What changed in this filing

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Item 1. Financial Statements

2025-07-23 compared with 2025-04-29 · 157 added, 67 removed, 395 unchanged (36% of the section changed)

3 unchanged sentences

(in millions, except share data)

March 31, December 31,

June 30, December 31,

Current Assets:

34 unchanged sentences

Common stock, $ 0.01 par value;

10,000,000,000 authorized shares, 238,784,867 outstanding as of March 31, 2025 and 241,806,421 outstanding as of December 31, 2024

10,000,000,000 authorized shares, 235,788,332 outstanding as of June 30, 2025 and 241,806,421 outstanding as of December 31, 2024

Treasury stock, at cost;

97,751,321 shares as of March 31, 2025 and 94,087,917 shares as of December 31, 2024

100,961,799 shares as of June 30, 2025 and 94,087,917 shares as of December 31, 2024

( 12,907 ) ( 11,256 )

13 unchanged sentences

(in millions, except per share data)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Franchise and licensing fees $ 745 $ 689 $ 1,370 $ 1,260

1 unchanged sentence

Incentive management fees 75 68 147 138

332 337 566 592

Other revenues 77 71 123 121

1,326 1,258 2,391 2,310

Cost reimbursement revenues

1,811 1,693 3,441 3,214

Total revenues 3,137 2,951 5,832 5,524

286 298 525 545

Depreciation and amortization 43 34 84 70

1 unchanged sentence

Other expenses 26 37 52 67

464 482 864 899

Reimbursed expenses

1,895 1,744 3,654 3,374

Total expenses 2,359 2,226 4,518 4,273

3 unchanged sentences

Gain (loss) on foreign currency transactions

( 1 ) ( 1 ) 1 ( 2 )

Other non-operating income (loss), net 3 8 20 ( 28 )

3 unchanged sentences

Net income attributable to redeemable and nonredeemable noncontrolling interests

( 2 ) ( 1 ) ( 2 ) ( 4 )

Net income attributable to Hilton stockholders

$ 440 $ 421 $ 740 $ 686

Earnings per share:

6 unchanged sentences

(in millions)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Net income $ 442 $ 422 $ 742 $ 690

1 unchanged sentence

Currency translation adjustment, net of tax of $ 5 , $( 1 ), $ 5 and $ 3

81 ( 12 ) 108 ( 39 )

Pension liability adjustment, net of tax of $( 1 ), $ — (1) , $( 2 ) and $( 1 )

Cash flow hedge adjustment, net of tax of $ 6 , $ 1 , $ 11 and $( 1 )

( 19 ) ( 5 ) ( 34 ) 2

Total other comprehensive income (loss) 64 ( 15 ) 78 ( 33 )

2 unchanged sentences

Comprehensive income attributable to Hilton stockholders

$ 504 $ 407 $ 817 $ 654

(1) Amount was less than $1 million.

3 unchanged sentences

(in millions)

Three Months Ended

Six Months Ended

Operating Activities:

15 unchanged sentences

( 42 ) ( 31 )

Cash paid for acquisitions, net of cash acquired

( 2 ) ( 236 )

Issuance of financing receivables — ( 15 )

Settlements of undesignated derivative financial instruments

12 unchanged sentences

Settlements of interest rate swap with financing component 20 29

Net cash provided by (used in) financing activities

Net cash used in financing activities

( 1,960 ) ( 506 )

Effect of exchange rate changes on cash, restricted cash and cash equivalents 8 ( 16 )

Net increase (decrease) in cash, restricted cash and cash equivalents

Net decrease in cash, restricted cash and cash equivalents

( 928 ) ( 73 )

Cash, restricted cash and cash equivalents, beginning of period 1,376 875

9 unchanged sentences

Basis of Presentation

The accompanying condensed consolidated financial statements for the three months ended March 31, 2025 and 2024 have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") and are unaudited.

The accompanying condensed consolidated financial statements for the three and six months ended June 30, 2025 and 2024 have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") and are unaudited.

We have condensed or omitted certain disclosures normally included in annual financial statements presented in accordance with GAAP;

1 unchanged sentence

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, 2024.

During the three months ended March 31, 2025, we revised the captions of certain financial statement line items presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

The captions of certain financial statement line items have been revised when compared to those presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

The revisions to our condensed consolidated statement of operations included:

1 unchanged sentence

and (ii) changing other revenues from managed and franchised properties and other expenses from managed and franchised properties to cost reimbursement revenues and reimbursed expenses, respectively.

The significant accounting policies for revenues and expenses recognized in each respective line item did not change, and prior period amounts are presented on the same basis as amounts for the three months ended March 31, 2025.

The significant accounting policies for the revenues and expenses recognized in each of these respective line items did not change, nor did prior period amounts.

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.

4 unchanged sentences

In May 2024, we completed the acquisition of the Graduate brand for a total purchase price of $ 210 million, $ 200 million of which we paid in cash upon closing.

The remaining amount was included in accounts payable, accrued expenses and other in our condensed consolidated balance sheet as of March 31, 2025.

The remaining amount unpaid was recorded in accounts payable, accrued expenses and other in our condensed consolidated balance sheet as of June 30, 2025.

We accounted for the transaction as an asset acquisition and recorded an indefinite-lived brand intangible asset of $ 122 million and franchise contract intangible assets of $ 91 million.

6 unchanged sentences

Contract Liabilities

The following table summarizes the activity of our contract liabilities, which are classified as components of current and long-term deferred revenues, during the three months ended March 31, 2025:

The following table summarizes the activity of our contract liabilities, which are classified as components of current and long-term deferred revenues, during the six months ended June 30, 2025:

(in millions)

2 unchanged sentences

Revenue recognized (1)

Balance as of March 31, 2025

Balance as of June 30, 2025

(1) Primarily related to Hilton Honors, our guest loyalty program, including co-branded credit card arrangements.

(2) Primarily represents the changes in estimated transaction prices for our performance obligations related to the issuance of Hilton Honors points, which had no effect on revenues.

(2) Represents the changes in estimated transaction prices for our performance obligations related to the issuance of Hilton Honors points, which had no effect on revenues.

Performance Obligations

As of March 31, 2025, deferred revenues for unsatisfied performance obligations consisted of:

As of June 30, 2025, deferred revenues for unsatisfied performance obligations consisted of:

(i) $ 1,099 million related to Hilton Honors that will be recognized as revenue over approximately the next two years ;

4 unchanged sentences

Consolidated Variable Interest Entities

As of March 31, 2025 and December 31, 2024, we consolidated two variable interest entities ("VIEs") that each lease one hotel property, both of which are located in Japan, and for which the assets are only available to settle the obligations of the respective entities and the liabilities of the respective entities are non-recourse to us.

As of June 30, 2025 and December 31, 2024, we consolidated two variable interest entities ("VIEs") that each lease one hotel property, both of which are located in Japan, and for which the assets are only available to settle the obligations of the respective entities and the liabilities of the respective entities are non-recourse to us.

We consolidated these VIEs since we are the primary beneficiary, having the power to direct the activities that most significantly affect their economic performance.

1 unchanged sentence

Our condensed consolidated balance sheets include the assets and liabilities of these entities, including the effect of foreign currency translation, which primarily comprised the following:

March 31, December 31,

June 30, December 31,

(in millions)

7 unchanged sentences

(1) Represents finance lease liabilities;

includes current maturities of $ 14 million and $ 13 million as of March 31, 2025 and December 31, 2024, respectively.

Long-term debt balances, including obligations for finance leases, and associated interest rates and maturities as of March 31, 2025, were as follows:

March 31, December 31,

includes current maturities of $ 15 million and $ 13 million as of June 30, 2025 and December 31, 2024, respectively.

Long-term debt balances, including obligations for finance leases, and associated interest rates and maturities as of June 30, 2025, were as follows:

June 30, December 31,

(in millions)

Senior secured revolving credit facility with a weighted average rate of 5.42 %, due 2028

Senior secured term loan facility with a rate of 6.07 %, due 2030

$ 3,119 $ 3,119

Senior notes with a rate of 5.375 %, due 2025 (1)

20 unchanged sentences

"Consolidated Variable Interest Entities" for additional information.

(3) Represents current maturities of finance lease liabilities and the 5.375 % Senior Notes due 2025 (the "May 2025 Senior Notes").

We believe that we have sufficient sources of liquidity and access to debt financing to address the current maturities of long-term debt at or prior to the respective maturity dates.

(3) Amount as of June 30, 2025 represents current maturities of finance lease liabilities.

Amount as of December 31, 2024 represents current maturities of finance lease liabilities and the 5.375 % Senior Notes due 2025 (the "May 2025 Senior Notes").

Our senior secured credit facilities consist of a senior secured revolving credit facility (the "Revolving Credit Facility") and senior secured term loan facilities (the "Term Loans").

The obligations under our senior secured credit facilities are unconditionally and irrevocably guaranteed by the Parent and substantially all of its direct and indirect wholly owned domestic restricted subsidiaries, other than HOC, the named borrower under the senior secured credit facilities.

No borrowings were outstanding under the Revolving Credit Facility as of March 31, 2025, which had an available borrowing capacity of $ 1,908 million after considering $ 92 million of outstanding letters of credit.

In April 2025, we issued notice to borrow $ 500 million under the Revolving Credit Facility and plan to use the proceeds, together with available cash, to repay, at maturity, all $ 500 million in aggregate principal amount of the May 2025 Senior Notes, plus accrued and unpaid interest.

During the three months ended June 30, 2025, we borrowed an aggregate $ 290 million, net of repayments, under the Revolving Credit Facility, and, as of June 30, 2025, in addition to those outstanding borrowings, we had $ 92 million of letters of credit outstanding, resulting in an available borrowing capacity under the Revolving Credit Facility of $ 1,618 million.

In May 2025, we used the proceeds from borrowings under the Revolving Credit Facility, together with available cash, to repay, at maturity, all $ 500 million in aggregate principal amount of the May 2025 Senior Notes, plus accrued and unpaid interest.

In July 2025, we borrowed $ 225 million under the Revolving Credit Facility and subsequently issued $ 1.0 billion aggregate principal amount of 5.750 % Senior Notes due 2033 (the " 5.750 % 2033 Senior Notes" or "July Senior Notes issuance").

As part of the July Senior Notes issuance, we incurred $ 15 million of debt issuance costs which will be recognized as a reduction to the outstanding debt balance in our condensed consolidated balance sheet and amortized to interest expense through the maturity date of the 5.750 % 2033 Senior Notes.

Interest on the 5.750 % 2033 Senior Notes is payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2025.

We used a portion of the net proceeds from the July Senior Notes issuance to repay all $ 515 million of outstanding indebtedness under our Revolving Credit Facility.

Fair Value Measurements

The fair values of certain financial instruments and the hierarchy level we used to estimate the fair values are shown below:

March 31, 2025

June 30, 2025

Hierarchy Level

23 unchanged sentences

Our share-based compensation primarily consists of awards that we grant to eligible employees under the Hilton 2017 Omnibus Incentive Plan (the "2017 Plan") and includes time-vesting restricted stock units ("RSUs"), nonqualified stock options ("options") and performance-vesting RSUs ("performance shares").

We recognized share-based compensation expense of $ 36 million and $ 41 million during the three months ended March 31, 2025 and 2024, respectively, which included amounts reimbursed by hotel owners.

During the three months ended March 31, 2025, we granted 376,000 RSUs with a grant date fair value per share of $ 259.10 , which vest in equal annual installments over two or three years from the date of grant.

During the three months ended March 31, 2025, we granted 204,000 options with an exercise price per share of $ 259.10 , which vest in equal annual installments over three years from the date of grant and terminate 10 years from the date of grant or earlier if the individual’s service terminates under certain circumstances.

The grant date fair value per share of the options granted during the three months ended March 31, 2025 was $ 93.02 , which was determined using the Black-Scholes-Merton option-pricing model with the following assumptions:

We recognized share-based compensation expense of $ 55 million during both the three months ended June 30, 2025 and 2024, and $ 91 million and $ 96 million during the six months ended June 30, 2025 and 2024, respectively, which included amounts reimbursed by hotel owners.

During the six months ended June 30, 2025, we granted 380,000 RSUs with a weighted average grant date fair value per share of $ 258.76 , which vest in equal annual installments over two or three years from the date of grant.

During the six months ended June 30, 2025, we granted 213,000 options with a weighted average exercise price per share of $ 257.43 , which vest in equal annual installments over three years from the date of grant and terminate 10 years from the date of grant or earlier if the individual’s service terminates under certain circumstances.

The weighted average grant date fair value per share of the options granted during the six months ended June 30, 2025 was $ 92.49 , which was determined using the Black-Scholes-Merton option-pricing model with the following weighted average assumptions:

Expected volatility (1)

3 unchanged sentences

(1) Estimated using a blended approach of historical and implied volatility.

Historical volatility is based on the historical movement of Hilton's stock price for a period that corresponds to the expected term of the option.

(2) Estimated based on the expected quarterly dividend and the three-month average stock price at the date of grant.

Historical volatility is based on the historical movement of Hilton's stock price for a period that corresponds to the expected terms of the options.

(2) Estimated based on the expected quarterly dividend and the three-month average stock price at the date of each grant.

(3) Based on the yield of a U.S.

Department of Treasury instrument with a similar expected term of the options at the date of grant.

(4) Estimated using the midpoint of the vesting period and the contractual term of the options as we do not have sufficient historical share option exercise data to estimate the term of the options.

Department of Treasury instrument with a similar expected term of the options at the date of each grant.

(4) Estimated using the midpoint of the vesting period and the contractual terms of the options as we do not have sufficient historical share option exercise data to estimate the terms of the options.

Performance Shares

During the three months ended March 31, 2025, we granted 147,000 performance shares with a grant date fair value per share of $ 259.10 , which vest three years from the date of grant based on the achievement of various performance measures.

As of March 31, 2025, we determined that all of the performance measures for all outstanding performance shares granted in 2023, 2024 and 2025 were probable of achievement, with the average of the applicable achievement factors estimated to be between the target and maximum achievement percentages for the performance shares granted in 2023, nearly at the target achievement percentage for performance shares granted in 2024 and at the target achievement percentage for the performance shares granted in 2025.

During the six months ended June 30, 2025, we granted 153,000 performance shares with a weighted average grant date fair value per share of $ 257.39 , which vest three years from the date of grant based on the achievement of various performance measures.

As of June 30, 2025, we determined that all of the performance measures for all outstanding performance shares granted in 2023, 2024 and 2025 were probable of achievement, with the average of the applicable achievement factors estimated to be between the target and maximum achievement percentages for the performance shares granted in 2023, nearly at the target achievement percentage for performance shares granted in 2024 and at the target achievement percentage for the performance shares granted in 2025.

Earnings Per Share

The following table presents the calculation of basic and diluted earnings per share ("EPS"):

Three Months Ended

(in millions,

except per share amounts)

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

(in millions, except per share amounts)

Net income attributable to Hilton stockholders

$ 440 $ 421 $ 740 $ 686

Weighted average shares outstanding 237 249 239 251

1 unchanged sentence

Net income attributable to Hilton stockholders

$ 440 $ 421 $ 740 $ 686

Weighted average shares outstanding (1)

239 252 241 253

Diluted EPS $ 1.84 $ 1.67 $ 3.07 $ 2.71

(1) Amounts for both periods include less than 1 million shares related to share-based compensation that were excluded from the calculations of diluted EPS because their effect would have been anti-dilutive under the treasury stock method.

(1) Amounts for all periods include less than 1 million shares related to share-based compensation that were excluded from the calculations of diluted EPS because their effect would have been anti-dilutive under the treasury stock method.

Noncontrolling Interests, Stockholders' Equity (Deficit) and Accumulated Other Comprehensive Loss

The following tables present the changes in the redeemable and nonredeemable noncontrolling interests and the components of stockholders' equity (deficit) attributable to Hilton stockholders:

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Redeemable Noncontrolling Interests Treasury Stock Additional

6 unchanged sentences

(in millions)

Balance as of December 31, 2024 $ 17 241.8 $ 3 $ ( 11,256 ) $ 11,130 $ ( 2,822 ) $ ( 782 ) $ 21 $ ( 3,706 )

Balance as of March 31, 2025 $ 16 238.8 $ 3 $ ( 12,154 ) $ 11,101 $ ( 2,559 ) $ ( 769 ) $ 23 $ ( 4,355 )

Net income (loss)

7 unchanged sentences

— 0.2 — 9 73 — — — 82

Balance as of June 30, 2025 $ 15 235.8 $ 3 $ ( 12,907 ) $ 11,174 $ ( 2,155 ) $ ( 705 ) $ 26 $ ( 4,564 )

Three Months Ended June 30, 2024

Redeemable Noncontrolling Interests Treasury Stock Additional

Capital Accumulated Deficit Accumulated

Comprehensive

Common Stock Noncontrolling

Interests Total Deficit

Shares Amount

(in millions)

Balance as of March 31, 2024 $ — 251.0 $ 3 $ ( 9,060 ) $ 10,954 $ ( 3,981 ) $ ( 749 ) $ 16 $ ( 2,817 )

Three Months Ended March 31, 2024

Treasury Stock Additional

Acquisition date fair value of redeemable noncontrolling interests 22 — — — — — — — —

Net income (loss)

( 1 ) — — — — 421 — 2 423

Other comprehensive loss

— — — — — — ( 14 ) ( 1 ) ( 15 )

— — — — — ( 37 ) — — ( 37 )

Repurchases of common stock

— ( 3.5 ) — ( 731 ) — — — — ( 731 )

Share-based compensation

— 0.3 — 10 68 — — — 78

Balance as of June 30, 2024 $ 21 247.8 $ 3 $ ( 9,781 ) $ 11,022 $ ( 3,597 ) $ ( 763 ) $ 17 $ ( 3,099 )

Six Months Ended June 30, 2025

Redeemable Noncontrolling Interests Treasury Stock Additional

Capital Accumulated Deficit Accumulated

4 unchanged sentences

(in millions)

Balance as of December 31, 2024 $ 17 241.8 $ 3 $ ( 11,256 ) $ 11,130 $ ( 2,822 ) $ ( 782 ) $ 21 $ ( 3,706 )

Net income — — — — 265 — 3 268

Net income (loss)

( 2 ) — — — — 740 — 4 744

Other comprehensive income

— — — — — — 77 1 78

— — — — — ( 73 ) — — ( 73 )

Repurchases of common stock

— ( 6.9 ) — ( 1,660 ) — — — — ( 1,660 )

Share-based compensation

— 0.9 — 9 44 — — — 53

Balance as of June 30, 2025 $ 15 235.8 $ 3 $ ( 12,907 ) $ 11,174 $ ( 2,155 ) $ ( 705 ) $ 26 $ ( 4,564 )

Six Months Ended June 30, 2024

Redeemable Noncontrolling Interests Treasury Stock Additional

Capital Accumulated Deficit Accumulated

Comprehensive

Common Stock Noncontrolling

Interests Total Deficit

Shares Amount

(in millions)

Balance as of December 31, 2023 $ — 253.5 $ 3 $ ( 8,393 ) $ 10,968 $ ( 4,207 ) $ ( 731 ) $ 13 $ ( 2,347 )

Acquisition date fair value of redeemable noncontrolling interests 22 — — — — — — — —

Net income (loss)

( 1 ) — — — — 686 — 5 691

Other comprehensive loss

5 unchanged sentences

— 1.2 — 10 54 — — — 64

Balance as of March 31, 2024 251.0 $ 3 $ ( 9,060 ) $ 10,954 $ ( 3,981 ) $ ( 749 ) $ 16 $ ( 2,817 )

Balance as of June 30, 2024 $ 21 247.8 $ 3 $ ( 9,781 ) $ 11,022 $ ( 3,597 ) $ ( 763 ) $ 17 $ ( 3,099 )

The changes in the components of accumulated other comprehensive loss, net of taxes, were as follows:

10 unchanged sentences

107 4 ( 34 ) 77

Balance as of March 31, 2025 $ ( 565 ) $ ( 238 ) $ 34 $ ( 769 )

Balance as of June 30, 2025 $ ( 484 ) $ ( 236 ) $ 15 $ ( 705 )

Currency Translation Adjustment (1)

9 unchanged sentences

( 38 ) 4 2 ( 32 )

Balance as of March 31, 2024 $ ( 566 ) $ ( 260 ) $ 77 $ ( 749 )

Balance as of June 30, 2024 $ ( 577 ) $ ( 258 ) $ 72 $ ( 763 )

(1) Includes net investment hedge gains and intra-entity foreign currency transactions that are of a long-term investment nature.

Amounts reclassified during the six months ended June 30, 2025 and 2024 relate to the liquidation of investments in certain foreign entities and were recognized in gain (loss) on foreign currency transactions in our condensed consolidated statements of operations.

(2) Amounts reclassified relate to the amortization of prior service cost and amortization of net loss and were recognized in other non-operating income (loss), net in our condensed consolidated statements of operations.

5 unchanged sentences

(b) being managed separately given its distinct economic characteristics.

The management and franchise segment includes all of the hotels we manage for third-party owners, as well as all properties that license our IP, and/or use our booking channels and related programs, and where we provide other contracted services, but the day-to-day services of the hotels are operated or managed by someone other than us.

services, but the day-to-day services of the hotels are operated or managed by someone other than us.

Revenues from this segment include:

21 unchanged sentences

The change in our reported measure of segment profit (loss) did not change the identification of our reportable segments from prior periods.

Prior period amounts presented are measured on the same basis as amounts for the three months ended March 31, 2025.

Prior period amounts presented are measured on the same basis as amounts for the three and six months ended June 30, 2025.

The following table presents revenues for our reportable segments, reconciled to consolidated amounts:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

(in millions)

1 unchanged sentence

Base and other management fees (1)

115 108 216 227

Incentive management fees 75 68 147 138

5 unchanged sentences

Cost reimbursement revenues

1,811 1,693 3,441 3,214

Intersegment fees elimination (1)

( 11 ) ( 7 ) ( 16 ) ( 13 )

Total revenues $ 3,137 $ 2,951 $ 5,832 $ 5,524

1 unchanged sentence

The following table presents Adjusted EBITDA for our reportable segments, reconciled to consolidated income before income taxes:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

(in millions)

Management and franchise (1)(2)

$ 941 $ 870 $ 1,745 $ 1,635

Ownership (1)(2)

Segment Adjusted EBITDA

998 924 1,810 1,704

Corporate and other (3)

5 unchanged sentences

Loss on debt guarantees (4)

— ( 3 ) — ( 50 )

FF&E replacement reserves ( 19 ) ( 13 ) ( 32 ) ( 24 )

2 unchanged sentences

Cost reimbursement revenues (5)

1,811 1,693 3,441 3,214

Reimbursed expenses (5)

1 unchanged sentence

Other adjustments (6)

( 13 ) ( 15 ) ( 22 ) ( 19 )

Income before income taxes $ 629 $ 591 $ 1,039 $ 956

2 unchanged sentences

For the ownership segment, rent expense is the significant expense regularly provided to the CODM;

rent expense for the three months ended March 31, 2025 and 2024 was $ 41 million and $ 42 million, respectively, and total other expenses were $ 186 million and $ 200 million for the three months ended March 31, 2025 and 2024, respectively, comprising (i) room expenses;

rent expense was $ 61 million and $ 63 million for the three months ended June 30, 2025 and 2024, respectively, and $ 102 million and $ 105 million for the six months ended June 30, 2025 and 2024, respectively.

Total other ownership expenses were $ 217 million and $ 222 million for the three months ended June 30, 2025 and 2024, respectively, and $ 403 million and $ 422 million for the six months ended June 30, 2025 and 2024, respectively, comprising (i) room expenses;

(ii) food and beverage costs;

2 unchanged sentences

Ownership segment Adjusted EBITDA also includes income (loss) from hotels owned or leased by entities in which we own a noncontrolling financial interest.

(3) Amounts primarily include general and administrative expenses, excluding share-based compensation expense, and expenses related to our purchasing operations.

(4) Amount includes losses on debt guarantees for certain hotels that we manage;

(3) Amounts primarily include general and administrative expenses, excluding share-based compensation expense, and activity related to our purchasing operations.

(4) Amounts include losses on debt guarantees for certain hotels that we manage;

refer to Note 12:

2 unchanged sentences

Under the terms of the related contracts, we do not operate these programs to generate a profit and have contractual rights to adjust future collections to recover prior period expenditures.

(6) Amount for the three months ended March 31, 2025 includes restructuring costs related to one of our leased properties.

Amount for the three months ended March 31, 2024 primarily relates to transaction costs incurred for acquisitions.

Amounts for both periods include net losses (gains) related to certain of our investments in unconsolidated affiliates, severance and other items.

(6) Amounts for the three and six months ended June 30, 2025 include expected future credit losses on financing receivables.

Amounts for the six months ended June 30, 2025 and for the three and six months ended June 30, 2024 include restructuring costs related to certain leased hotels.

Amounts for the three and six months ended June 30, 2024 also include transaction costs resulting from the amendment of our Term Loans.

Amount for the six months ended June 30, 2024 also includes transaction costs incurred for acquisitions.

Amounts for all periods include net losses (gains) related to certain of our investments in unconsolidated affiliates, severance and other items.

Commitments and Contingencies

Although we include performance clauses in certain of our management contracts, most of these clauses do not require us to fund shortfalls but instead allow the owner to terminate the contract if specified operating performance levels are not achieved.

Although our management contracts may include performance clauses, most of these clauses do not require us to fund shortfalls but instead allow the owner to terminate the contract if specified operating performance levels are not achieved.

In limited cases, we are obligated to fund performance shortfalls and our obligations under these guarantees in future periods are dependent on the operating performance level of the related hotel over the remaining term of the performance guarantee for that hotel.

As of March 31, 2025, we had performance guarantees with expirations ranging from 2025 to 2043 and possible cash outlays totaling $ 23 million.

As of June 30, 2025, we had performance guarantees with expirations ranging from 2025 to 2043 and possible cash outlays totaling $ 21 million.

We also have extended debt guarantees and provided letters of credit to owners of certain hotels that we currently or in the future will manage or franchise.

During the three months ended March 31, 2024, we recognized $ 47 million of losses in other non-operating loss, net in our condensed consolidated statement of operations and paid $ 62 million for debt guarantees extended to certain hotels we manage.

Our debt guarantees and letters of credit as of March 31, 2025 had expirations ranging from 2031 to 2033 and remaining possible cash outlays totaling $ 45 million.

During the three and six months ended June 30, 2024, we recognized losses of $ 3 million and $ 50 million, respectively, in other non-operating income (loss), net in our condensed consolidated statements of operations and paid $ 77 million during the six months ended June 30, 2024 for debt guarantees extended to certain hotels we manage.

Our debt guarantees and letters of credit as of June 30, 2025 had expirations ranging from 2031 to 2033 and remaining possible cash outlays totaling $ 45 million.

The performance and debt guarantees create variable interests in the ownership entities of the related hotels, of which we are not the primary beneficiary.

2 unchanged sentences

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, 2025 will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

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 June 30, 2025 will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Supplemental Disclosures of Cash Flow Information

Cash interest paid included within operating activities in our condensed consolidated statements of cash flows was $ 146 million and $ 120 million during the three months ended March 31, 2025 and 2024, respectively.

These amounts exclude $ 10 million and $ 14 million for the three months ended March 31, 2025 and 2024, respectively, of cash receipts related to settlements of our interest rate swap with a financing component, which are separately disclosed within financing activities in our condensed consolidated statements of cash flows.

Income tax payments, net of refunds received, were $ 29 million and $ 18 million for the three months ended March 31, 2025 and 2024, respectively.

Cash interest paid included within operating activities in our condensed consolidated statements of cash flows was $ 320 million and $ 272 million during the six months ended June 30, 2025 and 2024, respectively.

These amounts exclude $ 20 million and $ 29 million for the six months ended June 30, 2025 and 2024, respectively, of cash receipts related to settlements of our interest rate swap with a financing component, which are separately disclosed within financing activities in our condensed consolidated statements of cash flows.

Income tax payments, net of refunds received, were $ 121 million and $ 268 million for the six months ended June 30, 2025 and 2024, respectively.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements