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Item 2. Management’s Discussion and Analysis

2025-10-22 compared with 2025-07-23 · 93 added, 95 removed, 268 unchanged (41% of the section changed)

22 unchanged sentences

We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Hilton is one of the largest global hospitality companies, with 8,807 properties comprising 1,304,879 rooms in 139 countries and territories as of June 30, 2025.

Hilton is one of the largest global hospitality companies, with 8,995 properties comprising 1,328,821 rooms in 141 countries and territories as of September 30, 2025.

Our premier brand portfolio includes luxury, lifestyle, full service, focused service and all-suites hotel brands, as well as timeshare brands.

As of June 30, 2025, we had 226 million members in our award-winning guest loyalty program, Hilton Honors, an increase of 16 percent from June 30, 2024.

As of September 30, 2025, we had 235 million members in our award-winning guest loyalty program, Hilton Honors, an increase of 16 percent from September 30, 2024.

Segments and Regions

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The Americas region includes North America, South America and Central America, including all Caribbean nations.

Although the U.S., which represented 65 percent of our system-wide hotel rooms as of June 30, 2025, is included in the Americas region, it is often analyzed separately and apart from the Americas region and, as such, it is presented separately within our hotel operating statistics in "—Results of Operations." The EMEA region includes Europe, which represents the western-most peninsula of Eurasia stretching from Iceland in the west to Russia in the east, and the Middle East

and Africa ("MEA"), which represents the Middle East region and all African nations, including the Indian Ocean island nations.

Although the U.S., which represented 64 percent of our system-wide hotel rooms as of September 30, 2025, is included in the Americas region, it is often analyzed separately and apart from the Americas region and, as such, it is presented separately within our hotel operating statistics in "—Results of Operations." The EMEA region includes Europe, which represents the western-most peninsula of Eurasia stretching from Iceland in the west to Russia in the east, and the Middle

East and Africa ("MEA"), which represents the Middle East region and all African nations, including the Indian Ocean island nations.

Europe and MEA are often analyzed separately and, as such, are presented separately within our hotel operating statistics in "—Results of Operations." The Asia Pacific region includes the eastern and southeastern nations of Asia, as well as India, Australia, New Zealand and the Pacific Island nations.

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As of or for the

Six Months Ended

June 30, 2025

Nine Months Ended

September 30, 2025

Hotels Rooms (1)

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(2) Represents room additions, net of rooms removed from our system.

Net unit growth from June 30, 2024 to June 30, 2025 was 7.5 percent.

Net unit growth from September 30, 2024 to September 30, 2025 was 6.5 percent.

(3) The hotels in our development pipeline were under development throughout 128 countries and territories, including 26 countries and territories where we had no existing hotels, with nearly half of the rooms under construction and more than half of the rooms located outside of the U.S.

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Comparable Hotels

We define our comparable hotels as those that:

were active and operating in our system for at least one full calendar year, were open January 1st of the previous year and that (i) have not undergone a change in brand or ownership type during the current or comparable periods, (ii) have not undergone large-scale capital projects, sustained substantial property damage or encountered business interruption or (iii) for which comparable results were otherwise not available.

We define our comparable hotels as those that were active and operating in our system for at least one full calendar year and were open January 1st of the previous year.

We exclude hotels that have undergone a change in brand or ownership type or a large-scale capital project during the current or comparable periods or otherwise do not have available comparable results, such as those that have sustained substantial property damage or encountered business interruption.

We exclude strategic partner hotels from our comparable hotels.

Of the 8,702 hotels in our system as of June 30, 2025, 467 hotels were strategic partner hotels and 6,425 hotels were classified as comparable hotels.

Our 1,810 non-comparable hotels as of June 30, 2025 included (i) 947 hotels that were added to our system after January 1, 2024 or that have undergone a change in brand or ownership type during the current or comparable periods reported and (ii) 863 hotels that were removed from the comparable group for the current or comparable periods reported because they underwent or are undergoing large-scale capital projects, sustained substantial property damage, encountered business interruption or comparable results were otherwise not available for them.

Of the 8,887 hotels in our system as of September 30, 2025, 489 hotels were strategic partner hotels and 6,339 hotels were classified as comparable hotels.

Our 2,059 non-comparable hotels as of September 30, 2025 included (i) 1,124 hotels that were added to our system after January 1, 2024 or that have undergone a change in brand or ownership type during the current or comparable periods reported and (ii) 935 hotels that were removed from the comparable group for the current or comparable periods reported because they underwent or are undergoing large-scale capital projects, sustained substantial property damage, encountered business interruption or comparable results were otherwise not available for them.

Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel or group of hotels for a given period.

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RevPAR is also a useful indicator in measuring performance over comparable periods for comparable hotels.

References to occupancy, ADR and RevPAR are presented on a comparable basis, based on the comparable hotels as of June 30, 2025, and references to ADR and RevPAR are presented on a currency neutral basis, unless otherwise noted.

As such, comparisons of these hotel operating statistics for the three and six months ended June 30, 2025 and 2024 use foreign currency exchange rates for the three and six months ended June 30, 2025, respectively.

References to occupancy, ADR and RevPAR are presented on a comparable basis, based on the comparable hotels as of September 30, 2025, and references to ADR and RevPAR are presented on a currency neutral basis, unless otherwise noted.

As such, comparisons of these hotel operating statistics for the three and nine months ended September 30, 2025 and 2024 use foreign currency exchange rates for the three and nine months ended September 30, 2025, respectively.

Adjusted EBITDA

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The hotel operating statistics by region for our system-wide comparable hotels were as follows:

Three Months Ended Change Six Months Ended Change

June 30, 2025 2025 vs.

2024 June 30, 2025 2025 vs.

Three Months Ended Change Nine Months Ended Change

September 30, 2025 2025 vs.

2024 September 30, 2025 2025 vs.

Occupancy 74.5 % (0.5) % pts.

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RevPAR $ 75.32 (0.1) % $ 70.56 0.3 %

System-wide RevPAR decreased during the three months ended June 30, 2025, primarily due to declines in the U.S., and increased during the six months ended June 30, 2025, supported by an improvement in system-wide ADR, which included the impact of inflation.

In the U.S., for both the three and six months ended June 30, 2025, RevPAR was impacted by increased macroeconomic uncertainty, which, combined with unfavorable holiday shifts, led to a decline in group and business travel for the three months ended June 30, 2025.

These declines, for the six months ended June 30, 2025, were offset by increases due to special events.

The increases in RevPAR in the Americas region, excluding the U.S., were attributable to increases in both inbound and domestic leisure and group travel.

Europe and MEA were positively impacted by an increase in group and business travel, with MEA also benefiting from an increase in leisure travel.

RevPAR in Asia Pacific increased due to strong growth in countries and territories outside China, offset by decreases in RevPAR in China, due to a decline in group and business travel.

System-wide RevPAR decreased during the three months ended September 30, 2025, primarily due to declines in the U.S., and increased marginally during the nine months ended September 30, 2025, supported by an improvement in system-wide ADR, which included the impact of inflation.

In the U.S., for both the three and nine months ended September 30, 2025, RevPAR continued to be impacted by macroeconomic uncertainty, which, combined with unfavorable holiday shifts and prior year special events that did not repeat, led to a decline in leisure, group and business travel.

The increases in RevPAR in the Americas region, excluding the U.S., were attributable to increases in inbound leisure and group travel.

Europe and MEA were positively impacted by increases in both leisure and business travel.

The decrease in Asia Pacific during the three months ended September 30, 2025 was primarily driven by declines in group and business travel in China, partially offset by countries and territories outside of China.

RevPAR in Asia Pacific increased during the nine months ended September 30, 2025 due to moderate growth in countries and territories outside of China, offset by a decrease in RevPAR in China, due to a decline in group and business travel.

The table below provides a reconciliation of net income to Adjusted EBITDA:

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

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Income tax expense

183 147 480 413

Depreciation and amortization expenses 46 37 130 107

Gain on sales of assets, net

Loss (gain) on foreign currency transactions

Loss (gain) on sales of assets, net

Loss on foreign currency transactions

Loss on debt guarantees (1)

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Adjusted EBITDA $ 976 $ 904 $ 2,779 $ 2,571

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

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

refer to Note 12:

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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.

(3) 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.

(3) Amount for the nine months ended September 30, 2025 includes expected future credit losses on financing receivables.

Amounts for the nine months ended September 30, 2025 and 2024 include restructuring costs related to certain leased hotels.

Amount for the nine months ended September 30, 2024 also includes transaction costs resulting from the amendment of our Term Loans and 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.

Three Months Ended Percent Six Months Ended Percent

June 30, Change June 30, Change

Three Months Ended Percent Nine Months Ended Percent

September 30, Change September 30, Change

2025 2024 2025 vs.

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Total management fees $ 158 $ 154 2.6 $ 490 $ 491 (0.2)

The increase in franchise fees included net increases of $18 million and $30 million during the three and six months ended June 30, 2025, respectively, as a result of net hotel additions between the periods.

The increases in franchise fees also included increases of $10 million and $7 million in termination fees during three and six months ended June 30, 2025, respectively.

The currency neutral increases in franchise fees at our comparable franchised hotels of $2 million and $11 million for the three and six months ended June 30, 2025, respectively, were largely attributable to increases of in-place rates charged to hotels, partially offset by decreases in fees due to decreases in RevPAR.

During the three months ended June 30, 2025, RevPAR at our comparable franchised hotels decreased 1.5 percent, as a result of a decrease in occupancy of 0.9 percentage points, and a decrease in ADR of 0.3 percent.

During the six months ended June 30, 2025, RevPAR at our comparable franchised hotels decreased 0.1 percent, as a result of a decrease in occupancy of 0.3 percentage points, partially offset by an increase in ADR of 0.3 percent.

Licensing fees increased $24 million and $58 million during the three and six months ended June 30, 2025, respectively, as a result of increases in fees from our strategic partnerships, primarily resulting from activity under our co-branded credit card arrangements, HGV and branded residential fees.

Increased fees from HGV resulted from increased timeshare revenues earned by HGV, inclusive of the impact of adding new timeshare properties to our system between the periods.

During the three months ended June 30, 2025, RevPAR at our comparable managed hotels increased 2.6 percent, contributing to a currency neutral increase in management fees of $8 million, as a result of an increase in occupancy of 0.8 percentage points, and an increase in ADR of 1.4 percent.

The decrease in management fees during the six months ended June 30, 2025 was primarily attributable to a decrease of $17 million in termination fees received from hotels that exited our system, partially offset by an increase of $14 million in fees from our comparable managed hotels as a result of an increase in RevPAR.

RevPAR at our comparable managed hotels increased 4.1 percent during the six months ended June 30, 2025 as a result of an increase in occupancy of 1.0 percentage points, and an increase in ADR of 2.6 percent.

Three Months Ended Percent Six Months Ended Percent

June 30, Change June 30, Change

The increases in franchise fees included net increases of $15 million and $47 million during the three and nine months ended September 30, 2025, respectively, as a result of net hotel additions between the periods.

The increase in franchise fees for the nine months ended September 30, 2025 also included an increase of $7 million in termination fees.

The currency neutral increase in franchise fees at our comparable franchised hotels of $10 million for the nine months ended September 30, 2025 was largely attributable to increases of in-place rates charged to hotels, partially offset by a decrease in fees due to a decrease in RevPAR.

During the nine months ended September 30, 2025, RevPAR at our comparable franchised hotels decreased 0.6 percent, due to decreases in occupancy of 0.4 percentage points and ADR of 0.1 percent.

Licensing fees increased $25 million and $83 million during the three and nine months ended September 30, 2025, respectively, as a result of increases in fees from our strategic partnerships, primarily resulting from activity under our co-branded credit card arrangements and HGV.

Increased fees from HGV were the result of increased timeshare revenues earned by HGV, inclusive of the impact of adding new timeshare properties to our system between the periods.

The nine months ended September 30, 2025 also included an increase in branded residential fees.

The increase in management fees for the three months ended September 30, 2025 was primarily attributable to an increase in termination fees.

For the nine months ended September 30, 2025, management fees from comparable properties increased $14 million, on a currency neutral basis, as a result of an increase in RevPAR at our comparable managed hotels of 3.1 percent due to increases in occupancy of 0.8 percentage points and ADR of 1.8 percent.

The increase in management fees from comparable properties for the nine months ended September 30, 2025 was partially offset by a decrease of $12 million in termination fees received from hotels that exited our system.

Three Months Ended Percent Nine Months Ended Percent

September 30, Change September 30, Change

2025 2024 2025 vs.

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$ 322 $ 330 (2.4) $ 888 $ 922 (3.7)

The $5 million decrease in ownership revenues for the three months ended June 30, 2025 included a currency neutral decrease of $23 million, partially offset by an $18 million increase resulting from favorable fluctuations in foreign currency exchange rates.

The $26 million decrease in ownership revenues for the six months ended June 30, 2025 included a currency neutral decrease of $39 million, partially offset by a $13 million increase resulting from favorable fluctuations in foreign currency exchange rates.

Revenues from comparable hotels within our ownership segment increased $6 million, on a currency neutral basis, during the three months ended June 30, 2025 as a result of an increase in RevPAR of 4.6 percent due to increases in occupancy of 1.6 percentage points and ADR of 2.5 percent.

Revenues from our comparable hotels in our ownership segment increased $5 million, on a currency neutral basis, during the six months ended June 30, 2025 as a result of an increase in RevPAR of 4.7 percent due to increases in occupancy of 0.8 percentage points and ADR of 3.5 percent.

Revenues from our non-comparable consolidated hotels within our ownership segment decreased $29 million and $44 million for the three and six months ended June 30, 2025, respectively, on a currency neutral basis, primarily due to hotels that exited our system or changed ownership types between the periods.

Three Months Ended Percent Six Months Ended Percent

June 30, Change June 30, Change

The $8 million decrease in ownership revenues for the three months ended September 30, 2025 included a currency neutral decrease of $22 million, partially offset by a $14 million increase resulting from favorable fluctuations in foreign currency exchange rates.

The $34 million decrease in ownership revenues for the nine months ended September 30, 2025 included a currency neutral decrease of $61 million, partially offset by a $27 million increase resulting from favorable fluctuations in foreign currency exchange rates.

Revenues from our comparable hotels in our ownership segment increased $6 million, on a currency neutral basis, during the nine months ended September 30, 2025 as a result of an increase in RevPAR of 3.1 percent due to increases in occupancy of 1.0 percentage points and ADR of 1.7 percent.

Revenues from our non-comparable hotels within our ownership segment decreased $23 million and $67 million for the three and nine months ended September 30, 2025, respectively, on a currency neutral basis, primarily due to hotels that exited our system or changed ownership types between the periods.

Three Months Ended Percent Nine Months Ended Percent

September 30, Change September 30, Change

2025 2024 2025 vs.

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Operating Expenses

Three Months Ended Percent Six Months Ended Percent

June 30, Change June 30, Change

Three Months Ended Percent Nine Months Ended Percent

September 30, Change September 30, Change

2025 2024 2025 vs.

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$ 277 $ 288 (3.8) $ 802 $ 833 (3.7)

Ownership expenses included decreases of $27 million and $31 million, on a currency neutral basis, during the three and six months ended June 30, 2025, respectively, which were partially offset by increases of $15 million and $11 million, resulting from unfavorable fluctuations in foreign currency exchange rates, during the three and six months ended June 30, 2025, respectively.

Expenses from our comparable hotels in our ownership segment increased $5 million, on a currency neutral basis, during the six months ended June 30, 2025 as a result of increased occupancy and increases in payroll and other compensation costs.

The $29 million and $36 million decreases in ownership expenses, on a currency neutral basis, from our non-comparable hotels within our ownership segment during the three and six months ended June 30, 2025, respectively, were primarily due to hotels that exited our system or changed ownership types between the periods, partially offset by increases in expenses for hotels undergoing renovations.

Three Months Ended Percent Six Months Ended Percent

June 30, Change June 30, Change

During the three and nine months ended September 30, 2025, ownership expenses included currency neutral decreases of $23 million and $53 million, respectively, which were partially offset by increases of $12 million and $22 million, respectively, resulting from unfavorable fluctuations in foreign currency exchange rates.

The $19 million and $54 million decreases in ownership expenses, on a currency neutral basis, from our non-comparable hotels within our ownership segment during the three and nine months ended September 30, 2025, respectively, were primarily due to hotels that exited our system or changed ownership types between the periods.

Three Months Ended Percent Nine Months Ended Percent

September 30, Change September 30, Change

2025 2024 2025 vs.

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The increases in depreciation and amortization expenses were primarily related to software placed in service between the periods.

The decrease in general and administrative expenses for the three months ended June 30, 2025 was related to lower general corporate costs and the decrease for the six months ended June 30, 2025 was primarily due to decreases in costs related to payroll and other compensation costs.

The decreases in other expenses were primarily due to decreased procurement volume from our purchasing operations with properties outside of our system.

The decreases in general and administrative expenses for the three and nine months ended September 30, 2025 were due to lower general corporate costs.

The decrease for the nine months ended September 30, 2025 was also due to a decrease in costs related to payroll and other compensation costs.

The decrease in other expenses for the nine months ended September 30, 2025 was primarily due to decreased procurement volume from our purchasing operations with properties outside of our system.

Non-operating Income and Expenses

Three Months Ended Percent Six Months Ended Percent

June 30, Change June 30, Change

Three Months Ended Percent Nine Months Ended Percent

September 30, Change September 30, Change

2025 2024 2025 vs.

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Interest expense $ (159) $ (140) 13.6 $ (455) $ (412) 10.4

Gain (loss) on foreign currency transactions

Loss on foreign currency transactions

(9) (3) NM (1)

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(5) 11 NM (1)

15 (17) NM (1)

Income tax expense

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In both March 2024 and September 2024, we issued $1.0 billion Senior Notes (the "March 2024 Senior Notes issuance" and the "September 2024 Senior Notes issuance," respectively) for a total aggregate principal amount of $2.0 billion for the year.

During the three months ended June 30, 2025, the increase in interest expense was primarily attributable to an increase of $15 million due to the September 2024 Senior Notes issuance.

The increase during the six months ended June 30, 2025 was primarily attributable to an increase of $45 million due to the March 2024 Senior Notes issuance and the September 2024 Senior Notes issuance.

The increases were partially offset by decreases in interest expense on the Term Loans of $10 million and $21 million during the three and six months ended June 30, 2025, respectively, primarily as a result of decreases in one-month Secured Overnight Financing Rate ("SOFR") for the comparable periods.

The net gains and losses on foreign currency transactions are the result of changes in foreign currency exchange rates, including on certain intercompany financing arrangements, such as short-term cross-currency intercompany loans, as well as transactions denominated in foreign currencies.

The decrease in other non-operating income (loss) during the three months ended June 30, 2025 was primarily driven by an increase in expected future credit losses on financing receivables.

The net change in other non-operating income (loss), net during the six months ended June 30, 2025 was primarily driven by a decrease in losses on debt guarantees for certain hotels

that Hilton manages, partially offset by an increase in expected future credit losses on financing receivables.

"Commitments and Contingencies" in our unaudited condensed consolidated financial statements for additional information.

The increases in income tax expense during the three and six months ended June 30, 2025 were primarily attributable to the increase in income before income taxes.

During the three months ended September 30, 2025, the increase i n interest expense was primarily attributable to an increase of $25 million due to the September 2024 Senior Notes issuance and the July 2025 Senior Notes issuance.

Th e increase during the nine months ended September 30, 2025 was primarily attributable to an increase of $70 million due to the March 2024 Senior Notes issuance, the September 2024 Senior Not es issuance and the July 2025 Senior Notes issuance.

The increases were partially offset by decreases in interest expense of $7 million and $12 million during the three and nine months ended September 30, 2025, respectively, due to the repayment of the May 2025 Senior Notes and decreases of $4 million and $16 million on the unhedged portion of our Term Loan s during the three and nine months ended September 30, 2025, respectively, primarily as a result o f decreases in one-month SOFR for the comparable periods.

The net losses on foreign currency transactions are the result of changes in foreign currency exchange rates, including on certain intercompany financing arrangements, such as short-term cross-currency intercompany loans, as well as transactions denominated in foreign currencies.

Th e net change in other non-operating income (loss), net for the three months ended September 30, 2025 was primarily driven by a loss on an investment in an unconsolidated affiliate, which was recognized during the three months ended September 30, 2025.

The net change in other non-operating income (loss), net during the nine months ended September 30, 2025 was primarily driven by a decrease in losses on debt guarantees for certain hotels that Hilton manages, which were recognized during the nine months ended September 30, 2024, partially offset by a loss on an investment in an unconsolidated affiliate.

"Commitments and Contingencies" in our unaudited condensed consolidated financial statements for additional information on the losses on debt guarantees.

The increases in income tax expense during the three and nine months ended September 30, 2025 were primarily attributable to the increase in income before income taxes.

Segment Results

As of June 30, 2025, our management and franchise segment included 850 managed and 7,911 franchised and licensed properties, which included 105 timeshare and 467 strategic partner hotels, consisting of 1,289,592 total rooms, and our ownership segment included 46 hotels consisting of 15,287 total rooms.

As of September 30, 2025, our management and franchise segment included 858 managed and 8,091 franchised and licensed properties, which included 108 timeshare and 489 strategic partner hotels, consisting of 1,313,534 total rooms, and our ownership segment included 46 hotels consisting of 15,287 total rooms.

Refer to Note 11:

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Our ownership segment Adjusted EBITDA reflects revenues from consolidated hotels within our ownership segment, less (i) ownership expenses, excluding FF&E replacement reserves expenses, share-based compensation expenses and certain other items, less (ii) fees charged by our management and franchise segment to our ownership segment, plus (iii) income (loss) from hotels owned or leased by entities in which we own a noncontrolling financial interest.

For the three and six months ended June 30, 2025, refer to "—Revenues" for further discussion of the changes in our franchise and licensing fees and total management fees as well as for further discussion of the changes in revenues from our ownership segment.

For the three and nine months ended September 30, 2025, refer to "—Revenues" for further discussion of the changes in our franchise and licensing fees and total management fees as well as for further discussion of the changes in revenues from our ownership segment.

Refer to "—Operating Expenses" for further discussion of the changes in our ownership segment expenses.

Liquidity and Capital Resources

As of June 30, 2025, we had total cash and cash equivalents of $448 million, including $77 million of restricted cash and cash equivalents.

As of September 30, 2025, we had total cash and cash equivalents of $1,126 million, including $69 million of restricted cash and cash equivalents.

The majority of our restricted cash and cash equivalents is related to cash collateral and cash held for FF&E reserves.

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In May 2025, we repaid the May 2025 Senior Notes at maturity.

During the six months ended June 30, 2025, we borrowed $290 million, net of repayments, under the Revolving Credit Facility, and subsequently borrowed an additional $225 million in July 2025.

Subsequently, we issued $1.0 billion of 5.750% 2033 Senior Notes and used a portion of the net proceeds to repay the net borrowings outstanding under the Revolving Credit Facility, and we intend to use the remainder for general corporate purposes.

During the nine months ended September 30, 2025, we borrowed and subsequently repaid an aggregate $875 million under the Revolving Credit Facility.

In July 2025 we issued $1.0 billion of 5.750% 2033 Senior Notes and used a portion of the net proceeds to fully repay the net borrowings under the Revolving Credit Facility from earlier during the period.

Refer to Note 5:

"Debt" in our unaudited condensed consolidated financial statements for additional information.

Except for the net borrowings under the Revolving Credit Facility, the repayment of the May 2025 Senior Notes and the July Senior Notes issuance, there were no material changes to our contractual obligations from what we previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

During the six months ended June 30, 2025, we repurchased approximately 6.9 million shares of our common stock for $1.6 billion, excluding the excise tax on share repurchases.

As of June 30, 2025, approximately $2.8 billion remained available for share repurchases under our stock repurchase program.

Except for the repayment of the May 2025 Senior Notes and the July 2025 Senior Notes issuance, there were no material changes to our contractual obligations from what we previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

During the nine months ended September 30, 2025, we repurchased approximately 9.7 million shares of our common stock for $2.4 billion, excluding the excise tax on share repurchases.

As of September 30, 2025, approximately $2.0 billion remained available for share repurchases under our stock repurchase program.

In circumstances where we have the opportunity to support our strategic objectives, we may provide guarantees or other commitments, as necessary, to owners of hotels that we currently or in the future will manage or franchise or other third parties.

"Commitments and Contingencies" in our unaudited condensed consolidated financial statements for additional information on our commitments that were outstanding as of June 30, 2025.

"Commitments and Contingencies" in our unaudited condensed consolidated financial statements for additional information on our commitments that were outstanding as of September 30, 2025.

We have a long-term investment policy that is focused on the preservation of capital and maximizing the return on new and existing investments and returning available capital to stockholders through dividends and share repurchases.

Within the framework of our investment policy, we intend to finance our business activities primarily with cash on our balance sheet as of June 30, 2025, cash generated from our operations and, as needed, the use of the available capacity of our Revolving Credit Facility.

Within the framework of our investment policy, we intend to finance our business activities primarily with cash on our balance sheet as of September 30, 2025, cash generated from our operations and, as needed, the use of the available capacity of our Revolving Credit Facility.

We have continued access to debt markets and have obtained, and expect to continue to be able to obtain, financing as a source of liquidity as required and to extend maturities of existing borrowings, if necessary.

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The following table summarizes our net cash flows:

Six Months Ended Percent

June 30, Change

Nine Months Ended Percent

September 30, Change

2025 2024 2025 vs.

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Cash flows from operating activities were primarily generated from management, franchise and licensing fee revenue.

The increase in net cash inflows during the period included an increase in cash inflows generated from our management and franchise segment, discussed in "—Revenues." The increase also included a net $36 million increase in deferred revenues and liability for guest loyalty program on our condensed consolidated balance sheet primarily related to an increase in collections of Hilton Honors program and application fees.

Additionally, there was a $147 million decrease in income tax payments due to timing as well as a decrease in cash outflows of $77 million for debt guarantee payments that were made during the six months ended June 30, 2024.

The increase in net cash inflows during the period included an increase in cash inflows generated from franchise and licensing fees, discussed in "—Revenues." Additionally, there was a $234 million decrease in income tax payments due to timing as well as a decrease in cash outflows of $77 million for debt guarantee payments that were made during the nine months ended September 30, 2024.

Investing Activities

Net cash used in investing activities for the six months ended June 30, 2024 primarily included cash flows related to the acquisitions of (i) the Graduate brand and the associated franchise contracts and (ii) a controlling financial interest in the Sydell Group, both completed during the six months ended June 30, 2024.

Net cash used in investing activities for the nine months ended September 30, 2024 primarily included cash flows related to the acquisitions of (i) the Graduate brand and the associated franchise contracts and (ii) a controlling financial interest in the Sydell Group, both completed during the nine months ended September 30, 2024.

Net cash used in investing activities for both periods included:

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Financing Activities

The increase in net cash used in financing activities included (i) $500 million of cash outflows for the repayment of the May 2025 Senior Notes during the six months ended June 30, 2025, (ii) a cash inflow of $1.0 billion from the March 2024 Senior Notes issuance during the six months ended June 30, 2024, and (iii) a $242 million increase in cash outflows for share repurchases.

The increase in cash outflows was partially offset by net borrowings of $290 million under the Revolving Credit Facility.

The increase in net cash used in financing activities included (i) $500 million of cash outflows for the repayment of the May 2025 Senior Notes during the nine months ended September 30, 2025, (ii) a cash inflow of $2.0 billion from the March

2024 Senior Notes issuance and the September 2024 Senior Notes issuance during the nine months ended September 30, 2024, and (iii) a $276 million increase in cash outflows for share repurchases.

The increase in net cash used was partially offset by a cash inflow of $1.0 billion from the July 2025 Senior Notes issuance.

Debt and Borrowing Capacity

As of June 30, 2025, our total indebtedness, excluding the deduction for unamortized deferred financing costs and discount, was approximately $11.0 billion.

This included $290 million outstanding under the Revolving Credit Facility, which had an available borrowing capacity of $1,618 million after considering $92 million of outstanding letters of credit.

In July 2025, we borrowed an additional $225 million and subsequently 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.

As of September 30, 2025, our total indebtedness, excluding the deduction for unamortized deferred financing costs and discount, was approximately $11.7 billion.

No debt amounts were outstanding under the Revolving Credit Facility as of September 30, 2025, which had an available borrowing capacity of $1,898 million after considering $102 million of letters of credit outstanding.

For additional information on our total indebtedness and guarantees on our debt, refer to Note 5:

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If we are unable to generate sufficient cash flow from operations in the future to service our debt, we may be required to reduce capital expenditures or issue additional equity securities.

However, we do not have any material indebtedness outstanding that matures prior to April 2027, and we believe that we have sufficient sources of liquidity and access to debt financing to address all indebtedness at or prior to the respective maturity dates.

However, we do not have any material indebtedness outstanding that matures prior to April 2027, and we believe that we have sufficient sources of liquidity and access to debt markets to address all indebtedness at or prior to the respective maturity dates.

Our ability to make scheduled principal payments and to pay interest on our debt depends on our future operating performance, which is subject to general conditions in or affecting the hospitality industry that may be beyond our control.

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The preparation of our unaudited condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect reported amounts and related disclosures.

We have discussed the estimates and assumptions that we believe are critical because they involve a higher degree of judgment in their application and are based on information that is inherently uncertain in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and, during the six months ended June 30, 2025, there were no material changes to those critical accounting estimates that were previously disclosed.

We have discussed the estimates and assumptions that we believe are critical because they involve a higher degree of judgment in their application and are based on information that is inherently uncertain in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and, during the nine months ended September 30, 2025, there were no material changes to those critical accounting estimates that were previously disclosed.

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 2. Management’s Discussion and Analysis