Financial Analysis

Commitments and Contingencies 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 have provided performance guarantees that obligate us to fund these shortfalls. As of June 30, 2026, we had performance guarantees with expirations ranging from 2026 to 2043 and possible cash outlays totaling $13 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. Our debt guarantees and loan commitments as of June 30, 2026 had expirations ranging from 2027 to 2035 and remaining possible cash outlays totaling $56 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. If we collect amounts in excess of amounts expended, we have a commitment to spend these amounts on the related programs. We are involved in various claims and lawsuits arising in the ordinary course of business, some of which include claims for substantial sums. While the ultim …

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"Debt Long-term debt balances, including obligations for finance leases, and associated interest rates and maturities as of June 30, 2026, were as follows: June 30, December 31, 2026 2025 (in millions) Senior secured term loan facility with a rate of 5.40%, due 2030 $ 3,119 $ 3,119 Senior notes with a rate of 4.875%, due 2027 (1) 600 600 Senior notes with a rate of 5.875%, due 2029 (1) 550 550 Senior notes with a rate of 3.750%, due 2029 (1) 800 800 Senior notes with a rate of 4.875%, due 2030 (1) 1,000 1,000 Senior notes with a rate of 4.000%, due 2031 (1) 1,100 1,100 Senior notes with a rate of 5.500%, due 2031 (1) 1,000 Senior notes with a rate of 3.625%, due 2032 (1) 1,500 1,500 Senior notes with a rate of 6.125%, due 2032 (1) 450 450 Senior notes with a rate of 5.875%, due 2033 (1) 1,000 1,000 Senior notes with a rate of 5.750%, due 2033 (1) 1,000 1,000 Senior notes with a rate of 5.500%, due 2034 (1) 1,000 1,000 Finance lease liabilities with a weighted average rate of 4.62%, due 2026 to 2060 (2) 325 340 13,444 12,459 Less: unamortized deferred financing costs and discount (101) (96) Less: current maturities of long-term debt (3) (624) (25) $ 12,719 $ 12,338 ____________ (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. (""HDOC"") …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

"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""). In May 2026, stockholders approved the amendment and restatement of the 2017 Plan to authorize an additional 846,000 shares of common stock for issuance and extend the term of the Plan to May 2036. We recognized share-based compensation expense of $61 million and $55 million during the three months ended June 30, 2026 and 2025, respectively, and $106 million and $91 million during the six months ended June 30, 2026 and 2025, respectively, which included amounts reimbursed by hotel owners. RSUs During the six months ended June 30, 2026, we granted 338,000 RSUs with a weighted average grant date fair value per share of $313.31, which generally vest in equal annual installments over two or three years from the date of grant. Options During the six months ended June 30, 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 individuals service terminates under certain circumstances. The grant date fair value per share of the options granted during the six months ended June 30, 202 …

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"Fair Value Measurements The fair values of certain financial instruments and the hierarchy level we used to estimate the fair values are shown below: June 30, 2026 Hierarchy Level Carrying Value (1) Level 1 Level 2 Level 3 (in millions) Liabilities: Long-term debt (2) $ 13,119 $ 9,802 $ $ 3,127 December 31, 2025 Hierarchy Level Carrying Value (1) Level 1 Level 2 Level 3 (in millions) Assets: Interest rate swap (3) $ 7 $ $ 7 $ Liabilities: Long-term debt (2) 12,119 8,922 3,142 ____________ (1) The fair values of cash equivalents and restricted cash equivalents approximate their carrying values due to their short-term maturities. The fair values of all other financial instruments not included in these tables are estimated to be equal to their carrying values. (2) The carrying values and fair values exclude the deduction for unamortized deferred financing costs and any applicable discounts, as well as all finance lease liabilities; refer to Note 4: ""Debt"" for additional information. (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 June 30, 2026." …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Income Taxes 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 have evaluated the appellate court ruling and concluded that it does not impact Hilton's accounting for income taxes.

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"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 six months ended June 30, 2026: (in millions) Balance as of December 31, 2025 $ 2,354 Cash received in advance and not recognized as revenue 536 Revenue recognized (1) (347) Other (2) (134) Balance as of June 30, 2026 $ 2,409 ____________ (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. Performance Obligations As of June 30, 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; (ii) $845 million related to advance consideration received from hotel owners for application, initiation and other fees and system implementation fees; and (iii) $14 million related to other obligations. These performance obligations are recognized as revenue as discussed in Note 2: ""Basis of Presentation and Summary of Significant Accounting Policies"" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025."

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"Business Segments 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. 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: (i) management and franchise fees charged to third-party hotel owners; (ii) licensing fees from our strategic partners, including co-branded credit card providers and third-party hotels we do not manage or franchise but that use our booking channels and related programs (""strategic partner hotels""), and Hilton Grand Vacations Inc. (""HGV""); and (iii) fees for managing the hotels in our ownership segment. The ownership segment primarily derives revenues from nightly hotel room sales, food and beverage sales and other services at our consolidated hotels. Our President and Chief Executive Officer is our chief operating decision maker (""CODM""). Our CODM uses Adjusted EBITDA to evaluate the performance of our operating segments. Adjusted EBITDA is calculated as net income (lo …

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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 June 30, 2026 Redeemable Noncontrolling Interests Treasury Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Common Stock Noncontrolling Interests Total Deficit Shares Amount (in millions) (in millions) Balance as of March 31, 2026 $ 11 228.3 $ 3 $ (15,259) $ 11,254 $ (1,158) $ (745) $ 27 $ (5,878) Acquisition of redeemable noncontrolling interests (5) Net income (loss) (1) 482 1 483 Other comprehensive loss (2) (2) Dividends (34) (34) Repurchases of common stock (2.9) (940) (940) Share-based compensation 0.3 9 87 96 Balance as of June 30, 2026 $ 5 225.7 $ 3 $ (16,190) $ 11,341 $ (710) $ (747) $ 28 $ (6,275) Three Months Ended June 30, 2025 Redeemable Noncontrolling Interests Treasury Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Common Stock Noncontrolling Interests Total Deficit Shares Amount (in millions) (in millions) Balance as of March 31, 2025 $ 16 238.8 $ 3 $ (12,154) $ 11,101 $ (2,559) $ (769) $ 23 $ (4,355) Net income (loss) (1) 440 3 443 Other comprehensive income 64 64 Dividends (36) (36) Repurchases of common stock (3.2) (762) (762) Share-based compensation 0.2 9 73 82 Balance …

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