Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 19, 2018 | |
Entity Information [Line Items] | ||
Entity Registrant Name | Hilton Worldwide Holdings Inc. | |
Entity Central Index Key | 1,585,689 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Trading Symbol | hlt | |
Entity Common Stock, Shares Outstanding | 300,416,906 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 610 | $ 570 |
Restricted cash and cash equivalents | 73 | 100 |
Accounts receivable, net of allowance for doubtful accounts | 980 | 1,005 |
Prepaid expenses | 161 | 127 |
Income taxes receivable | 0 | 36 |
Other | 184 | 169 |
Total current assets | 2,008 | 2,007 |
Intangibles and Other Assets: | ||
Goodwill | 5,211 | 5,190 |
Brands | 4,902 | 4,890 |
Management and franchise contracts, net | 928 | 953 |
Other intangible assets, net | 428 | 433 |
Property and equipment, net | 358 | 353 |
Deferred income tax assets | 111 | 111 |
Other | 314 | 291 |
Total intangibles and other assets | 12,252 | 12,221 |
Total assets | 14,260 | 14,228 |
Current Liabilities: | ||
Accounts payable, accrued expenses and other | 1,344 | 1,416 |
Current portion of deferred revenues | 342 | 366 |
Current maturities of long-term debt | 47 | 46 |
Income taxes payable | 63 | 12 |
Current portion of liability for guest loyalty program | 692 | 622 |
Total current liabilities | 2,488 | 2,462 |
Long-term debt | 6,558 | 6,556 |
Deferred revenues | 828 | 829 |
Deferred income tax liabilities | 901 | 931 |
Liability for guest loyalty program | 841 | 839 |
Other | 897 | 920 |
Total liabilities | 12,513 | 12,537 |
Commitments and contingencies - see Note 14 | ||
Equity: | ||
Preferred Stock | 0 | 0 |
Common stock | 3 | 3 |
Treasury stock, at cost | (1,001) | (891) |
Additional paid-in capital | 10,288 | 10,298 |
Accumulated deficit | (6,868) | (6,981) |
Accumulated other comprehensive loss | (680) | (741) |
Total Hilton stockholders' equity | 1,742 | 1,688 |
Noncontrolling interests | 5 | 3 |
Total equity | 1,747 | 1,691 |
Total liabilities and equity | $ 14,260 | $ 14,228 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Allowance for doubtful accounts | $ 32 | $ 29 |
Variable interest entities - current assets | 99 | 93 |
Variable interest entities - non-current assets | 180 | 171 |
Variable interest entities - current liabilities | 55 | 58 |
Variable interest entities - total liabilities | $ 278 | $ 271 |
Preferred stock, par value (per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares | 3,000,000,000 | 3,000,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value (per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 10,000,000,000 | 10,000,000,000 |
Common stock, issued shares | 331,864,584 | 331,054,014 |
Common stock, outstanding shares | 316,904,646 | 317,420,933 |
Treasury stock, shares | 14,959,938 | 13,633,081 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | ||
Franchise fees | $ 331 | $ 282 |
Base and other management fees | 77 | 81 |
Incentive management fees | 55 | 49 |
Owned and leased hotels | 334 | 296 |
Other revenues | 23 | 37 |
Total revenues excluding reimburseable revenues | 820 | 745 |
Other revenues from managed and franchised properties | 1,254 | 1,151 |
Total revenues | 2,074 | 1,896 |
Expenses | ||
Owned and leased hotels | 320 | 268 |
Depreciation and amortization | 82 | 86 |
General and administrative | 104 | 106 |
Other expenses | 14 | 23 |
Total expenses excluding reimbursable expenses | 520 | 483 |
Other expenses from managed and franchised properties | 1,275 | 1,196 |
Total expenses | 1,795 | 1,679 |
Operating income | 279 | 217 |
Interest expense | (83) | (89) |
Gain (loss) on foreign currency transactions | 11 | (4) |
Loss on debt extinguishment | 0 | (60) |
Other non-operating income, net | 14 | 2 |
Income before income taxes | 221 | 66 |
Income tax expense | (58) | (18) |
Net income | 163 | 48 |
Net income attributable to noncontrolling interests | (2) | (1) |
Net income attributable to Hilton stockholders | $ 161 | $ 47 |
Earnings per share, basic | ||
Net income per share | $ 0.51 | $ 0.14 |
Earnings per share, diluted | ||
Net income per share | 0.51 | 0.14 |
Cash dividends declared per share | $ 0.15 | $ 0.15 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 163 | $ 48 |
Other comprehensive income (loss), net of tax: | ||
Currency translation adjustment | 32 | 20 |
Pension liability adjustment | 1 | 1 |
Cash flow hedge adjustment | 28 | (2) |
Total other comprehensive income | 61 | 19 |
Comprehensive income | 224 | 67 |
Comprehensive income attributable to noncontrolling interests | (2) | 0 |
Comprehensive income attributable to Hilton stockholders | $ 222 | $ 67 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Currency translation adjustment, tax | $ 1 | $ 1 |
Pension liability adjustment, tax | 0 | (1) |
Cash flow hedge adjustment, tax | $ (10) | $ 2 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Activities: | ||
Net income | $ 163 | $ 48 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 82 | 86 |
Amortization of contract acquisition costs | 7 | 3 |
Loss (gain) on foreign currency transactions | (11) | 4 |
Loss on debt extinguishment | 0 | 60 |
Share-based compensation | 28 | 25 |
Deferred income taxes | (37) | (67) |
Contract acquisition costs | (14) | (13) |
Working capital changes and other | 25 | (96) |
Net cash provided by operating activities | 243 | 50 |
Investing Activities: | ||
Capital expenditures for property and equipment | (10) | (9) |
Capitalized software costs | (15) | (9) |
Other | (1) | (19) |
Net cash used in investing activities | (26) | (37) |
Financing Activities: | ||
Borrowings | 0 | 1,823 |
Repayment of debt | (14) | (1,824) |
Debt issuance costs and redemption premium | 0 | (66) |
Dividends paid | (47) | (49) |
Cash transferred in spin-offs of Park and HGV | 0 | (501) |
Repurchases of common stock | (110) | (70) |
Distributions to noncontrolling interests | 0 | (1) |
Tax withholdings on share-based compensation | (40) | (28) |
Net cash used in financing activities | (211) | (716) |
Effect of exchange rate changes on cash, restricted cash and cash equivalents | 7 | 5 |
Net increase (decrease) in cash, restricted cash and cash equivalents | 13 | (698) |
Cash, restricted cash and cash equivalents from continuing operations, beginning of period | 670 | 1,183 |
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period | 0 | 501 |
Cash, restricted cash and cash equivalents, beginning of period | 1,684 | |
Cash, restricted cash and cash equivalents, end of period | 683 | 986 |
Supplemental Disclosures: | ||
Interest | 72 | 113 |
Income taxes, net of refunds | 9 | 6 |
Non-cash spin-offs of Park and HGV (financing activities) | $ 0 | $ 17 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements for the three months ended March 31, 2018 and 2017 have been prepared in accordance with United States of America ("U.S.") generally accepted accounting principles ("GAAP") and are unaudited. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP. Although we believe the disclosures made are adequate to prevent the information presented from being misleading, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 . The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and, accordingly, ultimate results could differ from those estimates. Additionally, interim results are not necessarily indicative of full year performance. In our opinion, the accompanying condensed consolidated financial statements reflect all adjustments, including normal recurring items, considered necessary for a fair presentation of the interim periods. All material intercompany transactions have been eliminated in consolidation. On January 1, 2018, we adopted the requirements of Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09") using the full retrospective approach as of January 1, 2016. All amounts and disclosures set forth in this Form 10-Q reflect the necessary adjustments required for the adoption of this standard, including the reclassification of prior year balances to conform to current year presentation. See "Summary of Significant Accounting Policies" below for additional information. Summary of Significant Accounting Policies Our significant accounting policies are detailed 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, 2017 . The significant accounting policies that changed as a result of the adoption of ASU 2014-09 are set forth below. Revenue Recognition Revenues are primarily derived from management and franchise contracts with third-party hotel and resort owners, as well as from our owned and leased hotels. The majority of our performance obligations are a series of distinct goods or services, for which we receive variable consideration through our management and franchise fees or fixed consideration through our owned and leased hotels. We allocate the variable fees to the distinct services to which they relate applying the prescribed variable consideration allocation guidance, and we allocate fixed consideration to the related performance obligations based on the present value of the allocated variable cash flows. We do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised good or service to a customer and when the customer pays for that good or service will be one year or less, which it is in substantially all cases. Additionally, we do not typically include extended payment terms in our contracts with customers. Management and franchise revenues We identified the following performance obligations in connection with our management and franchise contracts: • Intellectual Property ("IP") licenses grant the right to access our hotel system IP, including brand IP, reservations systems and property management systems. • Hotel management services include providing day-to-day management services of the hotels for the property owners. • Development services include providing consultative services (e.g., design assistance and contractor selection) to the property owner to assist with the construction of the hotel prior to the hotel opening. • Pre-opening services include providing services (e.g., advertising, budgeting, e-commerce strategies, food and beverage testing) to the property owner to assist in preparing for the hotel opening. • Material rights for free or discounted goods or services to hotel guests are satisfied at the earlier point in time of either when the material right expires or the underlying free or discounted good or service is provided to the hotel guest. Each of the identified performance obligations related to management and franchise revenues is considered to be a series of distinct services transferred over time. While the underlying activities may vary from day to day, the nature of the promises are the same each day, and the property owner can independently benefit from each day's services. Management and franchise fees are typically based on the sales or usage of the underlying hotel, with the exception of fixed upfront fees that usually represent an insignificant portion of the transaction price. Franchise fees represent fees earned in connection with the licensing of one of our brands, usually under long-term contracts with the property owner, and include the following: • Royalty fees are generally based on a percentage of a hotel's monthly gross room revenue and, in some cases, may also include a percentage of gross food and beverage revenues and other revenues, where applicable. These fees are typically billed and collected monthly, and revenue is generally recognized at the same time the fees are billed. • Application, initiation and other fees are charged when: (i) new hotels enter our system; (ii) there is a change of ownership; or (iii) contracts with properties already in our system are extended. These fees are typically fixed and collected upfront and are recognized as revenue over the term of the franchise contract. We do not consider this advance consideration to include a significant financing component, since it is used to protect us from the property owner failing to adequately complete some or all of its obligations under the contract. • License fees are earned from: (i) a license agreement with HGV to use certain Hilton marks and IP in its timeshare business, which are typically billed and collected monthly, and revenue is generally recognized at the same time the fees are billed; and (ii) co-brand credit card arrangements and are recognized as revenue when Hilton Honors points are issued, generally as spend on the co-branded credit card occurs; see further discussion below under "Hilton Honors." Franchise fees are reduced by any consideration paid or anticipated to be paid to incentivize hotel owners to enter into franchise contracts. Base management fees and incentive management fees represent fees earned from hotels that we manage, usually under long-term contracts with the property owner, and include the following: • Base fees are generally based on a percentage of a hotel's monthly gross revenue. Base fees are typically billed and collected monthly, and revenue is generally recognized at the same time the fees are billed. • Incentive fees are generally based on a percentage of a hotel's operating profits and in some cases may be subject to a stated return threshold to the property owner, normally over a one-calendar year period (the "incentive period"). Incentive fee revenue is recognized on a monthly basis, but only to the extent the cumulative fee earned does not exceed the probable fee for the incentive period. Incentive fee payment terms vary, but they are generally billed and collected monthly or annually upon completion of the incentive period. Base and other management fees are reduced by any consideration paid or anticipated to be paid to incentivize hotel owners to enter into management contracts. Other revenues from managed and franchised properties represent amounts that are contractually reimbursed to us by property owners directly as costs are incurred or fees that are billed and collected in advance related to certain indirect costs and expenses of the related properties, and include the following: • Direct reimbursements include payroll and related costs and certain other operating costs of the managed and franchised properties’ operations, which are contractually reimbursed to us by the property owners as expenses are incurred. Revenue is recognized based on the amount of expenses incurred by Hilton, which are presented as other expenses from managed and franchised properties in our consolidated statements of operations, that are then reimbursed by the property owner typically on a monthly basis, which results in no net effect on operating income (loss) or net income (loss). • Indirect reimbursements include marketing expenses and other expenses associated with our brands and shared services, which are paid from fees collected by Hilton from the managed and franchised properties. Revenue is generally recognized as fees are billed, which are based on the underlying hotel's sales or usage (e.g., gross room revenues and number of reservations processed). System implementation fees charged to property owners are deferred and recognized as revenue over the term of the management or franchise contract. The corresponding expenses are expensed as incurred and are presented as other expenses from managed and franchised properties in our consolidated statements of operations and are expected to equal the revenues earned from indirect reimbursements over time. The management and franchise fees and reimbursements from third-party hotel owners are allocated to the performance obligations and the distinct services to which they relate using their estimated standalone selling prices. The terms of the fees earned under the contract relate to a specific outcome of providing the services (e.g., hotel room sales) or to Hilton's efforts (e.g., costs) to satisfy the performance obligations. We use time as the measure of progress to recognize as revenue the fees that are allocated to the period earned per the contract or to the period when the reimbursable costs are incurred. Owned and leased hotel revenues We identified the following performance obligations in connection with our owned and leased hotel revenues, for which revenue is recognized as the respective performance obligations are satisfied, which results in recognizing the amount we expect to be entitled to for providing the goods or services: • Cancellable room reservations or ancillary services are typically satisfied as the good or service is transferred to the hotel guest, which is generally when the room stay occurs. • Noncancellable room reservations and banquet or conference reservations represent a series of distinct goods or services provided over time satisfied as each distinct good or service is provided, which is reflected by the duration of the room reservation. • Material rights for free or discounted goods or services are satisfied at the earlier point in time when the material right expires or the underlying free or discounted good or service is provided to the hotel guest. • Other ancillary goods and services are purchased independently of the room reservation at standalone selling prices and are considered separate performance obligations, which are satisfied when the related good or service is provided to the hotel guest. • Components of package reservations for which each component could be sold separately to other hotel guests are considered separate performance obligations and are satisfied as set forth above. Owned and leased hotel revenues primarily consist of hotel room rentals, revenue from accommodations sold in conjunction with other services (e.g., package reservations), food and beverage sales and other ancillary goods and services (e.g., parking) related to owned, leased and consolidated non-wholly owned hotel properties. Revenue is recognized when rooms are occupied or goods and services have been delivered or rendered, respectively. Payment terms typically align with when the goods and services are provided. Owned and leased hotel revenues are reduced upon issuance of points for our guest loyalty program, Hilton Honors, for Hilton Honors members' paid stay transactions and are recognized when Hilton Honors points are redeemed for a free stay at an owned or leased hotel (see "Hilton Honors" section below for additional information). Although the transaction prices of room rentals, goods and other services are generally fixed and based on the respective room reservation or other agreement, an estimate to reduce the transaction price is required if a discount is expected to be provided to the customer. For package reservations, the transaction price is allocated to the performance obligations within the package based on the estimated standalone selling prices of each component. On occasion, the hotel may also provide the customer with a material right to a free or discounted good or service in conjunction with a room reservation or banquet contract (e.g., free breakfast and free room night for every four nights booked). These material rights are considered separate performance obligations to which a portion of the transaction price is allocated based on the estimated standalone selling prices of the good or service, adjusted for the likelihood the hotel guest will exercise the right. Other revenues Other revenues include revenues generated by the incidental support of hotel operations for owned, leased, managed and franchised hotels, including purchasing operations, and other operating income. Purchasing revenues include any amounts received for vendor rebate arrangements that we participate in as a manager of hotel properties. Taxes and fees collected on behalf of governmental agencies We are required to collect certain taxes and fees from customers on behalf of governmental agencies and remit these back to the applicable governmental agencies on a periodic basis. We have a legal obligation to act as a collection agent. We do not retain these taxes and fees and, therefore, they are not included in our measurement of transaction prices. We have elected to present revenue net of sales taxes and other similar taxes. We record a liability when the amounts are collected and relieve the liability when payments are made to the applicable taxing authority or other appropriate governmental agency. Contract Assets Contract assets relate to incentive management fees for which the period of service has passed, but for which our right to consideration is conditional upon completing the requirements of the incentive fee period. Contract assets are included in other current assets in our consolidated balance sheets and are transferred to accounts receivable when our right to consideration becomes unconditional. Contract Liabilities Contract liabilities relate to: (i) advance consideration received from hotel owners at contract inception for services considered to be part of the contract performance obligations, such as management or franchise contract application, initiation, renewal and other fees; (ii) advance consideration received for certain indirect reimbursements, such as system implementation fees; and (iii) amounts received when points are issued under Hilton Honors, but for which revenue is not yet recognized, since the related points are not yet redeemed. Contract liabilities related to advance consideration received for fees, excluding Hilton Honors, and certain indirect reimbursements are recognized as revenue over the term of the related contract. Contract liabilities related to amounts received for Hilton Honors are recognized as revenue at the point in time when the points are redeemed for a free good or service by the Hilton Honors member, which typically occurs within two years of points issuance. Contract liabilities are included in deferred revenues in our consolidated balance sheets. Intangible Assets with Finite Useful Lives We have certain finite lived intangible assets that were initially recorded at their fair value in connection with the October 24, 2007 transaction whereby we became a wholly owned subsidiary of an affiliate of The Blackstone Group L.P. (the "Merger"). These intangible assets consist of management contracts, franchise contracts, leases, certain proprietary technologies and our Hilton Honors guest loyalty program. Additionally, we capitalize cash consideration paid to incentivize hotel owners to enter into management and franchise contracts as contract acquisition costs, as well as the incremental costs to obtain or fulfill the contracts as development commissions, which are generally fixed. We also capitalize as finite lived intangible assets costs incurred to develop internal-use computer software and costs to acquire software licenses, as well as internal and external costs incurred in connection with development of upgrades or enhancements that result in additional information technology functionality. Intangible assets with finite useful lives are amortized using the straight-line method over their respective estimated useful lives, which for contract acquisition costs and development commissions is the contract term, including any renewal periods at our sole option. These estimated useful lives are generally as follows: management contracts recorded at the Merger ( 13 to 16 years); management contract acquisition costs and development commissions ( 20 to 30 years); franchise contracts recorded at the Merger ( 12 to 13 years); franchise contract acquisition costs and development commissions ( 10 to 20 years); leases ( 12 to 35 years); Hilton Honors ( 16 years); and capitalized software development costs ( 3 years).The amortization of our intangible assets, excluding contract acquisition costs, is included in depreciation and amortization expense, and the amortization of contract acquisition costs is recognized as a reduction to franchise fees and base and other management fees (based on the contract type) in our consolidated statements of operations. Costs incurred prior to the acquisition of a contract (e.g., external legal costs) are expensed as incurred and included in general and administrative expenses in our consolidated statements of operations. Cash flows for contract acquisition costs and development commissions are included as operating activities in our consolidated statements of cash flows. We review all finite lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess carrying value over the fair value in our consolidated statements of operations. Hilton Honors Hilton Honors is our guest loyalty and marketing program provided to hotel and resort properties. Nearly all of our owned, leased, managed and franchised properties participate in the Hilton Honors program. Hilton Honors members earn points based on their spending at our participating properties and through participation in affiliated partner programs. When points are earned by Hilton Honors members, they are provided with a material right to free or discounted goods or services in the future upon accumulation of the required level of Hilton Honors points. Points may be redeemed for the right to stay at participating properties, as well as for other goods and services from third parties, including, but not limited to, airlines, car rentals, cruises, vacation packages, shopping and dining. As the points are issued to a Hilton Honors member, the property or affiliated partner pays Hilton Honors based on an estimated cost per point for the costs of operating the program, which include marketing, promotion, communication and administrative expenses, as well as the estimated cost of award redemptions. We record liabilities for the payments received from participating hotels and program partners, which are typically due when the points are issued to a Hilton Honors member. Amounts equal to the estimated cost per point of the future redemption obligation are included in the liability for guest loyalty program and any amounts received in excess of the estimated cost per point are included in deferred revenues in our consolidated balance sheets. We engage outside actuaries to assist in determining the fair value of the future redemption obligation using statistical formulas that project future point redemptions based on factors that include historical experience, an estimate of points that will eventually be redeemed, which includes an estimate of "breakage" for points that will never be redeemed, and the cost of reimbursing properties and other third parties in respect to other redemption opportunities available to members. When points are issued as a result of a stay at our owned or leased hotel, we recognize a reduction in owned and leased hotel revenues, since we are also the guest loyalty program sponsor. For the Hilton Honors fees that are charged to the participating properties, we allocate the fees to the material right created by Hilton Honors points issued using the variable consideration allocation guidance, since the fees are directly related to the issuance of Hilton Honors points to the Hilton Honors member and Hilton's efforts to satisfy the future redemption of those Hilton Honors points. The transaction prices for the Hilton Honors points are reduced by the expected payments to the third parties that will provide the free or discounted room or service using the actuarial projection of the cost per point. The remaining transaction price is then further allocated to the points that are expected to be redeemed, adjusting the points that are issued for estimated breakage, and recognized when those points are redeemed. While the points are outstanding, both the estimate of the expected payments to third parties (cost per point) and the estimated breakage are reevaluated, and the amount of revenue recognized when each point is redeemed is adjusted so that the final amount allocated to the material right is reflective of the amount retained for providing all of the free or discounted goods and services, net of the payments to third parties and points not redeemed. We also earn license fees from co-brand credit card arrangements (see "Management and franchise revenues" within the "Revenue Recognition" section above). The co-brand license fee is allocated between two performance obligations based on their estimated standalone selling prices: (i) an IP license using the relief-from-royalty method; and (ii) material rights for free or discounted goods or services to the credit card customers using a cost plus method based on an evaluation of other third-party administrators. We satisfy our performance obligation related to points issued under the Hilton Honors guest loyalty program at a point in time when points are redeemed for a free good or service by the Hilton Honors member, and we satisfy our remaining performance obligations over time as the customer simultaneously receives and consumes the benefits of the goods or services provided. Hilton Honors reimburses participating properties when points are redeemed by members at the respective properties, at which time the redemption obligation is reduced and the related deferred revenue is recognized in other revenues from managed and franchised properties in our consolidated statements of operations. Additionally, when Hilton Honors members redeem award certificates at our owned and leased hotels, we recognize room revenue, included in owned and leased hotels revenue in our consolidated statements of operations. Recently Issued Accounting Pronouncements Adopted Accounting Standards In March 2017, the Financial Accounting Standards Board ("FASB") issued ASU No. 2017-07 ("ASU 2017-07"), Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . This ASU requires employers to report the service cost component of net periodic pension cost in the same line item or items of the statement of operations as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net periodic pension cost must be presented separately from the service cost component and outside of a subtotal of income (loss) from operations. We adopted ASU 2017-07 on January 1, 2018 on a retrospective basis in our condensed consolidated statements of operations, which includes presenting: (i) the service cost component of net periodic pension cost in owned and leased hotel expenses and general and administrative expenses; and (ii) the other components of net periodic pension cost in other non-operating income (loss), net in our condensed consolidated statements of operations. Prior to adoption, all net periodic pension costs were presented in owned and leased hotel expenses and general and administrative expenses. We have applied the practical expedient permitting us to use the amounts disclosed in our Employee Benefits Plans note in our Annual Report on Form 10-K for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. See the "Prior Period Financial Information" below for the effect of the adoption of ASU 2017-07 on our condensed consolidated statement of operations for the three months ended March 31, 2017. In May 2014, the FASB issued ASU 2014-09. This ASU supersedes the revenue recognition requirements in Revenue Recognition (Topic 605) and requires entities to recognize revenue when a customer obtains control of promised goods or services and in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. Subsequent to ASU 2014-09, the FASB issued several related ASUs to clarify the application of the new revenue recognition standard, collectively referred to herein as ASU 2014-09. We adopted the requirements of ASU 2014-09 on January 1, 2018 using the full retrospective approach, as permitted by the standard, resulting in a cumulative adjustment to accumulated deficit of $212 million as of January 1, 2016. The provisions of ASU 2014-09 affected our revenue recognition as follows: • Application, initiation and other fees are recognized over the term of the franchise contract, rather than upon execution of the contract and the unamortized portion of these fees is included in deferred revenues in our condensed consolidated balance sheets. • Certain contract acquisition costs related to our management and franchise contracts are recognized over the term of the contracts as a reduction to revenue, instead of as amortization expense. This change does not affect net income (loss). • Incentive management fees are recognized to the extent that it is probable that a significant reversal will not occur as a result of future hotel profits or cash flows, as opposed to recognizing amounts that would be due if the management contract was terminated at the end of the reporting period. This change does not affect net income (loss) for any full year period. • Revenue related to our Hilton Honors guest loyalty program is recognized upon point redemption, net of any reward reimbursement paid to a third party, as opposed to recognized on a gross basis at the time points are issued in conjunction with the accrual of the expected future cost of the reward reimbursement. Additionally, points issued at owned and leased hotels are accounted for as a reduction of revenue from owned and leased hotels, as opposed to expenses of owned and leased hotels. Fees received in excess of the estimated liability for guest loyalty program are included in deferred revenues in our condensed consolidated balance sheets. • Reimbursable fees related to our management and franchise contracts are recognized as they are billed, as opposed to when we incur the related expenses. Timing differences related to the receipt and spend of these fees will no longer be recorded in other assets and other liabilities in our condensed consolidated balance sheets. We have not retrospectively restated for management and franchise contracts modified before January 1, 2016 for the contract modifications. Instead, we have reflected the aggregate effect of all contract modifications when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price. The estimated effect of applying this practical expedient is to use a longer period over which to straight line any fixed consideration either received from the customer or paid to the customer, since all fees will be amortized over the full contract term beginning on the date of initial execution, rather than amortizing fees received upon contract modifications prospectively from the contract modification date. We do not anticipate that this effect is material given the insignificance of the fixed consideration compared to the overall consideration we expect to earn over the term of the contract. See the "Prior Period Financial Information" below for the effect of the adoption of ASU 2014-09 on our condensed consolidated balance sheet as of December 31, 2017 and our condensed consolidated statement of operations for the three months ended March 31, 2017. Prior Period Financial Information The following table presents the effect of the adoption of ASU 2014-09 for the line items affected on our condensed consolidated balance sheet: December 31, 2017 As Previously Reported Adoption of ASU 2014-09 As Adjusted (in millions) ASSETS Accounts receivable, net $ 998 $ 7 $ 1,005 Prepaid expenses 111 16 127 Other current assets 171 (2 ) 169 Management and franchise contracts, net 909 44 953 Deferred income tax assets 113 (2 ) 111 Other non-current assets 434 (143 ) 291 TOTAL ASSETS 14,308 (80 ) 14,228 LIABILITIES AND EQUITY Current liabilities: Accounts payable, accrued expenses and other (1)(2) 1,487 (71 ) 1,416 Current portion of deferred revenues (1) 41 325 366 Deferred revenues 97 732 829 Deferred income tax liabilities 1,063 (132 ) 931 Other non-current liabilities 1,470 (550 ) 920 Total liabilities 12,233 304 12,537 Equity: Accumulated deficit (6,596 ) (385 ) (6,981 ) Accumulated other comprehensive loss (742 ) 1 (741 ) Total equity 2,075 (384 ) 1,691 TOTAL LIABILITIES AND EQUITY 14,308 (80 ) 14,228 ____________ (1) The current portion of deferred revenues has been separated from accounts payable, accrued expenses and other in the "As Previously Reported" column following the adoption of ASU 2014-09. (2) The current portion of liability for guest loyalty program has been separated from accounts payable, accrued expenses and other to conform with current presentation. The balance was $622 million as of December 31, 2017 and did not change as a result of the adoption of ASU 2014-09. The following table presents the effect of the adoption of ASU 2014-09 and ASU 2017-07 on our condensed consolidated statement of operations: Three Months Ended March 31, 2017 As Previously Reported Adoption of ASU 2014-09 Adoption of ASU 2017-07 As Adjusted (in millions) Revenues Franchise fees $ 294 $ (12 ) $ — $ 282 Base and other management fees 83 (2 ) — 81 Incentive management fees 52 (3 ) — 49 Owned and leased hotels 300 (4 ) — 296 Other revenues 37 — — 37 766 (21 ) — 745 Other revenues from managed and franchised properties 1,395 (244 ) — 1,151 Total revenues 2,161 (265 ) — 1,896 Expenses Owned and leased hotels 272 (4 ) — 268 Depreciation and amortization 89 (3 ) — 86 General and administrative 105 — 1 106 Other expenses 23 — — 23 489 (7 ) 1 483 Other expenses from managed and franchised properties 1,395 (199 ) — 1,196 Total expenses 1,884 (206 ) 1 1,679 Operating income 277 (59 ) (1 ) 217 Interest expense (104 ) 15 — (89 ) Loss on foreign currency transactions (4 ) — — (4 ) Loss on debt extinguishment (60 ) — — (60 ) Other non-operating income, net 1 — 1 2 Income before income taxes 110 (44 ) — 66 Income tax expense (35 ) 17 — (18 ) Net income 75 (27 ) — 48 Net income attributable to noncontrolling interests (1 ) — — (1 ) Net income attributable to Hilton stockholders $ 74 $ (27 ) $ — $ 47 Earnings per share: Basic $ 0.22 $ 0.14 Diluted $ 0.22 $ 0.14 Accounting Standards Not Yet Adopted In February 2018, the FASB issued ASU No. 2018-02 ("ASU 2018-02"), Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . This ASU permits a reclassification from accumulated other comp |
Organization
Organization | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization 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, including timeshare properties. As of March 31, 2018 , we managed, franchised, owned or leased 5,339 hotels and resorts, totaling 863,241 rooms in 106 countries and territories. As of March 31, 2018 , HNA Tourism Group Co., Ltd. and certain of its affiliates (together, "HNA") beneficially owned approximately 26 percent of our common stock. In April 2018, HNA sold its entire ownership interest in Hilton's common stock. See Note 16 : " Subsequent Events " for additional information. On January 3, 2017, we completed the spin-offs of a portfolio of hotels and resorts, as well as our timeshare business, into two independent, publicly traded companies: Park Hotels & Resorts Inc. ("Park") and Hilton Grand Vacations Inc. ("HGV"), respectively (the "spin-offs"). |
Revenues from Contracts with Cu
Revenues from Contracts with Customers | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | Revenues from Contracts with Customers Contract Liabilities The following table summarizes the activity of our contract liabilities, which are classified as a component of current and long-term deferred revenues, during the three months ended March 31, 2018: (in millions) Balance as of December 31, 2017 $ 1,087 Cash received in advance and not recognized as revenue 115 Revenue recognized (60 ) Other (1) (53 ) Balance as of March 31, 2018 $ 1,089 ____________ (1) Represents the reclassification from deferred revenues to the current portion of liability for guest loyalty program in our condensed consolidated balance sheet. The reclassification is the result of changes in estimated transaction prices for our performance obligations related to points issued under Hilton Honors due to a change in our expected costs to the third parties providing the good or service associated with the Hilton Honors points. Performance Obligations Estimated revenues expected to be recognized related to performance obligations that were unsatisfied as of March 31, 2018 , including revenues related to application, initiation and other fees and excluding revenues related to Hilton Honors, royalty fees, base management fees and incentive management fees, were as follows: Year (in millions) 2018 (remaining) $ 32 2019 43 2020 47 2021 52 2022 57 Thereafter 323 $ 554 As of March 31, 2018 , we had $535 million of deferred revenues related to unsatisfied performance obligations under Hilton Honors, which are not included in the table above. Revenue will be recognized as the points are redeemed, which is expected to occur over the next two years . We did not estimate revenues expected to be recognized related to our unsatisfied performance obligations for our: (i) royalty fees since they are considered sales-based royalty fees recognized as hotel room sales occur in exchange for licenses of our brand names over the terms of the franchise contracts; and (ii) base management fees and incentive management fees since they are allocated entirely to the wholly unsatisfied promise to transfer management services, which form part of a single performance obligation in a series, over the term of the management contract. Therefore, there are no amounts included in the table above related to these revenues. As part of the adoption of ASU 2014-09, we elected not to disclose the amount of the transaction price allocated to the same remaining performance obligations, disclosed above, as of December 31, 2017 or provide an explanation of when we expect to recognize that amount as revenue. |
Consolidated Variable Interest
Consolidated Variable Interest Entities | 3 Months Ended |
Mar. 31, 2018 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |
Consolidated Variable Interest Entities | Consolidated Variable Interest Entities As of March 31, 2018 and December 31, 2017 , we consolidated three variable interest entities ("VIEs"): two entities that lease hotel properties and one management company. We are the primary beneficiaries of these consolidated VIEs as we have the power to direct the activities that most significantly affect their economic performance. Additionally, we have the obligation to absorb their losses and the right to receive benefits that could be significant to them. The assets of our consolidated VIEs are only available to settle the obligations of the respective entities. Our condensed consolidated balance sheets included the assets and liabilities of these entities, which primarily comprised the following: March 31, December 31, 2018 2017 (in millions) Cash and cash equivalents $ 78 $ 73 Accounts receivable, net 15 16 Property and equipment, net 59 57 Deferred income tax assets 60 56 Other non-current assets 61 57 Accounts payable, accrued expenses and other 39 43 Long-term debt (1) 222 212 ____________ (1) Includes capital lease obligations of $199 million and $191 million as of March 31, 2018 and December 31, 2017, respectively. During the three months ended March 31, 2018 and 2017 , we did not provide any financial or other support to any VIEs that we were not previously contractually required to provide, nor do we intend to provide such support in the future. |
Amortizing Intangible Assets
Amortizing Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Amortizing Intangible Assets | Amortizing Intangible Assets Amortizing intangible assets were as follows: March 31, 2018 Gross Carrying Value Accumulated Amortization Net Carrying Value (in millions) Management and franchise contracts: Management and franchise contracts recorded at Merger (1) $ 2,247 $ (1,761 ) $ 486 Contract acquisition costs 436 (81 ) 355 Development commissions 100 (13 ) 87 $ 2,783 $ (1,855 ) $ 928 Other amortizing intangible assets: Leases (1) $ 310 $ (162 ) $ 148 Capitalized software 596 (440 ) 156 Hilton Honors (1) 343 (223 ) 120 Other 38 (34 ) 4 $ 1,287 $ (859 ) $ 428 December 31, 2017 Gross Carrying Value Accumulated Amortization Net Carrying Value (in millions) Management and franchise contracts: Management and franchise contracts recorded at Merger (1) $ 2,242 $ (1,716 ) $ 526 Contract acquisition costs 416 (74 ) 342 Development commissions 97 (12 ) 85 $ 2,755 $ (1,802 ) $ 953 Other amortizing intangible assets: Leases (1) $ 301 $ (153 ) $ 148 Capitalized software 585 (428 ) 157 Hilton Honors (1) 341 (217 ) 124 Other 38 (34 ) 4 $ 1,265 $ (832 ) $ 433 ____________ (1) Represents intangible assets that were initially recorded at their fair value at the time of the Merger. Amortization of our amortizing intangible assets included in depreciation and amortization expense in our condensed consolidated statements of operations was $69 million and $70 million for the three months ended March 31, 2018 and 2017 , respectively, including $1 million of amortization expense on our development commissions in each period. Amortization of our contract acquisition costs recognized as a reduction in franchise fee and base and other management fee revenues was $7 million and $3 million for the three months ended March 31, 2018 and 2017, respectively. We estimated future amortization for our amortizing intangible assets as of March 31, 2018 to be as follows: Recognized in Depreciation and Amortization Expense Recognized as a Reduction of Franchise Fee and Base and Other Management Fee Revenues Year (in millions) 2018 (remaining) $ 205 $ 16 2019 261 22 2020 210 22 2021 71 21 2022 61 21 Thereafter 193 253 $ 1,001 $ 355 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term Debt Long-term debt balances, including obligations for capital leases, and associated interest rates as of March 31, 2018 , were as follows: March 31, December 31, 2018 2017 (in millions) Senior notes with a rate of 4.250%, due 2024 1,000 1,000 Senior notes with a rate of 4.625%, due 2025 900 900 Senior notes with a rate of 4.875%, due 2027 600 600 Senior secured term loan facility with a rate of 3.87%, due 2023 3,919 3,929 Capital lease obligations with an average rate of 6.33%, due 2021 to 2030 241 233 Other debt with an average rate of 2.65%, due 2018 to 2026 23 21 6,683 6,683 Less: unamortized deferred financing costs and discount (78 ) (81 ) Less: current maturities of long-term debt (1) (47 ) (46 ) $ 6,558 $ 6,556 ____________ (1) Net of unamortized deferred financing costs and discount attributable to current maturities of long-term debt. Senior Notes In April 2018, we issued $1.5 billion aggregate principal amount of senior notes, see Note 16 : " Subsequent Events " for additional information. In March 2017, we issued $900 million aggregate principal amount of 4.625% Senior Notes due 2025 (the "2025 Senior Notes") and $600 million aggregate principal amount of 4.875% Senior Notes due 2027 (the "2027 Senior Notes"), and incurred $21 million of debt issuance costs. We used the net proceeds of the 2025 Senior Notes and the 2027 Senior Notes, along with available cash, to redeem in full our $1.5 billion 5.625% Senior Notes due 2021 (the "2021 Senior Notes"), plus accrued and unpaid interest. In connection with the repayment, we paid a redemption premium of $42 million and accelerated the recognition of $18 million of unamortized debt issuance costs, which were included in loss on debt extinguishment in our condensed consolidated statement of operations for the three months ended March 31, 2017 . The 4.250% Senior Notes due 2024 (the "2024 Senior Notes"), the 2025 Senior Notes and the 2027 Senior Notes are guaranteed on a senior unsecured basis by the Parent and certain of its wholly owned subsidiaries. See Note 15 : " Condensed Consolidating Guarantor Financial Information " for additional details. Senior Secured Credit Facility Our senior secured credit facility consists of a $1.0 billion senior secured revolving credit facility (the "Revolving Credit Facility") and a senior secured term loan facility (the "Term Loans"). The obligations of our senior secured credit facility are unconditionally and irrevocably guaranteed by the Parent and substantially all of its direct and indirect wholly owned domestic subsidiaries. As of March 31, 2018 , we had $64 million of letters of credit outstanding under our Revolving Credit Facility and a borrowing capacity of $936 million . In April 2018, we repaid approximately $500 million of our Term Loans and reduced the interest rate 25 basis points to LIBOR plus 175 basis points . See Note 16 : " Subsequent Events " for additional information. Debt Maturities The contractual maturities of our long-term debt as of March 31, 2018 were as follows: Year (in millions) 2018 (remaining) $ 41 2019 56 2020 58 2021 59 2022 59 Thereafter 6,410 $ 6,683 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Cash Flow Hedges In May 2017, we began hedging foreign exchange-based cash flow variability in certain of our foreign currency denominated management and franchise fees using forward contracts (the "Fee Forward Contracts"). We elected to designate these Fee Forward Contracts as cash flow hedges for accounting purposes. As of March 31, 2018 , the Fee Forward Contracts had an aggregate notional amount of $68 million and maturities of 24 months or less. As of March 31, 2018 , we held two interest rate swap agreements with notional amounts of $1.6 billion and $750 million , which swap one-month LIBOR on the Term Loans to fixed rates of 1.98 percent and 2.02 percent, respectively, and expire in March 2022 . We elected to designate these interest rate swaps as cash flow hedges for accounting purposes. Non-designated Hedges As of March 31, 2018 , we held short-term forward contracts with an aggregate notional amount of $336 million to offset exposure to fluctuations in certain of our foreign currency denominated cash balances. We elected not to designate these forwar d contracts as hedging instruments. Depending on the fair value of each contract, we classify it as an asset or liability. Fair Value of Derivative Instruments We measure our derivative instruments at fair value, which is estimated using a discounted cash flow analysis, and we consider the inputs used to measure the fair value as Level 2 within the fair value hierarchy. The discounted cash flow analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs of similar instruments, including interest rate curves and spot and forward rates, as applicable, as well as option volatility. The fair values of our derivative instruments in our condensed consolidated balance sheets were as follows: March 31, December 31, Balance Sheet Classification 2018 2017 (in millions) Cash Flow Hedges: Interest rate swaps Other non-current assets $ 47 $ 11 Forward contracts Accounts payable, accrued expenses and other 1 1 Non-designated Hedges: Forward contracts Other current assets 1 4 Forward contracts Accounts payable, accrued expenses and other 2 1 Earnings Effect of Derivative Instruments The gains and losses recognized in our condensed consolidated statements of operations and condensed consolidated statements of comprehensive income before any effect for income taxes were as follows: Three Months Ended March 31, Classification of Gain (Loss) Recognized 2018 2017 (in millions) Cash Flow Hedges (1)(2) : Interest rate swaps Other comprehensive income $ 34 $ (9 ) Interest rate swaps Interest expense (2 ) (2 ) Forward contracts Other comprehensive income (1 ) N/A Non-designated Hedges: Interest rate swaps Other non-operating income, net N/A 2 Interest rate swaps (3) Interest expense (3 ) (3 ) Forward contracts Gain (loss) on foreign currency transactions 1 1 ____________ (1) There were no amounts recognized in earnings related to hedge ineffectiveness or amounts excluded from hedge effectiveness testing during the three months ended March 31, 2018 and 2017 . (2) The earnings effect of the Fee Forward Contracts on fee revenues for the three months ended March 31, 2018 was less than $1 million . (3) These amounts are related to the dedesignation of interest rate swaps in 2016 that no longer met the criteria for hedge accounting and were settled in 2017. The amounts were reclassified from accumulated other comprehensive loss as the underlying transactions occurred. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We did not elect the fair value measurement option for any of our financial assets or liabilities. The fair values of certain financial instruments and the hierarchy level we used to estimate the fair values are shown below, see Note 7 : " Derivative Instruments and Hedging Activities " for the fair value information of our derivatives: March 31, 2018 Hierarchy Level Carrying Value Level 1 Level 2 Level 3 (in millions) Assets: Cash equivalents $ 237 $ — $ 237 $ — Restricted cash equivalents 12 — 12 — Liabilities: Long-term debt (1) 6,341 2,471 — 3,951 December 31, 2017 Hierarchy Level Carrying Value Level 1 Level 2 Level 3 (in millions) Assets: Cash equivalents $ 284 $ — $ 284 $ — Restricted cash equivalents 12 — 12 — Liabilities: Long-term debt (1) 6,348 2,575 — 3,954 ____________ (1) The carrying values include unamortized deferred financing costs and discount. The carrying values and fair values exclude capital lease obligations and other debt. The fair values of financial instruments not included in these tables are estimated to be equal to their carrying values as of March 31, 2018 and December 31, 2017 . Our estimates of the fair values were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop the estimated fair values. Cash equivalents and restricted cash equivalents primarily consisted of short-term interest-bearing money market funds with maturities of less than 90 days and time deposits. The estimated fair values were based on available market pricing information of similar financial instruments. The estimated fair values of our Level 1 long-term debt were based on prices in active debt markets. The estimated fair values of our Level 3 long-term debt were based on indicative quotes received for similar issuances. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income Taxes On December 22, 2017, the TCJ Act, which permanently reduces the federal corporate income tax rate from a graduated 35 percent to a flat 21 percent rate and imposes a one-time transition tax on earnings of foreign subsidiaries that were previously deferred, was signed into law. As of March 31, 2018, we had not completed our accounting for the tax effects of enactment of the TCJ Act; however, where possible, as described below, we made a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax. In other cases, we were not able to make a reasonable estimate and continued to account for those items based on the provisions of the tax laws that were in effect immediately prior to enactment. For the items for which were able to determine a reasonable estimate, we recognized a provisional benefit at December 31, 2017 of $665 million , of which $517 million was the result of the remeasurement of U.S. deferred tax assets and other tax liabilities. The provisional benefit of $517 million recorded at December 31, 2017 on our existing deferred tax balances excludes the income tax impact of the adoption of ASU 2014-09. Other than the effects of the adoption of ASU 2014-09 on our balance sheet as of December 31, 2017, as of March 31, 2018, we have not recognized any adjustments to the provisional amounts recorded at December 31, 2017. Provisional Amounts • Deferred tax assets and liabilities and other tax liabilities. We remeasured deferred tax assets and liabilities and other tax liabilities based on the rates at which they are expected to reverse in the future, which is generally 21 percent . The provisional amounts recorded at December 31, 2017 related to the remeasurement of our deferred tax assets and liabilities, uncertain tax position reserves, and other tax liabilities were income tax benefits of $517 million , $33 million and $84 million , respectively. However, this remeasurement is based on estimates as of the enactment date of the TCJ Act and our existing analysis of the numerous complex tax law changes in the TCJ Act. As we finalize our analysis of the tax law changes in the TCJ Act, including the impact on our 2017 tax return filing positions throughout the 2018 fiscal year, we will update our provisional amounts for this remeasurement. As of March 31, 2018, our provisional amounts remain unchanged. • Foreign taxation changes. A one-time transition tax is applied to foreign earnings previously not subjected to U.S. tax. The one-time transition tax is based on our total post-1986 earnings and profits ("E&P") that were previously deferred from U.S. income taxes, but is assessed at a lower tax rate than the federal corporate tax rate of 35 percent . We recorded a provisional amount for our one-time transition tax liability for our foreign subsidiaries based on estimates, as of the enactment date of the TCJ Act, for our controlled foreign subsidiaries and estimates of the total post-1986 E&P for noncontrolled foreign subsidiaries. Additionally, the language in the TCJ Act is not specific enough to address all aspects of the calculation of the transition tax and leaves certain components of the calculation open to interpretation. The U.S. Treasury department is expected to issue regulations to provide clarification. We will update our provisional amounts related to the transition tax for the E&P of our noncontrolled foreign subsidiaries, as further guidance is provided by the U.S. Treasury department. We previously recorded a federal deferred tax liability for our deferred earnings at the statutory 35 percent rate. The application of the transition tax results in the deferred earnings previously recorded at 35 percent being subjected to a lower rate, resulting in a provisional income tax benefit at December 31, 2017 of $15 million . We had not recorded certain deferred tax assets, related primarily to E&P deficits, for some foreign subsidiaries based upon an expectation that no tax benefit from such assets would be realized within the foreseeable future. The recognition of tax benefits from the deferred tax assets previously not recorded resulted in a provisional income tax benefit at December 31, 2017 of $16 million . As of March 31, 2018, our provisional amounts remain unchanged. We continue to analyze and refine our calculations related to the measurement of these balances. We continue to analyze the impact of the TCJ Act on our recognition of deferred tax assets and liabilities for outside basis differences in our investments in foreign subsidiaries and due to the complexity of these calculations on both our U.S. and foreign tax positions and uncertainty regarding the impact of new taxes on certain foreign earnings, we have not recorded provisional amounts. As of March 31, 2018, we had not recorded any deferred tax assets or liabilities for outside basis differences in our investments in foreign subsidiaries. We will further analyze the impact of these new taxes on foreign earnings and their impact on our tax positions throughout fiscal year 2018 to allow us to complete the required accounting for our outside basis differences in our investments in foreign subsidiaries. We continued to apply Accounting Standards Codification 740 based on the provisions of the tax laws that were in effect immediately prior to the TCJ Act being enacted. Global Intangible Low-Taxed Income ("GILTI") and Foreign Derived Intangible Income ("FDII") The TCJ Act subjects a U.S. shareholder to current tax on GILTI earned by certain foreign subsidiaries. In addition, the TCJ Act provides for FDII to be taxed at a lower effective rate than the statutory rate by allowing a tax deduction against the income. Interpretive guidance on the accounting for GILTI states than an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. Given the complexity of the GILTI provisions, we are still evaluating the effects of the GILTI provisions and have not yet determined our accounting policy. At March 31, 2018, because we are still evaluating the GILTI provisions and our analysis of future taxable income that is subject to GILTI, we have included GILTI and the FDII deduction related to current-year operations only in our estimated annual effective tax rate and have not provided additional GILTI on deferred items. 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 pre-tax income or loss, which is subject to federal, state, local and foreign income taxes. Our total unrecognized tax benefit as of March 31, 2018 was $284 million . We accrued approximately $35 million for the payment of interest and penalties as of March 31, 2018 . Included in the balance of unrecognized tax benefits as of March 31, 2018 was $285 million associated with positions that, if favorably resolved, would provide a benefit to our effective income tax rate. In April 2014, we received 30-day Letters from the Internal Revenue Service ("IRS") and the Revenue Agents Report ("RAR") for the 2006 and October 2007 tax years. We disagreed with several of the proposed adjustments in the RAR, filed a formal appeals protest with the IRS and did not make any tax payments related to this audit. The issues being protested in appeals relate to assertions by the IRS that: (i) certain foreign currency denominated intercompany loans from our foreign subsidiaries to certain U.S. subsidiaries should be recharacterized as equity for U.S. federal income tax purposes and constitute deemed dividends from such foreign subsidiaries to our U.S. subsidiaries; (ii) in calculating the amount of U.S. taxable income resulting from our Hilton Honors guest loyalty program, we should not reduce gross income by the estimated costs of future redemptions, but rather such costs would be deductible at the time the points are redeemed; and (iii) certain foreign currency denominated loans issued by one of our Luxembourg subsidiaries whose functional currency is the U.S. dollar ("USD"), should instead be treated as issued by one of our Belgian subsidiaries whose functional currency is the euro, and thus foreign currency gains and losses with respect to such loans should have been measured in euros, instead of USD. Additionally, in January 2016, we received a 30-day Letter from the IRS and the RAR for the December 2007 through 2010 tax years. The RAR includes the proposed adju stments for tax years December 2007 through 2010, which reflect the carryover effect of the three protested issues from 2006 through October 2007. These proposed adjustments will also be protested in appeals and formal appeals protests have been submitted. In total, the proposed adjustments sought by the IRS would result in additional U.S. federal tax owed of approximately $874 million , excluding interest and penalties and potential state income taxes. The portion of this amount related to Hilton Honors would result in a decrease to our future tax liability when the points are redeemed. We disagree with the IRS's position on each of these assertions and intend to vigorously contest them. However, based on continuing appeals process discussions with the IRS, we believe that it is more likely than not that we will not recognize the full benefit related to certain of the issues being appealed. Accordingly, as of March 31, 2018 , we have recorded $45 million of unrecognized tax benefits related to these issues. We file income tax returns, including returns for our subsidiaries, with federal, state, local and foreign tax jurisdictions. We are under regular and recurring audit by the IRS and other taxing authorities on open tax positions. The timing of the resolution of tax audits is highly uncertain, as are the amounts, if any, that may ultimately be paid upon such resolution. Changes may result from the conclusion of ongoing audits, appeals or litigation in federal, state, local and foreign tax jurisdictions or from the resolution of various proceedings between the U.S. and foreign tax authorities. We are no longer subject to U.S. federal income tax examination for years through 2004. As of March 31, 2018 , we remain subject to federal examinations from 2005 through 2016, state examinations from 2005 through 2016 and foreign examinations of our income tax returns for the years 1996 through 2017. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation We grant time-vesting restricted stock units and restricted stock (collectively, "RSUs"), nonqualified stock options ("options") and performance-vesting restricted stock units and restricted stock (collectively, "performance shares") to our employees and deferred share units ("DSUs") to members of our board of directors. We recognized share-based compensation expense of $28 million and $25 million during the three months ended March 31, 2018 and 2017 , respectively. As of March 31, 2018 , unrecognized compensation costs for unvested awards was approximately $223 million , which are expected to be recognized over a weighted-average period of 2.0 years on a straight-line basis. As of March 31, 2018 , there were 16.2 million shares of common stock available for future issuance under our 2017 Omnibus Incentive Plan, plus any shares subject to awards outstanding under our 2013 Omnibus Incentive Plan, which will become available for issuance under our 2017 Omnibus Incentive Plan if such outstanding awards expire or are terminated or are canceled or forfeited. RSUs During the three months ended March 31, 2018 , we granted 0.9 million RSUs with a weighted average grant date fair value per share of $79.37 , which generally vest in equal annual installments over two or three years from the date of grant. Options During the three months ended March 31, 2018 , we granted 0.6 million options with an exercise price per share of $79.35 , which vest over three years from the date of grant in equal annual installments and terminate 10 years from the date of grant or earlier if the individual’s service terminates under certain circumstances. The weighted average grant date fair value per share of the options granted during the three months ended March 31, 2018 was $23.78 , which was determined using the Black-Scholes-Merton option-pricing model with the following assumptions: Expected volatility (1) 27.99 % Dividend yield (2) 0.74 % Risk-free rate (3) 2.73 % Expected term (in years) (4) 6.0 ____________ (1) Estimated using historical movement of Hilton's stock price. (2) Estimated based on the current quarterly dividend and the three-month average stock price at the date of grant. (3) Based on the yields of U.S. Department of Treasury instruments with similar expected lives. (4) Estimated using the average of the vesting periods and the contractual term of the options. As of March 31, 2018 , 1.2 million options were exercisable. Performance Shares During the three months ended March 31, 2018 , we granted 0.3 million performance shares with a weighted average grant date fair value per share of $79.35 . The performance shares are settled at the end of the three-year performance period with 50 percent of the awards subject to achievement based on the Company's adjusted earnings before interest expense, a provision for income taxes and depreciation and amortization ("Adjusted EBITDA") compound annual growth rate ("CAGR") ("EBITDA CAGR") and the other 50 percent of the awards subject to achievement based on the Company’s free cash flow ("FCF") per share CAGR ("FCF CAGR"). We determined that the performance conditions for performance shares issued in 2018 and 2017 are probable of achievement and, as of March 31, 2018 , we recognized compensation expense based on the following anticipated achievement percentages for these performance shares: EBITDA CAGR FCF CAGR 2017 performance shares 200 % 200 % 2018 performance shares 150 % 125 % |
Stockholders' Equity and Accumu
Stockholders' Equity and Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity and Accumulated Other Comprehensive Loss | Stockholders' Equity and Accumulated Other Comprehensive Loss The changes in the components of stockholders' equity were as follows: Equity Attributable to Hilton Stockholders Treasury Stock Additional Accumulated Deficit (1) Accumulated Other Comprehensive Loss Common Stock Noncontrolling Shares Amount Total (in millions) Balance as of December 31, 2017 317 $ 3 $ (891 ) $ 10,298 $ (6,981 ) $ (741 ) $ 3 $ 1,691 Share-based compensation 1 — — (10 ) — — — (10 ) Repurchases of common stock (1 ) — (110 ) — — — — (110 ) Net income — — — — 161 — 2 163 Other comprehensive income — — — — — 61 — 61 Dividends — — — — (48 ) — — (48 ) Balance as of March 31, 2018 317 $ 3 $ (1,001 ) $ 10,288 $ (6,868 ) $ (680 ) $ 5 $ 1,747 Equity Attributable to Hilton Stockholders Treasury Stock Additional Accumulated Deficit (1) Accumulated Other Comprehensive Loss Common Stock Noncontrolling Interests (2) Shares Amount Total (in millions) Balance as of December 31, 2016 329 $ 3 $ — $ 10,220 $ (3,545 ) $ (1,001 ) $ (50 ) $ 5,627 Share-based compensation 2 — — (7 ) — — — (7 ) Repurchases of common stock (1 ) — (70 ) — — — — (70 ) Net income — — — — 47 — 1 48 Other comprehensive income (loss) — — — — — 20 (1 ) 19 Dividends — — — — (50 ) — — (50 ) Spin-offs of Park and HGV — — — — (4,318 ) 63 49 (4,206 ) Cumulative effect of the adoption of ASU 2016-09 — — — 1 (1 ) — — — Distributions — — — — — — (1 ) (1 ) Balance as of March 31, 2017 330 $ 3 $ (70 ) $ 10,214 $ (7,867 ) $ (918 ) $ (2 ) $ 1,360 ___________ (1) Includes adjustments of $385 million and $222 million as of December 31, 2017 and 2016, respectively, as a result of the adoption of ASU 2014-09 as of January 1, 2016. See Note 2 : " Basis of Presentation and Summary of Significant Accounting Policies " for additional information. (2) Other comprehensive loss was related to a currency translation adjustment. During 2017, our board of directors authorized stock repurchases of up to $2.0 billion of the Company's common stock. During the three months ended March 31, 2018 , we repurchased 1.3 million shares of common stock under the program. As of March 31, 2018 , approximately $1.0 billion remained available for share repurchases under the program. In April 2018, we repurchased 16.5 million shares of Hilton common stock from HNA for $1.17 billion , which was made apart from, and not pursuant to, the stock repurchase program. See Note 16 : " Subsequent Events " for additional information. 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, 2017 $ (513 ) $ (229 ) $ 1 $ (741 ) Other comprehensive income (loss) before reclassifications 32 (1 ) 24 55 Amounts reclassified from accumulated other comprehensive loss — 2 4 6 Net current period other comprehensive income 32 1 28 61 Balance as of March 31, 2018 $ (481 ) $ (228 ) $ 29 $ (680 ) Currency Translation Adjustment (1) Pension Liability Adjustment (2) Cash Flow Hedge Adjustment (3) Total (in millions) Balance as of December 31, 2016 $ (738 ) $ (251 ) $ (12 ) $ (1,001 ) Other comprehensive income (loss) before reclassifications 21 (1 ) (5 ) 15 Amounts reclassified from accumulated other comprehensive loss — 2 3 5 Net current period other comprehensive income (loss) 21 1 (2 ) 20 Spin-offs of Park and HGV 63 — — 63 Balance as of March 31, 2017 $ (654 ) $ (250 ) $ (14 ) $ (918 ) ____________ (1) Includes net investment hedges and intra-entity foreign currency transactions that are of a long-term investment nature. (2) Amounts reclassified include the amortization of prior service cost and the amortization of net loss that were included in our computation of net periodic pension cost. They were recognized in other non-operating income, net in our condensed consolidated statements of operations and are presented net of a $1 million tax benefit for the three months ended March 31, 2018 and 2017 . (3) Amounts reclassified relate to the designated interest rate swaps, as well as the interest rate swaps that were dedesignated in 2016 and settled in 2017. The amounts were recognized in interest expense in our condensed consolidated statements of operations and are presented net of a tax benefit of $1 million and $2 million for the three months ended March 31, 2018 and 2017 , respectively. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table presents the calculation of basic and diluted earnings per share ("EPS"): Three Months Ended March 31, 2018 2017 (in millions, except per share amounts) Basic EPS: Numerator: Net income attributable to Hilton stockholders $ 161 $ 47 Denominator: Weighted average shares outstanding 316 330 Basic EPS $ 0.51 $ 0.14 Diluted EPS: Numerator: Net income attributable to Hilton stockholders $ 161 $ 47 Denominator: Weighted average shares outstanding 319 331 Diluted EPS $ 0.51 $ 0.14 Less than 1 million share-based compensation awards were excluded from the weighted average shares outstanding in the computation of diluted EPS for the three months ended March 31, 2018 and 2017 because their effect would have been anti-dilutive under the treasury stock method. |
Business Segments
Business Segments | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments We are a hospitality company with operations organized in two distinct operating segments: (i) management and franchise; and (ii) ownership. These segments are managed and reported separately because of their distinct economic characteristics. The management and franchise segment includes all of the hotels we manage for third-party owners, as well as all franchised hotels operated or managed by someone other than us. As of March 31, 2018 , this segment included 650 managed hotels and 4,570 franchised hotels consisting of 833,421 total rooms. This segment also earns license fees from HGV and co-brand credit card arrangements and fees for managing properties in our ownership segment. As of March 31, 2018 , the ownership segment included 71 properties totaling 21,718 rooms, comprising 62 hotels that we wholly owned or leased, one hotel owned by a consolidated non-wholly owned entity, two hotels leased by consolidated VIEs and six hotels owned or leased by unconsolidated affiliates. The performance of our operating segments is evaluated primarily on operating income, without allocating corporate and other revenues and other expenses or general and administrative expenses. The following table presents revenues for our reportable segments, reconciled to consolidated amounts: Three Months Ended March 31, 2018 2017 (in millions) Franchise fees $ 333 $ 283 Base and other management fees (1) 90 90 Incentive management fees 55 49 Management and franchise 478 422 Ownership 334 296 Segment revenues 812 718 Amortization of contract acquisition costs (7 ) (3 ) Other revenues 23 37 Direct reimbursements from managed and franchised properties 699 663 Indirect reimbursements from managed and franchised properties 555 488 Intersegment fees elimination (1) (8 ) (7 ) Total revenues $ 2,074 $ 1,896 ____________ (1) Includes management, royalty and IP fees charged to our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations. The following table presents operating income for our reportable segments, reconciled to consolidated income before income taxes: Three Months Ended March 31, 2018 2017 (in millions) Management and franchise (1) $ 478 $ 422 Ownership (1) 6 21 Segment operating income 484 443 Amortization of contract acquisition costs (7 ) (3 ) Other revenues, less other expenses 9 14 Net other expenses from managed and franchised properties (21 ) (45 ) Depreciation and amortization (82 ) (86 ) General and administrative (104 ) (106 ) Operating income 279 217 Interest expense (83 ) (89 ) Gain (loss) on foreign currency transactions 11 (4 ) Loss on debt extinguishment — (60 ) Other non-operating income, net 14 2 Income before income taxes $ 221 $ 66 ____________ (1) Includes management, royalty and IP fees charged to our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations. The following table presents total assets for our reportable segments, reconciled to consolidated amounts: March 31, December 31, 2018 2017 (in millions) Management and franchise $ 11,435 $ 11,505 Ownership 994 964 Corporate and other 1,831 1,759 $ 14,260 $ 14,228 The following table presents capital expenditures for property and equipment for our reportable segments, reconciled to consolidated amounts: Three Months Ended March 31, 2018 2017 (in millions) Ownership $ 7 $ 6 Corporate and other 3 3 $ 10 $ 9 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure | Commitments and Contingencies We provide performance guarantees to certain owners of hotels that we operate under management contracts. Most of these guarantees allow us to terminate the contract, rather than fund shortfalls, if specified operating performance levels are not achieved. However, in limited cases, we are obligated to fund performance shortfalls. As of March 31, 2018 , we had four contracts containing performance guarantees, with expirations ranging from 2019 to 2030 , and possible cash outlays totaling approximately $47 million . Our obligations under these guarantees in future periods are dependent on the operating performance levels of these hotels over the remaining terms of the performance guarantees. We do not have any letters of credit pledged as collateral against these guarantees. As of March 31, 2018 and December 31, 2017 , we recorded $14 million and $12 million , respectively, in accounts payable, accrued expenses and other and $7 million and $9 million , respectively, in other liabilities in our condensed consolidated balance sheets for one and two outstanding performance guarantees, respectively, that are related to VIEs for which we are not the primary beneficiary. We receive fees from managed and franchise properties to operate our marketing, sales and brand programs on behalf of hotel owners. As of March 31, 2018 and December 31, 2017 , we had collected an aggregate of $397 million and $402 million in excess of net amounts expended, respectively, across all programs. We are involved in various claims and lawsuits arising in the ordinary course of business, some of which include claims for substantial sums. While the ultimate results of claims and litigation cannot be predicted with certainty, we expect that the ultimate resolution of all pending or threatened claims and litigation as of March 31, 2018 will not have a material adverse effect on our consolidated financial position, results of operations or cash flows. |
Condensed Consolidating Guarant
Condensed Consolidating Guarantor Financial Information | 3 Months Ended |
Mar. 31, 2018 | |
Condensed Consolidating Guarantor Financial Information [Abstract] | |
Condensed Consolidating Guarantor Financial Information | Condensed Consolidating Guarantor Financial Information 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 2025 Senior Notes and 2027 Senior Notes in March 2017 and are guarantors of the 2024 Senior Notes. In September 2016, Hilton Domestic Operating Company Inc. ("HOC"), an entity incorporated in July 2016 that is 100 percent owned by Hilton Worldwide Finance LLC and is a guarantor of the 2025 Senior Notes and 2027 Senior Notes, assumed the 2024 Senior Notes that were issued in August 2016 by escrow issuers. The 2024 Senior Notes, 2025 Senior Notes and 2027 Senior Notes are collectively referred to as the Senior Notes. The HWF Issuers and HOC are collectively referred to as the Subsidiary Issuers. The Senior Notes are guaranteed jointly and severally on a senior unsecured basis by HWP, the Parent and certain of the Parent's 100 percent owned domestic restricted subsidiaries that are themselves not issuers of the applicable series of Senior Notes (together, the "Guarantors''). The indentures that govern the Senior Notes provide that any subsidiary of the Company that provides a guarantee of our senior secured credit facility will guarantee the Senior Notes. As of March 31, 2018 , 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 condensed consolidating financial information presents the financial information based on the composition of the Guarantors and Non-Guarantors as of March 31, 2018 . 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 our 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 tables present the condensed consolidating financial information as of March 31, 2018 and December 31, 2017 , and for the three months ended March 31, 2018 and 2017 , for the Parent, HWF Issuers, HOC, Guarantors and Non-Guarantors. March 31, 2018 Parent HWF Issuers HOC Guarantors Non-Guarantors Eliminations Total (in millions) ASSETS Current Assets: Cash and cash equivalents $ — $ — $ 2 $ 14 $ 594 $ — $ 610 Restricted cash and cash equivalents — — 33 10 30 — 73 Accounts receivable, net — — 17 700 263 — 980 Intercompany receivables — — — — 40 (40 ) — Prepaid expenses — — 18 51 95 (3 ) 161 Other — — 1 17 166 — 184 Total current assets — — 71 792 1,188 (43 ) 2,008 Intangibles and Other Assets: Investments in subsidiaries 1,737 7,092 8,301 1,737 — (18,867 ) — Goodwill — — — 3,824 1,387 — 5,211 Brands — — — 4,404 498 — 4,902 Management and franchise contracts, net — — — 620 308 — 928 Other intangible assets, net — — — 278 150 — 428 Property and equipment, net — — 19 66 273 — 358 Deferred income tax assets 5 — 104 — 136 (134 ) 111 Other — 55 33 67 159 — 314 Total intangibles and other assets 1,742 7,147 8,457 10,996 2,911 (19,001 ) 12,252 TOTAL ASSETS $ 1,742 $ 7,147 $ 8,528 $ 11,788 $ 4,099 $ (19,044 ) $ 14,260 LIABILITIES AND EQUITY Current Liabilities: Accounts payable, accrued expenses and other $ — $ 39 $ 126 $ 555 $ 625 $ (1 ) $ 1,344 Current portion of deferred revenues — — 63 268 13 (2 ) 342 Intercompany payables — — 40 — — (40 ) — Current maturities of long-term debt — 32 — — 15 — 47 Income taxes payable — — — 22 41 — 63 Current portion of liability for guest loyalty program — — — 692 — — 692 Total current liabilities — 71 229 1,537 694 (43 ) 2,488 Long-term debt — 5,325 984 — 249 — 6,558 Deferred revenues — — — 766 62 — 828 Deferred income tax liabilities — 14 — 1,021 — (134 ) 901 Liability for guest loyalty program — — — 841 — — 841 Other — — 223 61 613 — 897 Total liabilities — 5,410 1,436 4,226 1,618 (177 ) 12,513 Equity: Total Hilton stockholders' equity 1,742 1,737 7,092 7,562 2,476 (18,867 ) 1,742 Noncontrolling interests — — — — 5 — 5 Total equity 1,742 1,737 7,092 7,562 2,481 (18,867 ) 1,747 TOTAL LIABILITIES AND EQUITY $ 1,742 $ 7,147 $ 8,528 $ 11,788 $ 4,099 $ (19,044 ) $ 14,260 December 31, 2017 Parent HWF Issuers HOC Guarantors Non-Guarantors Eliminations Total (in millions) ASSETS Current Assets: Cash and cash equivalents $ — $ — $ 2 $ 18 $ 550 $ — $ 570 Restricted cash and cash equivalents — — 61 10 29 — 100 Accounts receivable, net — — 18 712 275 — 1,005 Intercompany receivables — — — — 40 (40 ) — Prepaid expenses — — 25 24 84 (6 ) 127 Income taxes receivable — — — 60 — (24 ) 36 Other — — 1 13 155 — 169 Total current assets — — 107 837 1,133 (70 ) 2,007 Intangibles and Other Assets: Investments in subsidiaries 1,697 7,067 8,326 1,697 — (18,787 ) — Goodwill — — — 3,824 1,366 — 5,190 Brands — — — 4,405 485 — 4,890 Management and franchise contracts, net — — 2 645 306 — 953 Other intangible assets, net — — 1 283 149 — 433 Property and equipment, net — — 20 67 266 — 353 Deferred income tax assets 6 — 104 — 127 (126 ) 111 Other — 20 32 67 172 — 291 Total intangibles and other assets 1,703 7,087 8,485 10,988 2,871 (18,913 ) 12,221 TOTAL ASSETS $ 1,703 $ 7,087 $ 8,592 $ 11,825 $ 4,004 $ (18,983 ) $ 14,228 LIABILITIES AND EQUITY Current Liabilities: Accounts payable, accrued expenses and other $ 15 $ 20 $ 184 $ 576 $ 624 $ (3 ) $ 1,416 Current portion of deferred revenues — — 90 266 13 (3 ) 366 Intercompany payables — — 40 — — (40 ) — Current maturities of long-term debt — 32 — — 14 — 46 Income taxes payable — — — — 36 (24 ) 12 Current portion of liability for guest loyalty program — — — 622 — — 622 Total current liabilities 15 52 314 1,464 687 (70 ) 2,462 Long-term debt — 5,333 983 — 240 — 6,556 Deferred revenues — — — 770 59 — 829 Deferred income tax liabilities — 5 — 1,052 — (126 ) 931 Liability for guest loyalty program — — — 839 — — 839 Other — — 228 64 628 — 920 Total liabilities 15 5,390 1,525 4,189 1,614 (196 ) 12,537 Equity: Total Hilton stockholders' equity 1,688 1,697 7,067 7,636 2,387 (18,787 ) 1,688 Noncontrolling interests — — — — 3 — 3 Total equity 1,688 1,697 7,067 7,636 2,390 (18,787 ) 1,691 TOTAL LIABILITIES AND EQUITY $ 1,703 $ 7,087 $ 8,592 $ 11,825 $ 4,004 $ (18,983 ) $ 14,228 Three Months Ended March 31, 2018 Parent HWF Issuers HOC Guarantors Non-Guarantors Eliminations Total (in millions) Revenues Franchise fees $ — $ — $ 44 $ 262 $ 29 $ (4 ) $ 331 Base and other management fees — — — 51 26 — 77 Incentive management fees — — — 21 34 — 55 Owned and leased hotels — — — — 334 — 334 Other revenues — — 2 24 2 (5 ) 23 — — 46 358 425 (9 ) 820 Other revenues from managed and franchised properties — — 44 1,070 140 — 1,254 Total revenues — — 90 1,428 565 (9 ) 2,074 Expenses Owned and leased hotels — — — — 320 — 320 Depreciation and amortization — — 1 60 21 — 82 General and administrative — — 73 — 35 (4 ) 104 Other expenses — — 2 7 9 (4 ) 14 — — 76 67 385 (8 ) 520 Other expenses from managed and franchised properties — — 46 1,084 145 — 1,275 Total expenses — — 122 1,151 530 (8 ) 1,795 Operating income (loss) — — (32 ) 277 35 (1 ) 279 Interest expense — (61 ) (13 ) — (10 ) 1 (83 ) Gain (loss) on foreign currency transactions — — (3 ) 8 6 — 11 Other non-operating income, net — — 3 8 3 — 14 Income (loss) before income taxes and equity in earnings from subsidiaries — (61 ) (45 ) 293 34 — 221 Income tax benefit (expense) — 15 13 (73 ) (13 ) — (58 ) Income (loss) before equity in earnings from subsidiaries — (46 ) (32 ) 220 21 — 163 Equity in earnings from subsidiaries 161 207 239 161 — (768 ) — Net income 161 161 207 381 21 (768 ) 163 Net income attributable to noncontrolling interests — — — — (2 ) — (2 ) Net income attributable to Hilton stockholders $ 161 $ 161 $ 207 $ 381 $ 19 $ (768 ) $ 161 Comprehensive income $ 222 $ 190 $ 207 $ 382 $ 52 $ (829 ) $ 224 Comprehensive income attributable to noncontrolling interests — — — — (2 ) — (2 ) Comprehensive income attributable to Hilton stockholders $ 222 $ 190 $ 207 $ 382 $ 50 $ (829 ) $ 222 Three Months Ended March 31, 2017 Parent HWF Issuers HOC Guarantors Non-Guarantors Eliminations Total (in millions) Revenues Franchise fees $ — $ — $ 19 $ 244 $ 23 $ (4 ) $ 282 Base and other management fees — — — 49 32 — 81 Incentive management fees — — — 20 29 — 49 Owned and leased hotels — — — — 296 — 296 Other revenues — — 20 13 4 — 37 — — 39 326 384 (4 ) 745 Other revenues from managed and franchised properties — — 41 981 129 — 1,151 Total revenues — — 80 1,307 513 (4 ) 1,896 Expenses Owned and leased hotels — — — — 268 — 268 Depreciation and amortization — — 1 62 23 — 86 General and administrative — — 79 2 25 — 106 Other expenses — — 12 7 8 (4 ) 23 — — 92 71 324 (4 ) 483 Other expenses from managed and franchised properties — — 42 1,026 128 — 1,196 Total expenses — — 134 1,097 452 (4 ) 1,679 Operating income (loss) — — (54 ) 210 61 — 217 Interest expense — (63 ) (16 ) — (10 ) — (89 ) 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 3 — 2 Income (loss) before income taxes and equity in earnings from subsidiaries — (126 ) (58 ) 232 18 — 66 Income tax benefit (expense) — 50 24 (87 ) (5 ) — (18 ) Income (loss) before equity in earnings from subsidiaries — (76 ) (34 ) 145 13 — 48 Equity in earnings from subsidiaries 47 123 157 47 — (374 ) — Net income 47 47 123 192 13 (374 ) 48 Net income attributable to noncontrolling interests — — — — (1 ) — (1 ) Net income attributable to Hilton stockholders $ 47 $ 47 $ 123 $ 192 $ 12 $ (374 ) $ 47 Comprehensive income $ 67 $ 45 $ 127 $ 192 $ 30 $ (394 ) $ 67 Comprehensive income attributable to noncontrolling interests — — — — — — — Comprehensive income attributable to Hilton stockholders $ 67 $ 45 $ 127 $ 192 $ 30 $ (394 ) $ 67 Three Months Ended March 31, 2018 Parent HWF Issuers HOC Guarantors Non-Guarantors Eliminations Total (in millions) Operating Activities: Net cash provided by (used in) operating activities $ — $ (46 ) $ (29 ) $ 307 $ 11 $ — $ 243 Investing Activities: Capital expenditures for property and equipment — — — (1 ) (9 ) — (10 ) Capitalized software costs — — — (15 ) — — (15 ) Other — — — (2 ) 1 — (1 ) Net cash used in investing activities — — — (18 ) (8 ) — (26 ) Financing Activities: Repayment of debt — (10 ) — — (4 ) — (14 ) Intercompany transfers 157 56 41 (293 ) 39 — — Dividends paid (47 ) — — — — — (47 ) Repurchases of common stock (110 ) — — — — — (110 ) Tax withholdings on share-based compensation — — (40 ) — — — (40 ) Net cash provided by (used in) financing activities — 46 1 (293 ) 35 — (211 ) Effect of exchange rate changes on cash, restricted cash and cash equivalents — — — — 7 — 7 Net increase (decrease) in cash, restricted cash and cash equivalents — — (28 ) (4 ) 45 — 13 Cash, restricted cash and cash equivalents, beginning of period — — 63 28 579 — 670 Cash, restricted cash and cash equivalents, end of period $ — $ — $ 35 $ 24 $ 624 $ — $ 683 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 ) $ 48 $ 107 $ (3 ) $ 50 Investing Activities: Capital expenditures for property and equipment — — — (1 ) (8 ) — (9 ) Capitalized software costs — — — (9 ) — — (9 ) Other — (13 ) — (6 ) — — (19 ) Net cash used in investing activities — (13 ) — (16 ) (8 ) — (37 ) 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 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Event [Line Items] | |
Subsequent Events | Subsequent Events In April 2018, HOC issued $1.5 billion aggregate principal amount of 5.125% Senior Notes due 2026 (the "2026 Senior Notes"), guaranteed on a senior unsecured basis by the Parent and certain of its wholly owned subsidiaries. We used a portion of the net proceeds from the issuance, together with borrowings under our Revolving Credit Facility and available cash to repurchase 16.5 million shares of our common stock from HNA for $1,171 million . HNA also sold 66 million shares of Hilton common stock in an underwritten, public offering and no longer has any beneficial ownership in Hilton. Additionally, we used the remaining proceeds from the issuance of the 2026 Senior Notes to repay approximately $500 million of our Term Loans. |
Basis of Presentation and Sum24
Basis of Presentation and Summary of Significant Accounting Policies - (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition Revenues are primarily derived from management and franchise contracts with third-party hotel and resort owners, as well as from our owned and leased hotels. The majority of our performance obligations are a series of distinct goods or services, for which we receive variable consideration through our management and franchise fees or fixed consideration through our owned and leased hotels. We allocate the variable fees to the distinct services to which they relate applying the prescribed variable consideration allocation guidance, and we allocate fixed consideration to the related performance obligations based on the present value of the allocated variable cash flows. We do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised good or service to a customer and when the customer pays for that good or service will be one year or less, which it is in substantially all cases. Additionally, we do not typically include extended payment terms in our contracts with customers. Management and franchise revenues We identified the following performance obligations in connection with our management and franchise contracts: • Intellectual Property ("IP") licenses grant the right to access our hotel system IP, including brand IP, reservations systems and property management systems. • Hotel management services include providing day-to-day management services of the hotels for the property owners. • Development services include providing consultative services (e.g., design assistance and contractor selection) to the property owner to assist with the construction of the hotel prior to the hotel opening. • Pre-opening services include providing services (e.g., advertising, budgeting, e-commerce strategies, food and beverage testing) to the property owner to assist in preparing for the hotel opening. • Material rights for free or discounted goods or services to hotel guests are satisfied at the earlier point in time of either when the material right expires or the underlying free or discounted good or service is provided to the hotel guest. Each of the identified performance obligations related to management and franchise revenues is considered to be a series of distinct services transferred over time. While the underlying activities may vary from day to day, the nature of the promises are the same each day, and the property owner can independently benefit from each day's services. Management and franchise fees are typically based on the sales or usage of the underlying hotel, with the exception of fixed upfront fees that usually represent an insignificant portion of the transaction price. Franchise fees represent fees earned in connection with the licensing of one of our brands, usually under long-term contracts with the property owner, and include the following: • Royalty fees are generally based on a percentage of a hotel's monthly gross room revenue and, in some cases, may also include a percentage of gross food and beverage revenues and other revenues, where applicable. These fees are typically billed and collected monthly, and revenue is generally recognized at the same time the fees are billed. • Application, initiation and other fees are charged when: (i) new hotels enter our system; (ii) there is a change of ownership; or (iii) contracts with properties already in our system are extended. These fees are typically fixed and collected upfront and are recognized as revenue over the term of the franchise contract. We do not consider this advance consideration to include a significant financing component, since it is used to protect us from the property owner failing to adequately complete some or all of its obligations under the contract. • License fees are earned from: (i) a license agreement with HGV to use certain Hilton marks and IP in its timeshare business, which are typically billed and collected monthly, and revenue is generally recognized at the same time the fees are billed; and (ii) co-brand credit card arrangements and are recognized as revenue when Hilton Honors points are issued, generally as spend on the co-branded credit card occurs; see further discussion below under "Hilton Honors." Franchise fees are reduced by any consideration paid or anticipated to be paid to incentivize hotel owners to enter into franchise contracts. Base management fees and incentive management fees represent fees earned from hotels that we manage, usually under long-term contracts with the property owner, and include the following: • Base fees are generally based on a percentage of a hotel's monthly gross revenue. Base fees are typically billed and collected monthly, and revenue is generally recognized at the same time the fees are billed. • Incentive fees are generally based on a percentage of a hotel's operating profits and in some cases may be subject to a stated return threshold to the property owner, normally over a one-calendar year period (the "incentive period"). Incentive fee revenue is recognized on a monthly basis, but only to the extent the cumulative fee earned does not exceed the probable fee for the incentive period. Incentive fee payment terms vary, but they are generally billed and collected monthly or annually upon completion of the incentive period. Base and other management fees are reduced by any consideration paid or anticipated to be paid to incentivize hotel owners to enter into management contracts. Other revenues from managed and franchised properties represent amounts that are contractually reimbursed to us by property owners directly as costs are incurred or fees that are billed and collected in advance related to certain indirect costs and expenses of the related properties, and include the following: • Direct reimbursements include payroll and related costs and certain other operating costs of the managed and franchised properties’ operations, which are contractually reimbursed to us by the property owners as expenses are incurred. Revenue is recognized based on the amount of expenses incurred by Hilton, which are presented as other expenses from managed and franchised properties in our consolidated statements of operations, that are then reimbursed by the property owner typically on a monthly basis, which results in no net effect on operating income (loss) or net income (loss). • Indirect reimbursements include marketing expenses and other expenses associated with our brands and shared services, which are paid from fees collected by Hilton from the managed and franchised properties. Revenue is generally recognized as fees are billed, which are based on the underlying hotel's sales or usage (e.g., gross room revenues and number of reservations processed). System implementation fees charged to property owners are deferred and recognized as revenue over the term of the management or franchise contract. The corresponding expenses are expensed as incurred and are presented as other expenses from managed and franchised properties in our consolidated statements of operations and are expected to equal the revenues earned from indirect reimbursements over time. The management and franchise fees and reimbursements from third-party hotel owners are allocated to the performance obligations and the distinct services to which they relate using their estimated standalone selling prices. The terms of the fees earned under the contract relate to a specific outcome of providing the services (e.g., hotel room sales) or to Hilton's efforts (e.g., costs) to satisfy the performance obligations. We use time as the measure of progress to recognize as revenue the fees that are allocated to the period earned per the contract or to the period when the reimbursable costs are incurred. Owned and leased hotel revenues We identified the following performance obligations in connection with our owned and leased hotel revenues, for which revenue is recognized as the respective performance obligations are satisfied, which results in recognizing the amount we expect to be entitled to for providing the goods or services: • Cancellable room reservations or ancillary services are typically satisfied as the good or service is transferred to the hotel guest, which is generally when the room stay occurs. • Noncancellable room reservations and banquet or conference reservations represent a series of distinct goods or services provided over time satisfied as each distinct good or service is provided, which is reflected by the duration of the room reservation. • Material rights for free or discounted goods or services are satisfied at the earlier point in time when the material right expires or the underlying free or discounted good or service is provided to the hotel guest. • Other ancillary goods and services are purchased independently of the room reservation at standalone selling prices and are considered separate performance obligations, which are satisfied when the related good or service is provided to the hotel guest. • Components of package reservations for which each component could be sold separately to other hotel guests are considered separate performance obligations and are satisfied as set forth above. Owned and leased hotel revenues primarily consist of hotel room rentals, revenue from accommodations sold in conjunction with other services (e.g., package reservations), food and beverage sales and other ancillary goods and services (e.g., parking) related to owned, leased and consolidated non-wholly owned hotel properties. Revenue is recognized when rooms are occupied or goods and services have been delivered or rendered, respectively. Payment terms typically align with when the goods and services are provided. Owned and leased hotel revenues are reduced upon issuance of points for our guest loyalty program, Hilton Honors, for Hilton Honors members' paid stay transactions and are recognized when Hilton Honors points are redeemed for a free stay at an owned or leased hotel (see "Hilton Honors" section below for additional information). Although the transaction prices of room rentals, goods and other services are generally fixed and based on the respective room reservation or other agreement, an estimate to reduce the transaction price is required if a discount is expected to be provided to the customer. For package reservations, the transaction price is allocated to the performance obligations within the package based on the estimated standalone selling prices of each component. On occasion, the hotel may also provide the customer with a material right to a free or discounted good or service in conjunction with a room reservation or banquet contract (e.g., free breakfast and free room night for every four nights booked). These material rights are considered separate performance obligations to which a portion of the transaction price is allocated based on the estimated standalone selling prices of the good or service, adjusted for the likelihood the hotel guest will exercise the right. Other revenues Other revenues include revenues generated by the incidental support of hotel operations for owned, leased, managed and franchised hotels, including purchasing operations, and other operating income. Purchasing revenues include any amounts received for vendor rebate arrangements that we participate in as a manager of hotel properties. Taxes and fees collected on behalf of governmental agencies We are required to collect certain taxes and fees from customers on behalf of governmental agencies and remit these back to the applicable governmental agencies on a periodic basis. We have a legal obligation to act as a collection agent. We do not retain these taxes and fees and, therefore, they are not included in our measurement of transaction prices. We have elected to present revenue net of sales taxes and other similar taxes. We record a liability when the amounts are collected and relieve the liability when payments are made to the applicable taxing authority or other appropriate governmental agency. Contract Assets Contract assets relate to incentive management fees for which the period of service has passed, but for which our right to consideration is conditional upon completing the requirements of the incentive fee period. Contract assets are included in other current assets in our consolidated balance sheets and are transferred to accounts receivable when our right to consideration becomes unconditional. Contract Liabilities Contract liabilities relate to: (i) advance consideration received from hotel owners at contract inception for services considered to be part of the contract performance obligations, such as management or franchise contract application, initiation, renewal and other fees; (ii) advance consideration received for certain indirect reimbursements, such as system implementation fees; and (iii) amounts received when points are issued under Hilton Honors, but for which revenue is not yet recognized, since the related points are not yet redeemed. Contract liabilities related to advance consideration received for fees, excluding Hilton Honors, and certain indirect reimbursements are recognized as revenue over the term of the related contract. Contract liabilities related to amounts received for Hilton Honors are recognized as revenue at the point in time when the points are redeemed for a free good or service by the Hilton Honors member, which typically occurs within two years of points issuance. Contract liabilities are included in deferred revenues in our consolidated balance sheets. |
Intangible Assets, Finite-Lived | Intangible Assets with Finite Useful Lives We have certain finite lived intangible assets that were initially recorded at their fair value in connection with the October 24, 2007 transaction whereby we became a wholly owned subsidiary of an affiliate of The Blackstone Group L.P. (the "Merger"). These intangible assets consist of management contracts, franchise contracts, leases, certain proprietary technologies and our Hilton Honors guest loyalty program. Additionally, we capitalize cash consideration paid to incentivize hotel owners to enter into management and franchise contracts as contract acquisition costs, as well as the incremental costs to obtain or fulfill the contracts as development commissions, which are generally fixed. We also capitalize as finite lived intangible assets costs incurred to develop internal-use computer software and costs to acquire software licenses, as well as internal and external costs incurred in connection with development of upgrades or enhancements that result in additional information technology functionality. Intangible assets with finite useful lives are amortized using the straight-line method over their respective estimated useful lives, which for contract acquisition costs and development commissions is the contract term, including any renewal periods at our sole option. These estimated useful lives are generally as follows: management contracts recorded at the Merger ( 13 to 16 years); management contract acquisition costs and development commissions ( 20 to 30 years); franchise contracts recorded at the Merger ( 12 to 13 years); franchise contract acquisition costs and development commissions ( 10 to 20 years); leases ( 12 to 35 years); Hilton Honors ( 16 years); and capitalized software development costs ( 3 years).The amortization of our intangible assets, excluding contract acquisition costs, is included in depreciation and amortization expense, and the amortization of contract acquisition costs is recognized as a reduction to franchise fees and base and other management fees (based on the contract type) in our consolidated statements of operations. Costs incurred prior to the acquisition of a contract (e.g., external legal costs) are expensed as incurred and included in general and administrative expenses in our consolidated statements of operations. Cash flows for contract acquisition costs and development commissions are included as operating activities in our consolidated statements of cash flows. We review all finite lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess carrying value over the fair value in our consolidated statements of operations. |
Hilton Honors | Hilton Honors Hilton Honors is our guest loyalty and marketing program provided to hotel and resort properties. Nearly all of our owned, leased, managed and franchised properties participate in the Hilton Honors program. Hilton Honors members earn points based on their spending at our participating properties and through participation in affiliated partner programs. When points are earned by Hilton Honors members, they are provided with a material right to free or discounted goods or services in the future upon accumulation of the required level of Hilton Honors points. Points may be redeemed for the right to stay at participating properties, as well as for other goods and services from third parties, including, but not limited to, airlines, car rentals, cruises, vacation packages, shopping and dining. As the points are issued to a Hilton Honors member, the property or affiliated partner pays Hilton Honors based on an estimated cost per point for the costs of operating the program, which include marketing, promotion, communication and administrative expenses, as well as the estimated cost of award redemptions. We record liabilities for the payments received from participating hotels and program partners, which are typically due when the points are issued to a Hilton Honors member. Amounts equal to the estimated cost per point of the future redemption obligation are included in the liability for guest loyalty program and any amounts received in excess of the estimated cost per point are included in deferred revenues in our consolidated balance sheets. We engage outside actuaries to assist in determining the fair value of the future redemption obligation using statistical formulas that project future point redemptions based on factors that include historical experience, an estimate of points that will eventually be redeemed, which includes an estimate of "breakage" for points that will never be redeemed, and the cost of reimbursing properties and other third parties in respect to other redemption opportunities available to members. When points are issued as a result of a stay at our owned or leased hotel, we recognize a reduction in owned and leased hotel revenues, since we are also the guest loyalty program sponsor. For the Hilton Honors fees that are charged to the participating properties, we allocate the fees to the material right created by Hilton Honors points issued using the variable consideration allocation guidance, since the fees are directly related to the issuance of Hilton Honors points to the Hilton Honors member and Hilton's efforts to satisfy the future redemption of those Hilton Honors points. The transaction prices for the Hilton Honors points are reduced by the expected payments to the third parties that will provide the free or discounted room or service using the actuarial projection of the cost per point. The remaining transaction price is then further allocated to the points that are expected to be redeemed, adjusting the points that are issued for estimated breakage, and recognized when those points are redeemed. While the points are outstanding, both the estimate of the expected payments to third parties (cost per point) and the estimated breakage are reevaluated, and the amount of revenue recognized when each point is redeemed is adjusted so that the final amount allocated to the material right is reflective of the amount retained for providing all of the free or discounted goods and services, net of the payments to third parties and points not redeemed. We also earn license fees from co-brand credit card arrangements (see "Management and franchise revenues" within the "Revenue Recognition" section above). The co-brand license fee is allocated between two performance obligations based on their estimated standalone selling prices: (i) an IP license using the relief-from-royalty method; and (ii) material rights for free or discounted goods or services to the credit card customers using a cost plus method based on an evaluation of other third-party administrators. We satisfy our performance obligation related to points issued under the Hilton Honors guest loyalty program at a point in time when points are redeemed for a free good or service by the Hilton Honors member, and we satisfy our remaining performance obligations over time as the customer simultaneously receives and consumes the benefits of the goods or services provided. Hilton Honors reimburses participating properties when points are redeemed by members at the respective properties, at which time the redemption obligation is reduced and the related deferred revenue is recognized in other revenues from managed and franchised properties in our consolidated statements of operations. Additionally, when Hilton Honors members redeem award certificates at our owned and leased hotels, we recognize room revenue, included in owned and leased hotels revenue in our consolidated statements of operations. |
New Accounting Pronouncements | Recently Issued Accounting Pronouncements Adopted Accounting Standards In March 2017, the Financial Accounting Standards Board ("FASB") issued ASU No. 2017-07 ("ASU 2017-07"), Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . This ASU requires employers to report the service cost component of net periodic pension cost in the same line item or items of the statement of operations as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net periodic pension cost must be presented separately from the service cost component and outside of a subtotal of income (loss) from operations. We adopted ASU 2017-07 on January 1, 2018 on a retrospective basis in our condensed consolidated statements of operations, which includes presenting: (i) the service cost component of net periodic pension cost in owned and leased hotel expenses and general and administrative expenses; and (ii) the other components of net periodic pension cost in other non-operating income (loss), net in our condensed consolidated statements of operations. Prior to adoption, all net periodic pension costs were presented in owned and leased hotel expenses and general and administrative expenses. We have applied the practical expedient permitting us to use the amounts disclosed in our Employee Benefits Plans note in our Annual Report on Form 10-K for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. See the "Prior Period Financial Information" below for the effect of the adoption of ASU 2017-07 on our condensed consolidated statement of operations for the three months ended March 31, 2017. In May 2014, the FASB issued ASU 2014-09. This ASU supersedes the revenue recognition requirements in Revenue Recognition (Topic 605) and requires entities to recognize revenue when a customer obtains control of promised goods or services and in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. Subsequent to ASU 2014-09, the FASB issued several related ASUs to clarify the application of the new revenue recognition standard, collectively referred to herein as ASU 2014-09. We adopted the requirements of ASU 2014-09 on January 1, 2018 using the full retrospective approach, as permitted by the standard, resulting in a cumulative adjustment to accumulated deficit of $212 million as of January 1, 2016. The provisions of ASU 2014-09 affected our revenue recognition as follows: • Application, initiation and other fees are recognized over the term of the franchise contract, rather than upon execution of the contract and the unamortized portion of these fees is included in deferred revenues in our condensed consolidated balance sheets. • Certain contract acquisition costs related to our management and franchise contracts are recognized over the term of the contracts as a reduction to revenue, instead of as amortization expense. This change does not affect net income (loss). • Incentive management fees are recognized to the extent that it is probable that a significant reversal will not occur as a result of future hotel profits or cash flows, as opposed to recognizing amounts that would be due if the management contract was terminated at the end of the reporting period. This change does not affect net income (loss) for any full year period. • Revenue related to our Hilton Honors guest loyalty program is recognized upon point redemption, net of any reward reimbursement paid to a third party, as opposed to recognized on a gross basis at the time points are issued in conjunction with the accrual of the expected future cost of the reward reimbursement. Additionally, points issued at owned and leased hotels are accounted for as a reduction of revenue from owned and leased hotels, as opposed to expenses of owned and leased hotels. Fees received in excess of the estimated liability for guest loyalty program are included in deferred revenues in our condensed consolidated balance sheets. • Reimbursable fees related to our management and franchise contracts are recognized as they are billed, as opposed to when we incur the related expenses. Timing differences related to the receipt and spend of these fees will no longer be recorded in other assets and other liabilities in our condensed consolidated balance sheets. We have not retrospectively restated for management and franchise contracts modified before January 1, 2016 for the contract modifications. Instead, we have reflected the aggregate effect of all contract modifications when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price. The estimated effect of applying this practical expedient is to use a longer period over which to straight line any fixed consideration either received from the customer or paid to the customer, since all fees will be amortized over the full contract term beginning on the date of initial execution, rather than amortizing fees received upon contract modifications prospectively from the contract modification date. We do not anticipate that this effect is material given the insignificance of the fixed consideration compared to the overall consideration we expect to earn over the term of the contract. See the "Prior Period Financial Information" below for the effect of the adoption of ASU 2014-09 on our condensed consolidated balance sheet as of December 31, 2017 and our condensed consolidated statement of operations for the three months ended March 31, 2017. Prior Period Financial Information The following table presents the effect of the adoption of ASU 2014-09 for the line items affected on our condensed consolidated balance sheet: December 31, 2017 As Previously Reported Adoption of ASU 2014-09 As Adjusted (in millions) ASSETS Accounts receivable, net $ 998 $ 7 $ 1,005 Prepaid expenses 111 16 127 Other current assets 171 (2 ) 169 Management and franchise contracts, net 909 44 953 Deferred income tax assets 113 (2 ) 111 Other non-current assets 434 (143 ) 291 TOTAL ASSETS 14,308 (80 ) 14,228 LIABILITIES AND EQUITY Current liabilities: Accounts payable, accrued expenses and other (1)(2) 1,487 (71 ) 1,416 Current portion of deferred revenues (1) 41 325 366 Deferred revenues 97 732 829 Deferred income tax liabilities 1,063 (132 ) 931 Other non-current liabilities 1,470 (550 ) 920 Total liabilities 12,233 304 12,537 Equity: Accumulated deficit (6,596 ) (385 ) (6,981 ) Accumulated other comprehensive loss (742 ) 1 (741 ) Total equity 2,075 (384 ) 1,691 TOTAL LIABILITIES AND EQUITY 14,308 (80 ) 14,228 ____________ (1) The current portion of deferred revenues has been separated from accounts payable, accrued expenses and other in the "As Previously Reported" column following the adoption of ASU 2014-09. (2) The current portion of liability for guest loyalty program has been separated from accounts payable, accrued expenses and other to conform with current presentation. The balance was $622 million as of December 31, 2017 and did not change as a result of the adoption of ASU 2014-09. The following table presents the effect of the adoption of ASU 2014-09 and ASU 2017-07 on our condensed consolidated statement of operations: Three Months Ended March 31, 2017 As Previously Reported Adoption of ASU 2014-09 Adoption of ASU 2017-07 As Adjusted (in millions) Revenues Franchise fees $ 294 $ (12 ) $ — $ 282 Base and other management fees 83 (2 ) — 81 Incentive management fees 52 (3 ) — 49 Owned and leased hotels 300 (4 ) — 296 Other revenues 37 — — 37 766 (21 ) — 745 Other revenues from managed and franchised properties 1,395 (244 ) — 1,151 Total revenues 2,161 (265 ) — 1,896 Expenses Owned and leased hotels 272 (4 ) — 268 Depreciation and amortization 89 (3 ) — 86 General and administrative 105 — 1 106 Other expenses 23 — — 23 489 (7 ) 1 483 Other expenses from managed and franchised properties 1,395 (199 ) — 1,196 Total expenses 1,884 (206 ) 1 1,679 Operating income 277 (59 ) (1 ) 217 Interest expense (104 ) 15 — (89 ) Loss on foreign currency transactions (4 ) — — (4 ) Loss on debt extinguishment (60 ) — — (60 ) Other non-operating income, net 1 — 1 2 Income before income taxes 110 (44 ) — 66 Income tax expense (35 ) 17 — (18 ) Net income 75 (27 ) — 48 Net income attributable to noncontrolling interests (1 ) — — (1 ) Net income attributable to Hilton stockholders $ 74 $ (27 ) $ — $ 47 Earnings per share: Basic $ 0.22 $ 0.14 Diluted $ 0.22 $ 0.14 Accounting Standards Not Yet Adopted In February 2018, the FASB issued ASU No. 2018-02 ("ASU 2018-02"), Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . This ASU permits a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects that do not reflect the appropriate tax rates as a result of the Tax Cuts and Jobs Act of 2017 (the "TCJ Act"). The provisions of ASU 2018-02 are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years and should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the tax rate in the TCJ Act is recognized. Early adoption is permitted. We are currently evaluating the effect that ASU 2018-02 will have on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02 ("ASU 2016-02"), Leases (Topic 842) , which supersedes existing guidance on accounting for leases in Leases (Topic 840) and generally requires all leases, including operating leases, to be recognized in the statement of financial position as right-of-use assets and lease liabilities by lessees. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach and are effective for reporting periods beginning after December 15, 2018; early adoption is permitted. We intend to adopt the standard on January 1, 2019 and apply the package of practical expedients available to us upon adoption. We are continuing to evaluate the effect that this ASU will have on our consolidated financial statements, but we expect this ASU to have a material effect on our consolidated balance sheet. |
Basis of Presentation and Sum25
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Prior Period Financial Information The following table presents the effect of the adoption of ASU 2014-09 for the line items affected on our condensed consolidated balance sheet: December 31, 2017 As Previously Reported Adoption of ASU 2014-09 As Adjusted (in millions) ASSETS Accounts receivable, net $ 998 $ 7 $ 1,005 Prepaid expenses 111 16 127 Other current assets 171 (2 ) 169 Management and franchise contracts, net 909 44 953 Deferred income tax assets 113 (2 ) 111 Other non-current assets 434 (143 ) 291 TOTAL ASSETS 14,308 (80 ) 14,228 LIABILITIES AND EQUITY Current liabilities: Accounts payable, accrued expenses and other (1)(2) 1,487 (71 ) 1,416 Current portion of deferred revenues (1) 41 325 366 Deferred revenues 97 732 829 Deferred income tax liabilities 1,063 (132 ) 931 Other non-current liabilities 1,470 (550 ) 920 Total liabilities 12,233 304 12,537 Equity: Accumulated deficit (6,596 ) (385 ) (6,981 ) Accumulated other comprehensive loss (742 ) 1 (741 ) Total equity 2,075 (384 ) 1,691 TOTAL LIABILITIES AND EQUITY 14,308 (80 ) 14,228 ____________ (1) The current portion of deferred revenues has been separated from accounts payable, accrued expenses and other in the "As Previously Reported" column following the adoption of ASU 2014-09. (2) The current portion of liability for guest loyalty program has been separated from accounts payable, accrued expenses and other to conform with current presentation. The balance was $622 million as of December 31, 2017 and did not change as a result of the adoption of ASU 2014-09. The following table presents the effect of the adoption of ASU 2014-09 and ASU 2017-07 on our condensed consolidated statement of operations: Three Months Ended March 31, 2017 As Previously Reported Adoption of ASU 2014-09 Adoption of ASU 2017-07 As Adjusted (in millions) Revenues Franchise fees $ 294 $ (12 ) $ — $ 282 Base and other management fees 83 (2 ) — 81 Incentive management fees 52 (3 ) — 49 Owned and leased hotels 300 (4 ) — 296 Other revenues 37 — — 37 766 (21 ) — 745 Other revenues from managed and franchised properties 1,395 (244 ) — 1,151 Total revenues 2,161 (265 ) — 1,896 Expenses Owned and leased hotels 272 (4 ) — 268 Depreciation and amortization 89 (3 ) — 86 General and administrative 105 — 1 106 Other expenses 23 — — 23 489 (7 ) 1 483 Other expenses from managed and franchised properties 1,395 (199 ) — 1,196 Total expenses 1,884 (206 ) 1 1,679 Operating income 277 (59 ) (1 ) 217 Interest expense (104 ) 15 — (89 ) Loss on foreign currency transactions (4 ) — — (4 ) Loss on debt extinguishment (60 ) — — (60 ) Other non-operating income, net 1 — 1 2 Income before income taxes 110 (44 ) — 66 Income tax expense (35 ) 17 — (18 ) Net income 75 (27 ) — 48 Net income attributable to noncontrolling interests (1 ) — — (1 ) Net income attributable to Hilton stockholders $ 74 $ (27 ) $ — $ 47 Earnings per share: Basic $ 0.22 $ 0.14 Diluted $ 0.22 $ 0.14 |
Revenues from Contracts with 26
Revenues from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Contract Liabilities | The following table summarizes the activity of our contract liabilities, which are classified as a component of current and long-term deferred revenues, during the three months ended March 31, 2018: (in millions) Balance as of December 31, 2017 $ 1,087 Cash received in advance and not recognized as revenue 115 Revenue recognized (60 ) Other (1) (53 ) Balance as of March 31, 2018 $ 1,089 ____________ (1) Represents the reclassification from deferred revenues to the current portion of liability for guest loyalty program in our condensed consolidated balance sheet. The reclassification is the result of changes in estimated transaction prices for our performance obligations related to points issued under Hilton Honors due to a change in our expected costs to the third parties providing the good or service associated with the Hilton Honors points. |
Performance Obligations | Estimated revenues expected to be recognized related to performance obligations that were unsatisfied as of March 31, 2018 , including revenues related to application, initiation and other fees and excluding revenues related to Hilton Honors, royalty fees, base management fees and incentive management fees, were as follows: Year (in millions) 2018 (remaining) $ 32 2019 43 2020 47 2021 52 2022 57 Thereafter 323 $ 554 |
Consolidated Variable Interes27
Consolidated Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |
Schedule of Variable Interest Entities | Our condensed consolidated balance sheets included the assets and liabilities of these entities, which primarily comprised the following: March 31, December 31, 2018 2017 (in millions) Cash and cash equivalents $ 78 $ 73 Accounts receivable, net 15 16 Property and equipment, net 59 57 Deferred income tax assets 60 56 Other non-current assets 61 57 Accounts payable, accrued expenses and other 39 43 Long-term debt (1) 222 212 ____________ (1) Includes capital lease obligations of $199 million and $191 million as of March 31, 2018 and December 31, 2017, respectively. |
Amortizing Intangible Assets (T
Amortizing Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Other Intangible Assets | Amortizing intangible assets were as follows: March 31, 2018 Gross Carrying Value Accumulated Amortization Net Carrying Value (in millions) Management and franchise contracts: Management and franchise contracts recorded at Merger (1) $ 2,247 $ (1,761 ) $ 486 Contract acquisition costs 436 (81 ) 355 Development commissions 100 (13 ) 87 $ 2,783 $ (1,855 ) $ 928 Other amortizing intangible assets: Leases (1) $ 310 $ (162 ) $ 148 Capitalized software 596 (440 ) 156 Hilton Honors (1) 343 (223 ) 120 Other 38 (34 ) 4 $ 1,287 $ (859 ) $ 428 December 31, 2017 Gross Carrying Value Accumulated Amortization Net Carrying Value (in millions) Management and franchise contracts: Management and franchise contracts recorded at Merger (1) $ 2,242 $ (1,716 ) $ 526 Contract acquisition costs 416 (74 ) 342 Development commissions 97 (12 ) 85 $ 2,755 $ (1,802 ) $ 953 Other amortizing intangible assets: Leases (1) $ 301 $ (153 ) $ 148 Capitalized software 585 (428 ) 157 Hilton Honors (1) 341 (217 ) 124 Other 38 (34 ) 4 $ 1,265 $ (832 ) $ 433 ____________ (1) Represents intangible assets that were initially recorded at their fair value at the time of the Merger. |
Schedule of Future Amortization Expense of Intangible Assets | We estimated future amortization for our amortizing intangible assets as of March 31, 2018 to be as follows: Recognized in Depreciation and Amortization Expense Recognized as a Reduction of Franchise Fee and Base and Other Management Fee Revenues Year (in millions) 2018 (remaining) $ 205 $ 16 2019 261 22 2020 210 22 2021 71 21 2022 61 21 Thereafter 193 253 $ 1,001 $ 355 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-term debt | Long-term debt balances, including obligations for capital leases, and associated interest rates as of March 31, 2018 , were as follows: March 31, December 31, 2018 2017 (in millions) Senior notes with a rate of 4.250%, due 2024 1,000 1,000 Senior notes with a rate of 4.625%, due 2025 900 900 Senior notes with a rate of 4.875%, due 2027 600 600 Senior secured term loan facility with a rate of 3.87%, due 2023 3,919 3,929 Capital lease obligations with an average rate of 6.33%, due 2021 to 2030 241 233 Other debt with an average rate of 2.65%, due 2018 to 2026 23 21 6,683 6,683 Less: unamortized deferred financing costs and discount (78 ) (81 ) Less: current maturities of long-term debt (1) (47 ) (46 ) $ 6,558 $ 6,556 ____________ (1) Net of unamortized deferred financing costs and discount attributable to current maturities of long-term debt. |
Debt maturities | The contractual maturities of our long-term debt as of March 31, 2018 were as follows: Year (in millions) 2018 (remaining) $ 41 2019 56 2020 58 2021 59 2022 59 Thereafter 6,410 $ 6,683 |
Derivative Instruments and He30
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivative Instruments | The fair values of our derivative instruments in our condensed consolidated balance sheets were as follows: March 31, December 31, Balance Sheet Classification 2018 2017 (in millions) Cash Flow Hedges: Interest rate swaps Other non-current assets $ 47 $ 11 Forward contracts Accounts payable, accrued expenses and other 1 1 Non-designated Hedges: Forward contracts Other current assets 1 4 Forward contracts Accounts payable, accrued expenses and other 2 1 |
Earnings Effect of Derivative Instruments | The gains and losses recognized in our condensed consolidated statements of operations and condensed consolidated statements of comprehensive income before any effect for income taxes were as follows: Three Months Ended March 31, Classification of Gain (Loss) Recognized 2018 2017 (in millions) Cash Flow Hedges (1)(2) : Interest rate swaps Other comprehensive income $ 34 $ (9 ) Interest rate swaps Interest expense (2 ) (2 ) Forward contracts Other comprehensive income (1 ) N/A Non-designated Hedges: Interest rate swaps Other non-operating income, net N/A 2 Interest rate swaps (3) Interest expense (3 ) (3 ) Forward contracts Gain (loss) on foreign currency transactions 1 1 ____________ (1) There were no amounts recognized in earnings related to hedge ineffectiveness or amounts excluded from hedge effectiveness testing during the three months ended March 31, 2018 and 2017 . (2) The earnings effect of the Fee Forward Contracts on fee revenues for the three months ended March 31, 2018 was less than $1 million . (3) These amounts are related to the dedesignation of interest rate swaps in 2016 that no longer met the criteria for hedge accounting and were settled in 2017. The amounts were reclassified from accumulated other comprehensive loss as the underlying transactions occurred. |
Fair Value Measurements (Table
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | The fair values of certain financial instruments and the hierarchy level we used to estimate the fair values are shown below, see Note 7 : " Derivative Instruments and Hedging Activities " for the fair value information of our derivatives: March 31, 2018 Hierarchy Level Carrying Value Level 1 Level 2 Level 3 (in millions) Assets: Cash equivalents $ 237 $ — $ 237 $ — Restricted cash equivalents 12 — 12 — Liabilities: Long-term debt (1) 6,341 2,471 — 3,951 December 31, 2017 Hierarchy Level Carrying Value Level 1 Level 2 Level 3 (in millions) Assets: Cash equivalents $ 284 $ — $ 284 $ — Restricted cash equivalents 12 — 12 — Liabilities: Long-term debt (1) 6,348 2,575 — 3,954 ____________ (1) The carrying values include unamortized deferred financing costs and discount. The carrying values and fair values exclude capital lease obligations and other debt. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Options Valuation Assumptions | The weighted average grant date fair value per share of the options granted during the three months ended March 31, 2018 was $23.78 , which was determined using the Black-Scholes-Merton option-pricing model with the following assumptions: Expected volatility (1) 27.99 % Dividend yield (2) 0.74 % Risk-free rate (3) 2.73 % Expected term (in years) (4) 6.0 ____________ (1) Estimated using historical movement of Hilton's stock price. (2) Estimated based on the current quarterly dividend and the three-month average stock price at the date of grant. (3) Based on the yields of U.S. Department of Treasury instruments with similar expected lives. (4) Estimated using the average of the vesting periods and the contractual term of the options. |
Schedule of Additional Information on Performance Shares | We determined that the performance conditions for performance shares issued in 2018 and 2017 are probable of achievement and, as of March 31, 2018 , we recognized compensation expense based on the following anticipated achievement percentages for these performance shares: EBITDA CAGR FCF CAGR 2017 performance shares 200 % 200 % 2018 performance shares 150 % 125 % |
Stockholders' Equity and Accu33
Stockholders' Equity and Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stockholders' Equity | The changes in the components of stockholders' equity were as follows: Equity Attributable to Hilton Stockholders Treasury Stock Additional Accumulated Deficit (1) Accumulated Other Comprehensive Loss Common Stock Noncontrolling Shares Amount Total (in millions) Balance as of December 31, 2017 317 $ 3 $ (891 ) $ 10,298 $ (6,981 ) $ (741 ) $ 3 $ 1,691 Share-based compensation 1 — — (10 ) — — — (10 ) Repurchases of common stock (1 ) — (110 ) — — — — (110 ) Net income — — — — 161 — 2 163 Other comprehensive income — — — — — 61 — 61 Dividends — — — — (48 ) — — (48 ) Balance as of March 31, 2018 317 $ 3 $ (1,001 ) $ 10,288 $ (6,868 ) $ (680 ) $ 5 $ 1,747 Equity Attributable to Hilton Stockholders Treasury Stock Additional Accumulated Deficit (1) Accumulated Other Comprehensive Loss Common Stock Noncontrolling Interests (2) Shares Amount Total (in millions) Balance as of December 31, 2016 329 $ 3 $ — $ 10,220 $ (3,545 ) $ (1,001 ) $ (50 ) $ 5,627 Share-based compensation 2 — — (7 ) — — — (7 ) Repurchases of common stock (1 ) — (70 ) — — — — (70 ) Net income — — — — 47 — 1 48 Other comprehensive income (loss) — — — — — 20 (1 ) 19 Dividends — — — — (50 ) — — (50 ) Spin-offs of Park and HGV — — — — (4,318 ) 63 49 (4,206 ) Cumulative effect of the adoption of ASU 2016-09 — — — 1 (1 ) — — — Distributions — — — — — — (1 ) (1 ) Balance as of March 31, 2017 330 $ 3 $ (70 ) $ 10,214 $ (7,867 ) $ (918 ) $ (2 ) $ 1,360 ___________ (1) Includes adjustments of $385 million and $222 million as of December 31, 2017 and 2016, respectively, as a result of the adoption of ASU 2014-09 as of January 1, 2016. See Note 2 : " Basis of Presentation and Summary of Significant Accounting Policies " for additional information. (2) Other comprehensive loss was related to a currency translation adjustment. |
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, 2017 $ (513 ) $ (229 ) $ 1 $ (741 ) Other comprehensive income (loss) before reclassifications 32 (1 ) 24 55 Amounts reclassified from accumulated other comprehensive loss — 2 4 6 Net current period other comprehensive income 32 1 28 61 Balance as of March 31, 2018 $ (481 ) $ (228 ) $ 29 $ (680 ) Currency Translation Adjustment (1) Pension Liability Adjustment (2) Cash Flow Hedge Adjustment (3) Total (in millions) Balance as of December 31, 2016 $ (738 ) $ (251 ) $ (12 ) $ (1,001 ) Other comprehensive income (loss) before reclassifications 21 (1 ) (5 ) 15 Amounts reclassified from accumulated other comprehensive loss — 2 3 5 Net current period other comprehensive income (loss) 21 1 (2 ) 20 Spin-offs of Park and HGV 63 — — 63 Balance as of March 31, 2017 $ (654 ) $ (250 ) $ (14 ) $ (918 ) ____________ (1) Includes net investment hedges and intra-entity foreign currency transactions that are of a long-term investment nature. (2) Amounts reclassified include the amortization of prior service cost and the amortization of net loss that were included in our computation of net periodic pension cost. They were recognized in other non-operating income, net in our condensed consolidated statements of operations and are presented net of a $1 million tax benefit for the three months ended March 31, 2018 and 2017 . (3) Amounts reclassified relate to the designated interest rate swaps, as well as the interest rate swaps that were dedesignated in 2016 and settled in 2017. The amounts were recognized in interest expense in our condensed consolidated statements of operations and are presented net of a tax benefit of $1 million and $2 million for the three months ended March 31, 2018 and 2017 , respectively. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share | The following table presents the calculation of basic and diluted earnings per share ("EPS"): Three Months Ended March 31, 2018 2017 (in millions, except per share amounts) Basic EPS: Numerator: Net income attributable to Hilton stockholders $ 161 $ 47 Denominator: Weighted average shares outstanding 316 330 Basic EPS $ 0.51 $ 0.14 Diluted EPS: Numerator: Net income attributable to Hilton stockholders $ 161 $ 47 Denominator: Weighted average shares outstanding 319 331 Diluted EPS $ 0.51 $ 0.14 |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018 2017 (in millions) Franchise fees $ 333 $ 283 Base and other management fees (1) 90 90 Incentive management fees 55 49 Management and franchise 478 422 Ownership 334 296 Segment revenues 812 718 Amortization of contract acquisition costs (7 ) (3 ) Other revenues 23 37 Direct reimbursements from managed and franchised properties 699 663 Indirect reimbursements from managed and franchised properties 555 488 Intersegment fees elimination (1) (8 ) (7 ) Total revenues $ 2,074 $ 1,896 ____________ (1) Includes management, royalty and IP fees charged to our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations. |
Reconciliation of Segment Operating Income to Income Before Income Taxes | The following table presents operating income for our reportable segments, reconciled to consolidated income before income taxes: Three Months Ended March 31, 2018 2017 (in millions) Management and franchise (1) $ 478 $ 422 Ownership (1) 6 21 Segment operating income 484 443 Amortization of contract acquisition costs (7 ) (3 ) Other revenues, less other expenses 9 14 Net other expenses from managed and franchised properties (21 ) (45 ) Depreciation and amortization (82 ) (86 ) General and administrative (104 ) (106 ) Operating income 279 217 Interest expense (83 ) (89 ) Gain (loss) on foreign currency transactions 11 (4 ) Loss on debt extinguishment — (60 ) Other non-operating income, net 14 2 Income before income taxes $ 221 $ 66 ____________ (1) Includes management, royalty and IP fees charged to our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations. |
Schedule of Assets by Segment | The following table presents total assets for our reportable segments, reconciled to consolidated amounts: March 31, December 31, 2018 2017 (in millions) Management and franchise $ 11,435 $ 11,505 Ownership 994 964 Corporate and other 1,831 1,759 $ 14,260 $ 14,228 |
Schedule of Capital Expenditures by Segment | The following table presents capital expenditures for property and equipment for our reportable segments, reconciled to consolidated amounts: Three Months Ended March 31, 2018 2017 (in millions) Ownership $ 7 $ 6 Corporate and other 3 3 $ 10 $ 9 |
Condensed Consolidating Guara36
Condensed Consolidating Guarantor Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Condensed Consolidating Guarantor Financial Information [Abstract] | |
Condensed Balance Sheet | March 31, 2018 Parent HWF Issuers HOC Guarantors Non-Guarantors Eliminations Total (in millions) ASSETS Current Assets: Cash and cash equivalents $ — $ — $ 2 $ 14 $ 594 $ — $ 610 Restricted cash and cash equivalents — — 33 10 30 — 73 Accounts receivable, net — — 17 700 263 — 980 Intercompany receivables — — — — 40 (40 ) — Prepaid expenses — — 18 51 95 (3 ) 161 Other — — 1 17 166 — 184 Total current assets — — 71 792 1,188 (43 ) 2,008 Intangibles and Other Assets: Investments in subsidiaries 1,737 7,092 8,301 1,737 — (18,867 ) — Goodwill — — — 3,824 1,387 — 5,211 Brands — — — 4,404 498 — 4,902 Management and franchise contracts, net — — — 620 308 — 928 Other intangible assets, net — — — 278 150 — 428 Property and equipment, net — — 19 66 273 — 358 Deferred income tax assets 5 — 104 — 136 (134 ) 111 Other — 55 33 67 159 — 314 Total intangibles and other assets 1,742 7,147 8,457 10,996 2,911 (19,001 ) 12,252 TOTAL ASSETS $ 1,742 $ 7,147 $ 8,528 $ 11,788 $ 4,099 $ (19,044 ) $ 14,260 LIABILITIES AND EQUITY Current Liabilities: Accounts payable, accrued expenses and other $ — $ 39 $ 126 $ 555 $ 625 $ (1 ) $ 1,344 Current portion of deferred revenues — — 63 268 13 (2 ) 342 Intercompany payables — — 40 — — (40 ) — Current maturities of long-term debt — 32 — — 15 — 47 Income taxes payable — — — 22 41 — 63 Current portion of liability for guest loyalty program — — — 692 — — 692 Total current liabilities — 71 229 1,537 694 (43 ) 2,488 Long-term debt — 5,325 984 — 249 — 6,558 Deferred revenues — — — 766 62 — 828 Deferred income tax liabilities — 14 — 1,021 — (134 ) 901 Liability for guest loyalty program — — — 841 — — 841 Other — — 223 61 613 — 897 Total liabilities — 5,410 1,436 4,226 1,618 (177 ) 12,513 Equity: Total Hilton stockholders' equity 1,742 1,737 7,092 7,562 2,476 (18,867 ) 1,742 Noncontrolling interests — — — — 5 — 5 Total equity 1,742 1,737 7,092 7,562 2,481 (18,867 ) 1,747 TOTAL LIABILITIES AND EQUITY $ 1,742 $ 7,147 $ 8,528 $ 11,788 $ 4,099 $ (19,044 ) $ 14,260 December 31, 2017 Parent HWF Issuers HOC Guarantors Non-Guarantors Eliminations Total (in millions) ASSETS Current Assets: Cash and cash equivalents $ — $ — $ 2 $ 18 $ 550 $ — $ 570 Restricted cash and cash equivalents — — 61 10 29 — 100 Accounts receivable, net — — 18 712 275 — 1,005 Intercompany receivables — — — — 40 (40 ) — Prepaid expenses — — 25 24 84 (6 ) 127 Income taxes receivable — — — 60 — (24 ) 36 Other — — 1 13 155 — 169 Total current assets — — 107 837 1,133 (70 ) 2,007 Intangibles and Other Assets: Investments in subsidiaries 1,697 7,067 8,326 1,697 — (18,787 ) — Goodwill — — — 3,824 1,366 — 5,190 Brands — — — 4,405 485 — 4,890 Management and franchise contracts, net — — 2 645 306 — 953 Other intangible assets, net — — 1 283 149 — 433 Property and equipment, net — — 20 67 266 — 353 Deferred income tax assets 6 — 104 — 127 (126 ) 111 Other — 20 32 67 172 — 291 Total intangibles and other assets 1,703 7,087 8,485 10,988 2,871 (18,913 ) 12,221 TOTAL ASSETS $ 1,703 $ 7,087 $ 8,592 $ 11,825 $ 4,004 $ (18,983 ) $ 14,228 LIABILITIES AND EQUITY Current Liabilities: Accounts payable, accrued expenses and other $ 15 $ 20 $ 184 $ 576 $ 624 $ (3 ) $ 1,416 Current portion of deferred revenues — — 90 266 13 (3 ) 366 Intercompany payables — — 40 — — (40 ) — Current maturities of long-term debt — 32 — — 14 — 46 Income taxes payable — — — — 36 (24 ) 12 Current portion of liability for guest loyalty program — — — 622 — — 622 Total current liabilities 15 52 314 1,464 687 (70 ) 2,462 Long-term debt — 5,333 983 — 240 — 6,556 Deferred revenues — — — 770 59 — 829 Deferred income tax liabilities — 5 — 1,052 — (126 ) 931 Liability for guest loyalty program — — — 839 — — 839 Other — — 228 64 628 — 920 Total liabilities 15 5,390 1,525 4,189 1,614 (196 ) 12,537 Equity: Total Hilton stockholders' equity 1,688 1,697 7,067 7,636 2,387 (18,787 ) 1,688 Noncontrolling interests — — — — 3 — 3 Total equity 1,688 1,697 7,067 7,636 2,390 (18,787 ) 1,691 TOTAL LIABILITIES AND EQUITY $ 1,703 $ 7,087 $ 8,592 $ 11,825 $ 4,004 $ (18,983 ) $ 14,228 |
Condensed Statement of Income and Comprehensive Income | Three Months Ended March 31, 2018 Parent HWF Issuers HOC Guarantors Non-Guarantors Eliminations Total (in millions) Revenues Franchise fees $ — $ — $ 44 $ 262 $ 29 $ (4 ) $ 331 Base and other management fees — — — 51 26 — 77 Incentive management fees — — — 21 34 — 55 Owned and leased hotels — — — — 334 — 334 Other revenues — — 2 24 2 (5 ) 23 — — 46 358 425 (9 ) 820 Other revenues from managed and franchised properties — — 44 1,070 140 — 1,254 Total revenues — — 90 1,428 565 (9 ) 2,074 Expenses Owned and leased hotels — — — — 320 — 320 Depreciation and amortization — — 1 60 21 — 82 General and administrative — — 73 — 35 (4 ) 104 Other expenses — — 2 7 9 (4 ) 14 — — 76 67 385 (8 ) 520 Other expenses from managed and franchised properties — — 46 1,084 145 — 1,275 Total expenses — — 122 1,151 530 (8 ) 1,795 Operating income (loss) — — (32 ) 277 35 (1 ) 279 Interest expense — (61 ) (13 ) — (10 ) 1 (83 ) Gain (loss) on foreign currency transactions — — (3 ) 8 6 — 11 Other non-operating income, net — — 3 8 3 — 14 Income (loss) before income taxes and equity in earnings from subsidiaries — (61 ) (45 ) 293 34 — 221 Income tax benefit (expense) — 15 13 (73 ) (13 ) — (58 ) Income (loss) before equity in earnings from subsidiaries — (46 ) (32 ) 220 21 — 163 Equity in earnings from subsidiaries 161 207 239 161 — (768 ) — Net income 161 161 207 381 21 (768 ) 163 Net income attributable to noncontrolling interests — — — — (2 ) — (2 ) Net income attributable to Hilton stockholders $ 161 $ 161 $ 207 $ 381 $ 19 $ (768 ) $ 161 Comprehensive income $ 222 $ 190 $ 207 $ 382 $ 52 $ (829 ) $ 224 Comprehensive income attributable to noncontrolling interests — — — — (2 ) — (2 ) Comprehensive income attributable to Hilton stockholders $ 222 $ 190 $ 207 $ 382 $ 50 $ (829 ) $ 222 Three Months Ended March 31, 2017 Parent HWF Issuers HOC Guarantors Non-Guarantors Eliminations Total (in millions) Revenues Franchise fees $ — $ — $ 19 $ 244 $ 23 $ (4 ) $ 282 Base and other management fees — — — 49 32 — 81 Incentive management fees — — — 20 29 — 49 Owned and leased hotels — — — — 296 — 296 Other revenues — — 20 13 4 — 37 — — 39 326 384 (4 ) 745 Other revenues from managed and franchised properties — — 41 981 129 — 1,151 Total revenues — — 80 1,307 513 (4 ) 1,896 Expenses Owned and leased hotels — — — — 268 — 268 Depreciation and amortization — — 1 62 23 — 86 General and administrative — — 79 2 25 — 106 Other expenses — — 12 7 8 (4 ) 23 — — 92 71 324 (4 ) 483 Other expenses from managed and franchised properties — — 42 1,026 128 — 1,196 Total expenses — — 134 1,097 452 (4 ) 1,679 Operating income (loss) — — (54 ) 210 61 — 217 Interest expense — (63 ) (16 ) — (10 ) — (89 ) 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 3 — 2 Income (loss) before income taxes and equity in earnings from subsidiaries — (126 ) (58 ) 232 18 — 66 Income tax benefit (expense) — 50 24 (87 ) (5 ) — (18 ) Income (loss) before equity in earnings from subsidiaries — (76 ) (34 ) 145 13 — 48 Equity in earnings from subsidiaries 47 123 157 47 — (374 ) — Net income 47 47 123 192 13 (374 ) 48 Net income attributable to noncontrolling interests — — — — (1 ) — (1 ) Net income attributable to Hilton stockholders $ 47 $ 47 $ 123 $ 192 $ 12 $ (374 ) $ 47 Comprehensive income $ 67 $ 45 $ 127 $ 192 $ 30 $ (394 ) $ 67 Comprehensive income attributable to noncontrolling interests — — — — — — — Comprehensive income attributable to Hilton stockholders $ 67 $ 45 $ 127 $ 192 $ 30 $ (394 ) $ 67 |
Condensed Cash Flow Statement | Three Months Ended March 31, 2018 Parent HWF Issuers HOC Guarantors Non-Guarantors Eliminations Total (in millions) Operating Activities: Net cash provided by (used in) operating activities $ — $ (46 ) $ (29 ) $ 307 $ 11 $ — $ 243 Investing Activities: Capital expenditures for property and equipment — — — (1 ) (9 ) — (10 ) Capitalized software costs — — — (15 ) — — (15 ) Other — — — (2 ) 1 — (1 ) Net cash used in investing activities — — — (18 ) (8 ) — (26 ) Financing Activities: Repayment of debt — (10 ) — — (4 ) — (14 ) Intercompany transfers 157 56 41 (293 ) 39 — — Dividends paid (47 ) — — — — — (47 ) Repurchases of common stock (110 ) — — — — — (110 ) Tax withholdings on share-based compensation — — (40 ) — — — (40 ) Net cash provided by (used in) financing activities — 46 1 (293 ) 35 — (211 ) Effect of exchange rate changes on cash, restricted cash and cash equivalents — — — — 7 — 7 Net increase (decrease) in cash, restricted cash and cash equivalents — — (28 ) (4 ) 45 — 13 Cash, restricted cash and cash equivalents, beginning of period — — 63 28 579 — 670 Cash, restricted cash and cash equivalents, end of period $ — $ — $ 35 $ 24 $ 624 $ — $ 683 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 ) $ 48 $ 107 $ (3 ) $ 50 Investing Activities: Capital expenditures for property and equipment — — — (1 ) (8 ) — (9 ) Capitalized software costs — — — (9 ) — — (9 ) Other — (13 ) — (6 ) — — (19 ) Net cash used in investing activities — (13 ) — (16 ) (8 ) — (37 ) 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 |
Organization (Details)
Organization (Details) | Mar. 31, 2018RoomCountryHotelRate |
Organization and Basis of Presentation [Line Items] | |
Number of hotel and resort properties | Hotel | 5,339 |
Number of hotel and resort rooms | Room | 863,241 |
Number of countries and territories | Country | 106 |
HNA Tourism Group Co., Ltd. [Member] | |
Organization and Basis of Presentation [Line Items] | |
Common stock ownership percentage | Rate | 26.00% |
Basis of Presentation and Sum38
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2016 | |
Accounting Policies [Line Items] | |||
Cumulative effect of the adoption of an ASU | $ 0 | ||
Accounting Standards Update 2014-09 [Member] | |||
Accounting Policies [Line Items] | |||
Cumulative effect of the adoption of an ASU | $ 212 | ||
Management contracts [Member] | Minimum [member] | |||
Accounting Policies [Line Items] | |||
Useful life, intangibles | 13 years | ||
Management contracts [Member] | Maximum [member] | |||
Accounting Policies [Line Items] | |||
Useful life, intangibles | 16 years | ||
Management contract acquisition costs [Member] | Minimum [member] | |||
Accounting Policies [Line Items] | |||
Useful life, intangibles | 20 years | ||
Management contract acquisition costs [Member] | Maximum [member] | |||
Accounting Policies [Line Items] | |||
Useful life, intangibles | 30 years | ||
Franchise contracts [Member] | Minimum [member] | |||
Accounting Policies [Line Items] | |||
Useful life, intangibles | 12 years | ||
Franchise contracts [Member] | Maximum [member] | |||
Accounting Policies [Line Items] | |||
Useful life, intangibles | 13 years | ||
Franchise contract acquisition costs [Member] | Minimum [member] | |||
Accounting Policies [Line Items] | |||
Useful life, intangibles | 10 years | ||
Franchise contract acquisition costs [Member] | Maximum [member] | |||
Accounting Policies [Line Items] | |||
Useful life, intangibles | 20 years | ||
Leases [member] | Minimum [member] | |||
Accounting Policies [Line Items] | |||
Useful life, intangibles | 12 years | ||
Leases [member] | Maximum [member] | |||
Accounting Policies [Line Items] | |||
Useful life, intangibles | 35 years | ||
Hilton Honors intangible [Member] | |||
Accounting Policies [Line Items] | |||
Useful life, intangibles | 16 years | ||
Capitalized software development costs [Member] | |||
Accounting Policies [Line Items] | |||
Useful life, intangibles | 3 years |
Basis of Presentation and Sum39
Basis of Presentation and Summary of Significant Accounting Policies - Prior Period Financial Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Accounts receivable, net | $ 980 | $ 1,005 | |||
Prepaid expenses | 161 | 127 | |||
Other current assets | 184 | 169 | |||
Management and franchise contracts, net | 928 | 953 | |||
Deferred income tax assets | 111 | 111 | |||
Other non-current assets | 314 | 291 | |||
Total assets | 14,260 | 14,228 | |||
Accounts payable, accrued expenses and other | 1,344 | 1,416 | |||
Current portion of deferred revenues | 342 | 366 | |||
Deferred revenues | 828 | 829 | |||
Deferred income tax liabilities | 901 | 931 | |||
Other non-current liabilities | 897 | 920 | |||
Total liabilities | 12,513 | 12,537 | |||
Accumulated deficit | (6,868) | (6,981) | |||
Accumulated other comprehensive loss | (680) | $ (918) | (741) | $ (1,001) | |
Total equity | 1,747 | 1,360 | 1,691 | 5,627 | |
Total liabilities and equity | 14,260 | 14,228 | |||
Current portion of liability for guest loyalty program | 692 | 622 | |||
Franchise fees | 331 | 282 | |||
Base and other management fees | 77 | 81 | |||
Incentive management fees | 55 | 49 | |||
Owned and leased hotels | 334 | 296 | |||
Other revenues | 23 | 37 | |||
Total revenues excluding reimburseable revenues. | 820 | 745 | |||
Other revenues from managed and franchised properties | 1,254 | 1,151 | |||
Total revenues | 2,074 | 1,896 | |||
Owned and leased hotels | 320 | 268 | |||
Depreciation and amortization | 82 | 86 | |||
General and administrative | 104 | 106 | |||
Other expenses | 14 | 23 | |||
Total expenses excluding reimbursable expenses | 520 | 483 | |||
Other expenses from managed and franchised properties | 1,275 | 1,196 | |||
Total expenses | 1,795 | 1,679 | |||
Operating income | 279 | 217 | |||
Interest expense | (83) | (89) | |||
Loss on foreign currency transactions | 11 | (4) | |||
Loss on debt extinguishment | 0 | (60) | |||
Other non-operating income, net | 14 | 2 | |||
Income before income taxes | 221 | 66 | |||
Income tax expense | (58) | (18) | |||
Net income | 163 | 48 | |||
Net income attributable to noncontrolling interests | (2) | (1) | |||
Net income attributable to Hilton stockholders | $ 161 | $ 47 | |||
Net income per share, basic | $ 0.51 | $ 0.14 | |||
Net income per share, diluted | $ 0.51 | $ 0.14 | |||
Scenario, Previously Reported [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Accounts receivable, net | 998 | ||||
Prepaid expenses | 111 | ||||
Other current assets | 171 | ||||
Management and franchise contracts, net | 909 | ||||
Deferred income tax assets | 113 | ||||
Other non-current assets | 434 | ||||
Total assets | 14,308 | ||||
Accounts payable, accrued expenses and other | [1],[2] | 1,487 | |||
Current portion of deferred revenues | [1] | 41 | |||
Deferred revenues | 97 | ||||
Deferred income tax liabilities | 1,063 | ||||
Other non-current liabilities | 1,470 | ||||
Total liabilities | 12,233 | ||||
Accumulated deficit | (6,596) | ||||
Accumulated other comprehensive loss | (742) | ||||
Total equity | 2,075 | ||||
Total liabilities and equity | 14,308 | ||||
Franchise fees | $ 294 | ||||
Base and other management fees | 83 | ||||
Incentive management fees | 52 | ||||
Owned and leased hotels | 300 | ||||
Other revenues | 37 | ||||
Total revenues excluding reimburseable revenues. | 766 | ||||
Other revenues from managed and franchised properties | 1,395 | ||||
Total revenues | 2,161 | ||||
Owned and leased hotels | 272 | ||||
Depreciation and amortization | 89 | ||||
General and administrative | 105 | ||||
Other expenses | 23 | ||||
Total expenses excluding reimbursable expenses | 489 | ||||
Other expenses from managed and franchised properties | 1,395 | ||||
Total expenses | 1,884 | ||||
Operating income | 277 | ||||
Interest expense | (104) | ||||
Loss on foreign currency transactions | (4) | ||||
Loss on debt extinguishment | (60) | ||||
Other non-operating income, net | 1 | ||||
Income before income taxes | 110 | ||||
Income tax expense | 35 | ||||
Net income | 75 | ||||
Net income attributable to noncontrolling interests | (1) | ||||
Net income attributable to Hilton stockholders | $ 74 | ||||
Net income per share, basic | $ 0.22 | ||||
Net income per share, diluted | $ 0.22 | ||||
Accounting Standards Update 2014-09 [Member] | Restatement Adjustment [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Accounts receivable, net | 7 | ||||
Prepaid expenses | 16 | ||||
Other current assets | (2) | ||||
Management and franchise contracts, net | 44 | ||||
Deferred income tax assets | (2) | ||||
Other non-current assets | (143) | ||||
Total assets | (80) | ||||
Accounts payable, accrued expenses and other | (71) | ||||
Current portion of deferred revenues | 325 | ||||
Deferred revenues | 732 | ||||
Deferred income tax liabilities | (132) | ||||
Other non-current liabilities | (550) | ||||
Total liabilities | 304 | ||||
Accumulated deficit | (385) | $ (222) | |||
Accumulated other comprehensive loss | 1 | ||||
Total equity | (384) | ||||
Total liabilities and equity | $ (80) | ||||
Franchise fees | $ (12) | ||||
Base and other management fees | (2) | ||||
Incentive management fees | (3) | ||||
Owned and leased hotels | (4) | ||||
Other revenues | 0 | ||||
Total revenues excluding reimburseable revenues. | (21) | ||||
Other revenues from managed and franchised properties | (244) | ||||
Total revenues | (265) | ||||
Owned and leased hotels | (4) | ||||
Depreciation and amortization | (3) | ||||
General and administrative | 0 | ||||
Other expenses | 0 | ||||
Total expenses excluding reimbursable expenses | (7) | ||||
Other expenses from managed and franchised properties | (199) | ||||
Total expenses | (206) | ||||
Operating income | (59) | ||||
Interest expense | (15) | ||||
Loss on foreign currency transactions | 0 | ||||
Loss on debt extinguishment | 0 | ||||
Other non-operating income, net | 0 | ||||
Income before income taxes | (44) | ||||
Income tax expense | (17) | ||||
Net income | (27) | ||||
Net income attributable to noncontrolling interests | 0 | ||||
Net income attributable to Hilton stockholders | (27) | ||||
Accounting Standards Update 2017-07 [Member] | Restatement Adjustment [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Franchise fees | 0 | ||||
Base and other management fees | 0 | ||||
Incentive management fees | 0 | ||||
Owned and leased hotels | 0 | ||||
Other revenues | 0 | ||||
Total revenues excluding reimburseable revenues. | 0 | ||||
Other revenues from managed and franchised properties | 0 | ||||
Total revenues | 0 | ||||
Owned and leased hotels | 0 | ||||
Depreciation and amortization | 0 | ||||
General and administrative | 1 | ||||
Other expenses | 0 | ||||
Total expenses excluding reimbursable expenses | 1 | ||||
Other expenses from managed and franchised properties | 0 | ||||
Total expenses | 1 | ||||
Operating income | (1) | ||||
Interest expense | 0 | ||||
Loss on foreign currency transactions | 0 | ||||
Loss on debt extinguishment | 0 | ||||
Other non-operating income, net | 1 | ||||
Income before income taxes | 0 | ||||
Income tax expense | 0 | ||||
Net income | 0 | ||||
Net income attributable to noncontrolling interests | 0 | ||||
Net income attributable to Hilton stockholders | $ 0 | ||||
[1] | The current portion of deferred revenues has been separated from accounts payable, accrued expenses and other in the "As Previously Reported" column following the adoption of ASU 2014-09. | ||||
[2] | The current portion of liability for guest loyalty program has been separated from accounts payable, accrued expenses and other to conform with current presentation. The balance was $622 million as of December 31, 2017 and did not change as a result of the adoption of ASU 2014-09. |
Revenues from Contracts with 40
Revenues from Contracts with Customers - Contract Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | ||
Revenue from Contract with Customer [Abstract] | |||
Contract liabilities | $ 1,089 | $ 1,087 | |
Cash received in advance and not recognized as revenue | 115 | ||
Revenue recognized | (60) | ||
Other | [1] | $ (53) | |
[1] | Represents the reclassification from deferred revenues to the current portion of liability for guest loyalty program in our condensed consolidated balance sheet. The reclassification is the result of changes in estimated transaction prices for our performance obligations related to points issued under Hilton Honors due to a change in our expected costs to the third parties providing the good or service associated with the Hilton Honors points. |
Revenues from Contracts with 41
Revenues from Contracts with Customers - Performance Obligations (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Unsatisfied performance obligations, excluding loyalty program [member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 554 |
Unsatisfied performance obligations, excluding loyalty program [member] | 2018 (remaining) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | 32 |
Unsatisfied performance obligations, excluding loyalty program [member] | 2019 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | 43 |
Unsatisfied performance obligations, excluding loyalty program [member] | 2020 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | 47 |
Unsatisfied performance obligations, excluding loyalty program [member] | 2021 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | 52 |
Unsatisfied performance obligations, excluding loyalty program [member] | 2022 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | 57 |
Unsatisfied performance obligations, excluding loyalty program [member] | Thereafter | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | 323 |
Loyalty program [member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 535 |
Expected timing of satisfaction of performance obligations | 2 years |
Consolidated Variable Interes42
Consolidated Variable Interest Entities - Additional Information (Details) - Entity | Mar. 31, 2018 | Dec. 31, 2017 |
Variable Interest Entity [Line Items] | ||
Number of consolidated variable interest entities | 3 | 3 |
Hotel VIEs [member] | ||
Variable Interest Entity [Line Items] | ||
Number of consolidated variable interest entities | 2 | 2 |
Management company VIE [member] | ||
Variable Interest Entity [Line Items] | ||
Number of consolidated variable interest entities | 1 | 1 |
Consolidated Variable Interes43
Consolidated Variable Interest Entities - Schedule of Consolidated Variable Interest Entities (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | |
Variable Interest Entity [Line Items] | |||
Cash and cash equivalents | $ 610 | $ 570 | |
Accounts receivable, net | 980 | 1,005 | |
Property and equipment, net | 358 | 353 | |
Deferred income tax assets | 111 | 111 | |
Other non-current assets | 314 | 291 | |
Accounts payable, accrued expenses and other | 1,344 | 1,416 | |
Long-term debt | 6,558 | 6,556 | |
Consolidated VIEs [member] | |||
Variable Interest Entity [Line Items] | |||
Cash and cash equivalents | 78 | 73 | |
Accounts receivable, net | 15 | 16 | |
Property and equipment, net | 59 | 57 | |
Deferred income tax assets | 60 | 56 | |
Other non-current assets | 61 | 57 | |
Accounts payable, accrued expenses and other | 39 | 43 | |
Long-term debt | [1] | 222 | 212 |
Capital lease obligations [member] | Consolidated VIEs [member] | |||
Variable Interest Entity [Line Items] | |||
Long-term debt | $ 199 | $ 191 | |
[1] | Includes capital lease obligations of $199 million and $191 million as of March 31, 2018 and December 31, 2017, respectively. |
Amortizing Intangible Assets -
Amortizing Intangible Assets - Schedule of Finite Lived Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Management and franchise contracts, gross | $ 2,783 | $ 2,755 | |
Other intangible assets, gross | 1,287 | 1,265 | |
Management and franchise contracts, accumulated amortization | (1,855) | (1,802) | |
Other intangible assets, accumulated amortization | (859) | (832) | |
Management and franchise contracts, net | 928 | 953 | |
Other intangible assets, net | 428 | 433 | |
Management and franchise contracts recorded at merger [member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Management and franchise contracts, gross | [1] | 2,247 | 2,242 |
Management and franchise contracts, accumulated amortization | [1] | (1,761) | (1,716) |
Management and franchise contracts, net | [1] | 486 | 526 |
Contract acquisition costs [member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Management and franchise contracts, gross | 436 | 416 | |
Management and franchise contracts, accumulated amortization | (81) | (74) | |
Management and franchise contracts, net | 355 | 342 | |
Development commissions [member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Management and franchise contracts, gross | 100 | 97 | |
Management and franchise contracts, accumulated amortization | (13) | (12) | |
Management and franchise contracts, net | 87 | 85 | |
Leases [member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Other intangible assets, gross | [1] | 310 | 301 |
Other intangible assets, accumulated amortization | [1] | (162) | (153) |
Other intangible assets, net | [1] | 148 | 148 |
Capitalized software [member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Other intangible assets, gross | 596 | 585 | |
Other intangible assets, accumulated amortization | (440) | (428) | |
Other intangible assets, net | 156 | 157 | |
Hilton Honors [member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Other intangible assets, gross | [1] | 343 | 341 |
Other intangible assets, accumulated amortization | [1] | (223) | (217) |
Other intangible assets, net | [1] | 120 | 124 |
Other [member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Other intangible assets, gross | 38 | 38 | |
Other intangible assets, accumulated amortization | (34) | (34) | |
Other intangible assets, net | $ 4 | $ 4 | |
[1] | Represents intangible assets that were initially recorded at their fair value at the time of the Merger. |
Amortizing Intangible Assets 45
Amortizing Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Depreciation and amortization [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 69 | $ 70 |
Franchise fee and base and other management fee revenues [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | 7 | 3 |
Development commissions [member] | Depreciation and amortization [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 1 | $ 1 |
Amortizing Intangible Assets 46
Amortizing Intangible Assets - Schedule of Future Amortization (Details) $ in Millions | Mar. 31, 2018USD ($) |
Depreciation and amortization [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
2018 (remaining) | $ 205 |
2,019 | 261 |
2,020 | 210 |
2,021 | 71 |
2,022 | 61 |
Thereafter | 193 |
Amortizing intangible assets, net | 1,001 |
Franchise fee and base and other management fee revenues [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
2018 (remaining) | 16 |
2,019 | 22 |
2,020 | 22 |
2,021 | 21 |
2,022 | 21 |
Thereafter | 253 |
Amortizing intangible assets, net | $ 355 |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 01, 2017 | |
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 6,683 | $ 6,683 | ||
Unamortized deferred financing costs and discount | (78) | (81) | ||
Long-term debt, current maturities | [1] | (47) | (46) | |
Long-term debt | 6,558 | 6,556 | ||
Senior notes due 2024 [member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 1,000 | 1,000 | ||
Debt instrument, interest rate, stated percentage | 4.25% | |||
Senior notes due 2025 [member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 900 | 900 | ||
Debt instrument, interest rate, stated percentage | 4.625% | 4.625% | ||
Senior notes due 2027 [member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 600 | 600 | ||
Debt instrument, interest rate, stated percentage | 4.875% | 4.875% | ||
Senior secured term loan facility due 2023 [member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 3,919 | 3,929 | ||
Debt instrument, interest rate, stated percentage | 3.87% | |||
Capital lease obligations [member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 241 | 233 | ||
Other debt obligations [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 23 | $ 21 | ||
Other debt obligations [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, weighted average interest rate | 2.65% | |||
Capital lease obligations [member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, weighted average interest rate | 6.33% | |||
[1] | Net of unamortized deferred financing costs and discount attributable to current maturities of long-term debt. |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Millions | Apr. 01, 2018 | Mar. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 01, 2017 |
Debt Instrument [Line Items] | ||||||
Long-term debt, gross | $ 6,683 | $ 6,683 | ||||
Senior notes due 2025 [member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from Issuance of Debt | $ 900 | |||||
Long-term debt, gross | $ 900 | 900 | ||||
Debt instrument, interest rate, stated percentage | 4.625% | 4.625% | ||||
Senior notes due 2027 [member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, gross | $ 600 | 600 | ||||
Debt instrument, interest rate, stated percentage | 4.875% | 4.875% | ||||
Proceeds from Issuance of Long-term Debt | 600 | |||||
Senior notes due 2025 and senior notes due 2027 [member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt issuance costs, gross | $ 21 | $ 21 | ||||
Senior notes due 2021 [member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, gross | $ 1,500 | |||||
Debt instrument, interest rate, stated percentage | 5.625% | |||||
Premium paid to redeem debt instrument | 42 | |||||
Write off of deferred debt issuance cost | $ 18 | |||||
Senior notes due 2024 [member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, gross | $ 1,000 | 1,000 | ||||
Debt instrument, interest rate, stated percentage | 4.25% | |||||
Senior secured revolving credit facility [member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 1,000 | |||||
Letters of credit outstanding, amount | 64 | |||||
Line of credit facility, remaining borrowing capacity | 936 | |||||
Senior secured term loan facility due 2023 [member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, gross | $ 3,919 | $ 3,929 | ||||
Debt instrument, interest rate, stated percentage | 3.87% | |||||
Subsequent event [Member] | Senior secured term loan facility due 2023 [member] | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of debt | $ 500 | |||||
Debt instrument, interest rate, increase (decrease) | 0.25% | |||||
Debt instrument, basis spread on variable rate | 1.75% | |||||
Subsequent event [Member] | Senior notes due 2026 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes | $ 1,500 | |||||
Debt instrument, interest rate, stated percentage | 5.125% |
Debt - Debt Maturities (Details
Debt - Debt Maturities (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
2018 (remaining) | $ 41 | |
2,019 | 56 | |
2,020 | 58 | |
2,021 | 59 | |
2,022 | 59 | |
Thereafter | 6,410 | |
Gross long-term debt and capital lease obligations, including current maturities | $ 6,683 | $ 6,683 |
Derivative Instruments and He50
Derivative Instruments and Hedging Activities - Fair Value of Derivative Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Other Noncurrent Assets [Member] | Designated as hedging instrument [member] | Interest rate swaps [member] | ||
Derivative [Line Items] | ||
Derivative asset | $ 47 | $ 11 |
Other current assets [member] | Not designated as hedging instrument [member] | Foreign exchange forward contracts [member] | ||
Derivative [Line Items] | ||
Derivative asset | 1 | 4 |
Accounts payable, accrued expenses and other [member] | Designated as hedging instrument [member] | Foreign exchange forward contracts [member] | ||
Derivative [Line Items] | ||
Derivative liability | 1 | 1 |
Accounts payable, accrued expenses and other [member] | Not designated as hedging instrument [member] | Foreign exchange forward contracts [member] | ||
Derivative [Line Items] | ||
Derivative liability | $ 2 | $ 1 |
Derivative Instruments and He51
Derivative Instruments and Hedging Activities - Earnings Effect of Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Designated as hedging instrument [member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments, gain (loss) recognized in income, ineffective portion and amount excluded from effectiveness testing, net | [1] | $ 0 | $ 0 |
Interest rate swaps [member] | Designated as hedging instrument [member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments, gain (loss) recognized in other comprehensive income (loss), effective portion, net | 34 | (9) | |
Foreign exchange forward contracts [member] | Designated as hedging instrument [member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments, gain (loss) recognized in other comprehensive income (loss), effective portion, net | $ (1) | ||
Derivative instruments, expense reclassified from accumulated OCI into income, effective portion, net | [2] | less than $1 million | |
Other non-operating income, net [member] | Interest rate swaps [member] | Not designated as hedging instrument [member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on interest rate derivative instruments not designated as hedging instruments | 2 | ||
Interest expense [member] | Interest rate swaps [member] | Designated as hedging instrument [member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments, gain (loss) reclassified from accumulated OCI into income, effective portion, net | $ (2) | (2) | |
Interest expense [member] | Interest rate swaps [member] | Not designated as hedging instrument [member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Loss reclassified to earnings, net from discontinued cash flow hedges | [3] | (3) | (3) |
Gain (loss) on foreign currency transactions [member] | Foreign exchange forward contracts [member] | Not designated as hedging instrument [member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on foreign exchange forward contracts not designated as hedging instruments | $ 1 | $ 1 | |
[1] | There were no amounts recognized in earnings related to hedge ineffectiveness or amounts excluded from hedge effectiveness testing during the three months ended March 31, 2018 and 2017. | ||
[2] | The earnings effect of the Fee Forward Contracts on fee revenues for the three months ended March 31, 2018 was less than $1 million. | ||
[3] | These amounts are related to the dedesignation of interest rate swaps in 2016 that no longer met the criteria for hedge accounting and were settled in 2017. The amounts were reclassified from accumulated other comprehensive loss as the underlying transactions occurred. |
Derivative Instruments and He52
Derivative Instruments and Hedging Activities - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($)Derivative | |
Designated as hedging instrument [member] | Interest rate swaps [member] | |
Derivative [Line Items] | |
Derivative, maturity date | Mar. 1, 2022 |
Number of interest rate derivatives held | Derivative | 2 |
Designated as hedging instrument [member] | Foreign exchange forward contracts [member] | |
Derivative [Line Items] | |
Derivative, notional amount | $ 68 |
Derivative, remaining maturity | 24 months |
Not designated as hedging instrument [member] | Foreign exchange forward contracts [member] | |
Derivative [Line Items] | |
Derivative, notional amount | $ 336 |
$1.6 billion notional [Member] | Designated as hedging instrument [member] | Interest rate swaps [member] | |
Derivative [Line Items] | |
Derivative, notional amount | $ 1,600 |
Derivative, swaption interest rate | 1.98% |
$750 million notional [Member] | Designated as hedging instrument [member] | Interest rate swaps [member] | |
Derivative [Line Items] | |
Derivative, notional amount | $ 750 |
Derivative, swaption interest rate | 2.02% |
Fair Value Measurements - Sche
Fair Value Measurements - Schedule by Balance Sheet Grouping (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | |
Level 1 [member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | [1] | $ 2,471 | $ 2,575 |
Level 2 [member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash equivalents | 237 | 284 | |
Restricted cash equivalents | 12 | 12 | |
Level 3 [member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | [1] | 3,951 | 3,954 |
Carrying value [member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash equivalents | 237 | 284 | |
Restricted cash equivalents | 12 | 12 | |
Long-term debt | [1] | $ 6,341 | $ 6,348 |
[1] | The carrying values include unamortized deferred financing costs and discount. The carrying values and fair values exclude capital lease obligations and other debt. |
Income Taxes - Additional Info
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | ||
Effective income tax rate reconciliation, change in enacted tax rate, amount | $ 0 | $ 665 |
Unrecognized tax benefits | 284 | |
Accrual for interest and penalties | 35 | |
Unrecognized tax benefits that would impact effective tax rate | 285 | |
Income tax examination, estimate of possible loss | 874 | |
Accrual for taxing authority proposed tax owed adjustment | 45 | |
Pre-enactment [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Effective income tax rate reconciliation, change in enacted tax rate, percent | 35.00% | |
Post-enactment [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Effective income tax rate reconciliation, change in enacted tax rate, percent | 21.00% | |
Remeasurement of U.S. DTAs/DTLs [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Effective income tax rate reconciliation, change in enacted tax rate, amount | 0 | $ 517 |
Uncertain tax position reserves [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Effective income tax rate reconciliation, change in enacted tax rate, amount | 0 | 33 |
Other tax liabilities [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Effective income tax rate reconciliation, change in enacted tax rate, amount | 0 | 84 |
Recognition of tax benefits [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Effective income tax rate reconciliation, change in enacted tax rate, amount | 0 | 16 |
Transition tax results [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Effective income tax rate reconciliation, change in enacted tax rate, amount | $ 0 | $ 15 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 28 | $ 25 |
Unrecognized compensation costs related to unvested awards | $ 223 | |
Unrecognized compensation costs related to unvested awards, weighted-average period | 2 years | |
Shares of common stock reserved for future issuance, in millions | 16.2 | |
Restricted stock units (RSUs) [member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted, in millions | 0.9 | |
Weighted average grant date fair value, granted | $ 79.37 | |
Restricted stock units (RSUs) [member] | Minimum [member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 2 years | |
Restricted stock units (RSUs) [member] | Maximum [member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Employee stock option [member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Options granted in period, in millions | 0.6 | |
Options granted in period, weighted average exercise price | $ 79.35 | |
Options, expiration period | 10 years | |
Options, grants in period, grant date fair value | $ 23.78 | |
Exercisable, in millions | 1.2 | |
EBITDA CAGR [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting rights, percentage | 50.00% | |
Free cash flow CAGR [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting rights, percentage | 50.00% | |
Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted, in millions | 0.3 | |
Weighted average grant date fair value, granted | $ 79.35 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Stock Options Valuation Assumptions (Details) - Employee stock option [member] | 3 Months Ended | |
Mar. 31, 2018Rate | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 27.99% | [1] |
Dividend yield | 0.74% | [2] |
Risk-free interest rate | 2.73% | [3] |
Expected term (in years) | 6 years | [4] |
[1] | Estimated using historical movement of Hilton's stock price. | |
[2] | Estimated based on the current quarterly dividend and the three-month average stock price at the date of grant. | |
[3] | Based on the yields of U.S. Department of Treasury instruments with similar expected lives. | |
[4] | Estimated using the average of the vesting periods and the contractual term of the options. |
Share-Based Compensation Additi
Share-Based Compensation Additional Information On Performance Shares (Details) | 3 Months Ended |
Mar. 31, 2018Rate | |
2017 awards [Member] | EBITDA CAGR [Member] | |
Schedule of Additional Information on Performance Shares [Line Items] | |
Performance Shares achievement percentage | 200.00% |
2017 awards [Member] | Free cash flow CAGR [Member] | |
Schedule of Additional Information on Performance Shares [Line Items] | |
Performance Shares achievement percentage | 200.00% |
2018 awards [Member] | EBITDA CAGR [Member] | |
Schedule of Additional Information on Performance Shares [Line Items] | |
Performance Shares achievement percentage | 150.00% |
2018 awards [Member] | Free cash flow CAGR [Member] | |
Schedule of Additional Information on Performance Shares [Line Items] | |
Performance Shares achievement percentage | 125.00% |
Stockholders' Equity and Accu58
Stockholders' Equity and Accumulated Other Comprehensive Loss - Schedule of Stockholders' Equity (Details) - USD ($) $ in Millions | 3 Months Ended | |||||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2016 | ||||
Class of Stock [Line Items] | ||||||||
Accumulated deficit | $ (6,868) | $ (6,981) | ||||||
Total Hilton stockholders' equity | 1,742 | 1,688 | ||||||
Beginning Balance | $ 1,691 | $ 5,627 | ||||||
Beginning Balance, shares | 317,420,933 | |||||||
Share-based compensation | $ (10) | (7) | ||||||
Repurchases of common stock, shares | (1,000,000) | |||||||
Repurchases of common stock, purchase price | $ (110) | (70) | ||||||
Net income, parent | 161 | 47 | ||||||
Net income attributable to noncontrolling interests | (2) | (1) | ||||||
Net income | 163 | 48 | ||||||
Comprehensive income, attributable to parent | 222 | 67 | ||||||
Comprehensive income attributable to noncontrolling interests | (2) | 0 | ||||||
Total other comprehensive income | 61 | 19 | ||||||
Dividends | (48) | (50) | ||||||
Spin-offs of Park and HGV | (4,206) | |||||||
Cumulative effect of the adoption of an ASU | 0 | |||||||
Distributions | (1) | |||||||
Stockholders' Equity Attributable to Noncontrolling Interest | (5) | (3) | ||||||
Ending Balance | $ 1,747 | 1,360 | ||||||
Ending Balance, shares | 316,904,646 | |||||||
Common Stock [member] | ||||||||
Class of Stock [Line Items] | ||||||||
Total Hilton stockholders' equity | $ 3 | $ 3 | 3 | $ 3 | ||||
Beginning Balance, shares | 317,000,000 | 329,000,000 | ||||||
Share-based payment award transactions net shares | 1,000,000 | 2,000,000 | ||||||
Repurchases of common stock, shares | (1,000,000) | (1,000,000) | ||||||
Ending Balance, shares | 317,000,000 | 330,000,000 | ||||||
Treasury Stock [member] | ||||||||
Class of Stock [Line Items] | ||||||||
Total Hilton stockholders' equity | $ (1,001) | $ (70) | 891 | 0 | ||||
Repurchases of common stock, purchase price | (110) | (70) | ||||||
Additional Paid-in Capital [member] | ||||||||
Class of Stock [Line Items] | ||||||||
Total Hilton stockholders' equity | 10,288 | 10,214 | 10,298 | 10,220 | ||||
Share-based compensation | (10) | (7) | ||||||
Cumulative effect of the adoption of an ASU | 1 | |||||||
Accumulated Deficit [member] | ||||||||
Class of Stock [Line Items] | ||||||||
Total Hilton stockholders' equity | (6,868) | (7,867) | (6,981) | [1] | (3,545) | [1] | ||
Net income, parent | 161 | 47 | ||||||
Dividends | (48) | (50) | ||||||
Spin-offs of Park and HGV | (4,318) | |||||||
Cumulative effect of the adoption of an ASU | (1) | |||||||
Accumulated Other Comprehensive Loss [member] | ||||||||
Class of Stock [Line Items] | ||||||||
Total Hilton stockholders' equity | (680) | (918) | (741) | (1,001) | ||||
Comprehensive income, attributable to parent | 61 | 20 | ||||||
Spin-offs of Park and HGV | 63 | |||||||
Noncontrolling Interest [member] | ||||||||
Class of Stock [Line Items] | ||||||||
Net income attributable to noncontrolling interests | (2) | (1) | ||||||
Comprehensive income attributable to noncontrolling interests | [2] | 1 | ||||||
Spin-offs of Park and HGV | 49 | |||||||
Distributions | (1) | |||||||
Stockholders' Equity Attributable to Noncontrolling Interest | (5) | 2 | 3 | 50 | ||||
Accounting Standards Update 2014-09 [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Cumulative effect of the adoption of an ASU | $ 212 | |||||||
Accounting Standards Update 2014-09 [Member] | Restatement Adjustment [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Accumulated deficit | $ (385) | $ (222) | ||||||
Beginning Balance | $ (384) | |||||||
Net income, parent | (27) | |||||||
Net income attributable to noncontrolling interests | 0 | |||||||
Net income | $ (27) | |||||||
[1] | Includes adjustments of $385 million and $222 million as of December 31, 2017 and 2016, respectively, as a result of the adoption of ASU 2014-09 as of January 1, 2016. See Note 2: "Basis of Presentation and Summary of Significant Accounting Policies" for additional information. | |||||||
[2] | Other comprehensive loss was related to a currency translation adjustment. |
Stockholders' Equity and Accu59
Stockholders' Equity and Accumulated Other Comprehensive Loss - Additional Information (Details) - USD ($) shares in Millions, $ in Millions | Apr. 01, 2018 | Mar. 31, 2018 | Mar. 31, 2017 |
Equity, Class of Treasury Stock [Line Items] | |||
Stock repurchase program, authorized amount | $ 2,000 | ||
Repurchases of common stock, shares | 1 | ||
Stock repurchase program, remaining authorized repurchase amount | $ 1,000 | ||
Repurchases of common stock, purchase price | 110 | $ 70 | |
Treasury Stock [member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Repurchases of common stock, purchase price | $ 110 | $ 70 | |
HNA Tourism Group Co., Ltd. [Member] | Subsequent event [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Repurchases of common stock, shares | 16.5 | ||
Repurchases of common stock, purchase price | $ 1,171 |
Stockholders' Equity and Accu60
Stockholders' Equity and Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Loss (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | $ (741,000,000) | $ (1,001,000,000) | |
Other comprehensive income (loss) before reclassifications | 55,000,000 | 15,000,000 | |
Amounts reclassified from accumulated other comprehensive loss | 6,000,000 | 5,000,000 | |
Net current period other comprehensive income (loss) | 61,000,000 | 20,000,000 | |
Spin-offs of Park and HGV | (4,206,000,000) | ||
Ending balance | (680,000,000) | (918,000,000) | |
Currency translation adjustment [member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | [1] | (513,000,000) | (738,000,000) |
Tax benefit (expense) on currency translation adjustment reclassifications | 0 | 0 | |
Other comprehensive income (loss) before reclassifications | [1] | 32,000,000 | 21,000,000 |
Amounts reclassified from accumulated other comprehensive loss | [1] | 0 | 0 |
Net current period other comprehensive income (loss) | [1] | 32,000,000 | 21,000,000 |
Spin-offs of Park and HGV | 63,000,000 | ||
Ending balance | [1] | (481,000,000) | (654,000,000) |
Pension liability adjustment [member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | (229,000,000) | (251,000,000) | |
Tax benefit on pension liability adjustment reclassifications | [2] | 1,000,000 | 1,000,000 |
Other comprehensive income (loss) before reclassifications | (1,000,000) | (1,000,000) | |
Amounts reclassified from accumulated other comprehensive loss | [2] | 2,000,000 | 2,000,000 |
Net current period other comprehensive income (loss) | 1,000,000 | 1,000,000 | |
Spin-offs of Park and HGV | 0 | ||
Ending balance | (228,000,000) | (250,000,000) | |
Cash flow hedge adjustment [member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | 1,000,000 | (12,000,000) | |
Tax benefit on cash flow hedge adjustment reclassifications | [3] | 1,000,000 | 2,000,000 |
Other comprehensive income (loss) before reclassifications | 24,000,000 | (5,000,000) | |
Amounts reclassified from accumulated other comprehensive loss | [3] | 4,000,000 | 3,000,000 |
Net current period other comprehensive income (loss) | 28,000,000 | (2,000,000) | |
Spin-offs of Park and HGV | 0 | ||
Ending balance | $ 29,000,000 | (14,000,000) | |
Spin-offs of Park and HGV | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Spin-offs of Park and HGV | $ 63,000,000 | ||
[1] | Includes net investment hedges and intra-entity foreign currency transactions that are of a long-term investment nature. | ||
[2] | Amounts reclassified include the amortization of prior service cost and the amortization of net loss that were included in our computation of net periodic pension cost. They were recognized in other non-operating income, net in our condensed consolidated statements of operations and are presented net of a $1 million tax benefit for the three months ended March 31, 2018 and 2017. | ||
[3] | Amounts reclassified relate to the designated interest rate swaps, as well as the interest rate swaps that were dedesignated in 2016 and settled in 2017. The amounts were recognized in interest expense in our condensed consolidated statements of operations and are presented net of a tax benefit of $1 million and $2 million for the three months ended March 31, 2018 and 2017, respectively. |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from computation of EPS, Amount | Less than 1 million | Less than 1 million |
Net Income (Loss) Available to Common Stockholders, Operations, Basic [Abstract] | ||
Net income attributable to Hilton stockholders | $ 161 | $ 47 |
Net Income (Loss) Available to Common Stockholders, Operations, Diluted [Abstract] | ||
Net income attributable to Hilton stockholders | $ 161 | $ 47 |
Basic EPS: | ||
Weighted average shares outstanding, basic | 316 | 330 |
Net income per share | $ 0.51 | $ 0.14 |
Diluted EPS: | ||
Weighted average shares outstanding, diluted | 319 | 331 |
Net income per share | $ 0.51 | $ 0.14 |
Business Segments - Hotel Prope
Business Segments - Hotel Properties by Segment (Detail) | 3 Months Ended |
Mar. 31, 2018RoomHotelSegment | |
Segment Reporting Information [Line Items] | |
Number of operating business segments | Segment | 2 |
Management and franchise [member] | |
Segment Reporting Information [Line Items] | |
Number of managed hotels | 650 |
Number of franchised hotels | 4,570 |
Number of managed and franchised hotel rooms | Room | 833,421 |
Ownership [member] | |
Segment Reporting Information [Line Items] | |
Number of owned and leased hotels | 71 |
Number of owned and leased hotel rooms | Room | 21,718 |
Number of wholly owned and leased hotels | 62 |
Number of non-wholly owned hotels | 1 |
Number of hotels of consolidated VIEs | 2 |
Number of hotels owned or leased by unconsolidated joint ventures | 6 |
Business Segments - Reconciliat
Business Segments - Reconciliation of Revenue from Segment Amounts to Consolidated Amounts (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Franchise fees | $ 331 | $ 282 | |
Base and other management fees | 77 | 81 | |
Incentive management fees | 55 | 49 | |
Revenues | 2,074 | 1,896 | |
Amortization of contract acquisition costs | (7) | (3) | |
Other revenues | 23 | 37 | |
Direct reimbursements from managed and franchised properties | 699 | 663 | |
Indirect reimbursements from managed and franchised properties | 555 | 488 | |
Ownership [member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | 334 | 296 | |
Management and franchise [member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Franchise fees | 333 | 283 | |
Base and other management fees | [1] | 90 | 90 |
Incentive management fees | 55 | 49 | |
Revenues | 478 | 422 | |
Operating segments [member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | 812 | 718 | |
Intersegment eliminations [member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | [1] | $ (8) | $ (7) |
[1] | Includes management, royalty and IP fees charged to our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations. |
Business Segments - Reconcili64
Business Segments - Reconciliation of Segment Operating Income to Income Before Income Taxes (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Operating income | $ 279 | $ 217 | |
Amortization of contract acquisition costs | (7) | (3) | |
Other revenues, less other expenses | 9 | 14 | |
Net other expenses from managed and franchised properties | (21) | (45) | |
Depreciation and amortization | (82) | (86) | |
General and administrative | (104) | (106) | |
Interest expense | (83) | (89) | |
Gain (loss) on foreign currency transactions | 11 | (4) | |
Loss on debt extinguishment | 0 | (60) | |
Other non-operating income, net | 14 | 2 | |
Income before income taxes | 221 | 66 | |
Management and franchise [member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Operating income | [1] | 478 | 422 |
Ownership [member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Operating income | [1] | 6 | 21 |
Operating segments [member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Operating income | $ 484 | $ 443 | |
[1] | Includes management, royalty and IP fees charged to our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations. |
Business Segments - Schedule of
Business Segments - Schedule of Assets by Segment (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 14,260 | $ 14,228 |
Corporate and other [member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 1,831 | 1,759 |
Management and franchise [member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 11,435 | 11,505 |
Ownership [member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 994 | $ 964 |
Business Segments - Schedule 66
Business Segments - Schedule of Capital Expenditures by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting, Capital Expenditure Reconciling Item [Line Items] | ||
Capital expenditures for property and equipment | $ 10 | $ 9 |
Corporate and other [member] | ||
Segment Reporting, Capital Expenditure Reconciling Item [Line Items] | ||
Capital expenditures for property and equipment | 3 | 3 |
Ownership [member] | ||
Segment Reporting, Capital Expenditure Reconciling Item [Line Items] | ||
Capital expenditures for property and equipment | $ 7 | $ 6 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)Contract | Dec. 31, 2017USD ($)Contract | |
Commitments and Contingencies [Line Items] | ||
Accounts payable, accrued expenses and other | $ 1,344 | $ 1,416 |
Other liabilities | 897 | 920 |
Supply commitment, remaining minimum amount committed | $ 397 | 402 |
Management contract performance guarantees [member] | ||
Commitments and Contingencies [Line Items] | ||
Number of contracts with performance guarantees | Contract | 4 | |
Guarantor obligations, maximum exposure, undiscounted | $ 47 | |
Guarantor obligations, term | 2019 to 2030 | |
Accounts payable, accrued expenses and other | $ 14 | 12 |
Other liabilities | $ 7 | $ 9 |
Number of contracts with performance guarantees with recorded liabilities | Contract | 1 | 2 |
Condensed Consolidating Guara68
Condensed Consolidating Guarantor Financial Information - Condensed Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Current Assets: | ||||
Cash and cash equivalents | $ 610 | $ 570 | ||
Restricted cash and cash equivalents | 73 | 100 | ||
Accounts receivable, net | 980 | 1,005 | ||
Intercompany receivables | 0 | 0 | ||
Prepaid expenses | 161 | 127 | ||
Income taxes receivable | 0 | 36 | ||
Other | 184 | 169 | ||
Total current assets | 2,008 | 2,007 | ||
Intangibles and Other Assets: | ||||
Investments in subsidiaries | 0 | 0 | ||
Goodwill | 5,211 | 5,190 | ||
Brands | 4,902 | 4,890 | ||
Management and franchise contracts, net | 928 | 953 | ||
Other intangible assets, net | 428 | 433 | ||
Property and equipment, net | 358 | 353 | ||
Deferred income tax assets | 111 | 111 | ||
Other | 314 | 291 | ||
Total intangibles and other assets | 12,252 | 12,221 | ||
Total assets | 14,260 | 14,228 | ||
Current Liabilities: | ||||
Accounts payable, accrued expenses and other | 1,344 | 1,416 | ||
Current portion of deferred revenues | 342 | 366 | ||
Intercompany payables | 0 | 0 | ||
Current maturities of long-term debt | 47 | 46 | ||
Income taxes payable | 63 | 12 | ||
Current portion of liability for guest loyalty program | 692 | 622 | ||
Total current liabilities | 2,488 | 2,462 | ||
Long-term debt | 6,558 | 6,556 | ||
Deferred revenues | 828 | 829 | ||
Deferred income tax liabilities | 901 | 931 | ||
Liability for guest loyalty program | 841 | 839 | ||
Other | 897 | 920 | ||
Total liabilities | 12,513 | 12,537 | ||
Equity: | ||||
Total Hilton stockholders' equity | 1,742 | 1,688 | ||
Noncontrolling interests | 5 | 3 | ||
Total equity | 1,747 | 1,691 | $ 1,360 | $ 5,627 |
Total liabilities and equity | 14,260 | 14,228 | ||
Eliminations [Member] | ||||
Current Assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Restricted cash and cash equivalents | 0 | 0 | ||
Accounts receivable, net | 0 | 0 | ||
Intercompany receivables | (40) | (40) | ||
Prepaid expenses | (3) | (6) | ||
Income taxes receivable | (24) | |||
Other | 0 | 0 | ||
Total current assets | (43) | (70) | ||
Intangibles and Other Assets: | ||||
Investments in subsidiaries | (18,867) | (18,787) | ||
Goodwill | 0 | 0 | ||
Brands | 0 | 0 | ||
Management and franchise contracts, net | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Deferred income tax assets | (134) | (126) | ||
Other | 0 | 0 | ||
Total intangibles and other assets | (19,001) | (18,913) | ||
Total assets | (19,044) | (18,983) | ||
Current Liabilities: | ||||
Accounts payable, accrued expenses and other | (1) | (3) | ||
Current portion of deferred revenues | (2) | (3) | ||
Intercompany payables | (40) | (40) | ||
Current maturities of long-term debt | 0 | 0 | ||
Income taxes payable | 0 | (24) | ||
Current portion of liability for guest loyalty program | 0 | 0 | ||
Total current liabilities | (43) | (70) | ||
Long-term debt | 0 | 0 | ||
Deferred revenues | 0 | 0 | ||
Deferred income tax liabilities | (134) | (126) | ||
Liability for guest loyalty program | 0 | 0 | ||
Other | 0 | 0 | ||
Total liabilities | (177) | (196) | ||
Equity: | ||||
Total Hilton stockholders' equity | (18,867) | (18,787) | ||
Noncontrolling interests | 0 | 0 | ||
Total equity | (18,867) | (18,787) | ||
Total liabilities and equity | (19,044) | (18,983) | ||
Parent [Member] | ||||
Current Assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Restricted cash and cash equivalents | 0 | 0 | ||
Accounts receivable, net | 0 | 0 | ||
Intercompany receivables | 0 | 0 | ||
Prepaid expenses | 0 | 0 | ||
Income taxes receivable | 0 | |||
Other | 0 | 0 | ||
Total current assets | 0 | 0 | ||
Intangibles and Other Assets: | ||||
Investments in subsidiaries | 1,737 | 1,697 | ||
Goodwill | 0 | 0 | ||
Brands | 0 | 0 | ||
Management and franchise contracts, net | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Deferred income tax assets | 5 | 6 | ||
Other | 0 | 0 | ||
Total intangibles and other assets | 1,742 | 1,703 | ||
Total assets | 1,742 | 1,703 | ||
Current Liabilities: | ||||
Accounts payable, accrued expenses and other | 0 | 15 | ||
Current portion of deferred revenues | 0 | 0 | ||
Intercompany payables | 0 | 0 | ||
Current maturities of long-term debt | 0 | 0 | ||
Income taxes payable | 0 | 0 | ||
Current portion of liability for guest loyalty program | 0 | 0 | ||
Total current liabilities | 0 | 15 | ||
Long-term debt | 0 | 0 | ||
Deferred revenues | 0 | 0 | ||
Deferred income tax liabilities | 0 | 0 | ||
Liability for guest loyalty program | 0 | 0 | ||
Other | 0 | 0 | ||
Total liabilities | 0 | 15 | ||
Equity: | ||||
Total Hilton stockholders' equity | 1,742 | 1,688 | ||
Noncontrolling interests | 0 | 0 | ||
Total equity | 1,742 | 1,688 | ||
Total liabilities and equity | 1,742 | 1,703 | ||
Guarantor Subsidiaries [Member] | ||||
Current Assets: | ||||
Cash and cash equivalents | 14 | 18 | ||
Restricted cash and cash equivalents | 10 | 10 | ||
Accounts receivable, net | 700 | 712 | ||
Intercompany receivables | 0 | 0 | ||
Prepaid expenses | 51 | 24 | ||
Income taxes receivable | 60 | |||
Other | 17 | 13 | ||
Total current assets | 792 | 837 | ||
Intangibles and Other Assets: | ||||
Investments in subsidiaries | 1,737 | 1,697 | ||
Goodwill | 3,824 | 3,824 | ||
Brands | 4,404 | 4,405 | ||
Management and franchise contracts, net | 620 | 645 | ||
Other intangible assets, net | 278 | 283 | ||
Property and equipment, net | 66 | 67 | ||
Deferred income tax assets | 0 | 0 | ||
Other | 67 | 67 | ||
Total intangibles and other assets | 10,996 | 10,988 | ||
Total assets | 11,788 | 11,825 | ||
Current Liabilities: | ||||
Accounts payable, accrued expenses and other | 555 | 576 | ||
Current portion of deferred revenues | 268 | 266 | ||
Intercompany payables | 0 | 0 | ||
Current maturities of long-term debt | 0 | 0 | ||
Income taxes payable | 22 | 0 | ||
Current portion of liability for guest loyalty program | 692 | 622 | ||
Total current liabilities | 1,537 | 1,464 | ||
Long-term debt | 0 | 0 | ||
Deferred revenues | 766 | 770 | ||
Deferred income tax liabilities | 1,021 | 1,052 | ||
Liability for guest loyalty program | 841 | 839 | ||
Other | 61 | 64 | ||
Total liabilities | 4,226 | 4,189 | ||
Equity: | ||||
Total Hilton stockholders' equity | 7,562 | 7,636 | ||
Noncontrolling interests | 0 | 0 | ||
Total equity | 7,562 | 7,636 | ||
Total liabilities and equity | 11,788 | 11,825 | ||
Non-Guarantor Subsidiaries [Member] | ||||
Current Assets: | ||||
Cash and cash equivalents | 594 | 550 | ||
Restricted cash and cash equivalents | 30 | 29 | ||
Accounts receivable, net | 263 | 275 | ||
Intercompany receivables | 40 | 40 | ||
Prepaid expenses | 95 | 84 | ||
Income taxes receivable | 0 | |||
Other | 166 | 155 | ||
Total current assets | 1,188 | 1,133 | ||
Intangibles and Other Assets: | ||||
Investments in subsidiaries | 0 | 0 | ||
Goodwill | 1,387 | 1,366 | ||
Brands | 498 | 485 | ||
Management and franchise contracts, net | 308 | 306 | ||
Other intangible assets, net | 150 | 149 | ||
Property and equipment, net | 273 | 266 | ||
Deferred income tax assets | 136 | 127 | ||
Other | 159 | 172 | ||
Total intangibles and other assets | 2,911 | 2,871 | ||
Total assets | 4,099 | 4,004 | ||
Current Liabilities: | ||||
Accounts payable, accrued expenses and other | 625 | 624 | ||
Current portion of deferred revenues | 13 | 13 | ||
Intercompany payables | 0 | 0 | ||
Current maturities of long-term debt | 15 | 14 | ||
Income taxes payable | 41 | 36 | ||
Current portion of liability for guest loyalty program | 0 | 0 | ||
Total current liabilities | 694 | 687 | ||
Long-term debt | 249 | 240 | ||
Deferred revenues | 62 | 59 | ||
Deferred income tax liabilities | 0 | 0 | ||
Liability for guest loyalty program | 0 | 0 | ||
Other | 613 | 628 | ||
Total liabilities | 1,618 | 1,614 | ||
Equity: | ||||
Total Hilton stockholders' equity | 2,476 | 2,387 | ||
Noncontrolling interests | 5 | 3 | ||
Total equity | 2,481 | 2,390 | ||
Total liabilities and equity | 4,099 | 4,004 | ||
HWF Issuers [Member] | ||||
Current Assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Restricted cash and cash equivalents | 0 | 0 | ||
Accounts receivable, net | 0 | 0 | ||
Intercompany receivables | 0 | 0 | ||
Prepaid expenses | 0 | 0 | ||
Income taxes receivable | 0 | |||
Other | 0 | 0 | ||
Total current assets | 0 | 0 | ||
Intangibles and Other Assets: | ||||
Investments in subsidiaries | 7,092 | 7,067 | ||
Goodwill | 0 | 0 | ||
Brands | 0 | 0 | ||
Management and franchise contracts, net | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Deferred income tax assets | 0 | 0 | ||
Other | 55 | 20 | ||
Total intangibles and other assets | 7,147 | 7,087 | ||
Total assets | 7,147 | 7,087 | ||
Current Liabilities: | ||||
Accounts payable, accrued expenses and other | 39 | 20 | ||
Current portion of deferred revenues | 0 | 0 | ||
Intercompany payables | 0 | 0 | ||
Current maturities of long-term debt | 32 | 32 | ||
Income taxes payable | 0 | 0 | ||
Current portion of liability for guest loyalty program | 0 | 0 | ||
Total current liabilities | 71 | 52 | ||
Long-term debt | 5,325 | 5,333 | ||
Deferred revenues | 0 | 0 | ||
Deferred income tax liabilities | 14 | 5 | ||
Liability for guest loyalty program | 0 | 0 | ||
Other | 0 | 0 | ||
Total liabilities | 5,410 | 5,390 | ||
Equity: | ||||
Total Hilton stockholders' equity | 1,737 | 1,697 | ||
Noncontrolling interests | 0 | 0 | ||
Total equity | 1,737 | 1,697 | ||
Total liabilities and equity | 7,147 | 7,087 | ||
HOC [Member] | ||||
Current Assets: | ||||
Cash and cash equivalents | 2 | 2 | ||
Restricted cash and cash equivalents | 33 | 61 | ||
Accounts receivable, net | 17 | 18 | ||
Intercompany receivables | 0 | 0 | ||
Prepaid expenses | 18 | 25 | ||
Income taxes receivable | 0 | |||
Other | 1 | 1 | ||
Total current assets | 71 | 107 | ||
Intangibles and Other Assets: | ||||
Investments in subsidiaries | 8,301 | 8,326 | ||
Goodwill | 0 | 0 | ||
Brands | 0 | 0 | ||
Management and franchise contracts, net | 0 | 2 | ||
Other intangible assets, net | 0 | 1 | ||
Property and equipment, net | 19 | 20 | ||
Deferred income tax assets | 104 | 104 | ||
Other | 33 | 32 | ||
Total intangibles and other assets | 8,457 | 8,485 | ||
Total assets | 8,528 | 8,592 | ||
Current Liabilities: | ||||
Accounts payable, accrued expenses and other | 126 | 184 | ||
Current portion of deferred revenues | 63 | 90 | ||
Intercompany payables | 40 | 40 | ||
Current maturities of long-term debt | 0 | 0 | ||
Income taxes payable | 0 | 0 | ||
Current portion of liability for guest loyalty program | 0 | 0 | ||
Total current liabilities | 229 | 314 | ||
Long-term debt | 984 | 983 | ||
Deferred revenues | 0 | 0 | ||
Deferred income tax liabilities | 0 | 0 | ||
Liability for guest loyalty program | 0 | 0 | ||
Other | 223 | 228 | ||
Total liabilities | 1,436 | 1,525 | ||
Equity: | ||||
Total Hilton stockholders' equity | 7,092 | 7,067 | ||
Noncontrolling interests | 0 | 0 | ||
Total equity | 7,092 | 7,067 | ||
Total liabilities and equity | $ 8,528 | $ 8,592 |
Condensed Consolidating Guara69
Condensed Consolidating Guarantor Financial Information - Condensed Income Statement (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | ||
Franchise fees | $ 331 | $ 282 |
Base and other management fees | 77 | 81 |
Incentive management fees | 55 | 49 |
Owned and leased hotels | 334 | 296 |
Other revenues | 23 | 37 |
Total revenues excluding reimburseable revenues | 820 | 745 |
Other revenues from managed and franchised properties | 1,254 | 1,151 |
Total revenues | 2,074 | 1,896 |
Expenses | ||
Owned and leased hotels | 320 | 268 |
Depreciation and amortization | 82 | 86 |
General and administrative | 104 | 106 |
Other expenses | 14 | 23 |
Total expenses excluding reimbursable expenses | 520 | 483 |
Other expenses from managed and franchised properties | 1,275 | 1,196 |
Total expenses | 1,795 | 1,679 |
Operating income | 279 | 217 |
Interest expense | (83) | (89) |
Gain (loss) on foreign currency transactions | 11 | (4) |
Other nonoperating income (loss), net | 14 | 2 |
Loss on debt extinguishment | 0 | (60) |
Income (loss) before income taxes and equity in earnings from subsidiaries | (221) | (66) |
Income tax expense | (58) | (18) |
Income (loss) before equity in earnings from subsidiaries | 163 | 48 |
Equity in earnings from subsidiaries | 0 | 0 |
Net income | 163 | 48 |
Net income attributable to noncontrolling interests | (2) | (1) |
Net income attributable to Hilton stockholders | 161 | 47 |
Comprehensive income | 224 | 67 |
Comprehensive income attributable to noncontrolling interests | (2) | 0 |
Comprehensive income attributable to Hilton stockholders | 222 | 67 |
Eliminations [Member] | ||
Revenues | ||
Franchise fees | (4) | (4) |
Base and other management fees | 0 | 0 |
Incentive management fees | 0 | 0 |
Owned and leased hotels | 0 | 0 |
Other revenues | (5) | 0 |
Total revenues excluding reimburseable revenues | (9) | (4) |
Other revenues from managed and franchised properties | 0 | 0 |
Total revenues | (9) | (4) |
Expenses | ||
Owned and leased hotels | 0 | 0 |
Depreciation and amortization | 0 | 0 |
General and administrative | (4) | 0 |
Other expenses | (4) | (4) |
Total expenses excluding reimbursable expenses | (8) | (4) |
Other expenses from managed and franchised properties | 0 | 0 |
Total expenses | (8) | (4) |
Operating income | (1) | 0 |
Interest expense | 1 | 0 |
Gain (loss) on foreign currency transactions | 0 | 0 |
Other nonoperating income (loss), net | 0 | 0 |
Loss on debt extinguishment | 0 | |
Income (loss) before income taxes and equity in earnings from subsidiaries | 0 | 0 |
Income tax expense | 0 | 0 |
Income (loss) before equity in earnings from subsidiaries | 0 | 0 |
Equity in earnings from subsidiaries | (768) | (374) |
Net income | (768) | (374) |
Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Hilton stockholders | (768) | (374) |
Comprehensive income | (829) | (394) |
Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Comprehensive income attributable to Hilton stockholders | (829) | (394) |
Parent [Member] | ||
Revenues | ||
Franchise fees | 0 | 0 |
Base and other management fees | 0 | 0 |
Incentive management fees | 0 | 0 |
Owned and leased hotels | 0 | 0 |
Other revenues | 0 | 0 |
Total revenues excluding reimburseable revenues | 0 | 0 |
Other revenues from managed and franchised properties | 0 | 0 |
Total revenues | 0 | 0 |
Expenses | ||
Owned and leased hotels | 0 | 0 |
Depreciation and amortization | 0 | 0 |
General and administrative | 0 | 0 |
Other expenses | 0 | 0 |
Total expenses excluding reimbursable expenses | 0 | 0 |
Other expenses from managed and franchised properties | 0 | 0 |
Total expenses | 0 | 0 |
Operating income | 0 | 0 |
Interest expense | 0 | 0 |
Gain (loss) on foreign currency transactions | 0 | 0 |
Other nonoperating income (loss), net | 0 | 0 |
Loss on debt extinguishment | 0 | |
Income (loss) before income taxes and equity in earnings from subsidiaries | 0 | 0 |
Income tax expense | 0 | 0 |
Income (loss) before equity in earnings from subsidiaries | 0 | 0 |
Equity in earnings from subsidiaries | 161 | 47 |
Net income | 161 | 47 |
Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Hilton stockholders | 161 | 47 |
Comprehensive income | 222 | 67 |
Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Comprehensive income attributable to Hilton stockholders | 222 | 67 |
Guarantor Subsidiaries [Member] | ||
Revenues | ||
Franchise fees | 262 | 244 |
Base and other management fees | 51 | 49 |
Incentive management fees | 21 | 20 |
Owned and leased hotels | 0 | 0 |
Other revenues | 24 | 13 |
Total revenues excluding reimburseable revenues | 358 | 326 |
Other revenues from managed and franchised properties | 1,070 | 981 |
Total revenues | 1,428 | 1,307 |
Expenses | ||
Owned and leased hotels | 0 | 0 |
Depreciation and amortization | 60 | 62 |
General and administrative | 0 | 2 |
Other expenses | 7 | 7 |
Total expenses excluding reimbursable expenses | 67 | 71 |
Other expenses from managed and franchised properties | 1,084 | 1,026 |
Total expenses | 1,151 | 1,097 |
Operating income | 277 | 210 |
Interest expense | 0 | 0 |
Gain (loss) on foreign currency transactions | 8 | 21 |
Other nonoperating income (loss), net | 8 | 1 |
Loss on debt extinguishment | 0 | |
Income (loss) before income taxes and equity in earnings from subsidiaries | (293) | (232) |
Income tax expense | (73) | (87) |
Income (loss) before equity in earnings from subsidiaries | 220 | 145 |
Equity in earnings from subsidiaries | 161 | 47 |
Net income | 381 | 192 |
Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Hilton stockholders | 381 | 192 |
Comprehensive income | 382 | 192 |
Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Comprehensive income attributable to Hilton stockholders | 382 | 192 |
Non-Guarantor Subsidiaries [Member] | ||
Revenues | ||
Franchise fees | 29 | 23 |
Base and other management fees | 26 | 32 |
Incentive management fees | 34 | 29 |
Owned and leased hotels | 334 | 296 |
Other revenues | 2 | 4 |
Total revenues excluding reimburseable revenues | 425 | 384 |
Other revenues from managed and franchised properties | 140 | 129 |
Total revenues | 565 | 513 |
Expenses | ||
Owned and leased hotels | 320 | 268 |
Depreciation and amortization | 21 | 23 |
General and administrative | 35 | 25 |
Other expenses | 9 | 8 |
Total expenses excluding reimbursable expenses | 385 | 324 |
Other expenses from managed and franchised properties | 145 | 128 |
Total expenses | 530 | 452 |
Operating income | 35 | 61 |
Interest expense | (10) | (10) |
Gain (loss) on foreign currency transactions | 6 | (36) |
Other nonoperating income (loss), net | 3 | 3 |
Loss on debt extinguishment | 0 | |
Income (loss) before income taxes and equity in earnings from subsidiaries | (34) | (18) |
Income tax expense | (13) | (5) |
Income (loss) before equity in earnings from subsidiaries | 21 | 13 |
Equity in earnings from subsidiaries | 0 | 0 |
Net income | 21 | 13 |
Net income attributable to noncontrolling interests | (2) | (1) |
Net income attributable to Hilton stockholders | 19 | 12 |
Comprehensive income | 52 | 30 |
Comprehensive income attributable to noncontrolling interests | (2) | 0 |
Comprehensive income attributable to Hilton stockholders | 50 | 30 |
HWF Issuers [Member] | ||
Revenues | ||
Franchise fees | 0 | 0 |
Base and other management fees | 0 | 0 |
Incentive management fees | 0 | 0 |
Owned and leased hotels | 0 | 0 |
Other revenues | 0 | 0 |
Total revenues excluding reimburseable revenues | 0 | 0 |
Other revenues from managed and franchised properties | 0 | 0 |
Total revenues | 0 | 0 |
Expenses | ||
Owned and leased hotels | 0 | 0 |
Depreciation and amortization | 0 | 0 |
General and administrative | 0 | 0 |
Other expenses | 0 | 0 |
Total expenses excluding reimbursable expenses | 0 | 0 |
Other expenses from managed and franchised properties | 0 | 0 |
Total expenses | 0 | 0 |
Operating income | 0 | 0 |
Interest expense | (61) | (63) |
Gain (loss) on foreign currency transactions | 0 | 0 |
Other nonoperating income (loss), net | 0 | (3) |
Loss on debt extinguishment | (60) | |
Income (loss) before income taxes and equity in earnings from subsidiaries | 61 | 126 |
Income tax expense | 15 | 50 |
Income (loss) before equity in earnings from subsidiaries | (46) | (76) |
Equity in earnings from subsidiaries | 207 | 123 |
Net income | 161 | 47 |
Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Hilton stockholders | 161 | 47 |
Comprehensive income | 190 | 45 |
Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Comprehensive income attributable to Hilton stockholders | 190 | 45 |
HOC [Member] | ||
Revenues | ||
Franchise fees | 44 | 19 |
Base and other management fees | 0 | 0 |
Incentive management fees | 0 | 0 |
Owned and leased hotels | 0 | 0 |
Other revenues | 2 | 20 |
Total revenues excluding reimburseable revenues | 46 | 39 |
Other revenues from managed and franchised properties | 44 | 41 |
Total revenues | 90 | 80 |
Expenses | ||
Owned and leased hotels | 0 | 0 |
Depreciation and amortization | 1 | 1 |
General and administrative | 73 | 79 |
Other expenses | 2 | 12 |
Total expenses excluding reimbursable expenses | 76 | 92 |
Other expenses from managed and franchised properties | 46 | 42 |
Total expenses | 122 | 134 |
Operating income | (32) | (54) |
Interest expense | (13) | (16) |
Gain (loss) on foreign currency transactions | (3) | 11 |
Other nonoperating income (loss), net | 3 | 1 |
Loss on debt extinguishment | 0 | |
Income (loss) before income taxes and equity in earnings from subsidiaries | 45 | 58 |
Income tax expense | 13 | 24 |
Income (loss) before equity in earnings from subsidiaries | (32) | (34) |
Equity in earnings from subsidiaries | 239 | 157 |
Net income | 207 | 123 |
Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Hilton stockholders | 207 | 123 |
Comprehensive income | 207 | 127 |
Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Comprehensive income attributable to Hilton stockholders | $ 207 | $ 127 |
Condensed Consolidating Guara70
Condensed Consolidating Guarantor Financial Information - Condensed Cash Flow Statement (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Activities: | ||
Net cash provided by (used in) operating activities | $ 243 | $ 50 |
Investing Activities: | ||
Capital expenditures for property and equipment | (10) | (9) |
Capitalized software costs | (15) | (9) |
Other | (1) | (19) |
Net cash used in investing activities | (26) | (37) |
Financing Activities: | ||
Borrowings | 0 | 1,823 |
Repayment of debt | (14) | (1,824) |
Debt issuance costs and redemption premium | 0 | (66) |
Repayment of intercompany borrowings | 0 | |
Intercompany transfers | 0 | 0 |
Dividends paid | (47) | (49) |
Cash transferred in spin-offs of Park and HGV | 0 | (501) |
Repurchases of common stock | (110) | (70) |
Distributions to noncontrolling interests | 0 | (1) |
Tax withholdings on share-based compensation | (40) | (28) |
Net cash used in financing activities | (211) | (716) |
Effect of exchange rate changes on cash, restricted cash and cash equivalents | 7 | 5 |
Net increase (decrease) in cash, restricted cash and cash equivalents | 13 | (698) |
Cash, restricted cash and cash equivalents from continuing operations, beginning of period | 670 | 1,183 |
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period | 0 | 501 |
Cash, restricted cash and cash equivalents, beginning of period | 1,684 | |
Cash, restricted cash and cash equivalents, end of period | 683 | 986 |
Eliminations [Member] | ||
Operating Activities: | ||
Net cash provided by (used in) operating activities | 0 | (3) |
Investing Activities: | ||
Capital expenditures for property and equipment | 0 | 0 |
Capitalized software costs | 0 | 0 |
Other | 0 | 0 |
Net cash used in investing activities | 0 | 0 |
Financing Activities: | ||
Borrowings | 0 | |
Repayment of debt | 0 | 0 |
Debt issuance costs and redemption premium | 0 | |
Repayment of intercompany borrowings | 3 | |
Intercompany transfers | 0 | 0 |
Dividends paid | 0 | 0 |
Cash transferred in spin-offs of Park and HGV | 0 | |
Repurchases of common stock | 0 | 0 |
Distributions to noncontrolling interests | 0 | |
Tax withholdings on share-based compensation | 0 | 0 |
Net cash used in financing activities | 0 | 3 |
Effect of exchange rate changes on cash, restricted cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash, restricted cash and cash equivalents | 0 | 0 |
Cash, restricted cash and cash equivalents from continuing operations, beginning of period | 0 | |
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period | 0 | |
Cash, restricted cash and cash equivalents, beginning of period | 0 | |
Cash, restricted cash and cash equivalents, end of period | 0 | 0 |
Parent [Member] | ||
Operating Activities: | ||
Net cash provided by (used in) operating activities | 0 | 0 |
Investing Activities: | ||
Capital expenditures for property and equipment | 0 | 0 |
Capitalized software costs | 0 | 0 |
Other | 0 | 0 |
Net cash used in investing activities | 0 | 0 |
Financing Activities: | ||
Borrowings | 0 | |
Repayment of debt | 0 | 0 |
Debt issuance costs and redemption premium | 0 | |
Repayment of intercompany borrowings | 0 | |
Intercompany transfers | 157 | 119 |
Dividends paid | (47) | (49) |
Cash transferred in spin-offs of Park and HGV | 0 | |
Repurchases of common stock | (110) | (70) |
Distributions to noncontrolling interests | 0 | |
Tax withholdings on share-based compensation | 0 | 0 |
Net cash used in financing activities | 0 | 0 |
Effect of exchange rate changes on cash, restricted cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash, restricted cash and cash equivalents | 0 | 0 |
Cash, restricted cash and cash equivalents from continuing operations, beginning of period | 0 | |
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period | 0 | |
Cash, restricted cash and cash equivalents, beginning of period | 0 | |
Cash, restricted cash and cash equivalents, end of period | 0 | 0 |
Guarantor Subsidiaries [Member] | ||
Operating Activities: | ||
Net cash provided by (used in) operating activities | 307 | 48 |
Investing Activities: | ||
Capital expenditures for property and equipment | (1) | (1) |
Capitalized software costs | (15) | (9) |
Other | (2) | (6) |
Net cash used in investing activities | (18) | (16) |
Financing Activities: | ||
Borrowings | 0 | |
Repayment of debt | 0 | 0 |
Debt issuance costs and redemption premium | 0 | |
Repayment of intercompany borrowings | 0 | |
Intercompany transfers | (293) | (42) |
Dividends paid | 0 | 0 |
Cash transferred in spin-offs of Park and HGV | 0 | |
Repurchases of common stock | 0 | 0 |
Distributions to noncontrolling interests | 0 | |
Tax withholdings on share-based compensation | 0 | 0 |
Net cash used in financing activities | (293) | (42) |
Effect of exchange rate changes on cash, restricted cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash, restricted cash and cash equivalents | (4) | (10) |
Cash, restricted cash and cash equivalents from continuing operations, beginning of period | 28 | 31 |
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period | 0 | |
Cash, restricted cash and cash equivalents, beginning of period | 31 | |
Cash, restricted cash and cash equivalents, end of period | 24 | 21 |
Non-Guarantor Subsidiaries [Member] | ||
Operating Activities: | ||
Net cash provided by (used in) operating activities | 11 | 107 |
Investing Activities: | ||
Capital expenditures for property and equipment | (9) | (8) |
Capitalized software costs | 0 | 0 |
Other | 1 | 0 |
Net cash used in investing activities | (8) | (8) |
Financing Activities: | ||
Borrowings | 0 | |
Repayment of debt | (4) | (1) |
Debt issuance costs and redemption premium | 0 | |
Repayment of intercompany borrowings | 0 | |
Intercompany transfers | 39 | (289) |
Dividends paid | 0 | 0 |
Cash transferred in spin-offs of Park and HGV | (501) | |
Repurchases of common stock | 0 | 0 |
Distributions to noncontrolling interests | (1) | |
Tax withholdings on share-based compensation | 0 | 0 |
Net cash used in financing activities | 35 | (792) |
Effect of exchange rate changes on cash, restricted cash and cash equivalents | 7 | 5 |
Net increase (decrease) in cash, restricted cash and cash equivalents | 45 | (688) |
Cash, restricted cash and cash equivalents from continuing operations, beginning of period | 579 | 1,062 |
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period | 501 | |
Cash, restricted cash and cash equivalents, beginning of period | 1,563 | |
Cash, restricted cash and cash equivalents, end of period | 624 | 875 |
HWF Issuers [Member] | ||
Operating Activities: | ||
Net cash provided by (used in) operating activities | (46) | 0 |
Investing Activities: | ||
Capital expenditures for property and equipment | 0 | 0 |
Capitalized software costs | 0 | 0 |
Other | 0 | (13) |
Net cash used in investing activities | 0 | (13) |
Financing Activities: | ||
Borrowings | 1,823 | |
Repayment of debt | (10) | (1,823) |
Debt issuance costs and redemption premium | (66) | |
Repayment of intercompany borrowings | 0 | |
Intercompany transfers | 56 | 79 |
Dividends paid | 0 | 0 |
Cash transferred in spin-offs of Park and HGV | 0 | |
Repurchases of common stock | 0 | 0 |
Distributions to noncontrolling interests | 0 | |
Tax withholdings on share-based compensation | 0 | 0 |
Net cash used in financing activities | 46 | 13 |
Effect of exchange rate changes on cash, restricted cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash, restricted cash and cash equivalents | 0 | 0 |
Cash, restricted cash and cash equivalents from continuing operations, beginning of period | 0 | |
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period | 0 | |
Cash, restricted cash and cash equivalents, beginning of period | 0 | |
Cash, restricted cash and cash equivalents, end of period | 0 | 0 |
HOC [Member] | ||
Operating Activities: | ||
Net cash provided by (used in) operating activities | (29) | (102) |
Investing Activities: | ||
Capital expenditures for property and equipment | 0 | 0 |
Capitalized software costs | 0 | 0 |
Other | 0 | 0 |
Net cash used in investing activities | 0 | 0 |
Financing Activities: | ||
Borrowings | 0 | |
Repayment of debt | 0 | 0 |
Debt issuance costs and redemption premium | 0 | |
Repayment of intercompany borrowings | (3) | |
Intercompany transfers | 41 | 133 |
Dividends paid | 0 | 0 |
Cash transferred in spin-offs of Park and HGV | 0 | |
Repurchases of common stock | 0 | 0 |
Distributions to noncontrolling interests | 0 | |
Tax withholdings on share-based compensation | (40) | (28) |
Net cash used in financing activities | 1 | 102 |
Effect of exchange rate changes on cash, restricted cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash, restricted cash and cash equivalents | (28) | 0 |
Cash, restricted cash and cash equivalents from continuing operations, beginning of period | 63 | 90 |
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period | 0 | |
Cash, restricted cash and cash equivalents, beginning of period | 90 | |
Cash, restricted cash and cash equivalents, end of period | $ 35 | $ 90 |
Condensed Consolidating Guara71
Condensed Consolidating Guarantor Financial Information - Additional Information (Details) | Mar. 31, 2018Rate |
Guarantor Subsidiaries [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Ownership percentage of equity interest | 100.00% |
HWF Issuers [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Ownership percentage of equity interest | 100.00% |
Hilton Worldwide Parent [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Ownership percentage of equity interest | 100.00% |
HOC [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Ownership percentage of equity interest | 100.00% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Apr. 01, 2018 | Mar. 31, 2018 | Mar. 31, 2017 |
Subsequent Event [Line Items] | |||
Repurchases of common stock, shares | 1,000,000 | ||
Repurchases of common stock, purchase price | $ 110 | $ 70 | |
Senior notes due 2026 [Member] | Subsequent event [Member] | |||
Subsequent Event [Line Items] | |||
Proceeds from issuance of long-term debt | $ 1,500 | ||
Debt instrument, interest rate, stated percentage | 5.125% | ||
Senior secured term loan facility due 2023 [member] | |||
Subsequent Event [Line Items] | |||
Debt instrument, interest rate, stated percentage | 3.87% | ||
Senior secured term loan facility due 2023 [member] | Subsequent event [Member] | |||
Subsequent Event [Line Items] | |||
Repayments of debt | $ 500 | ||
HNA Tourism Group Co., Ltd. [Member] | Subsequent event [Member] | |||
Subsequent Event [Line Items] | |||
Repurchases of common stock, shares | 16,500,000 | ||
Repurchases of common stock, purchase price | $ 1,171 | ||
Number of shares offered in secondary offering | 66,000,000 | ||
Treasury Stock [Member] | |||
Subsequent Event [Line Items] | |||
Repurchases of common stock, purchase price | $ 110 | $ 70 |