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Item 1. Financial Statements

2026-04-28 compared with 2025-10-22 · 81 added, 194 removed, 363 unchanged (43% of the section changed)

3 unchanged sentences

(in millions, except share data)

September 30, December 31,

March 31, December 31,

Current Assets:

Cash and cash equivalents

$ 1,057 $ 1,301

Restricted cash and cash equivalents

31 unchanged sentences

Common stock, $ 0.01 par value;

10,000,000,000 authorized shares, 233,053,504 outstanding as of September 30, 2025 and 241,806,421 outstanding as of December 31, 2024

10,000,000,000 authorized shares, 228,329,688 outstanding as of March 31, 2026 and 230,433,192 outstanding as of December 31, 2025

Treasury stock, at cost;

103,762,388 shares as of September 30, 2025 and 94,087,917 shares as of December 31, 2024

109,274,014 shares as of March 31, 2026 and 106,540,900 shares as of December 31, 2025

( 15,259 ) ( 14,428 )

13 unchanged sentences

(in millions, except per share data)

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Three Months Ended

Franchise and licensing fees $ 696 $ 625

1 unchanged sentence

Incentive management fees 76 72

322 330 888 922

Other revenues 66 46

1,283 1,240 3,674 3,550

Cost reimbursement revenues

1,837 1,627 5,278 4,841

Total revenues 2,937 2,695

277 288 802 833

Depreciation and amortization 50 41

1 unchanged sentence

Other expenses 22 26

441 452 1,305 1,351

Reimbursed expenses

1,902 1,790 5,556 5,164

Total expenses 2,259 2,159

Gain (loss) on sales of assets, net

Operating income 678 536

Interest expense ( 162 ) ( 145 )

Loss on foreign currency transactions

( 9 ) ( 3 ) ( 8 ) ( 5 )

Other non-operating income (loss), net ( 5 ) 11 15 ( 17 )

Gain (loss) on foreign currency transactions

Other non-operating income, net

Income before income taxes 518 410

1 unchanged sentence

Net income 383 300

Net income attributable to redeemable and nonredeemable noncontrolling interests

( 1 ) — ( 3 ) ( 4 )

Net loss attributable to redeemable and nonredeemable noncontrolling interests

Net income attributable to Hilton stockholders

$ 420 $ 344 $ 1,160 $ 1,030

Earnings per share:

6 unchanged sentences

(in millions)

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Three Months Ended

Net income $ 383 $ 300

1 unchanged sentence

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

( 7 ) 54 101 15

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

Cash flow hedge adjustment, net of tax of $ 2 and $ 5

( 5 ) ( 32 ) ( 39 ) ( 30 )

Total other comprehensive income (loss) ( 18 ) 14

Comprehensive income 365 314

Comprehensive income attributable to redeemable and nonredeemable noncontrolling interests — ( 2 ) ( 3 ) ( 5 )

Comprehensive loss (income) attributable to redeemable and nonredeemable noncontrolling interests

Comprehensive income attributable to Hilton stockholders

$ 412 $ 366 $ 1,229 $ 1,020

(1) Amount was less than $1 million.

3 unchanged sentences

(in millions)

Nine Months Ended

September 30,

Three Months Ended

Operating Activities:

3 unchanged sentences

Depreciation and amortization expenses 50 41

Gain on sales of assets, net

Loss on foreign currency transactions

Loss (gain) on foreign currency transactions

Share-based compensation expense 45 36

7 unchanged sentences

Capital expenditures for property and equipment

( 71 ) ( 48 )

Cash paid for acquisitions, net of cash acquired

( 2 ) ( 236 )

Issuance of financing receivables ( 10 ) —

Settlements of undesignated derivative financial instruments 3 ( 9 )

Proceeds from asset dispositions

Capitalized software costs ( 22 ) ( 21 )

Investments in unconsolidated affiliates ( 2 ) ( 5 )

Net cash used in investing activities ( 39 ) ( 50 )

Financing Activities:

Borrowings 1,875 2,283

Repayment of debt ( 8 ) ( 10 )

8 unchanged sentences

Effect of exchange rate changes on cash, restricted cash and cash equivalents ( 7 ) 3

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

Net decrease in cash, restricted cash and cash equivalents

( 351 ) ( 569 )

Cash, restricted cash and cash equivalents, beginning of period 970 1,376

7 unchanged sentences

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 global hospitality companies and is engaged in managing, franchising, owning and leasing hotels and resorts and licensing its intellectual property ("IP"), including brand names, trademarks and service marks.

(the "Parent," or together with its subsidiaries, "Hilton," "we," "us," "our" or the "Company"), a Delaware corporation, is one of the largest global hospitality companies and is engaged in managing, franchising and leasing hotels, including resorts and other lodging offerings, and licensing its intellectual property ("IP"), including brand names, trademarks and service marks.

Basis of Presentation

The accompanying condensed consolidated financial statements for the three and nine months ended September 30, 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 months ended March 31, 2026 and 2025 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, 2025.

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:

(i) changing owned and leased hotels revenues and owned and leased hotels expenses to ownership revenues and ownership expenses, respectively;

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 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.

2 unchanged sentences

All material intercompany transactions have been eliminated in consolidation.

Graduate by Hilton

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 unpaid was recorded in accounts payable, accrued expenses and other in our condensed consolidated balance sheet as of September 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.

In April 2024, we acquired a controlling financial interest in both Sydell Hotels & Resorts, LLC and Sydell Holding Company UK Ltd (collectively, the "Sydell Group"), which owns the NoMad brand.

We accounted for the transaction as a business combination and recognized an indefinite-lived brand intangible asset with a fair value of $ 48 million and management contract intangible assets with an aggregate fair value of $ 8 million.

Our redeemable noncontrolling interests relate to our interest in the Sydell Group.

The Sydell Group's governing documents contain put options that give the noncontrolling interest holders the right to sell their equity interests to us beginning in the second quarter of 2030, as well as call options that give us the right to purchase the remaining equity interests beginning in the second quarter of 2032.

The exercise price of the put and call options is based on a multiple of the Sydell Group's earnings as of the date that such option would be exercised.

Revenues from Contracts with Customers

Contract Liabilities

The following table summarizes the activity of our contract liabilities, which are classified as components of current and long-term deferred revenues, during the nine months ended September 30, 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 three months ended March 31, 2026:

(in millions)

2 unchanged sentences

Revenue recognized (1)

Balance as of September 30, 2025

Balance as of March 31, 2026

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

1 unchanged sentence

Performance Obligations

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

As of March 31, 2026, deferred revenues for unsatisfied performance obligations consisted of:

(i) $ 1,550 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 September 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.

As of March 31, 2026 and December 31, 2025, 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:

September 30, December 31,

March 31, December 31,

(in millions)

7 unchanged sentences

(1) Represents finance lease liabilities;

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

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

September 30, December 31,

includes current maturities of $ 4 million as of March 31, 2026 and December 31, 2025.

Long-term debt balances, including obligations for finance leases, and associated interest rates and maturities as of March 31, 2026, were as follows:

March 31, December 31,

(in millions)

11 unchanged sentences

Senior notes with a rate of 5.500 %, due 2034 (1)

Senior notes with a rate of 5.750 %, due 2033 (1)

Finance lease liabilities with a weighted average rate of 4.63 %, due 2026 to 2060 (2)

6 unchanged sentences

(1) These notes are collectively referred to as the Senior Notes and are jointly and severally guaranteed on a senior unsecured basis by the Parent and substantially all of its direct and indirect wholly owned domestic restricted subsidiaries, other than Hilton Domestic Operating Company Inc.

("HOC"), an indirect wholly owned subsidiary of the Parent and the issuer of all of the series of Senior Notes.

("HDOC"), an indirect wholly owned subsidiary of the Parent and the issuer of all of the series of Senior Notes.

(2) Includes long-term debt of our consolidated VIEs.

1 unchanged sentence

"Consolidated Variable Interest Entities" for additional information.

(3) Amount as of September 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.

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

No borrowings 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.

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 issued $ 1.0 billion aggregate principal amount of 5.750 % Senior Notes due 2033 (the " 5.750 % 2033 Senior Notes" or "July 2025 Senior Notes issuance").

As part of the July 2025 Senior Notes issuance, we incurred $ 15 million of debt issuance costs, which were recognized as a reduction to the outstanding debt balance in our condensed consolidated balance sheet and will be 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 2025 Senior Notes issuance to repay the remaining $ 515 million of outstanding indebtedness under our Revolving Credit Facility at that time.

(3) Amounts for both periods represent current maturities of finance lease liabilities.

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

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 HDOC, the named borrower under the senior secured credit facilities.

In March 2026, we amended the credit agreement governing our Revolving Credit Facility to extend the maturity date, which we expect to be March 2031, and reprice the rate on amounts outstanding to the secured overnight financing rate ("SOFR") plus 1.00%.

In connection with this amendment, we incurred approximately $ 5 million of debt issuance costs.

As of March 31, 2026, no borrowings were outstanding under the Revolving Credit Facility, which had an available borrowing capacity of $ 1,894 million after considering $ 106 million of letters of credit outstanding.

In April 2026, we borrowed $ 265 million under the Revolving Credit Facility for general corporate purposes and subsequently repaid $ 115 million of the outstanding indebtedness.

Fair Value Measurements

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

September 30, 2025

March 31, 2026

Hierarchy Level

2 unchanged sentences

(in millions)

Interest rate swap $ 16 $ — $ 16 $ —

Long-term debt (2)

6 unchanged sentences

Interest rate swap (3)

$ 7 $ — $ 7 $ —

Long-term debt (2)

5 unchanged sentences

"Debt" for additional information.

We measured our interest rate swap at fair value, which was determined using a discounted cash flow analysis that reflects the contractual terms of the interest rate swap, including the period to maturity, and uses observable market-based inputs of similar instruments, including interest rate curves, as applicable.

During the quarter, H.R.

1, or the One Big Beautiful Bill Act (the “Tax Act”), was enacted.

Hilton does not anticipate a material impact to income tax expense for the year ended December 31, 2025 as a result of the Tax Act.

(3) In March 2026, our interest rate swap with a notional amount of $ 1.6 billion matured.

As such, the Company does not have any interest rate swaps outstanding as of March 31, 2026.

At the end of each quarter, we estimate the effective income tax rate expected to be applied for the full year.

The effective income tax rate is determined by the level and composition of income (loss) before income taxes, which is subject to federal, state, local and foreign income taxes.

In October 2023, the U.S.

Tax Court issued an opinion deciding that a third-party taxpayer was not entitled to apply the method of accounting provided for in Treasury Regulation Section 1.451-4 to its hotel loyalty program.

We currently apply this method of accounting to our guest loyalty program for federal income tax purposes.

On April 22, 2026, the U.S.

Court of Appeals for the Seventh Circuit vacated the U.S.

Tax Court's ruling and remanded the case for further proceedings.

We are currently evaluating the appellate court ruling to determine whether it will have any impact on Hilton's accounting for income taxes.

Share-Based Compensation

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 $ 44 million for both the three months ended September 30, 2025 and 2024, and $ 135 million and $ 140 million during the nine months ended September 30, 2025 and 2024, respectively, which included amounts reimbursed by hotel owners.

During the nine months ended September 30, 2025, we granted 396,000 RSUs with a weighted average grant date fair value per share of $ 258.93 , which generally vest in equal annual installments over two or three years from the date of grant.

During the nine months ended September 30, 2025, we granted 220,000 options with a weighted average exercise price per share of $ 257.51 , 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 nine months ended September 30, 2025 was $ 92.58 , which was determined using the Black-Scholes-Merton option-pricing model with the following weighted average assumptions:

We recognized share-based compensation expense of $ 45 million and $ 36 million during the three months ended March 31, 2026 and 2025, respectively, which included amounts reimbursed by hotel owners.

During the three months ended March 31, 2026, we granted 331,000 RSUs with a grant date fair value per share of $ 313.35 , which generally vest in equal annual installments over two or three years from the date of grant.

During the three months ended March 31, 2026, we granted 177,000 options with an exercise price per share of $ 313.35 , 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, 2026 was $ 113.22 , which was determined using the Black-Scholes-Merton option-pricing model with the following 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 options at the date of each grant.

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

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

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

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.

Performance Shares

During the nine months ended September 30, 2025, we granted 158,000 performance shares with a weighted average grant date fair value per share of $ 257.48 , which vest three years from the date of grant based on the achievement of various performance measures.

As of September 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.

During the three months ended March 31, 2026, we granted 128,000 performance shares with a grant date fair value per share of $ 313.35 , which vest three years from the date of grant based on the achievement of various performance measures.

As of March 31, 2026, we determined that all of the performance measures for all outstanding performance shares granted in 2024, 2025 and 2026 were probable of achievement, with the average of the applicable achievement factors estimated to be nearly at the target achievement percentage for performance shares granted in 2025 and at the target achievement percentage for the performance shares granted in 2024 and 2026.

Earnings Per Share

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

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Three Months Ended

(in millions, except per share amounts)

Net income attributable to Hilton stockholders

$ 420 $ 344 $ 1,160 $ 1,030

Weighted average shares outstanding 229 240

1 unchanged sentence

Net income attributable to Hilton stockholders

$ 420 $ 344 $ 1,160 $ 1,030

Weighted average shares outstanding (1)

237 249 240 252

Diluted EPS $ 1.66 $ 1.23

(1) Amounts for all periods includ e less than 1 million shares r elated 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 both periods includ e less than 1 million shares r elated 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 September 30, 2025

Three Months Ended March 31, 2026

Redeemable Noncontrolling Interests Treasury Stock Additional

6 unchanged sentences

(in millions)

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

Balance as of December 31, 2025 $ 13 230.4 $ 3 $ ( 14,428 ) $ 11,274 $ ( 1,508 ) $ ( 729 ) $ 29 $ ( 5,359 )

Net income (loss)

7 unchanged sentences

— 0.6 — — ( 20 ) — — — ( 20 )

Balance as of September 30, 2025 $ 14 233.1 $ 3 $ ( 13,672 ) $ 11,220 $ ( 1,770 ) $ ( 713 ) $ 27 $ ( 4,905 )

Three Months Ended September 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 June 30, 2024 $ 21 247.8 $ 3 $ ( 9,781 ) $ 11,022 $ ( 3,597 ) $ ( 763 ) $ 17 $ ( 3,099 )

Net income (loss)

( 1 ) — — — — 344 — 1 345

Other comprehensive income

— — — — — — 22 2 24

— — — — — ( 37 ) — — ( 37 )

Repurchases of common stock

— ( 3.3 ) — ( 733 ) — — — — ( 733 )

Share-based compensation

— 0.1 — — 50 — — — 50

Balance as of September 30, 2024 $ 20 244.6 $ 3 $ ( 10,514 ) $ 11,072 $ ( 3,290 ) $ ( 741 ) $ 20 $ ( 3,450 )

Nine Months Ended September 30, 2025

Balance as of March 31, 2026 $ 11 228.3 $ 3 $ ( 15,259 ) $ 11,254 $ ( 1,158 ) $ ( 745 ) $ 27 $ ( 5,878 )

Three Months Ended March 31, 2025

Redeemable Noncontrolling Interests Treasury Stock Additional

16 unchanged sentences

— 0.7 — — ( 29 ) — — — ( 29 )

Balance as of September 30, 2025 $ 14 233.1 $ 3 $ ( 13,672 ) $ 11,220 $ ( 1,770 ) $ ( 713 ) $ 27 $ ( 4,905 )

Nine Months Ended September 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)

( 2 ) — — — — 1,030 — 6 1,036

Other comprehensive income (loss)

— — — — — — ( 10 ) 1 ( 9 )

Dividends — — — — — ( 113 ) — — ( 113 )

Repurchases of common stock

— ( 10.2 ) — ( 2,131 ) — — — — ( 2,131 )

Share-based compensation

— 1.3 — 10 104 — — — 114

Balance as of September 30, 2024 $ 20 244.6 $ 3 $ ( 10,514 ) $ 11,072 $ ( 3,290 ) $ ( 741 ) $ 20 $ ( 3,450 )

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

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

10 unchanged sentences

( 20 ) 4 — ( 16 )

Balance as of September 30, 2025 $ ( 490 ) $ ( 233 ) $ 10 $ ( 713 )

Balance as of March 31, 2026 $ ( 527 ) $ ( 219 ) $ 1 $ ( 745 )

Currency Translation Adjustment (1)

9 unchanged sentences

26 2 ( 15 ) 13

Balance as of September 30, 2024 $ ( 525 ) $ ( 256 ) $ 40 $ ( 741 )

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

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

Amounts reclassified during the nine months ended September 30, 2025 and 2024 relate to the liquidation of investments in certain foreign entities and were recognized in 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.

(3) Amounts reclassified were primarily the result of our interest rate swap that hedges our exposure to changes in the secured overnight financing rate ("SOFR") with the related amounts recognized in interest expense 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, net in our condensed consolidated statements of operations.

(3) Amounts reclassified were primarily the result of our interest rate swap that hedges our exposure to changes in SOFR, with the related amounts recognized in interest expense in our condensed consolidated statements of operations.

Amounts reclassified also related to foreign currency forward contracts that hedge our foreign currency denominated fees, with related amounts recognized in various revenue line items, as applicable, in our condensed consolidated statements of operations.

1 unchanged sentence

We are a hospitality company with operations organized in two distinct operating segments:

(i) management and franchise and (ii) ownership, each of which is reported as a segment based on (a) delivering a similar set of products and services and

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

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

(i) management and franchise and (ii) ownership, each of which is reported as a segment based on (a) delivering a similar set of products and services and (b) being managed separately given its distinct economic characteristics.

The management and franchise segment includes all of the hotels we manage for third-party owners, as well as all 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.

Revenues from this segment include:

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Our CODM does not use assets by operating segment when assessing performance or making operating segment resource allocations.

We previously were required to report segment profitability based on segment operating income (loss) as such measure was also regularly provided to our CODM.

Beginning in the fourth quarter of 2024, segment operating income (loss) was no longer included in regular reporting provided to the CODM, and, as a result, our reported measure of segment profit (loss) changed to Adjusted EBITDA.

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 and nine months ended September 30, 2025.

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

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Three Months Ended

(in millions)

1 unchanged sentence

Base and other management fees (1)

108 103 324 330

Incentive management fees (1)

74 66 221 204

Management and franchise 893 804

4 unchanged sentences

Cost reimbursement revenues (2)

1,837 1,627 5,278 4,841

Intersegment fees elimination (1)

( 16 ) ( 9 ) ( 32 ) ( 22 )

Total revenues $ 2,937 $ 2,695

(1) Includes management, royalty and IP fees charged to consolidated hotels in our ownership segment by our management and franchise segment, which were eliminated in our condensed consolidated statements of operations.

(2) Amounts include revenues from the operation of programs conducted for the benefit of property owners and exclude cash receipts recorded as deferred revenues on our condensed consolidated balance sheets related to these programs.

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.

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

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Three Months Ended

(in millions)

Management and franchise (1)(2)

$ 928 $ 873 $ 2,673 $ 2,508

Ownership (1)(2)

51 51 116 120

Segment Adjusted EBITDA

979 924 2,789 2,628

Corporate and other (3)

( 3 ) ( 20 ) ( 10 ) ( 57 )

Interest expense ( 162 ) ( 145 )

Depreciation and amortization expenses ( 50 ) ( 41 )

Gain (loss) on sales of assets, net

Loss on foreign currency transactions ( 9 ) ( 3 ) ( 8 ) ( 5 )

Loss on debt guarantees (4)

Gain (loss) on foreign currency transactions ( 5 ) 2

FF&E replacement reserves ( 10 ) ( 13 )

2 unchanged sentences

Cost reimbursement revenues (4)

1,837 1,627 5,278 4,841

Reimbursed expenses (4)

1 unchanged sentence

Other adjustments (5)

( 16 ) 2 ( 38 ) ( 17 )

Income before income taxes $ 518 $ 410

2 unchanged sentences

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

rent expense was $ 55 million and $ 61 million for the three months ended September 30, 2025 and 2024, respectively, and $ 157 million and $ 166 million for the nine months ended September 30, 2025 and 2024, respectively.

Total other ownership expenses were $ 220 million and $ 222 million for the three months ended September 30, 2025 and 2024, respectively, and $ 623 million and $ 644 million for the nine months ended September 30, 2025 and 2024, respectively, comprising (i) room expenses;

rent expense was $ 41 million for both periods and total other ownership expenses were $ 195 million and $ 186 million for the three months ended March 31, 2026 and 2025, respectively, comprising (i) room expenses;

(ii) food and beverage costs;

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

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

refer to Note 12:

"Commitments and Contingencies" for additional information.

(4) Amounts include results from the operation of programs conducted for the benefit of property owners and exclude cash receipts recorded as deferred revenues on our condensed consolidated balance sheets related to these programs.

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 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.

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

Amounts for both periods include gains (losses) related to severance and other items, including non-cash charges, such as net gains (losses) related to certain of our investments in unconsolidated affiliates.

Commitments and Contingencies

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In limited cases, we have provided performance guarantees that obligate us to fund these shortfalls.

As of September 30, 2025, we had performance guarantees with expirations ranging from 2025 to 2043 and possible cash outlays totaling $ 22 million.

As of March 31, 2026, we had performance guarantees with expirations ranging from 2026 to 2043 and possible cash outlays totaling $ 20 million.

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

During the nine months ended September 30, 2024, we recognized losses of $ 50 million in other non-operating loss, net in our condensed consolidated statement of operations and paid $ 77 million for debt guarantees extended to certain hotels we manage.

Our debt guarantees and loan commitments as of September 30, 2025 had expirations ranging from 2027 to 2035 and remaining possible cash outlays totaling $ 79 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.

Our debt guarantees and loan commitments as of March 31, 2026 had expirations ranging from 2027 to 2035 and remaining possible cash outlays totaling $ 53 million.

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

We receive program fees from property owners and strategic partners that are used to operate our Hilton Honors program, marketing, sales and brands programs and other shared services on behalf of property owners.

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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 September 30, 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 March 31, 2026 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 $ 462 million and $ 388 million during the nine months ended September 30, 2025 and 2024, respectively.

These amounts exclude $ 31 million and $ 43 million for the nine months ended September 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 $ 165 million and $ 399 million for the nine months ended September 30, 2025 and 2024, respectively.

The decrease during the period was due to the timing of income tax payments.

Cash interest paid included within operating activities in our condensed consolidated statements of cash flows was $ 143 million and $ 146 million during the three months ended March 31, 2026 and 2025, respectively.

These amounts exclude $ 7 million and $ 10 million for the three months ended March 31, 2026 and 2025, 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 $ 41 million and $ 29 million for the three months ended March 31, 2026 and 2025, 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