholders’ equity 1,598 1,588 6,975 7,249 2,466 (18,278 ) 1,598
Noncontrolling interests — — — — (2 ) — (2 )
Total equity 1,598 1,588 6,975 7,249 2,464 (18,278 ) 1,596
TOTAL LIABILITIES AND EQUITY $ 1,598 $ 6,990 $ 8,454 $ 11,796 $ 3,956 $ (18,507 ) $ 14,287
December 31, 2016
Parent HWF Issuers HOC Guarantors Non- Guarantors Eliminations Total
(in
millions)
ASSETS
Current Assets:
Cash and cash equivalents $ — $ — $ 3 $ 22 $ 1,037 $ — $ 1,062
Restricted cash and cash equivalents — — 87 9 25 — 121
Accounts receivable, net — — 7 484 264 — 755
Intercompany receivables — — — — 42 (42 ) —
Prepaid expenses — — 6 21 65 (3 ) 89
Income taxes receivable — — — 30 — (17 ) 13
Other — — 1 5 33 — 39
Current assets of discontinued operations — — — — 1,502 (24 ) 1,478
Total current assets — — 104 571 2,968 (86 ) 3,557
Intangibles and Other Assets:
Investments in subsidiaries 5,889 11,300 12,583 5,889 — (35,661 ) —
Goodwill — — — 3,824 1,394 — 5,218
Brands — — — 4,404 444 — 4,848
Management and franchise contracts, net — — — 716 247 — 963
Other intangible assets, net — — 1 296 150 — 447
Property and equipment, net — — 12 62 267 — 341
Deferred income tax assets 10 2 167 — 82 (179 ) 82
Other — 12 30 213 153 — 408
Non-current assets of discontinued operations — — — 12 10,345 (10 ) 10,347
Total intangibles and other assets 5,899 11,314 12,793 15,416 13,082 (35,850 ) 22,654
TOTAL ASSETS $ 5,899 $ 11,314 $ 12,897 $ 15,987 $ 16,050 $ (35,936 ) $ 26,211
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other $ — $ 26 $ 293 $ 1,091 $ 414 $ (3 ) $ 1,821
Intercompany payables — — 42 — — (42 ) —
Current maturities of long-term debt — 26 — — 7 — 33
Income taxes payable — — — — 73 (17 ) 56
Current liabilities of discontinued operations — — — 77 721 (24 ) 774
Total current liabilities — 52 335 1,168 1,215 (86 ) 2,684
Long-term debt — 5,361 981 — 241 — 6,583
Deferred revenues — — — 42 — — 42
Deferred income tax liabilities — — — 1,919 38 (179 ) 1,778
Liability for guest loyalty program — — — 889 — — 889
Other — 12 277 490 713 — 1,492
Non-current liabilities of discontinued operations — — 4 — 6,900 (10 ) 6,894
Total liabilities — 5,425 1,597 4,508 9,107 (275 ) 20,362
Equity:
Total Hilton stockholders’ equity 5,899 5,889 11,300 11,479 6,993 (35,661 ) 5,899
Noncontrolling interests — — — — (50 ) — (50 )
Total equity 5,899 5,889 11,300 11,479 6,943 (35,661 ) 5,849
TOTAL LIABILITIES AND EQUITY $ 5,899 $ 11,314 $ 12,897 $ 15,987 $ 16,050 $ (35,936 ) $ 26,211
Three Months Ended March 31,
2017
Parent HWF HOC Guarantors Non- Guarantors Eliminations Total
(in
millions)
Revenues
Franchise fees $
— $ — $ 19 $ 255 $ 24 $ (4 ) $ 294
Base and other management fees — — — 50 33 — 83
Incentive management fees — — — 22 30 — 52
Owned and leased hotels — — — — 300 — 300
Other revenues — — 20 13 4 — 37
— — 39 340 391 (4 ) 766
Other revenues from managed and franchised properties — — 45 1,220 130 — 1,395
Total revenues — — 84 1,560 521 (4 ) 2,161
Expenses
Owned and leased hotels — — — — 272 — 272
Depreciation and amortization — — 1 64 24 — 89
General and administrative — — 79 2 24 — 105
Other expenses — — 12 7 8 (4 ) 23
— — 92 73 328 (4 ) 489
Other expenses from managed and franchised properties — — 45 1,220 130 — 1,395
Total expenses — — 137 1,293 458 (4 ) 1,884
Operating income (loss) — — (53 ) 267 63 — 277
Interest expense — (63 ) (28 ) — (13 ) — (104 )
Gain (loss) on foreign currency transactions — — 11 21 (36 ) — (4 )
Loss on debt extinguishment — (60 ) — — — — (60 )
Other non-operating income (loss), net — (3 ) 1 1 2 — 1
Income (loss) from continuing operations before income taxes and
equity in earnings from subsidiaries — (126 ) (69 ) 289 16 — 110
Income tax benefit (expense) — 49 27 (108 ) (3 ) — (35 )
Income (loss) from continuing operations before equity in
earnings from subsidiaries — (77 ) (42 ) 181 13 — 75
Equity in earnings from subsidiaries 74 151 193 74 — (492 ) —
Net income 74 74 151 255 13 (492 ) 75
Net income attributable to noncontrolling interests — — — — (1 ) — (1 )
Net income attributable to Hilton stockholders $ 74 $ 74 $ 151 $ 255 $ 12 $ (492 ) $ 74
Comprehensive income $ 94 $ 72 $ 155 $ 255 $ 30 $ (512 ) $ 94
Comprehensive loss (income) attributable to noncontrolling
interests — — — — — — —
Comprehensive income attributable to Hilton stockholders $ 94 $ 72 $ 155 $ 255 $ 30 $ (512 ) $ 94
Three Months Ended March 31,
2016
Parent HWF Guarantors Non- Guarantors Eliminations Total
(in
millions)
Revenues
Franchise fees $ — $ — $ 234 $ 22 $ (3 ) $ 253
Base and other management fees — — 32 28 — 60
Incentive management fees — — 8 28 — 36
Owned and leased hotels — — — 319 — 319
Other revenues — — 14 3 — 17
— — 288 400 (3 ) 685
Other revenues from managed and franchised properties — — 924 117 — 1,041
Total revenues — — 1,212 517 (3 ) 1,726
Expenses
Owned and leased hotels — — — 307 — 307
Depreciation and amortization — — 68 24 — 92
Impairment loss — — — 15 — 15
General and administrative — — 57 26 — 83
Other expenses — — 9 12 (3 ) 18
— — 134 384 (3 ) 515
Other expenses from managed and franchised properties — — 924 117 — 1,041
Total expenses — — 1,058 501 (3 ) 1,556
Operating income — — 154 16 — 170
Interest expense — (67 ) (11 ) (12 ) — (90 )
Gain (loss) on foreign currency transactions — — 5 (17 ) — (12 )
Other non-operating income, net — — 2 — — 2
Income (loss) from continuing operations before income taxes and
equity in earnings from subsidiaries — (67 ) 150 (13 ) — 70
Income tax benefit (expense) 192 26 (100 ) 3 — 121
Income (loss) from continuing operations before equity in
earnings from subsidiaries 192 (41 ) 50 (10 ) — 191
Equity in earnings (losses) from subsidiaries — 41 (9 ) — (32 ) —
Income (losses) from continuing operations, net of taxes 192 — 41 (10 ) (32 ) 191
Income from discontinued operations, net of taxes 117 117 117 106 (338 ) 119
Net income 309 117 158 96 (370 ) 310
Net income attributable to noncontrolling interests — — — (1 ) — (1 )
Net income attributable to Hilton stockholders $ 309 $ 117 $ 158 $ 95 $ (370 ) $ 309
Comprehensive income $ 319 $ 111 $ 149 $ 119 $ (380 ) $ 318
Comprehensive loss attributable to noncontrolling
interests — — — 1 — 1
Comprehensive income attributable to Hilton stockholders $ 319 $ 111 $ 149 $ 120 $ (380 ) $ 319
Three Months Ended March 31,
2017
Parent HWF Issuers HOC Guarantors Non- Guarantors Eliminations Total
(in
millions)
Operating Activities:
Net cash provided by (used in) operating activities $ — $ — $ (102 ) $ 56 $ 112 $ (3 ) $ 63
Investing Activities:
Capital expenditures for property and equipment — — — (1 ) (8 ) — (9 )
Contract acquisition costs — — — (8 ) (5 ) — (13 )
Capitalized software costs — — — (9 ) — — (9 )
Other — (13 ) — (6 ) — — (19 )
Net cash used in investing activities — (13 ) — (24 ) (13 ) — (50 )
Financing Activities:
Borrowings — 1,823 — — — — 1,823
Repayment of debt — (1,823 ) — — (1 ) — (1,824 )
Debt issuance costs and redemption premium — (66 ) — — — — (66 )
Repayment of intercompany borrowings — — (3 ) — — 3 —
Intercompany transfers 119 79 133 (42 ) (289 ) — —
Dividends paid (49 ) — — — — — (49 )
Cash transferred in spin-offs of Park and HGV — — — — (501 ) — (501 )
Repurchases of common stock (70 ) — — — — — (70 )
Distributions to noncontrolling interests — — — — (1 ) — (1 )
Tax withholdings on share-based compensation — — (28 ) — — — (28 )
Net cash provided by (used in) financing activities — 13 102 (42 ) (792 ) 3 (716 )
Effect of exchange rate changes on cash, restricted cash and cash
equivalents — — — — 5 — 5
Net decrease in cash, restricted cash and cash
equivalents — — — (10 ) (688 ) — (698 )
Cash, restricted cash and cash equivalents from continuing
operations, beginning of period — — 90 31 1,062 — 1,183
Cash, restricted cash and cash equivalents from discontinued
operations, beginning of period — — — — 501 — 501
Cash, restricted cash and cash equivalents, beginning of
period — — 90 31 1,563 — 1,684
Cash, restricted cash and cash equivalents, end of
period $ — $ — $ 90 $ 21 $ 875 $
— $ 986
Three Months Ended March 31,
2016
Parent HWF Issuers Guarantors Non- Guarantors Eliminations Total
(in
millions)
Operating Activities:
Net cash provided by (used in) operating activities $
— $
— $ (279 ) $ 618 $ — $ 339
Investing Activities:
Capital expenditures for property and equipment — — — (84 ) — (84 )
Contract acquisition costs — — (8 ) (1 ) — (9 )
Capitalized software costs — — (10 ) (1 ) — (11 )
Other — — (9 ) 3 — (6 )
Net cash used in investing activities — — (27 ) (83 ) — (110 )
Financing Activities:
Repayment of debt — — — (32 ) — (32 )
Intercompany transfers 69 — 317 (386 ) — —
Dividends paid (69 ) — — — — (69 )
Distributions to noncontrolling interests — — — (2 ) — (2 )
Tax withholdings on share-based compensation — — (13 ) — — (13 )
Net cash provided by (used in) financing activities — — 304 (420 ) — (116 )
Effect of exchange rate changes on cash, restricted cash and cash
equivalents — — — 4 — 4
Net increase (decrease) in cash, restricted cash and cash
equivalents — — (2 ) 119 — 117
Cash, restricted cash and cash equivalents from continuing
operations, beginning of period — — 108 526 — 634
Cash, restricted cash and cash equivalents from discontinued
operations, beginning of period — — — 222 — 222
Cash, restricted cash and cash equivalents, beginning of
period — — 108 748 — 856
Cash, restricted cash and cash equivalents from continuing
operations, end of period — — 106 576 — 682
Cash, restricted cash and cash equivalents from discontinued
operations, end of period — — — 291 — 291
Cash, restricted cash and cash equivalents, end of
period $ — $ — $ 106 $ 867 $
— $ 973 | Note 24: Condensed Consolidating Guarantor Financial
Information
In October 2013, Hilton Worldwide Finance LLC and Hilton Worldwide
Finance Corp. (the “HWF Issuers”), entities that are
100 percent owned by Hilton Worldwide Parent LLC
(“HWP”), which is 100 percent owned by the Parent,
issued the 2021 Senior Notes. In September 2016, Hilton Domestic
Operating Company Inc. (“HOC”), an entity incorporated
in July 2016 that is 100 percent owned by Hilton Worldwide Finance
LLC and a guarantor of the 2021 Senior Notes, assumed the 2024
Senior Notes that were issued in August 2016 by escrow issuers and
are guaranteed by the HWF Issuers and HWP. The 2021 Senior Notes
and the 2024 Senior Notes are referred to as the Senior Notes. The
HWF Issuers and HOC are collectively referred to as the Subsidiary
Issuers.
In September 2016, certain employees, assets and liabilities of a
guarantor subsidiary were transferred into HOC. This transfer was
considered to be a transfer of assets rather than a transfer of a
business. Accordingly, we have separately presented HOC as a
subsidiary issuer in our condensed consolidating financial
information prospectively from the date of the transfer.
The Senior Notes are guaranteed jointly and severally on a senior
unsecured basis by the Parent and certain of the Parent’s 100
percent owned domestic restricted subsidiaries that are themselves
not issuers of the applicable series of Senior Notes (together, the
“Guarantors”). The indentures that govern the Senior
Notes provide that any subsidiary of the Company that provides a
guarantee of the Senior Secured Credit Facility will guarantee the
Senior Notes. None of our foreign subsidiaries or U.S. subsidiaries
owned by foreign subsidiaries or conducting foreign operations or
our non-wholly owned subsidiaries guarantee the Senior Notes
(collectively, the “Non-Guarantors”).
The guarantees are full and unconditional, subject to certain
customary release provisions. The indentures that govern the Senior
Notes provide that any Guarantor may be released from its guarantee
so long as: (i) the subsidiary is sold or sells all of its
assets; (ii) the subsidiary is released from its guaranty
under the Senior Secured Credit Facility; (iii) the subsidiary
is declared “unrestricted” for covenant purposes;
(iv) the subsidiary is merged with or into the applicable
Subsidiary Issuers or another Guarantor or the Guarantor liquidates
after transferring all of its assets to the applicable Subsidiary
Issuers or another Guarantor; or (v) the requirements for
legal defeasance or covenant defeasance or to discharge the
indenture have been satisfied, in each case in compliance with
applicable provisions of the indentures.
The following schedules present the condensed consolidating
financial information as of December 31, 2016 and 2015, and
for the years ended December 31, 2016, 2015 and 2014, for the
Parent, HWF Issuers, HOC, Guarantors and Non-Guarantors.
December 31, 2016
Parent HWF Issuers HOC Guarantors Non- Guarantors Eliminations Total
(in
millions)
ASSETS
Current Assets:
Cash and cash equivalents $ — $ — $ 3 $ 22 $ 1,037 $ — $ 1,062
Restricted cash and cash equivalents — — 87 9 25 — 121
Accounts receivable, net — — 7 484 264 — 755
Intercompany receivables — — — — 42 (42 ) —
Prepaid expenses — — 6 21 65 (3 ) 89
Income taxes receivable — — — 30 — (17 ) 13
Other — — 1 5 33 — 39
Current assets of discontinued operations — — — — 1,502 (24 ) 1,478
Total current assets — — 104 571 2,968 (86 ) 3,557
Intangibles and Other Assets:
Investments in subsidiaries 5,889 11,300 12,583 5,889 — (35,661 ) —
Goodwill — — — 3,824 1,394 — 5,218
Brands — — — 4,404 444 — 4,848
Management and franchise contracts, net — — — 716 247 — 963
Other intangible assets, net — — 1 296 150 — 447
Property and equipment, net — — 12 62 267 — 341
Deferred income tax assets 10 2 167 — 82 (179 ) 82
Other — 12 30 213 153 — 408
Non-current assets of discontinued operations — — — 12 10,345 (10 ) 10,347
Total intangibles and other assets 5,899 11,314 12,793 15,416 13,082 (35,850 ) 22,654
TOTAL ASSETS $ 5,899 $ 11,314 $ 12,897 $ 15,987 $ 16,050 $ (35,936 ) $ 26,211
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other $ — $ 26 $ 293 $ 1,091 $ 414 $ (3 ) $ 1,821
Intercompany payables — — 42 — — (42 ) —
Current maturities of long-term debt — 26 — — 7 — 33
Income taxes payable — — — — 73 (17 ) 56
Current liabilities of discontinued operations — — — 77 721 (24 ) 774
Total current liabilities — 52 335 1,168 1,215 (86 ) 2,684
Long-term debt — 5,361 981 — 241 — 6,583
Deferred revenues — — — 42 — — 42
Deferred income tax liabilities — — — 1,919 38 (179 ) 1,778
Liability for guest loyalty program — — — 889 — — 889
Other — 12 277 490 713 — 1,492
Non-current liabilities of discontinued operations — — 4 — 6,900 (10 ) 6,894
Total liabilities — 5,425 1,597 4,508 9,107 (275 ) 20,362
Equity:
Total Hilton stockholders’ equity 5,899 5,889 11,300 11,479 6,993 (35,661 ) 5,899
Noncontrolling interests — — — — (50 ) — (50 )
Total equity 5,899 5,889 11,300 11,479 6,943 (35,661 ) 5,849
TOTAL LIABILITIES AND EQUITY $ 5,899 $ 11,314 $ 12,897 $ 15,987 $ 16,050 $ (35,936 ) $ 26,211
December 31, 2015
Parent HWF Issuers Guarantors Non- Guarantors Eliminations Total
(in
millions)
ASSETS
Current Assets:
Cash and cash equivalents $ — $ — $ 18 $ 495 $ — $ 513
Restricted cash and cash equivalents — — 91 29 — 120
Accounts receivable, net — — 406 258 — 664
Prepaid expenses — — 36 79 (3 ) 112
Income taxes receivable — — 120 — (23 ) 97
Other — — 3 32 — 35
Current assets of discontinued operations — — — 1,070 (26 ) 1,044
Total current assets — — 674 1,963 (52 ) 2,585
Intangibles and Other Assets:
Investments in subsidiaries 6,166 11,854 6,457 — (24,477 ) —
Goodwill — — 3,824 1,456 — 5,280
Brands — — 4,405 514 — 4,919
Management and franchise contracts, net — — 818 271 — 1,089
Other intangible assets, net — — 334 189 — 523
Property and equipment, net — — 73 338 — 411
Deferred income tax assets 24 3 — 59 (27 ) 59
Other — 9 200 123 — 332
Non-current assets of discontinued operations — — 28 10,396 — 10,424
Total intangibles and other assets 6,190 11,866 16,139 13,346 (24,504 ) 23,037
TOTAL ASSETS $ 6,190 $ 11,866 $ 16,813 $ 15,309 $ (24,556 ) $ 25,622
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other $ — $ 39 $ 1,168 $ 415 $ (3 ) $ 1,619
Current maturities of long-term debt — — — 7 — 7
Income taxes payable — — — 50 (23 ) 27
Current liabilities of discontinued operations — — 71 767 (26 ) 812
Total current liabilities — 39 1,239 1,239 (52 ) 2,465
Long-term debt — 5,647 — 240 — 5,887
Deferred revenues — — 251 — — 251
Deferred income tax liabilities — — 1,813 89 (27 ) 1,875
Liability for guest loyalty program — — 784 — — 784
Other 205 14 808 238 — 1,265
Non-current liabilities of discontinued operations — — 64 7,080 — 7,144
Total liabilities 205 5,700 4,959 8,886 (79 ) 19,671
Equity:
Total Hilton stockholders’ equity 5,985 6,166 11,854 6,457 (24,477 ) 5,985
Noncontrolling interests — — — (34 ) — (34 )
Total equity 5,985 6,166 11,854 6,423 (24,477 ) 5,951
TOTAL LIABILITIES AND EQUITY $ 6,190 $ 11,866 $ 16,813 $ 15,309 $ (24,556 ) $ 25,622
Year Ended December 31,
2016
Parent HWF Issuers HOC Guarantors Non- Guarantors Eliminations Total
(in
millions)
Revenues
Franchise fees $ — $ — $ 21 $ 1,031 $ 112 $ (10 ) $ 1,154
Base and other management fees — — — 126 116 — 242
Incentive management fees — — — 16 126 — 142
Owned and leased hotels — — — — 1,452 — 1,452
Other revenues — — 10 61 11 — 82
— — 31 1,234 1,817 (10 ) 3,072
Other revenues from managed and franchised properties — — 32 3,777 501 — 4,310
Total revenues — — 63 5,011 2,318 (10 ) 7,382
Expenses
Owned and leased hotels — — — — 1,295 — 1,295
Depreciation and amortization — — 1 272 91 — 364
Impairment loss — — — — 15 — 15
General and administrative — — 90 204 109 — 403
Other expenses — — 1 31 29 (10 ) 51
— — 92 507 1,539 (10 ) 2,128
Other expenses from managed and franchised properties — — 32 3,777 501 — 4,310
Total expenses — — 124 4,284 2,040 (10 ) 6,438
Gain on sales of assets, net — — — — 8 — 8
Operating income (loss) — — (61 ) 727 286 — 952
Interest expense — (261 ) (30 ) (51 ) (52 ) (394 )
Gain (loss) on foreign currency transactions — — 11 (150 ) 123 — (16 )
Other non-operating income, net — 1 1 8 4 — 14
Income (loss) from continuing operations before income taxes and
equity in losses from subsidiaries — (260 ) (79 ) 534 361 — 556
Income tax benefit (expense) 193 100 32 (319 ) (570 ) — (564 )
Income (loss) from continuing operations before equity in losses
from subsidiaries 193 (160 ) (47 ) 215 (209 ) — (8 )
Equity in losses from subsidiaries (211 ) (51 ) (4 ) (211 ) — 477 —
Income (loss) from continuing operations, net of taxes (18 ) (211 ) (51 ) 4 (209 ) 477 (8 )
Income from discontinued operations, net of taxes 366 366 366 428 374 (1,528 ) 372
Net income 348 155 315 432 165 (1,051 ) 364
Net income attributable to noncontrolling interests — — — — (16 ) — (16 )
Net income attributable to Hilton stockholders $ 348 $ 155 $ 315 $ 432 $ 149 $ (1,051 ) $ 348
Comprehensive income $ 131 $ 153 $ 320 $ 361 $ 15 $ (834 ) $ 146
Comprehensive income attributable to noncontrolling
interests — — — — (15 ) — (15 )
Comprehensive income attributable to Hilton stockholders $ 131 $ 153 $ 320 $ 361 $ — $ (834 ) $ 131
Year Ended December 31,
2015
Parent HWF Issuers Guarantors Non- Guarantors Eliminations Total
(in millions)
Revenues
Franchise fees $ — $ — $ 998 $ 101 $ (12 ) $ 1,087
Base and other management fees — — 125 105 — 230
Incentive management fees — — 18 120 — 138
Owned and leased hotels — — — 1,596 — 1,596
Other revenues — — 61 10 — 71
— — 1,202 1,932 (12 ) 3,122
Other revenues from managed and franchised properties — — 3,510 501 — 4,011
Total revenues — — 4,712 2,433 (12 ) 7,133
Expenses
Owned and leased hotels — — — 1,414 — 1,414
Depreciation and amortization — — 288 97 — 385
Impairment loss — — — 9 — 9
General and administrative — — 424 113 — 537
Other expenses — — 37 15 (12 ) 40
— — 749 1,648 (12 ) 2,385
Other expenses from managed and franchised properties — — 3,510 501 — 4,011
Total expenses — — 4,259 2,149 (12 ) 6,396
Gain on sales of assets, net — — — 163 — 163
Operating income — — 453 447 — 900
Interest expense — (281 ) (50 ) (46 ) — (377 )
Gain (loss) on foreign currency transactions — — 77 (118 ) — (41 )
Other non-operating income, net — — 14 37 — 51
Income (loss) from continuing operations before income taxes and
equity in earnings from subsidiaries — (281 ) 494 320 — 533
Income tax benefit (expense) (7 ) 108 189 58 — 348
Income (loss) from continuing operations before equity in
earnings from subsidiaries (7 ) (173 ) 683 378 — 881
Equity in earnings from subsidiaries 883 1,056 373 — (2,312 ) —
Income from continuing operations, net of taxes 876 883 1,056 378 (2,312 ) 881
Income from discontinued operations, net of taxes 528 528 528 460 (1,509 ) 535
Net income 1,404 1,411 1,584 838 (3,821 ) 1,416
Net income attributable to noncontrolling interests — — — (12 ) — (12 )
Net income attributable to Hilton stockholders $ 1,404 $ 1,411 $ 1,584 $ 826 $ (3,821 ) $ 1,404
Comprehensive income $ 1,248 $ 1,404 $ 1,546 $ 727 $ (3,665 ) $ 1,260
Comprehensive income attributable to noncontrolling
interests — — — (12 ) — (12 )
Comprehensive income attributable to Hilton stockholders $ 1,248 $ 1,404 $ 1,546 $ 715 $ (3,665 ) $ 1,248
Year Ended December 31,
2014
Parent HWF Issuers Guarantors Non- Guarantors Eliminations Total
(in
millions)
Revenues
Franchise fees $ — $ — $ 826 $ 85 $ (6 ) $ 905
Base and other management fees — — 129 102 (4 ) 227
Incentive management fees — — 17 116 — 133
Owned and leased hotels — — — 1,776 — 1,776
Other revenues — — 71 9 — 80
— — 1,043 2,088 (10 ) 3,121
Other revenues from managed and franchised properties — — 3,120 447 — 3,567
Total revenues — — 4,163 2,535 (10 ) 6,688
Expenses
Owned and leased hotels — — — 1,586 — 1,586
Depreciation and amortization — — 263 100 — 363
General and administrative — — 303 108 — 411
Other expenses — — 49 19 (10 ) 58
— — 615 1,813 (10 ) 2,418
Other expenses from managed and franchised properties — — 3,120 447 — 3,567
Total expenses — — 3,735 2,260 (10 ) 5,985
Operating income — — 428 275 — 703
Interest expense — (334 ) (54 ) (28 ) — (416 )
Gain (loss) on foreign currency transactions — — 443 (417 ) — 26
Other non-operating income, net — — 9 11 — 20
Income (loss) from continuing operations before income taxes and
equity in earnings from subsidiaries — (334 ) 826 (159 ) — 333
Income tax benefit (expense) (5 ) 128 (306 ) 29 — (154 )
Income (loss) from continuing operations before equity in
earnings from subsidiaries (5 ) (206 ) 520 (130 ) — 179
Equity in earnings (losses) from subsidiaries 179 385 (135 ) — (429 ) —
Income (loss) from continuing operations, net of taxes 174 179 385 (130 ) (429 ) 179
Income from discontinued operations, net of taxes 499 499 499 450 (1,444 ) 503
Net income 673 678 884 320 (1,873 ) 682
Net income attributable to noncontrolling interests — — — (9 ) — (9 )
Net income attributable to Hilton stockholders $ 673 $ 678 $ 884 $ 311 $ (1,873 ) $ 673
Comprehensive income $ 315 $ 669 $ 813 $ 47 $ (1,515 ) $ 329
Comprehensive income attributable to noncontrolling
interests — — — (14 ) — (14 )
Comprehensive income attributable to Hilton stockholders $ 315 $ 669 $ 813 $ 33 $ (1,515 ) $ 315
Year Ended December 31,
2016
Parent HWF Issuers HOC Guarantors Non- Guarantors Eliminations Total
(in
millions)
Operating Activities:
Net cash provided by (used in) operating activities $ — $ (37 ) $ — $ 912 $ 1,095 $ (605 ) $ 1,365
Investing Activities:
Capital expenditures for property and equipment — — — (9 ) (308 ) — (317 )
Issuance of intercompany receivables — — — (192 ) (42 ) 234 —
Payments received on intercompany receivables — — — 192 — (192 ) —
Proceeds from asset dispositions — — — — 11 — 11
Contract acquisition costs — — — (46 ) (9 ) — (55 )
Capitalized software costs — — — (73 ) (8 ) — (81 )
Other — (6 ) — (35 ) 5 — (36 )
Net cash used in investing activities — (6 ) — (163 ) (351 ) 42 (478 )
Financing Activities:
Borrowings — — 1,000 — 3,715 — 4,715
Repayment of debt — (266 ) — — (4,093 ) — (4,359 )
Debt issuance costs — (17 ) (20 ) — (39 ) — (76 )
Intercompany borrowings — — — 42 192 (234 ) —
Repayment of intercompany borrowings — — — — (192 ) 192 —
Intercompany transfers 277 326 (890 ) (854 ) 1,141 — —
Dividends paid (277 ) — — — — — (277 )
Intercompany dividends — — — — (605 ) 605 —
Distributions to noncontrolling interests — — — — (32 ) — (32 )
Tax withholdings on share-based compensation — — — (15 ) — — (15 )
Net cash provided by (used in) financing activities — 43 90 (827 ) 87 563 (44 )
Effect of exchange rate changes on cash, restricted cash and cash
equivalents — — — — (15 ) — (15 )
Net increase (decrease) in cash, restricted cash and cash
equivalents — — 90 (78 ) 816 — 828
Cash, restricted cash and cash equivalents from continuing
operations, beginning of period — — — 109 524 — 633
Cash, restricted cash and cash equivalents from discontinued
operations, beginning of period — — — — 223 — 223
Cash, restricted cash and cash equivalents, beginning of
period — — — 109 747 — 856
Cash, restricted cash and cash equivalents from continuing
operations, end of period — — 90 31 1,062 — 1,183
Cash, restricted cash and cash equivalents from discontinued
operations, end of period — — — — 501 — 501
Cash, restricted cash and cash equivalents, end of
period $ — $ — $ 90 $ 31 $ 1,563 $ — $ 1,684
Year Ended December 31,
2015
Parent HWF Issuers Guarantors Non- Guarantors Eliminations Total
(in
millions)
Operating Activities:
Net cash provided by operating activities $ — $ 184 $ 975 $ 723 $ (436 ) $ 1,446
Investing Activities:
Capital expenditures for property and equipment — — (11 ) (299 ) — (310 )
Acquisitions, net of cash acquired — — — (1,402 ) — (1,402 )
Proceeds from asset dispositions — — — 2,205 — 2,205
Contract acquisition costs — — (23 ) (14 ) — (37 )
Capitalized software costs — — (57 ) (5 ) — (62 )
Other — — 13 7 — 20
Net cash provided by (used in) investing activities — — (78 ) 492 — 414
Financing Activities:
Borrowings — — — 48 — 48
Repayment of debt — (775 ) — (849 ) — (1,624 )
Intercompany transfers 138 591 (693 ) (36 ) — —
Dividends paid (138 ) — — — — (138 )
Intercompany dividends — — (184 ) (252 ) 436 —
Distributions to noncontrolling interests — — — (8 ) — (8 )
Tax withholdings on share-based compensation — — (31 ) — — (31 )
Net cash provided by (used in) financing activities — (184 ) (908 ) (1,097 ) 436 (1,753 )
Effect of exchange rate changes on cash, restricted cash and cash
equivalents — — — (19 ) — (19 )
Net increase (decrease) in cash, restricted cash and cash
equivalents — — (11 ) 99 — 88
Cash, restricted cash and cash equivalents from continuing
operations, beginning of period — — 119 509 — 628
Cash, restricted cash and cash equivalents from discontinued
operations, beginning of period — — 1 139 — 140
Cash, restricted cash and cash equivalents, beginning of
period — — 120 648 — 768
Cash, restricted cash and cash equivalents from continuing
operations, end of period — — 109 524 — 633
Cash, restricted cash and cash equivalents from discontinued
operations, end of period — — — 223 — 223
Cash, restricted cash and cash equivalents, end of
period $ — $ — $ 109 $ 747 $ — $ 856
Year Ended December 31,
2014
Parent HWF Issuers Guarantors Non- Guarantors Eliminations Total
(in
millions)
Operating Activities:
Net cash provided by operating activities $
— $
— $ 1,085 $ 522 $ (300 ) $ 1,307
Investing Activities:
Capital expenditures for property and equipment — — (5 ) (263 ) — (268 )
Proceeds from asset dispositions — — 4 40 — 44
Contract acquisition costs — — (19 ) (46 ) — (65 )
Capitalized software costs — — (64 ) (5 ) — (69 )
Other — — 11 37 — 48
Net cash used in investing activities — — (73 ) (237 ) — (310 )
Financing Activities:
Borrowings — — — 350 — 350
Repayment of debt — (1,000 ) — (424 ) — (1,424 )
Debt issuance costs — (6 ) — (3 ) — (9 )
Capital contribution — — — 22 (9 ) 13
Intercompany transfers — 1,006 (1,094 ) 88 — —
Intercompany dividends — — — (309 ) 309 —
Distributions to noncontrolling interests — — — (5 ) — (5 )
Net cash used in financing activities — — (1,094 ) (281 ) 300 (1,075 )
Effect of exchange rate changes on cash, restricted cash and cash
equivalents — — — (14 ) — (14 )
Net decrease in cash, restricted cash and cash
equivalents — — (82 ) (10 ) — (92 )
Cash, restricted cash and cash equivalents from continuing
operations, beginning of period — — 201 505 — 706
Cash, restricted cash and cash equivalents from discontinued
operations, beginning of period — — 1 153 — 154
Cash, restricted cash and cash equivalents, beginning of
period — — 202 658 — 860
Cash, restricted cash and cash equivalents from continuing
operations, end of period — — 119 509 — 628
Cash, restricted cash and cash equivalents from discontinued
operations, end of period — — 1 139 — 140
Cash, restricted cash and cash equivalents, end of
period $ — $ — $ 120 $ 648 $ — $ 768 |
