10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-36243

Hilton Worldwide Holdings Inc.

(Exact name of registrant as specified in its charter)

Delaware	27-4384691
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
7930 Jones Branch Drive, Suite 1100, McLean, VA	22102
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (703) 883-1000

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer x		Accelerated filer ¨
Non-accelerated filer ¨	(Do not check if a smaller reporting company)	Smaller reporting company ¨
Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange

Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The number of shares outstanding of the registrant's common stock, par value $0.01 per share, as of July 19, 2018 was 298,186,104.

HILTON WORLDWIDE HOLDINGS INC.

FORM 10-Q TABLE OF CONTENTS

		Page No.
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	2
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	47
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	48
Item 1A.	Risk Factors	48
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 3.	Defaults Upon Senior Securities	48
Item 4.	Mine Safety Disclosures	48
Item 5.	Other Information	49
Item 6.	Exhibits	49
	Signatures	50

1

PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements

HILTON WORLDWIDE HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

(unaudited)

	June 30,			December 31,
	2018			2017
ASSETS
Current Assets:
Cash and cash equivalents	$	423		$	570
Restricted cash and cash equivalents	82			100
Accounts receivable, net of allowance for doubtful accounts of $38 and $29	1,041			1,005
Prepaid expenses	151			127
Income taxes receivable	11			36
Other	136			169
Total current assets (variable interest entities - $92 and $93)	1,844			2,007
Intangibles and Other Assets:
Goodwill	5,174			5,190
Brands	4,878			4,890
Management and franchise contracts, net	893			953
Other intangible assets, net	419			433
Property and equipment, net	351			353
Deferred income tax assets	111			111
Other	316			291
Total intangibles and other assets (variable interest entities - $176 and $171)	12,142			12,221
TOTAL ASSETS	$	13,986		$	14,228
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other	$	1,312		$	1,416
Current portion of deferred revenues	308			366
Current maturities of long-term debt	11			46
Income taxes payable	22			12
Current portion of liability for guest loyalty program	725			622
Total current liabilities (variable interest entities - $49 and $58)	2,378			2,462
Long-term debt	7,564			6,556
Deferred revenues	819			829
Deferred income tax liabilities	908			931
Liability for guest loyalty program	876			839
Other	881			920
Total liabilities (variable interest entities - $261 and $271)	13,426			12,537
Commitments and contingencies - see Note 14
Equity:
Preferred stock, $0.01 par value; 3,000,000,000 authorized shares, none issued or outstanding as of June 30, 2018 and December 31, 2017	—			—
Common stock, $0.01 par value; 10,000,000,000 authorized shares, 331,911,793 issued and 298,487,855 outstanding as of June 30, 2018 and 331,054,014 issued and 317,420,933 outstanding as of December 31, 2017	3			3
Treasury stock, at cost; 33,423,938 shares as of June 30, 2018 and 13,633,081 shares as of December 31, 2017	(2,330		)	(891		)
Additional paid-in capital	10,321			10,298
Accumulated deficit	(6,697		)	(6,981		)
Accumulated other comprehensive loss	(742		)	(741		)
Total Hilton stockholders' equity	555			1,688
Noncontrolling interests	5			3
Total equity	560			1,691
TOTAL LIABILITIES AND EQUITY	$	13,986		$	14,228

See notes to condensed consolidated financial statements.

2

HILTON WORLDWIDE HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

(unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Revenues
Franchise fees	$	404		$	355		$	735		$	637
Base and other management fees	84			81			161			162
Incentive management fees	59			57			114			106
Owned and leased hotels	392			373			726			669
Other revenues	22			20			45			57
	961			886			1,781			1,631
Other revenues from managed and franchised properties	1,330			1,190			2,584			2,341
Total revenues	2,291			2,076			4,365			3,972
Expenses
Owned and leased hotels	352			327			672			595
Depreciation and amortization	79			83			161			169
General and administrative	115			118			219			224
Other expenses	12			11			26			34
	558			539			1,078			1,022
Other expenses from managed and franchised properties	1,327			1,213			2,602			2,409
Total expenses	1,885			1,752			3,680			3,431
Operating income	406			324			685			541
Interest expense	(95		)	(86		)	(178		)	(175		)
Gain (loss) on foreign currency transactions	(12		)	5			(1		)	1
Loss on debt extinguishment	—			—			—			(60		)
Other non-operating income (loss), net	(1		)	7			13			9
Income before income taxes	298			250			519			316
Income tax expense	(81		)	(99		)	(139		)	(117		)
Net income	217			151			380			199
Net income attributable to noncontrolling interests	—			(1		)	(2		)	(2		)
Net income attributable to Hilton stockholders	$	217		$	150		$	378		$	197
Earnings per share:
Basic	$	0.72		$	0.46		$	1.22		$	0.60
Diluted	$	0.71		$	0.46		$	1.21		$	0.60
Cash dividends declared per share	$	0.15		$	0.15		$	0.30		$	0.30

See notes to condensed consolidated financial statements.

3

HILTON WORLDWIDE HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

(unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Net income	$	217		$	151		$	380		$	199
Other comprehensive income (loss), net of tax benefit (expense):
Currency translation adjustment, net of tax of $—, $—, $1 and $1	(77		)	53			(45		)	73
Pension liability adjustment, net of tax of $(1), $—, $(1) and $(1)	2			3			3			4
Cash flow hedge adjustment, net of tax of $(4), $2, $(14) and $4	13			(5		)	41			(7		)
Total other comprehensive income (loss)	(62		)	51			(1		)	70
Comprehensive income	155			202			379			269
Comprehensive income attributable to noncontrolling interests	—			(2		)	(2		)	(2		)
Comprehensive income attributable to Hilton stockholders	$	155		$	200		$	377		$	267

See notes to condensed consolidated financial statements.

4

HILTON WORLDWIDE HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)

	Six Months Ended
	June 30,
	2018			2017
Operating Activities:
Net income	$	380		$	199
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	161			169
Amortization of contract acquisition costs	14			8
Loss (gain) on foreign currency transactions	1			(1		)
Loss on debt extinguishment	—			60
Share-based compensation	68			59
Deferred income taxes	(39		)	(123		)
Contract acquisition costs	(38		)	(32		)
Working capital changes and other	(15		)	5
Net cash provided by operating activities	532			344
Investing Activities:
Capital expenditures for property and equipment	(28		)	(18		)
Capitalized software costs	(38		)	(29		)
Other	(9		)	(18		)
Net cash used in investing activities	(75		)	(65		)
Financing Activities:
Borrowings	1,650			1,823
Repayment of debt	(672		)	(1,836		)
Debt issuance costs and redemption premium	(21		)	(68		)
Dividends paid	(92		)	(98		)
Cash transferred in spin-offs of Park and HGV	—			(501		)
Repurchases of common stock	(1,439		)	(352		)
Distributions to noncontrolling interests	—			(1		)
Tax withholdings on share-based compensation	(42		)	(28		)
Net cash used in financing activities	(616		)	(1,061		)
Effect of exchange rate changes on cash, restricted cash and cash equivalents	(6		)	7
Net decrease in cash, restricted cash and cash equivalents	(165		)	(775		)
Cash, restricted cash and cash equivalents from continuing operations, beginning of period	670			1,183
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period	—			501
Cash, restricted cash and cash equivalents, beginning of period	670			1,684
Cash, restricted cash and cash equivalents, end of period	$	505		$	909
Supplemental Disclosures:
Cash paid during the year:
Interest	$	149		$	158
Income taxes, net of refunds	149			237
Non-cash financing activities:
Spin-offs of Park and HGV	$	—		$	17

See notes to condensed consolidated financial statements.

5

HILTON WORLDWIDE HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1: Organization

Organization

Hilton Worldwide Holdings Inc. (the "Parent," or together with its subsidiaries, "Hilton," "we," "us," "our" or the "Company"), a Delaware corporation, is one of the largest hospitality companies in the world and is engaged in managing, franchising, owning and leasing hotels and resorts, including timeshare properties. As of June 30, 2018, we managed, franchised, owned or leased 5,456 hotels and resorts, totaling 879,349 rooms in 106 countries and territories.

In April 2018, HNA Tourism Group Co., Ltd. and certain of its affiliates (together, "HNA") sold its entire ownership interest in Hilton totaling 82.5 million shares of Hilton common stock, of which 66.0 million shares were sold in an underwritten, public offering and 16.5 million shares were repurchased by us. See Note 6: "Debt" for additional information.

On January 3, 2017, we completed the spin-offs of a portfolio of hotels and resorts, as well as our timeshare business, into two independent, publicly traded companies: Park Hotels & Resorts Inc. ("Park") and Hilton Grand Vacations Inc. ("HGV"), respectively (the "spin-offs").

Note 2: Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements for the three and six months ended June 30, 2018 and 2017 have been prepared in accordance with United States of America ("U.S.") generally accepted accounting principles ("GAAP") and are unaudited. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP. Although we believe the disclosures made are adequate to prevent the information presented from being misleading, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and, accordingly, ultimate results could differ from those estimates. Additionally, interim results are not necessarily indicative of full year performance. In our opinion, the accompanying condensed consolidated financial statements reflect all adjustments, including normal recurring items, considered necessary for a fair presentation of the interim periods. All material intercompany transactions have been eliminated in consolidation.

On January 1, 2018, we adopted the requirements of Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09") using the full retrospective approach as of January 1, 2016. All amounts and disclosures set forth in this Form 10-Q reflect the necessary adjustments required for the adoption of this standard, including the reclassification of prior year balances to conform to current year presentation. See "Summary of Significant Accounting Policies" below for additional information.

Summary of Significant Accounting Policies

Our significant accounting policies are detailed in Note 2: "Basis of Presentation and Summary of Significant Accounting Policies" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The significant accounting policies that changed as a result of the adoption of ASU 2014-09 are set forth below.

Revenue Recognition

Revenues are primarily derived from management and franchise contracts with third-party hotel and resort owners, as well as from our owned and leased hotels. The majority of our performance obligations are a series of distinct goods or services, for which we receive variable consideration through our management and franchise fees or fixed consideration through our owned and leased hotels. We allocate the variable fees to the distinct services to which they relate applying the prescribed variable consideration allocation guidance, and we allocate fixed consideration to the related performance obligations based on the present value of the allocated variable cash flows. We do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised good

6

or service to a customer and when the customer pays for that good or service will be one year or less, which it is in substantially all cases. Additionally, we do not typically include extended payment terms in our contracts with customers.

Management and franchise revenues

We identified the following performance obligations in connection with our management and franchise contracts:

• Intellectual Property ("IP") licenses grant the right to access our hotel system IP, including brand IP, reservations systems and property management systems.

• Hotel management services include providing day-to-day management services of the hotels for the property owners.

• Development services include providing consultative services (e.g., design assistance and contractor selection) to the property owner to assist with the construction of the hotel prior to the hotel opening.

• Pre-opening services include providing services (e.g., advertising, budgeting, e-commerce strategies, food and beverage testing) to the property owner to assist in preparing for the hotel opening.

• Material rights for free or discounted goods or services to hotel guests are satisfied at the earlier point in time of either when the material right expires or the underlying free or discounted good or service is provided to the hotel guest.

Each of the identified performance obligations related to management and franchise revenues is considered to be a series of distinct services transferred over time. While the underlying activities may vary from day to day, the nature of the promises are the same each day, and the property owner can independently benefit from each day's services. Management and franchise fees are typically based on the sales or usage of the underlying hotel, with the exception of fixed upfront fees, which usually represent an insignificant portion of the transaction price.

Franchise fees represent fees earned in connection with the licensing of one of our brands, usually under long-term contracts with the property owner, and include the following:

• Royalty fees are generally based on a percentage of the hotel's monthly gross room revenue and, in some cases, may also include a percentage of gross food and beverage revenues and other revenues, as applicable. These fees are typically billed and collected monthly, and revenue is generally recognized at the same time the fees are billed.

• Application, initiation and other fees are charged when: (i) new hotels enter our system; (ii) there is a change of ownership of a hotel; or (iii) contracts with properties already in our system are extended. These fees are typically fixed and collected upfront and are recognized as revenue over the term of the franchise contract. We do not consider this advance consideration to include a significant financing component, since it is used to protect us from the property owner failing to adequately complete some or all of its obligations under the contract.

• License fees are earned from: (i) a license agreement with HGV to use certain Hilton marks and IP in its timeshare business, which are typically billed and collected monthly, and revenue is generally recognized at the same time the fees are billed; and (ii) co-brand credit card arrangements, which are recognized as revenue when points for our guest loyalty program, Hilton Honors, are issued, generally as spend on the co-branded credit card occurs; see further discussion below under "Hilton Honors."

Franchise fees are reduced by any consideration paid or anticipated to be paid to incentivize hotel owners to enter into franchise contracts with us.

Management fees represent fees earned from hotels that we manage, usually under long-term contracts with the property owner, and include the following:

• Base management fees are generally based on a percentage of the hotel's monthly gross revenue. Base fees are typically billed and collected monthly, and revenue is generally recognized at the same time the fees are billed.

• Incentive management fees are generally based on a percentage of the hotel's operating profits and in some cases may be subject to a stated return threshold to the property owner, normally over a one-calendar year period (the "incentive period"). Incentive fee revenue is recognized on a monthly basis, but only to the extent the cumulative fee earned does not exceed the probable fee for the incentive period. Incentive fee payment terms vary, but they are generally billed and collected monthly or annually upon completion of the incentive period.

Base and other management fees are reduced by any consideration paid or anticipated to be paid to incentivize hotel owners to enter into management contracts with us.

7

Other revenues from managed and franchised properties represent amounts that are contractually reimbursed to us by property owners, either directly as costs are incurred or indirectly through fees that are billed and collected in advance related to certain costs and expenses of the related properties, and include the following:

• Direct reimbursements include payroll and related costs and certain other operating costs of the managed and franchised properties’ operations, which are contractually reimbursed to us by the property owners as expenses are incurred. Revenue is recognized based on the amount of expenses incurred by Hilton, which are presented as other expenses from managed and franchised properties in our consolidated statements of operations, that are then reimbursed to us by the property owner typically on a monthly basis, which results in no net effect on operating income (loss) or net income (loss).

• Indirect reimbursements include marketing expenses and other expenses associated with our brands and shared services, which are paid from fees collected by Hilton from the managed and franchised properties. Revenue is generally recognized as fees are billed, which are based on the underlying hotel's sales or usage (e.g., gross room revenues and number of reservations processed). System implementation fees charged to property owners are deferred and recognized as revenue over the term of the management or franchise contract. The corresponding expenses are expensed as incurred and are presented as other expenses from managed and franchised properties in our consolidated statements of operations and are expected to equal the revenues earned from indirect reimbursements over time.

The management and franchise fees and reimbursements from third-party hotel owners are allocated to the performance obligations and the distinct services to which they relate using their estimated standalone selling prices. The terms of the fees earned under the contract relate to a specific outcome of providing the services (e.g., hotel room sales) or to Hilton's efforts (e.g., costs) to satisfy the performance obligations. We use time as the measure of progress to recognize as revenue the fees that are allocated to the period earned per the contract or to the period when the reimbursable costs are incurred.

Owned and leased hotel revenues

We identified the following performance obligations in connection with our owned and leased hotel revenues, for which revenue is recognized as the respective performance obligations are satisfied, which results in recognizing the amount we expect to be entitled to for providing the goods or services:

• Cancellable room reservations or ancillary services are typically satisfied as the good or service is transferred to the hotel guest, which is generally when the room stay occurs.

• Noncancellable room reservations and banquet or conference reservations represent a series of distinct goods or services provided over time and satisfied as each distinct good or service is provided, which is reflected by the duration of the room reservation.

• Material rights for free or discounted goods or services are satisfied at the earlier point in time when the material right expires or the underlying free or discounted good or service is provided to the hotel guest.

• Other ancillary goods and services are purchased independently of the room reservation at standalone selling prices and are considered separate performance obligations, which are satisfied when the related good or service is provided to the hotel guest.

• Components of package reservations for which each component could be sold separately to other hotel guests are considered separate performance obligations and are satisfied as set forth above.

Owned and leased hotel revenues primarily consist of hotel room rentals, revenue from accommodations sold in conjunction with other services (e.g., package reservations), food and beverage sales and other ancillary goods and services (e.g., parking) related to owned, leased and consolidated non-wholly owned hotel properties. Revenue is recognized when rooms are occupied or goods and services have been delivered or rendered, respectively. Payment terms typically align with when the goods and services are provided. Owned and leased hotel revenues are reduced upon issuance of Hilton Honors points, for Hilton Honors members' paid stay transactions and are recognized when Hilton Honors points are redeemed for a free stay at an owned or leased hotel (see the "Hilton Honors" section below for additional information).

Although the transaction prices of room rentals, goods and other services are generally fixed and based on the respective room reservation or other agreement, an estimate to reduce the transaction price is required if a discount is expected to be provided to the customer. For package reservations, the transaction price is allocated to the performance obligations within the package based on the estimated standalone selling prices of each component. On occasion, the hotel may also provide the customer with a material right to a free or discounted good or service in conjunction with a room reservation or banquet contract (e.g., free breakfast and free room night for every four nights booked). These material rights are considered separate performance obligations to which a portion of the transaction price is allocated based on the estimated standalone selling prices of the good or service, adjusted for the likelihood the hotel guest will exercise the right.

8

Other revenues

Other revenues include revenues generated by the incidental support of hotel operations for owned, leased, managed and franchised hotels, including purchasing operations, and other operating income. Purchasing revenues include any amounts received for vendor rebate arrangements that we participate in as a manager of hotels.

Taxes and fees collected on behalf of governmental agencies

We are required to collect certain taxes and fees from customers on behalf of governmental agencies and remit these back to the applicable governmental agencies on a periodic basis. We have a legal obligation to act as a collection agent. We do not retain these taxes and fees and, therefore, they are not included in our measurement of transaction prices. We have elected to present revenue net of sales taxes and other similar taxes. We record a liability when the amounts are collected and relieve the liability when payments are made to the applicable taxing authority or other appropriate governmental agency.

Contract Assets

Contract assets relate to incentive management fees for which the period of service has passed, but for which our right to consideration is conditional upon completing the requirements of the incentive fee period. Contract assets are included in other current assets in our consolidated balance sheets and are reclassified as accounts receivable when our right to consideration becomes unconditional.

Contract Liabilities

Contract liabilities relate to: (i) advance consideration received from hotel owners at contract inception for services considered to be part of the contract performance obligations, such as management or franchise contract application, initiation, renewal and other fees; (ii) advance consideration received for certain indirect reimbursements, such as system implementation fees; and (iii) amounts received when points are issued under Hilton Honors, but for which revenue is not yet recognized, since the related points are not yet redeemed. Contract liabilities related to advance consideration received for fees, excluding Hilton Honors, and certain indirect reimbursements are recognized as revenue over the term of the related contract. Contract liabilities related to amounts received for Hilton Honors are recognized as revenue when the points are redeemed for a free good or service by the Hilton Honors member, which, on average, occurs within two years of points issuance. Contract liabilities are included in deferred revenues in our consolidated balance sheets.

Intangible Assets with Finite Useful Lives

We have certain finite lived intangible assets that were initially recorded at their fair value in connection with the October 24, 2007 transaction whereby we became a wholly owned subsidiary of an affiliate of The Blackstone Group L.P. ("Blackstone") (the "Merger"). These intangible assets consist of management contracts, franchise contracts, leases, certain proprietary technologies and our Hilton Honors guest loyalty program. Additionally, we capitalize cash consideration paid to incentivize hotel owners to enter into management and franchise contracts with us as contract acquisition costs and the incremental costs to obtain or fulfill the contracts as development commissions, which are generally fixed. We also capitalize costs incurred to develop internal-use computer software and costs to acquire software licenses, as well as internal and external costs incurred in connection with development of upgrades or enhancements that result in additional information technology functionality.

Intangible assets with finite useful lives are amortized using the straight-line method over their respective estimated useful lives, which for contract acquisition costs and development commissions is the contract term, including any renewal periods that are at our sole option. These estimated useful lives are generally as follows: management contracts recorded at the Merger (13 to 16 years); management contract acquisition costs and development commissions (20 to 30 years); franchise contracts recorded at the Merger (12 to 13 years); franchise contract acquisition costs and development commissions (10 to 20 years); leases (12 to 35 years); Hilton Honors (16 years); and capitalized software development costs (3 years).The amortization of these intangible assets, excluding contract acquisition costs, is included in depreciation and amortization expense in our consolidated statements of operations, and the amortization of contract acquisition costs is recognized as a reduction to franchise fees and base and other management fees in our consolidated statements of operations, based on contract type. Costs incurred prior to the acquisition of a contract, such as external legal costs, are expensed as incurred and included in general and administrative expenses in our consolidated statements of operations. Cash flows for contract acquisition costs and development commissions are included as operating activities in our consolidated statements of cash flows.

9

We review all finite lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess carrying value over the fair value in our consolidated statements of operations.

Hilton Honors

Hilton Honors is our guest loyalty and marketing program provided to our hotel and resort properties. Nearly all of our owned, leased, managed and franchised properties participate in the Hilton Honors program. Hilton Honors members earn points based on their spending at our participating properties and through participation in affiliated partner programs. When points are earned by Hilton Honors members, they are provided with a material right to free or discounted goods or services in the future upon accumulation of the required level of Hilton Honors points. Points may be redeemed for the right to stay at participating properties, as well as for other goods and services from third parties, including, but not limited to, airlines, car rentals, cruises, vacation packages, shopping and dining. As the points are issued to a Hilton Honors member, the property or affiliated partner pays Hilton Honors based on an estimated cost per point for the costs of operating the program, which include marketing, promotion, communication and administrative expenses, as well as the estimated cost of award redemptions.

We record liabilities for the payments received from participating hotels and program partners, which are typically due when the points are issued to a Hilton Honors member. Amounts equal to the estimated cost per point of the future redemption obligation are included in the liability for guest loyalty program and any amounts received in excess of the estimated cost per point are included in deferred revenues in our consolidated balance sheets. We engage outside actuaries to assist in determining the fair value of the future redemption obligation using statistical formulas that project future point redemptions based on factors that include historical experience, an estimate of points that will eventually be redeemed, which includes an estimate of "breakage" for points that will never be redeemed, and the cost of reimbursing properties and other third parties with respect to other redemption opportunities available to Hilton Honors members. When points are issued as a result of a stay at an owned or leased hotel, we recognize a reduction in owned and leased hotel revenues, since we are also the guest loyalty program sponsor. For the Hilton Honors fees that are charged to the participating properties, we allocate the fees to the material right created by the Hilton Honors points that are issued using the variable consideration allocation guidance, since the fees are directly related to the issuance of Hilton Honors points to the Hilton Honors member and Hilton's efforts to satisfy the future redemption of those Hilton Honors points.

The transaction prices for the Hilton Honors points are reduced by the expected payments to the third parties that will provide the free or discounted room or service using the actuarial projection of the cost per point. The remaining transaction price is then further allocated to the points that are expected to be redeemed, adjusting the points that are issued for estimated breakage, and recognized when those points are redeemed. While the points are outstanding, both the estimate of the expected payments to third parties (cost per point) and the estimated breakage are reevaluated, and the amount of revenue recognized when each point is redeemed is adjusted so that the final amount allocated to the material right is reflective of the amount retained for providing the free or discounted goods and services, net of the payments to third parties and points not redeemed.

We also earn license fees from co-brand credit card arrangements (see "Management and franchise revenues" within the "Revenue Recognition" section above). The co-brand license fee is allocated between two performance obligations based on their estimated standalone selling prices: (i) an IP license using the relief-from-royalty method; and (ii) material rights for free or discounted goods or services to the credit card customers using a cost plus method based on an evaluation of other third-party administrators.

We satisfy our performance obligation related to points issued under Hilton Honors when points are redeemed for a free good or service by the Hilton Honors member, and we satisfy our remaining performance obligations over time as the customer simultaneously receives and consumes the benefits of the goods or services provided. Hilton Honors reimburses participating properties when points are redeemed by members at the respective properties, at which time the redemption obligation is reduced and the related deferred revenue is recognized in other revenues from managed and franchised properties in our consolidated statements of operations. Additionally, when Hilton Honors members redeem award certificates at our owned and leased hotels, we recognize room revenue, included in owned and leased hotel revenues in our consolidated statements of operations.

Recently Issued Accounting Pronouncements

Adopted Accounting Standards

In March 2017, the Financial Accounting Standards Board ("FASB") issued ASU No. 2017-07 ("ASU 2017-07"), Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic

10

Postretirement Benefit Cost. This ASU requires employers to report the service cost component of net periodic pension cost in the same line item or items of the statement of operations as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net periodic pension cost must be presented separately from the service cost component and outside of a subtotal of income (loss) from operations. We adopted ASU 2017-07 on January 1, 2018 on a retrospective basis in our condensed consolidated statements of operations, which includes presenting: (i) the service cost component of net periodic pension cost in owned and leased hotel expenses and general and administrative expenses; and (ii) the other components of net periodic pension cost in other non-operating income (loss), net in our condensed consolidated statements of operations. Prior to adoption, all net periodic pension costs were presented in owned and leased hotel expenses and general and administrative expenses. We have applied the practical expedient permitting us to use the amounts disclosed in our Employee Benefits Plans note in our Annual Report on Form 10-K for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. See the "Prior Period Financial Information" below for the effect of the adoption of ASU 2017-07 on our condensed consolidated statements of operations for the three and six months ended June 30, 2017.

In May 2014, the FASB issued ASU 2014-09. This ASU supersedes the revenue recognition requirements in Revenue Recognition (Topic 605) and requires entities to recognize revenue when a customer obtains control of promised goods or services and in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. Subsequent to ASU 2014-09, the FASB issued several related ASUs to clarify the application of the new revenue recognition standard, collectively referred to herein as ASU 2014-09. We adopted the requirements of ASU 2014-09 on January 1, 2018 using the full retrospective approach, as permitted by the standard, resulting in a cumulative adjustment to accumulated deficit of $212 million as of January 1, 2016.

The provisions of ASU 2014-09 affected our revenue recognition as follows:

• Application, initiation and other fees are recognized over the term of the franchise contract, rather than upon execution of the contract and the unamortized portion of these fees is included in deferred revenues in our condensed consolidated balance sheets.

• Contract acquisition costs related to our management and franchise contracts are recognized over the term of the contracts as a reduction to revenue, instead of as amortization expense. This change does not affect net income (loss).

• Incentive management fees are recognized to the extent that it is probable that a significant reversal will not occur as a result of future hotel profits or cash flows, as opposed to recognizing amounts that would be due if the management contract was terminated at the end of the reporting period. This change does not affect net income (loss) for any full year period.

• Revenue related to our Hilton Honors guest loyalty program is recognized upon point redemption, net of any reward reimbursement paid to a third party, as opposed to recognized on a gross basis at the time points are issued in conjunction with the accrual of the expected future cost of the reward reimbursement. Additionally, points issued at owned and leased hotels are accounted for as a reduction of revenue from owned and leased hotels, as opposed to expenses of owned and leased hotels. Fees received in excess of the estimated liability for guest loyalty program are included in deferred revenues in our condensed consolidated balance sheets.

• Reimbursable fees related to our management and franchise contracts are recognized as they are billed, as opposed to when we incur the related expenses. Timing differences related to the receipt and spend of these fees will no longer be recorded in other assets and other liabilities in our condensed consolidated balance sheets.

We have not retrospectively restated for contract modifications of management and franchise contracts that occurred before January 1, 2016. Instead, we have reflected the aggregate effect of all contract modifications when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price. The estimated effect of applying this practical expedient is to use a longer period over which to straight line any fixed consideration either received from the customer or paid to the customer, since all fees will be amortized over the full contract term beginning on the date of initial execution, rather than amortizing fees received upon contract modifications prospectively from the contract modification date. We do not anticipate that this effect is material given the insignificance of the fixed consideration compared to the overall consideration we expect to earn over the term of the contract. See the "Prior Period Financial Information" below for the effect of the adoption of ASU 2014-09 on our condensed consolidated balance sheet as of December 31, 2017 and our condensed consolidated statements of operations for the three and six months ended June 30, 2017.

11

Prior Period Financial Information

The following table presents the effect of the adoption of ASU 2014-09 for the line items affected in our condensed consolidated balance sheet:

	December 31, 2017
	As Previously Reported			Adoption of ASU 2014-09			As Adjusted
	(in millions)
ASSETS
Accounts receivable, net	$	998		$	7		$	1,005
Prepaid expenses	111			16			127
Other current assets	171			(2		)	169
Management and franchise contracts, net	909			44			953
Deferred income tax assets	113			(2		)	111
Other non-current assets	434			(143		)	291
TOTAL ASSETS	14,308			(80		)	14,228
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable, accrued expenses and other(1)(2)	1,487			(71		)	1,416
Current portion of deferred revenues(1)	41			325			366
Deferred revenues	97			732			829
Deferred income tax liabilities	1,063			(132		)	931
Other non-current liabilities	1,470			(550		)	920
Total liabilities	12,233			304			12,537
Equity:
Accumulated deficit	(6,596		)	(385		)	(6,981		)
Accumulated other comprehensive loss	(742		)	1			(741		)
Total equity	2,075			(384		)	1,691
TOTAL LIABILITIES AND EQUITY	14,308			(80		)	14,228

____________

⁽¹⁾  The current portion of deferred revenues has been separated from accounts payable, accrued expenses and other in the "As Previously Reported" column following the adoption of ASU 2014-09.

⁽²⁾  The current portion of liability for guest loyalty program has been separated from accounts payable, accrued expenses and other to conform with current presentation. The balance was $622 million as of December 31, 2017 and did not change as a result of the adoption of ASU 2014-09.

12

The following tables present the effect of the adoption of ASU 2014-09 and ASU 2017-07 on our condensed consolidated statement of operations:

	Three Months Ended June 30, 2017
	As Previously Reported			Adoption of ASU 2014-09			Adoption of ASU 2017-07			As Adjusted
	(in millions)
Revenues
Franchise fees	$	372		$	(17	)	$	—		$	355
Base and other management fees	85			(4		)	—			81
Incentive management fees	56			1			—			57
Owned and leased hotels	377			(4		)	—			373
Other revenues	20			—			—			20
	910			(24		)	—			886
Other revenues from managed and franchised properties	1,436			(246		)	—			1,190
Total revenues	2,346			(270		)	—			2,076
Expenses
Owned and leased hotels	330			(4		)	1			327
Depreciation and amortization	87			(4		)	—			83
General and administrative	117			—			1			118
Other expenses	11			—			—			11
	545			(8		)	2			539
Other expenses from managed and franchised properties	1,436			(223		)	—			1,213
Total expenses	1,981			(231		)	2			1,752
Operating income	365			(39		)	(2		)	324
Interest expense	(100		)	14			—			(86		)
Gain on foreign currency transactions	5			—			—			5
Other non-operating income, net	5			—			2			7
Income before income taxes	275			(25		)	—			250
Income tax expense	(108		)	9			—			(99		)
Net income	167			(16		)	—			151
Net income attributable to noncontrolling interests	(1		)	—			—			(1		)
Net income attributable to Hilton stockholders	$	166		$	(16	)	$	—		$	150
Earnings per share:
Basic	$	0.51								$	0.46
Diluted	$	0.51								$	0.46

13

	Six Months Ended June 30, 2017
	As Previously Reported			Adoption of ASU 2014-09			Adoption of ASU 2017-07			As Adjusted
	(in millions)
Revenues
Franchise fees	$	666		$	(29	)	$	—		$	637
Base and other management fees	168			(6		)	—			162
Incentive management fees	108			(2		)	—			106
Owned and leased hotels	677			(8		)	—			669
Other revenues	57			—			—			57
	1,676			(45		)	—			1,631
Other revenues from managed and franchised properties	2,831			(490		)	—			2,341
Total revenues	4,507			(535		)	—			3,972
Expenses
Owned and leased hotels	602			(8		)	1			595
Depreciation and amortization	176			(7		)	—			169
General and administrative	222			—			2			224
Other expenses	34			—			—			34
	1,034			(15		)	3			1,022
Other expenses from managed and franchised properties	2,831			(422		)	—			2,409
Total expenses	3,865			(437		)	3			3,431
Operating income	642			(98		)	(3		)	541
Interest expense	(204		)	29			—			(175		)
Gain on foreign currency transactions	1			—			—			1
Loss on debt extinguishment	(60		)	—			—			(60		)
Other non-operating income, net	6			—			3			9
Income before income taxes	385			(69		)	—			316
Income tax expense	(143		)	26			—			(117		)
Net income	242			(43		)	—			199
Net income attributable to noncontrolling interests	(2		)	—			—			(2		)
Net income attributable to Hilton stockholders	$	240		$	(43	)	$	—		$	197
Earnings per share:
Basic	$	0.73								$	0.60
Diluted	$	0.73								$	0.60

Accounting Standards Not Yet Adopted

In February 2018, the FASB issued ASU No. 2018-02 ("ASU 2018-02"), Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASU permits a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects that do not reflect the appropriate tax rates as a result of the Tax Cuts and Jobs Act of 2017 (the "TCJ Act"). The provisions of ASU 2018-02 are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years and should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the tax rate in the TCJ Act is recognized. Early adoption is permitted. We are currently evaluating the effect that ASU 2018-02 will have on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02 ("ASU 2016-02"), Leases (Topic 842), which supersedes existing guidance on accounting for leases in Leases (Topic 840) and generally requires all leases, including operating leases, to be recognized in the statement of financial position as right-of-use assets and lease liabilities by lessees. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach and are effective for reporting periods beginning after

14

December 15, 2018; early adoption is permitted. We intend to adopt the standard on January 1, 2019 and apply the package of practical expedients available to us upon adoption. We are continuing to evaluate the effect that this ASU will have on our consolidated financial statements, but we expect this ASU to have a material effect on our consolidated balance sheet.

Note 3: Revenues from Contracts with Customers

Contract Liabilities

Our contract liabilities, which are classified as a component of current and long-term deferred revenues, decreased $18 million during the six months ended June 30, 2018, from $1,087 million as of December 31, 2017 to $1,069 million as of June 30, 2018. The change included a $107 million decrease, which had no effect on revenues, resulting from changes in estimated transaction prices for our performance obligations related to points issued under Hilton Honors. This decrease was partially offset by a $90 million net increase from cash received in advance, for which revenue recognition was deferred, and revenue recognized during the period, mostly related to Hilton Honors. We recognized revenue that was previously deferred as a contract liability of $56 million and $38 million during the three months ended June 30, 2018 and 2017, respectively, and $116 million and $74 million during the six months ended June 30, 2018 and 2017, respectively.

Performance Obligations

As of June 30, 2018, we had $509 million of deferred revenues related to unsatisfied performance obligations under Hilton Honors that will be recognized in revenue as the points are redeemed, which is expected to occur over the next two years. Additionally, we had $560 million of deferred revenues related to application, initiation and other fees, which are expected to be recognized in revenue in future periods over the term of the related contract.

We did not estimate revenues expected to be recognized related to our unsatisfied performance obligations for our: (i) royalty fees since they are considered sales-based royalty fees recognized as hotel room sales occur in exchange for licenses of our brand names over the terms of the franchise contracts; and (ii) base management fees and incentive management fees since they are allocated entirely to the wholly unsatisfied promise to transfer management services, which form part of a single performance obligation in a series, over the term of the management contract.

As part of the adoption of ASU 2014-09, we elected not to disclose the amount of the transaction price allocated to our remaining performance obligations as of December 31, 2017 or provide an explanation of when we expect to recognize that amount as revenue.

Note 4: Consolidated Variable Interest Entities

As of June 30, 2018 and December 31, 2017, we consolidated three variable interest entities ("VIEs"): two entities that lease hotel properties and one management company. We are the primary beneficiaries of these consolidated VIEs as we have the power to direct the activities that most significantly affect their economic performance. Additionally, we have the obligation to absorb their losses and the right to receive benefits that could be significant to them. The assets of our consolidated VIEs are only available to settle the obligations of the respective entities. Our condensed consolidated balance sheets included the assets and liabilities of these entities, which primarily comprised the following:

	June 30,		December 31,
	2018		2017
	(in millions)
Cash and cash equivalents	$	73	$	73
Accounts receivable, net	12		16
Property and equipment, net	59		57
Deferred income tax assets	57		56
Other non-current assets	59		57
Accounts payable, accrued expenses and other	38		43
Long-term debt(1)	207		212
Other long-term liabilities	13		13

____________

⁽¹⁾  Includes capital lease obligations of $189 million and $191 million as of June 30, 2018 and December 31, 2017, respectively.

During the six months ended June 30,2018 and 2017, we did not provide any financial or other support to any VIEs that we were not previously contractually required to provide, nor do we intend to provide such support in the future.

15

Note 5: Amortizing Intangible Assets

Amortizing intangible assets were as follows:

	June 30, 2018
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
	(in millions)
Management and franchise contracts:
Management and franchise contracts recorded at Merger(1)	$	2,234	$	(1,794	)	$	440
Contract acquisition costs	451		(87		)	364
Development commissions	102		(13		)	89
	$	2,787	$	(1,894	)	$	893
Other amortizing intangible assets:
Leases(1)	$	295	$	(157	)	$	138
Capitalized software costs	619		(455		)	164
Hilton Honors(1)	339		(226		)	113
Other	38		(34		)	4
	$	1,291	$	(872	)	$	419

	December 31, 2017
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
	(in millions)
Management and franchise contracts:
Management and franchise contracts recorded at Merger(1)	$	2,242	$	(1,716	)	$	526
Contract acquisition costs	416		(74		)	342
Development commissions	97		(12		)	85
	$	2,755	$	(1,802	)	$	953
Other amortizing intangible assets:
Leases(1)	$	301	$	(153	)	$	148
Capitalized software costs	585		(428		)	157
Hilton Honors(1)	341		(217		)	124
Other	38		(34		)	4
	$	1,265	$	(832	)	$	433

____________

⁽¹⁾  Represents intangible assets that were initially recorded at their fair value at the time of the Merger.

Amortization of our amortizing intangible assets was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
	(in millions)
Recognized in depreciation and amortization expense(1)	$	66	$	69	$	135	$	139
Recognized as a reduction of franchise fee and base and other management fee revenues	7		5		14		8

____________

⁽¹⁾  Includes amortization of $52 million and $50 millionfor the three months ended June 30, 2018 and 2017, respectively, and $103 million and $101 millionfor the six months ended June 30, 2018 and 2017, respectively, associated with assets recorded at their fair value at the time of the Merger.

16

We estimated future amortization of our amortizing intangible assets as of June 30, 2018 to be as follows:

	Recognized in Depreciation and Amortization Expense		Recognized as a Reduction of Franchise Fee and Base and Other Management Fee Revenues
Year	(in millions)
2018 (remaining)	$	136	$	13
2019	270		23
2020	219		22
2021	82		21
2022	60		21
Thereafter	181		264
	$	948	$	364

Note 6: Debt

Long-term Debt

Long-term debt balances, including obligations for capital leases, and associated interest rates as of June 30, 2018, were as follows:

	June 30,			December 31,
	2018			2017
	(in millions)
Senior notes with a rate of 4.250%, due 2024	$	1,000		$	1,000
Senior notes with a rate of 4.625%, due 2025	900			900
Senior notes with a rate of 5.125%, due 2026	1,500			—
Senior notes with a rate of 4.875%, due 2027	600			600
Senior secured term loan facility with a rate of 3.84%, due 2023	3,419			3,929
Capital lease obligations with an average rate of 6.32%, due 2021 to 2030	229			233
Other debt with a rate of 3.08% due 2026	17			21
	7,665			6,683
Less: unamortized deferred financing costs and discount	(90		)	(81		)
Less: current maturities of long-term debt(1)	(11		)	(46		)
	$	7,564		$	6,556

____________

⁽¹⁾  Net of unamortized deferred financing costs and discount attributable to current maturities of long-term debt.

Senior Notes

In April 2018, we issued $1.5 billion aggregate principal amount of 5.125% Senior Notes due 2026 (the "2026 Senior Notes"), and incurred $21 million of debt issuance costs. Interest on the 2026 Senior Notes is payable semi-annually in arrears on May 1 and November 1 of each year, beginning November 2018. We used a portion of the net proceeds from the issuance of the 2026 Senior Notes, together with borrowings under our senior secured revolving credit facility (the "Revolving Credit Facility") and available cash to repurchase 16.5 million shares of our common stock from HNA for $1,171 million and repay $500 million outstanding under our senior secured term loan facility (the "Term Loans"). See "Senior Secured Credit Facility" below for additional information.

In March 2017, we used the proceeds from issuances of the 4.625% Senior Notes due 2025 (the "2025 Senior Notes") and the 4.875% Senior Notes due 2027 (the "2027 Senior Notes") to redeem in full $1.5 billion of Senior Notes due 2021 (the "2021 Senior Notes"). In connection with the repayment, we paid a redemption premium of $42 million and accelerated the recognition of $18 million of unamortized debt issuance costs, which were included in loss on debt extinguishment in our condensed consolidated statement of operations for the six months ended June 30, 2017.

17

The 4.250% Senior Notes due 2024 (the "2024 Senior Notes"), the 2025 Senior Notes, the 2026 Senior Notes and the 2027 Senior Notes are guaranteed on a senior unsecured basis by the Parent and certain of its wholly owned subsidiaries. See Note 15: "Condensed Consolidating Guarantor Financial Information" for additional details.

Senior Secured Credit Facility

Our senior secured credit facility consists of a $1.0 billion Revolving Credit Facility and the Term Loans. The obligations of our senior secured credit facility are unconditionally and irrevocably guaranteed by the Parent and substantially all of its direct and indirect wholly owned domestic subsidiaries.

In connection with the $500 million repayment of the Term Loans in April 2018, we accelerated the recognition of $5 million of unamortized debt issuance costs and discount, which were included in other non-operating income (loss), net in our condensed consolidated statements of operations for the three and six months ended June 30, 2018. Additionally, the interest rate on the remaining balance of the Term Loans was reduced by 25 basis points to LIBOR plus 175 basis points.

As of June 30, 2018, we had $64 million of letters of credit outstanding under our Revolving Credit Facility and a borrowing capacity of $936 million.

Debt Maturities

The contractual maturities of our long-term debt as of June 30, 2018 were as follows:

Year	(in millions)
2018 (remaining)	$	4
2019	16
2020	17
2021	18
2022	19
Thereafter	7,591
	$	7,665

Note 7: Derivative Instruments and Hedging Activities

Cash Flow Hedges

In May 2017, we began hedging foreign exchange-based cash flow variability in certain of our foreign currency denominated management and franchise fees using forward contracts (the "Fee Forward Contracts"). We elected to designate these Fee Forward Contracts as cash flow hedges for accounting purposes. As of June 30, 2018, the Fee Forward Contracts had an aggregate notional amount of $69 million and maturities of 24 months or less.

In March 2017, we entered into two interest rate swap agreements with notional amounts of $1.6 billion and $750 million to swap one-month LIBOR on the Term Loans to fixed rates of 1.98 percent and 2.02 percent, respectively, through March 2022. In May 2018, we settled the interest rate swap with a notional amount of $750 million and received $18 million from the counterparty. Concurrently, we entered into an interest rate swap agreement with a notional amount of $1.6 billion, which swaps one-month LIBOR on the Term Loans to a fixed rate of 3.03 percent, for a term from March 2022 to March 2023. We elected to designate these interest rate swaps as cash flow hedges for accounting purposes.

Non-designated Hedges

As of June 30, 2018, we held short-term forward contracts with an aggregate notional amount of $349 million to offset exposure to fluctuations in certain of our foreign currency denominated cash balances. We elected not to designate these forward contracts as hedging instruments. Depending on the fair value of each contract, we classify it as an asset or liability.

18

Fair Value of Derivative Instruments

We measure our derivative instruments at fair value, which is estimated using a discounted cash flow analysis, and we consider the inputs used to measure the fair value as Level 2 within the fair value hierarchy. The discounted cash flow analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs of similar instruments, including interest rate curves and spot and forward rates, as applicable, as well as option volatility. The fair values of our derivative instruments in our condensed consolidated balance sheets were as follows:

		June 30,		December 31,
	Balance Sheet Classification	2018		2017
		(in millions)
Cash Flow Hedges:
Interest rate swaps	Other non-current assets	$	41	$	11
Forward contracts	Other current assets	2		—
Forward contracts	Accounts payable, accrued expenses and other	—		1
Non-designated Hedges:
Forward contracts	Other current assets	3		4
Forward contracts	Accounts payable, accrued expenses and other	6		1

Earnings Effect of Derivative Instruments

The gains and losses recognized in our condensed consolidated statements of operations and condensed consolidated statements of comprehensive income before any effect for income taxes were as follows: 

		Three Months Ended						Six Months Ended
		June 30,						June 30,
	Classification of Gain (Loss) Recognized	2018			2017			2018			2017
		(in millions)
Cash Flow Hedges(1):
Interest rate swaps	Other comprehensive income (loss)	$	11		$	(15	)	$	45		$	(24	)
Interest rate swaps(2)	Interest expense	—			(6		)	(2		)	(8		)
Forward contracts(3)(4)	Other comprehensive income (loss)	4			—			3			—
Non-designated Hedges:
Interest rate swaps	Other non-operating income (loss), net	N/A			—			N/A			2
Interest rate swaps(5)	Interest expense	(2		)	(2		)	(5		)	(5		)
Forward contracts	Gain (loss) on foreign currency transactions	(7		)	6			(6		)	7

____________

⁽¹⁾  There were no amounts recognized in earnings related to hedge ineffectiveness or amounts excluded from hedge effectiveness testing during the three and six months ended June 30, 2018 and 2017.

⁽²⁾  The amount for the three months ended June 30, 2018 was less than $1 million.

⁽³⁾  The earnings effect of the Fee Forward Contracts on fee revenues for the three and six months ended June 30, 2018 and 2017 was less than $1 million.

⁽⁴⁾  Amounts for the three and six months ended June 30, 2017 were less than $1 million.

⁽⁵⁾  These amounts are related to the dedesignation of interest rate swaps in 2016 that no longer met the criteria for hedge accounting and were settled in 2017 and the interest rate swap that was settled in May 2018. The amounts were reclassified to interest expense from accumulated other comprehensive loss as the underlying transactions occurred.

19

Note 8: Fair Value Measurements

We did not elect the fair value measurement option for any of our financial assets or liabilities. The fair values of certain financial instruments and the hierarchy level we used to estimate the fair values are shown below, see Note 7: "Derivative Instruments and Hedging Activities" for the fair value information of our derivative instruments:

	June 30, 2018
			Hierarchy Level
	Carrying Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Cash equivalents	$	109	$	—	$	109	$	—
Restricted cash equivalents	15		—		15		—
Liabilities:
Long-term debt(1)	7,329		3,895		—		3,419

	December 31, 2017
			Hierarchy Level
	Carrying Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Cash equivalents	$	284	$	—	$	284	$	—
Restricted cash equivalents	12		—		12		—
Liabilities:
Long-term debt(1)	6,348		2,575		—		3,954

____________

⁽¹⁾ The carrying values include unamortized deferred financing costs and discount. The carrying values and fair values exclude capital lease obligations and other debt.

The fair values of financial instruments not included in these tables are estimated to be equal to their carrying values as of June 30, 2018 and December 31, 2017. Our estimates of the fair values were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop the estimated fair values.

Cash equivalents and restricted cash equivalents primarily consisted of short-term interest-bearing money market funds with maturities of less than 90 days and time deposits. The estimated fair values were based on available market pricing information of similar financial instruments.

The estimated fair values of our Level 1 long-term debt were based on prices in active debt markets. The estimated fair values of our Level 3 long-term debt were based on indicative quotes received for similar issuances.

Note 9: Income Taxes

On December 22, 2017, the TCJ Act, which permanently reduces the federal corporate income tax rate from a graduated 35 percent to a flat 21 percent rate and imposes a one-time transition tax on earnings of foreign subsidiaries that were previously deferred, was signed into law. As of June 30, 2018, we had not completed our accounting for the tax effects of enactment of the TCJ Act; however, where possible, as described below, we made a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax. In other cases, we were not able to make a reasonable estimate and continued to account for those items based on the provisions of the tax laws that were in effect immediately prior to enactment. For the items for which we were able to determine a reasonable estimate, we recognized a provisional benefit at December 31, 2017 of $665 million, of which $517 million was the result of the remeasurement of U.S. deferred tax assets and other tax liabilities. The provisional benefit of $517 million recorded at December 31, 2017 on our existing deferred tax balances excludes the income tax impact of the adoption of ASU 2014-09. As of June 30, 2018, we made adjustments to the provisional amounts recorded at December 31, 2017, as described below.

20

Provisional Amounts

• Deferred tax assets and liabilities and other tax liabilities. We remeasured deferred tax assets and liabilities and other tax liabilities based on the rates at which they are expected to reverse in the future, which is generally 21 percent. The provisional amounts recorded at December 31, 2017 related to the remeasurement of our deferred tax assets and liabilities, uncertain tax position reserves, and other tax liabilities were income tax benefits of $517 million, $33 million and $84 million, respectively. However, this remeasurement was based on estimates as of the enactment date of the TCJ Act and our existing analysis of the numerous complex tax law changes in the TCJ Act. Upon refinement of our calculations during the three months ended June 30, 2018, we adjusted our provisional amount by recording an additional tax benefit of $8 million, which is included as a component of income tax expense. We will continue to analyze the tax law changes in the TCJ Act, including the impact on our 2017 tax return filing positions throughout the 2018 fiscal year, and update our provisional amounts related to the remeasurement of these balances.

• Foreign taxation changes. A one-time transition tax is applied to foreign earnings previously not subjected to U.S. tax. The one-time transition tax is based on our total post-1986 earnings and profits ("E&P") that were previously deferred from U.S. income taxes, but is assessed at a lower tax rate than the federal corporate tax rate of 35 percent. We recorded a provisional amount for our one-time transition tax liability for our foreign subsidiaries based on estimates, as of the enactment date of the TCJ Act, for our controlled foreign subsidiaries and estimates of the total post-1986 E&P for noncontrolled foreign subsidiaries. Additionally, the language in the TCJ Act is not specific enough to address all aspects of the calculation of the transition tax and leaves certain components of the calculation open to interpretation. The U.S. Treasury department is expected to issue regulations to provide clarification. We previously recorded a federal deferred tax liability for our deferred earnings at the statutory 35 percent rate. The application of the transition tax results in the deferred earnings previously recorded at 35 percent being subjected to a lower rate, resulting in a provisional income tax benefit at December 31, 2017 of $15 million. As a result of additional guidance issued by the U.S. Treasury department during the three months ended June 30, 2018, we refined our calculations and recorded an additional tax benefit of $3 million. Additionally, we had not recorded certain deferred tax assets, related primarily to E&P deficits, for some foreign subsidiaries based upon an expectation that no tax benefit from such assets would be realized within the foreseeable future. The recognition of tax benefits from the deferred tax assets previously not recorded resulted in a provisional income tax benefit at December 31, 2017 of $16 million. We will continue to update our provisional amounts related to the transition tax as the U.S. Treasury department provides further guidance.

We continue to analyze the impact of the TCJ Act on our recognition of deferred tax assets and liabilities for outside basis differences in our investments in foreign subsidiaries and due to the complexity of these calculations on both our U.S. and foreign tax positions and uncertainty regarding the impact of new taxes on certain foreign earnings, we have not recorded provisional amounts. As of June 30, 2018, we had not recorded any deferred tax assets or liabilities for outside basis differences in our investments in foreign subsidiaries. We will further analyze the impact of these new taxes on foreign earnings and their impact on our tax positions throughout fiscal year 2018 to allow us to complete the required accounting for our outside basis differences in our investments in foreign subsidiaries. We continued to apply existing accounting guidance based on the provisions of the tax laws that were in effect immediately prior to the TCJ Act being enacted.

Global Intangible Low-Taxed Income ("GILTI") and Foreign Derived Intangible Income ("FDII")

The TCJ Act subjects a U.S. shareholder to current tax on GILTI earned by certain foreign subsidiaries. In addition, the TCJ Act provides for FDII to be taxed at a lower effective rate than the statutory rate by allowing a tax deduction against the income. Interpretive guidance on the accounting for GILTI states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. Given the complexity of the GILTI provisions, we are still evaluating the effects of the GILTI provisions and have not yet determined our accounting policy. As of June 30, 2018, because we are still evaluating the GILTI provisions and our analysis of future taxable income that is subject to GILTI, we have included GILTI and the FDII deduction related to current-year operations only in our estimated annual effective tax rate and have not provided additional GILTI on deferred items.

At the end of each quarter, we estimate the effective income tax rate expected to be applied for the full year. The effective income tax rate is determined by the level and composition of pre-tax income or loss, which is subject to federal, state, local and foreign income taxes.

Our total unrecognized tax benefit as of June 30, 2018 was $285 million. We accrued approximately $36 million for the payment of interest and penalties as of June 30, 2018. Included in the balance of unrecognized tax benefits as of June 30, 2018 was $285 million associated with positions that, if favorably resolved, would provide a benefit to our effective income tax rate.

21

In April 2014, we received 30-day Letters from the Internal Revenue Service ("IRS") and the Revenue Agents Report ("RAR") for the 2006 and October 2007 tax years. We disagreed with several of the proposed adjustments in the RAR, filed a formal appeals protest with the IRS and did not make any tax payments related to this audit. The issues being protested in appeals relate to assertions by the IRS that: (i) certain foreign currency denominated intercompany loans from our foreign subsidiaries to certain U.S. subsidiaries should be recharacterized as equity for U.S. federal income tax purposes and constitute deemed dividends from such foreign subsidiaries to our U.S. subsidiaries; (ii) in calculating the amount of U.S. taxable income resulting from our Hilton Honors guest loyalty program, we should not reduce gross income by the estimated costs of future redemptions, but rather such costs would be deductible at the time the points are redeemed; and (iii) certain foreign currency denominated loans issued by one of our Luxembourg subsidiaries whose functional currency is the U.S. dollar ("USD"), should instead be treated as issued by one of our Belgian subsidiaries whose functional currency is the euro, and thus foreign currency gains and losses with respect to such loans should have been measured in euros, instead of USD. Additionally, in January 2016, we received a 30-day Letter from the IRS and the RAR for the December 2007 through 2010 tax years. The RAR includes the proposed adjustments for tax years December 2007 through 2010, which reflect the carryover effect of the three protested issues from 2006 through October 2007. These proposed adjustments will also be protested in appeals and formal appeals protests have been submitted. In total, the proposed adjustments sought by the IRS would result in additional U.S. federal tax owed of approximately$874 million, excluding interest and penalties and potential state income taxes. The portion of this amount related to Hilton Honorswould result in a decrease to our future tax liability when the points are redeemed. We disagree with the IRS's position on each of these assertions and intend to vigorously contest them. However, based on continuing appeals process discussions with the IRS, we believe that it is more likely than not that we will not recognize the full benefit related to certain of the issues being appealed. Accordingly, as of June 30, 2018, we have recorded $47 million of unrecognized tax benefits related to these issues.

We file income tax returns, including returns for our subsidiaries, with federal, state, local and foreign tax jurisdictions. We are under regular and recurring audit by the IRS and other taxing authorities on open tax positions. The timing of the resolution of tax audits is highly uncertain, as are the amounts, if any, that may ultimately be paid upon such resolution. Changes may result from the conclusion of ongoing audits, appeals or litigation in federal, state, local and foreign tax jurisdictions or from the resolution of various proceedings between the U.S. and foreign tax authorities. We are no longer subject to U.S. federal income tax examination for years through 2004. As of June 30, 2018, we remain subject to federal examinations from 2005 through 2016, state examinations from 2005 through 2016 and foreign examinations of our income tax returns for the years 1996 through 2017.

Note 10: Share-Based Compensation

We grant time-vesting restricted stock units and restricted stock (collectively, "RSUs"), nonqualified stock options ("options") and performance-vesting restricted stock units and restricted stock (collectively, "performance shares") to our employees and deferred share units ("DSUs") to members of our board of directors. We recognized share-based compensation expense of $40 million and $34 million during the three months ended June 30, 2018 and 2017, respectively, and $68 million and $59 million during the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018, unrecognized compensation costs for unvested awards was approximately $190 million, which are expected to be recognized over a weighted-average period of 1.9 years on a straight-line basis. As of June 30, 2018, there were 16.1 million shares of common stock available for future issuance under our 2017 Omnibus Incentive Plan, plus any shares subject to awards outstanding under our 2013 Omnibus Incentive Plan, which will become available for issuance under our 2017 Omnibus Incentive Plan if such outstanding awards expire or are terminated or are canceled or forfeited.

RSUs

During the six months ended June 30, 2018, we granted 0.9 million RSUs with a weighted average grant date fair value per share of $79.32, 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, 2018, we granted 0.6 million options with a weighted average exercise price per share of $79.36, which vest over three years from the date of grant in equal annual installments and terminate 10 years from the date of grant or earlier if the individual’s service terminates under certain circumstances.

22

The weighted average grant date fair value per share of the options granted during the six months ended June 30, 2018 was $23.72, which was determined using the Black-Scholes-Merton option-pricing model with the following assumptions:

Expected volatility(1)	27.91	%
Dividend yield(2)	0.74	%
Risk-free rate(3)	2.73	%
Expected term (in years)(4)	6.0

____________

⁽¹⁾  Estimated using historical movement of Hilton's stock price.

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

⁽³⁾  Based on the yields of U.S. Department of Treasury instruments with similar expected lives.

⁽⁴⁾  Estimated using the average of the vesting periods and the contractual term of the options.

As of June 30, 2018, 1.2 million options were exercisable.

Performance Shares

During the six months ended June 30, 2018, we granted 0.3 million performance shares with a weighted average grant date fair value per share of $79.36. The performance shares are settled at the end of the three-year performance period with 50 percent of the awards subject to achievement based on the Company's adjusted earnings before interest expense, a provision for income taxes and depreciation and amortization ("Adjusted EBITDA") compound annual growth rate ("CAGR") ("EBITDA CAGR") and the other 50 percent of the awards subject to achievement based on the Company’s free cash flow ("FCF") per share CAGR ("FCF CAGR"). We determined that the performance conditions for performance shares issued in 2018 and 2017 are probable of achievement and, as of June 30, 2018, we recognized compensation expense based on the following anticipated achievement percentages for these performance shares:

	EBITDA CAGR		FCF CAGR
2017 performance shares	200	%	200	%
2018 performance shares	150	%	150	%

23

Note 11: Stockholders' Equity and Accumulated Other Comprehensive Loss

The changes in the components of stockholders' equity were as follows:

	Equity Attributable to Hilton Stockholders
					Treasury Stock			Additional Paid-in Capital		Accumulated Deficit(1)			Accumulated Other Comprehensive Loss
	Common Stock															Noncontrolling Interests
	Shares		Amount															Total
	(in millions)
Balance as of December 31, 2017	317		$	3	$	(891	)	$	10,298	$	(6,981	)	$	(741	)	$	3	$	1,691
Share-based compensation	1		—		—			23		—			—			—		23
Repurchases of common stock	(20	)	—		(1,439		)	—		—			—			—		(1,439		)
Net income	—		—		—			—		378			—			2		380
Other comprehensive loss	—		—		—			—		—			(1		)	—		(1		)
Dividends	—		—		—			—		(94		)	—			—		(94		)
Balance as of June 30, 2018	298		$	3	$	(2,330	)	$	10,321	$	(6,697	)	$	(742	)	$	5	$	560

	Equity Attributable to Hilton Stockholders
					Treasury Stock			Additional Paid-in Capital		Accumulated Deficit(1)			Accumulated Other Comprehensive Loss
	Common Stock															Noncontrolling Interests
	Shares		Amount																Total
	(in millions)
Balance as of December 31, 2016	329		$	3	$	—		$	10,220	$	(3,545	)	$	(1,001	)	$	(50	)	$	5,627
Share-based compensation	2		—		—			24		—			—			—			24
Repurchases of common stock	(6	)	—		(352		)	—		—			—			—			(352		)
Net income	—		—		—			—		197			—			2			199
Other comprehensive income	—		—		—			—		—			70			—			70
Dividends	—		—		—			—		(99		)	—			—			(99		)
Spin-offs of Park and HGV	—		—		—			—		(4,318		)	63			49			(4,206		)
Cumulative effect of the adoption of ASU 2016-09	—		—		—			1		(1		)	—			—			—
Distributions	—		—		—			—		—			—			(1		)	(1		)
Balance as of June 30, 2017	325		$	3	$	(352	)	$	10,245	$	(7,766	)	$	(868	)	$	—		$	1,262

___________

⁽¹⁾  Includes adjustments of $385 million and $222 million to the balances as of December 31, 2017 and 2016, respectively, as a result of the adoption of ASU 2014-09 as of January 1, 2016. See Note 2: "Basis of Presentation and Summary of Significant Accounting Policies" for additional information.

During 2017, our board of directors authorized a stock repurchase program for up to $2.0 billion of the Company's common stock (the "program"), and, as of June 30, 2018, approximately $841 million remained available for share repurchases under the program. During the six months ended June 30, 2018, we repurchased 19.8 million shares of common stock, including 1.25 million shares that were repurchased pursuant to the program from affiliates of Blackstone, as part of their full divestiture of their investment in Hilton, as well as 16.5 million shares that were repurchased from HNA outside of the program, as part of their full divestiture of their investment in Hilton. See Note 1: "Organization" for additional information on the HNA share repurchase.

24

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

	Currency Translation Adjustment(1)			Pension Liability Adjustment(2)			Cash Flow Hedge Adjustment(3)		Total
	(in millions)
Balance as of December 31, 2017	$	(513	)	$	(229	)	$	1	$	(741	)
Other comprehensive income (loss) before reclassifications	(45		)	—			36		(9		)
Amounts reclassified from accumulated other comprehensive loss	—			3			5		8
Net current period other comprehensive income (loss)	(45		)	3			41		(1		)
Balance as of June 30, 2018	$	(558	)	$	(226	)	$	42	$	(742	)

	Currency Translation Adjustment(1)			Pension Liability Adjustment(2)			Cash Flow Hedge Adjustment(3)			Total
	(in millions)
Balance as of December 31, 2016	$	(738	)	$	(251	)	$	(12	)	$	(1,001	)
Other comprehensive income (loss) before reclassifications	73			—			(15		)	58
Amounts reclassified from accumulated other comprehensive loss	—			4			8			12
Net current period other comprehensive income (loss)	73			4			(7		)	70
Spin-offs of Park and HGV	63			—			—			63
Balance as of June 30, 2017	$	(602	)	$	(247	)	$	(19	)	$	(868	)

____________

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

⁽²⁾  Amounts reclassified include the amortization of prior service cost and the amortization of net gain (loss) that were included in our computation of net periodic pension cost. They were recognized in other non-operating income (loss), net in our condensed consolidated statements of operations and are presented net of a tax benefit of $1 million and $2 million for the six months ended June 30, 2018 and 2017, respectively.

⁽³⁾  Amounts reclassified relate to the designated interest rate swaps, as well as the interest rate swaps that were settled in 2017 and 2018. The amounts were recognized in interest expense in our condensed consolidated statements of operations and are presented net of a tax benefit of $2 million and $5 million for the six months ended June 30, 2018 and 2017, respectively. See Note 7: "Derivative Instruments and Hedging Activities" for additional information.

25

Note 12: Earnings Per Share

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
	(in millions, except per share amounts)
Basic EPS:
Numerator:
Net income attributable to Hilton stockholders	$	217	$	150	$	378	$	197
Denominator:
Weighted average shares outstanding	301		327		308		328
Basic EPS	$	0.72	$	0.46	$	1.22	$	0.60
Diluted EPS:
Numerator:
Net income attributable to Hilton stockholders	$	217	$	150	$	378	$	197
Denominator:
Weighted average shares outstanding	303		329		311		330
Diluted EPS	$	0.71	$	0.46	$	1.21	$	0.60

Less than 1 million share-based compensation awards were excluded from the weighted average shares outstanding in the computation of diluted EPS for the three and six months ended June 30, 2018 and 2017 because their effect would have been anti-dilutive under the treasury stock method.

Note 13: Business Segments

We are a hospitality company with operations organized in two distinct operating segments: (i) management and franchise; and (ii) ownership. These segments are managed and reported separately because of their distinct economic characteristics.

The management and franchise segment includes all of the hotels we manage for third-party owners, as well as all franchised hotels operated or managed by someone other than us. As of June 30, 2018, this segment included 662 managed hotels and 4,672 franchised hotels consisting of 849,265 total rooms. This segment also earns license fees from HGV and co-brand credit card arrangements, as well as fees for managing properties in our ownership segment.

As of June 30, 2018, the ownership segment included 71 properties totaling 21,717 rooms, comprising 62 hotels that we wholly owned or leased, one hotel owned by a consolidated non-wholly owned entity, two hotels leased by consolidated VIEs and six hotels owned or leased by unconsolidated affiliates.

The performance of our operating segments is evaluated primarily on operating income, without allocating corporate and other revenues and expenses or general and administrative expenses.

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
	(in millions)
Franchise fees	$	405		$	356		$	738		$	639
Base and other management fees(1)	101			95			191			185
Incentive management fees	59			57			114			106
Management and franchise	565			508			1,043			930
Ownership	392			373			726			669
Segment revenues	957			881			1,769			1,599
Amortization of contract acquisition costs	(7		)	(5		)	(14		)	(8		)
Other revenues	22			20			45			57
Direct reimbursements from managed and franchised properties	730			636			1,429			1,299
Indirect reimbursements from managed and franchised properties	600			554			1,155			1,042
Intersegment fees elimination(1)	(11		)	(10		)	(19		)	(17		)
Total revenues	$	2,291		$	2,076		$	4,365		$	3,972

____________

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

26

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
	(in millions)
Management and franchise(1)	$	565		$	508		$	1,043		$	930
Ownership(1)	29			36			35			57
Segment operating income	594			544			1,078			987
Amortization of contract acquisition costs	(7		)	(5		)	(14		)	(8		)
Other revenues, less other expenses	10			9			19			23
Net other revenues (expenses) from managed and franchised properties	3			(23		)	(18		)	(68		)
Depreciation and amortization	(79		)	(83		)	(161		)	(169		)
General and administrative	(115		)	(118		)	(219		)	(224		)
Operating income	406			324			685			541
Interest expense	(95		)	(86		)	(178		)	(175		)
Gain (loss) on foreign currency transactions	(12		)	5			(1		)	1
Loss on debt extinguishment	—			—			—			(60		)
Other non-operating income (loss), net	(1		)	7			13			9
Income before income taxes	$	298		$	250		$	519		$	316

____________

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

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

	June 30,		December 31,
	2018		2017
	(in millions)
Management and franchise	$	11,366	$	11,505
Ownership	954		964
Corporate and other	1,666		1,759
	$	13,986	$	14,228

The following table presents capital expenditures for property and equipment for our reportable segments, reconciled to consolidated amounts:

	Six Months Ended
	June 30,
	2018		2017
	(in millions)
Ownership	$	19	$	10
Corporate and other	9		8
	$	28	$	18

Note 14: Commitments and Contingencies

We provide performance guarantees to certain owners of hotels that we operate under management contracts. Most of these guarantees allow us to terminate the contract, rather than fund shortfalls, if specified operating performance levels are not achieved. However, in limited cases, we are obligated to fund performance shortfalls. We may enter into new contracts containing performance guarantees in the future, which could increase our possible cash outlays. As of June 30, 2018, we had four operating contracts containing performance guarantees, with expirations ranging from 2019 to 2030, and possible cash outlays totaling approximately $45 million. Our obligations under these guarantees in future periods are dependent on the operating performance levels of these hotels over the remaining terms of the performance guarantees. We do not have any letters of credit pledged as collateral against these guarantees. As of June 30, 2018 and December 31, 2017, we recorded $11 million and $12 million, respectively, in accounts payable, accrued expenses and other and $5 million and $9 million,

27

respectively, in other liabilities in our condensed consolidated balance sheets for one and two outstanding performance guarantees, respectively, that are related to VIEs for which we are not the primary beneficiary.

We receive fees from managed and franchised properties to operate our marketing, sales and brand programs on behalf of hotel and resort owners. As of June 30, 2018 and December 31, 2017, we had collected an aggregate of $414 million and $402 million in excess of amounts expended, respectively, across all programs.

We are involved in various claims and lawsuits arising in the ordinary course of business, some of which include claims for substantial sums. While the ultimate results of claims and litigation cannot be predicted with certainty, we expect that the ultimate resolution of all pending or threatened claims and litigation as of June 30, 2018 will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Note 15: Condensed Consolidating Guarantor Financial Information

In April 2018, Hilton Domestic Operating Company Inc. ("HOC"), which is 100 percent owned by Hilton Worldwide Finance LLC, issued the 2026 Senior Notes. In March 2017, Hilton Worldwide Finance LLC and Hilton Worldwide Finance Corp. (the "HWF Issuers"), entities that are 100 percent owned by Hilton Worldwide Parent LLC ("HWP"), which is 100 percent owned by the Parent, issued the 2025 Senior Notes and 2027 Senior Notes. In September 2016, HOC assumed the 2024 Senior Notes that were issued in August 2016 by escrow issuers. The HWF Issuers are guarantors of the 2026 Senior Notes and the 2024 Senior Notes. HOC is a guarantor of the 2025 Senior Notes and the 2027 Senior Notes. The 2024 Senior Notes, 2025 Senior Notes, 2026 Senior Notes and 2027 Senior Notes are collectively referred to as the Senior Notes. The HWF Issuers and HOC are collectively referred to as the Subsidiary Issuers.

The Senior Notes are guaranteed jointly and severally on a senior unsecured basis by HWP, the Parent and certain of the Parent's 100 percent owned domestic restricted subsidiaries that are themselves not issuers of the applicable series of Senior Notes (together, the "Guarantors''). The indentures that govern the Senior Notes provide that any subsidiary of the Company that provides a guarantee of our senior secured credit facility will guarantee the Senior Notes. As of June 30, 2018, none of our foreign subsidiaries or U.S. subsidiaries owned by foreign subsidiaries or conducting foreign operations or our non-wholly owned subsidiaries guarantee the Senior Notes (collectively, the "Non-Guarantors").

The condensed consolidating financial information presents the financial information for all periods based on the composition of the Guarantors and Non-Guarantors as of June 30, 2018.

The guarantees are full and unconditional, subject to certain customary release provisions. The indentures that govern the Senior Notes provide that any Guarantor may be released from its guarantee so long as: (i) the subsidiary is sold or sells all of its assets; (ii) the subsidiary is released from its guaranty under our senior secured credit facility; (iii) the subsidiary is declared "unrestricted" for covenant purposes; (iv) the subsidiary is merged with or into the applicable Subsidiary Issuers or another Guarantor or the Guarantor liquidates after transferring all of its assets to the applicable Subsidiary Issuers or another Guarantor; or (v) the requirements for legal defeasance or covenant defeasance or to discharge the indenture have been satisfied, in each case in compliance with applicable provisions of the indentures.

The following tables present the condensed consolidating financial information as of June 30, 2018 and December 31, 2017, and for the three and six months ended June 30, 2018 and 2017, for the Parent, HWF Issuers, HOC, Guarantors and Non-Guarantors.

28

	June 30, 2018
	Parent		HWF Issuers		HOC		Guarantors		Non-Guarantors		Eliminations			Total
	(in millions)
ASSETS
Current Assets:
Cash and cash equivalents	$	—	$	—	$	3	$	14	$	406	$	—		$	423
Restricted cash and cash equivalents	—		—		34		16		32		—			82
Accounts receivable, net	—		—		21		734		287		(1		)	1,041
Intercompany receivables	—		—		—		—		40		(40		)	—
Prepaid expenses	—		—		16		49		88		(2		)	151
Income taxes receivable	—		—		—		32		—		(21		)	11
Other	—		2		1		21		112		—			136
Total current assets	—		2		75		866		965		(64		)	1,844
Intangibles and Other Assets:
Investments in subsidiaries	553		5,397		8,095		553		—		(14,598		)	—
Goodwill	—		—		—		3,824		1,350		—			5,174
Brands	—		—		—		4,405		473		—			4,878
Management and franchise contracts, net	—		—		—		587		306		—			893
Other intangible assets, net	—		—		—		281		138		—			419
Property and equipment, net	—		—		21		65		265		—			351
Deferred income tax assets	5		—		102		—		111		(107		)	111
Other	—		49		31		65		171		—			316
Total intangibles and other assets	558		5,446		8,249		9,780		2,814		(14,705		)	12,142
TOTAL ASSETS	$	558	$	5,448	$	8,324	$	10,646	$	3,779	$	(14,769	)	$	13,986
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other	$	3	$	20	$	170	$	548	$	573	$	(2	)	$	1,312
Current portion of deferred revenues	—		—		37		261		11		(1		)	308
Intercompany payables	—		—		40		—		—		(40		)	—
Current maturities of long-term debt	—		—		—		—		11		—			11
Income taxes payable	—		—		—		—		43		(21		)	22
Current portion of liability for guest loyalty program	—		—		—		725		—		—			725
Total current liabilities	3		20		247		1,534		638		(64		)	2,378
Long-term debt	—		4,865		2,464		—		235		—			7,564
Deferred revenues	—		—		1		757		61		—			819
Deferred income tax liabilities	—		10		—		1,000		5		(107		)	908
Liability for guest loyalty program	—		—		—		876		—		—			876
Other	—		—		215		64		602		—			881
Total liabilities	3		4,895		2,927		4,231		1,541		(171		)	13,426
Equity:
Total Hilton stockholders' equity	555		553		5,397		6,415		2,233		(14,598		)	555
Noncontrolling interests	—		—		—		—		5		—			5
Total equity	555		553		5,397		6,415		2,238		(14,598		)	560
TOTAL LIABILITIES AND EQUITY	$	558	$	5,448	$	8,324	$	10,646	$	3,779	$	(14,769	)	$	13,986

29

	December 31, 2017
	Parent		HWF Issuers		HOC		Guarantors		Non-Guarantors		Eliminations			Total
	(in millions)
ASSETS
Current Assets:
Cash and cash equivalents	$	—	$	—	$	2	$	18	$	550	$	—		$	570
Restricted cash and cash equivalents	—		—		61		10		29		—			100
Accounts receivable, net	—		—		18		712		275		—			1,005
Intercompany receivables	—		—		—		—		40		(40		)	—
Prepaid expenses	—		—		25		24		84		(6		)	127
Income taxes receivable	—		—		—		60		—		(24		)	36
Other	—		—		1		13		155		—			169
Total current assets	—		—		107		837		1,133		(70		)	2,007
Intangibles and Other Assets:
Investments in subsidiaries	1,697		7,067		8,326		1,697		—		(18,787		)	—
Goodwill	—		—		—		3,824		1,366		—			5,190
Brands	—		—		—		4,405		485		—			4,890
Management and franchise contracts, net	—		—		2		645		306		—			953
Other intangible assets, net	—		—		1		283		149		—			433
Property and equipment, net	—		—		20		67		266		—			353
Deferred income tax assets	6		—		104		—		127		(126		)	111
Other	—		20		32		67		172		—			291
Total intangibles and other assets	1,703		7,087		8,485		10,988		2,871		(18,913		)	12,221
TOTAL ASSETS	$	1,703	$	7,087	$	8,592	$	11,825	$	4,004	$	(18,983	)	$	14,228
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other	$	15	$	20	$	184	$	576	$	624	$	(3	)	$	1,416
Current portion of deferred revenues	—		—		90		266		13		(3		)	366
Intercompany payables	—		—		40		—		—		(40		)	—
Current maturities of long-term debt	—		32		—		—		14		—			46
Income taxes payable	—		—		—		—		36		(24		)	12
Current portion of liability for guest loyalty program	—		—		—		622		—		—			622
Total current liabilities	15		52		314		1,464		687		(70		)	2,462
Long-term debt	—		5,333		983		—		240		—			6,556
Deferred revenues	—		—		—		770		59		—			829
Deferred income tax liabilities	—		5		—		1,052		—		(126		)	931
Liability for guest loyalty program	—		—		—		839		—		—			839
Other	—		—		228		64		628		—			920
Total liabilities	15		5,390		1,525		4,189		1,614		(196		)	12,537
Equity:
Total Hilton stockholders' equity	1,688		1,697		7,067		7,636		2,387		(18,787		)	1,688
Noncontrolling interests	—		—		—		—		3		—			3
Total equity	1,688		1,697		7,067		7,636		2,390		(18,787		)	1,691
TOTAL LIABILITIES AND EQUITY	$	1,703	$	7,087	$	8,592	$	11,825	$	4,004	$	(18,983	)	$	14,228

30

	Three Months Ended June 30, 2018
	Parent		HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Revenues
Franchise fees	$	—	$	—		$	50		$	322		$	36		$	(4	)	$	404
Base and other management fees	—		—			1			55			28			—			84
Incentive management fees	—		—			—			22			37			—			59
Owned and leased hotels	—		—			—			—			392			—			392
Other revenues	—		—			1			17			3			1			22
	—		—			52			416			496			(3		)	961
Other revenues from managed and franchised properties	—		—			62			1,110			158			—			1,330
Total revenues	—		—			114			1,526			654			(3		)	2,291
Expenses
Owned and leased hotels	—		—			—			—			352			—			352
Depreciation and amortization	—		—			2			58			19			—			79
General and administrative	—		—			83			—			32			—			115
Other expenses	—		—			2			8			6			(4		)	12
	—		—			87			66			409			(4		)	558
Other expenses from managed and franchised properties	—		—			62			1,114			151			—			1,327
Total expenses	—		—			149			1,180			560			(4		)	1,885
Operating income (loss)	—		—			(35		)	346			94			1			406
Interest expense	—		(57		)	(31		)	—			(9		)	2			(95		)
Gain (loss) on foreign currency transactions	—		—			6			(89		)	71			—			(12		)
Other non-operating income (loss), net	—		(7		)	1			4			4			(3		)	(1		)
Income (loss) before income taxes and equity in earnings from subsidiaries	—		(64		)	(59		)	261			160			—			298
Income tax benefit (expense)	—		16			14			(61		)	(50		)	—			(81		)
Income (loss) before equity in earnings from subsidiaries	—		(48		)	(45		)	200			110			—			217
Equity in earnings from subsidiaries	217		265			310			217			—			(1,009		)	—
Net income	217		217			265			417			110			(1,009		)	217
Net income attributable to noncontrolling interests	—		—			—			—			—			—			—
Net income attributable to Hilton stockholders	$	217	$	217		$	265		$	417		$	110		$	(1,009	)	$	217
Comprehensive income	$	155	$	227		$	266		$	416		$	38		$	(947	)	$	155
Comprehensive income attributable to noncontrolling interests	—		—			—			—			—			—			—
Comprehensive income attributable to Hilton stockholders	$	155	$	227		$	266		$	416		$	38		$	(947	)	$	155

31

	Three Months Ended June 30, 2017
	Parent		HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Revenues
Franchise fees	$	—	$	—		$	49		$	282		$	29		$	(5	)	$	355
Base and other management fees	—		—			—			52			29			—			81
Incentive management fees	—		—			—			21			36			—			57
Owned and leased hotels	—		—			—			—			373			—			373
Other revenues	—		—			2			16			2			—			20
	—		—			51			371			469			(5		)	886
Other revenues from managed and franchised properties	—		—			44			1,001			145			—			1,190
Total revenues	—		—			95			1,372			614			(5		)	2,076
Expenses
Owned and leased hotels	—		—			—			—			327			—			327
Depreciation and amortization	—		—			2			59			22			—			83
General and administrative	—		—			92			—			28			(2		)	118
Other expenses	—		—			3			7			4			(3		)	11
	—		—			97			66			381			(5		)	539
Other expenses from managed and franchised properties	—		—			45			1,006			162			—			1,213
Total expenses	—		—			142			1,072			543			(5		)	1,752
Operating income (loss)	—		—			(47		)	300			71			—			324
Interest expense	—		(60		)	(14		)	—			(12		)	—			(86		)
Gain (loss) on foreign currency transactions	—		—			2			53			(50		)	—			5
Other non-operating income, net	—		—			2			3			2			—			7
Income (loss) before income taxes and equity in earnings from subsidiaries	—		(60		)	(57		)	356			11			—			250
Income tax benefit (expense)	—		23			19			(138		)	(3		)	—			(99		)
Income (loss) before equity in earnings from subsidiaries	—		(37		)	(38		)	218			8			—			151
Equity in earnings from subsidiaries	150		187			225			150			—			(712		)	—
Net income	150		150			187			368			8			(712		)	151
Net income attributable to noncontrolling interests	—		—			—			—			(1		)	—			(1		)
Net income attributable to Hilton stockholders	$	150	$	150		$	187		$	368		$	7		$	(712	)	$	150
Comprehensive income	$	200	$	145		$	186		$	369		$	64		$	(762	)	$	202
Comprehensive income attributable to noncontrolling interests	—		—			—			—			(2		)	—			(2		)
Comprehensive income attributable to Hilton stockholders	$	200	$	145		$	186		$	369		$	62		$	(762	)	$	200

32

	Six Months Ended June 30, 2018
	Parent		HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Revenues
Franchise fees	$	—	$	—		$	94		$	584		$	65		$	(8	)	$	735
Base and other management fees	—		—			1			106			54			—			161
Incentive management fees	—		—			—			43			71			—			114
Owned and leased hotels	—		—			—			—			726			—			726
Other revenues	—		—			3			41			5			(4		)	45
	—		—			98			774			921			(12		)	1,781
Other revenues from managed and franchised properties	—		—			106			2,180			298			—			2,584
Total revenues	—		—			204			2,954			1,219			(12		)	4,365
Expenses
Owned and leased hotels	—		—			—			—			672			—			672
Depreciation and amortization	—		—			3			118			40			—			161
General and administrative	—		—			156			—			67			(4		)	219
Other expenses	—		—			4			15			15			(8		)	26
	—		—			163			133			794			(12		)	1,078
Other expenses from managed and franchised properties	—		—			108			2,198			296			—			2,602
Total expenses	—		—			271			2,331			1,090			(12		)	3,680
Operating income (loss)	—		—			(67		)	623			129			—			685
Interest expense	—		(118		)	(44		)	—			(19		)	3			(178		)
Gain (loss) on foreign currency transactions	—		—			3			(81		)	77			—			(1		)
Other non-operating income (loss), net	—		(7		)	4			12			7			(3		)	13
Income (loss) before income taxes and equity in earnings from subsidiaries	—		(125		)	(104		)	554			194			—			519
Income tax benefit (expense)	—		31			27			(134		)	(63		)	—			(139		)
Income (loss) before equity in earnings from subsidiaries	—		(94		)	(77		)	420			131			—			380
Equity in earnings from subsidiaries	378		472			549			378			—			(1,777		)	—
Net income	378		378			472			798			131			(1,777		)	380
Net income attributable to noncontrolling interests	—		—			—						(2		)	—			(2		)
Net income attributable to Hilton stockholders	$	378	$	378		$	472		$	798		$	129		$	(1,777	)	$	378
Comprehensive income	$	377	$	417		$	473		$	798		$	90		$	(1,776	)	$	379
Comprehensive income attributable to noncontrolling interests	—		—			—			—			(2		)	—			(2		)
Comprehensive income attributable to Hilton stockholders	$	377	$	417		$	473		$	798		$	88		$	(1,776	)	$	377

33

	Six Months Ended June 30, 2017
	Parent		HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Revenues
Franchise fees	$	—	$	—		$	68		$	526		$	52		$	(9	)	$	637
Base and other management fees	—		—			—			101			61			—			162
Incentive management fees	—		—			—			41			65			—			106
Owned and leased hotels	—		—			—			—			669			—			669
Other revenues	—		—			22			29			6			—			57
	—		—			90			697			853			(9		)	1,631
Other revenues from managed and franchised properties	—		—			85			1,982			274			—			2,341
Total revenues	—		—			175			2,679			1,127			(9		)	3,972
Expenses
Owned and leased hotels	—		—			—			—			595			—			595
Depreciation and amortization	—		—			3			121			45			—			169
General and administrative	—		—			171			2			53			(2		)	224
Other expenses	—		—			15			14			12			(7		)	34
	—		—			189			137			705			(9		)	1,022
Other expenses from managed and franchised properties	—		—			87			2,032			290			—			2,409
Total expenses	—		—			276			2,169			995			(9		)	3,431
Operating income (loss)	—		—			(101		)	510			132			—			541
Interest expense	—		(123		)	(30		)	—			(22		)	—			(175		)
Gain (loss) on foreign currency transactions	—		—			13			74			(86		)	—			1
Loss on debt extinguishment	—		(60		)	—			—			—			—			(60		)
Other non-operating income (loss), net	—		(3		)	3			4			5			—			9
Income (loss) before income taxes and equity in earnings from subsidiaries	—		(186		)	(115		)	588			29			—			316
Income tax benefit (expense)	—		73			43			(225		)	(8		)	—			(117		)
Income (loss) before equity in earnings from subsidiaries	—		(113		)	(72		)	363			21			—			199
Equity in earnings from subsidiaries	197		310			382			197			—			(1,086		)	—
Net income	197		197			310			560			21			(1,086		)	199
Net income attributable to noncontrolling interests	—		—			—			—			(2		)	—			(2		)
Net income attributable to Hilton stockholders	$	197	$	197		$	310		$	560		$	19		$	(1,086	)	$	197
Comprehensive income	$	267	$	190		$	313		$	561		$	94		$	(1,156	)	$	269
Comprehensive income attributable to noncontrolling interests	—		—			—			—			(2		)	—			(2		)
Comprehensive income attributable to Hilton stockholders	$	267	$	190		$	313		$	561		$	92		$	(1,156	)	$	267

34

	Six Months Ended June 30, 2018
	Parent			HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations		Total
	(in millions)
Operating Activities:
Net cash provided by (used in) operating activities	$	—		$	(102	)	$	(8	)	$	494		$	148		$	—	$	532
Investing Activities:
Capital expenditures for property and equipment	—			—			(4		)	(1		)	(23		)	—		(28		)
Capitalized software costs	—			—			—			(38		)	—			—		(38		)
Other	—			—			—			(3		)	(6		)	—		(9		)
Net cash used in investing activities	—			—			(4		)	(42		)	(29		)	—		(75		)
Financing Activities:
Borrowings	—			150			1,500			—			—			—		1,650
Repayment of debt	—			(660		)	—			—			(12		)	—		(672		)
Debt issuance costs	—			—			(21		)	—			—			—		(21		)
Intercompany transfers	1,531			612			(1,451		)	(450		)	(242		)	—		—
Dividends paid	(92		)	—			—			—			—			—		(92		)
Repurchases of common stock	(1,439		)	—			—			—			—			—		(1,439		)
Tax withholdings on share-based compensation	—			—			(42		)	—			—			—		(42		)
Net cash provided by (used in) financing activities	—			102			(14		)	(450		)	(254		)	—		(616		)
Effect of exchange rate changes on cash, restricted cash and cash equivalents	—			—			—			—			(6		)	—		(6		)
Net increase (decrease) in cash, restricted cash and cash equivalents	—			—			(26		)	2			(141		)	—		(165		)
Cash, restricted cash and cash equivalents, beginning of period	—			—			63			28			579			—		670
Cash, restricted cash and cash equivalents, end of period	$	—		$	—		$	37		$	30		$	438		$	—	$	505

35

	Six Months Ended June 30, 2017
	Parent			HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Operating Activities:
Net cash provided by (used in) operating activities	$	—		$	(69	)	$	(58	)	$	378		$	93		$	—		$	344
Investing Activities:
Capital expenditures for property and equipment	—			—			(3		)	(3		)	(12		)	—			(18		)
Capitalized software costs	—			—			—			(29		)	—			—			(29		)
Other	—			(13		)	—			(5		)	3			(3		)	(18		)
Net cash used in investing activities	—			(13		)	(3		)	(37		)	(9		)	(3		)	(65		)
Financing Activities:
Borrowings	—			1,823			—			—			—			—			1,823
Repayment of debt	—			(1,832		)	—			—			(4		)	—			(1,836		)
Debt issuance costs and redemption premium	—			(68		)	—			—			—			—			(68		)
Repayment of intercompany borrowings	—			—			(3		)	—			—			3			—
Intercompany transfers	450			159			92			(351		)	(350		)	—			—
Dividends paid	(98		)	—			—			—			—			—			(98		)
Cash transferred in spin-offs of Park and HGV	—			—			—			—			(501		)	—			(501		)
Repurchases of common stock	(352		)	—			—			—			—			—			(352		)
Distributions to noncontrolling interests	—			—			—			—			(1		)	—			(1		)
Tax withholdings on share-based compensation	—			—			(28		)	—			—			—			(28		)
Net cash provided by (used in) financing activities	—			82			61			(351		)	(856		)	3			(1,061		)
Effect of exchange rate changes on cash, restricted cash and cash equivalents	—			—			—			—			7			—			7
Net decrease in cash, restricted cash and cash equivalents	—			—			—			(10		)	(765		)	—			(775		)
Cash, restricted cash and cash equivalents from continuing operations, beginning of period	—			—			90			31			1,062			—			1,183
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period	—			—			—			—			501			—			501
Cash, restricted cash and cash equivalents, beginning of period	—			—			90			31			1,563			—			1,684
Cash, restricted cash and cash equivalents, end of period	$	—		$	—		$	90		$	21		$	798		$	—		$	909

36

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. As previously discussed, we adopted the requirements of ASU 2014-09 as of January 1, 2016 using the full retrospective approach; refer to Note 2: "Basis of Presentation and Summary of Significant Accounting Policies" in our unaudited condensed consolidated financial statements for additional information. All amounts and disclosures set forth in this Quarterly Report on Form 10-Q reflect this adoption.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources and other non-historical statements. In some cases, you can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "could," "seeks," "projects," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties including, among others, risks inherent to the hospitality industry, macroeconomic factors beyond our control, competition for hotel guests and management and franchise contracts, risks related to doing business with third-party hotel owners, performance of our information technology systems, growth of reservation channels outside of our system, risks of doing business outside of the U.S. and our indebtedness. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described under "Part I—Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Quarterly Report on Form 10-Q. 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.

Overview

Our Business

Hilton isone of the largest and fastest growing hospitality companies in the world, with 5,456 properties comprising 879,349 rooms in 106 countries and territories as of June 30, 2018. Our premier brand portfolio includes: our luxury and lifestyle hotel brands, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts and Canopy by Hilton; our full service hotel brands, Hilton Hotels & Resorts, Curio - A Collection by Hilton, DoubleTree by Hilton, Tapestry Collection by Hilton and Embassy Suites by Hilton; our focused service hotel brands, Hilton Garden Inn, Hampton by Hilton, Tru by Hilton, Homewood Suites by Hilton and Home2 Suites by Hilton; and our timeshare brand, Hilton Grand Vacations. As of June 30, 2018, we had approximately 78 million members in our award-winning guest loyalty program, Hilton Honors,a 20 percent increase from June 30, 2017.

Segments and Regions

Management analyzes our operations and business by both operating segments and geographic regions. Our operations consist of two reportable segments that are based on similar products or services: (i) management and franchise; and (ii) ownership. The management and franchise segment provides services, including hotel management and licensing of our brands. This segment generates its revenue from: (i) management and franchise fees charged to third-party hotel owners; (ii) license fees for the exclusive right to use certain Hilton marks and IP; and (iii) fees for managing our owned and leased hotels. As a manager of hotels, we typically are responsible for supervising or operating the property in exchange for management fees. As a franchisor of hotels, we charge franchise fees in exchange for the use of one of our brand names and related commercial services, such as our reservation system, marketing and information technology services. The ownership segment primarily derives earnings from providing hotel room rentals, food and beverage sales and other services at our owned and leased hotels.

Geographically, management conducts business through three distinct geographic regions: (i) the Americas; (ii) Europe, Middle East and Africa ("EMEA"); and (iii) Asia Pacific. The Americas region includes North America, South America and Central America, including all Caribbean nations. Although the U.S. is included in the Americas, it represented 74 percent of our system-wide hotel rooms as of June 30, 2018; therefore, the U.S. is often analyzed separately and apart from the Americas

37

geographic region overall and, as such, it is presented separately within the analysis herein. 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 the analysis herein. The Asia Pacific region includes the eastern and southeastern nations of Asia, as well as India, Australia, New Zealand and the Pacific island nations.

System Growth and Pipeline

Our strategic priorities include the continued expansion of our global network and fee-based business. As we enter into new management and franchise contracts, we expand our business with minimal or no capital investment by us as the manager or franchisor, since the capital required to build and maintain hotels is typically provided by the third-party owner of the hotel with whom we contract to provide management or franchise services. Prior to approving the addition of new properties to our management and franchise development pipeline, we evaluate the economic viability of the property based on its geographic location, the credit quality of the third-party owner and other factors. By increasing the number of management and franchise contracts with third-party owners, we expect to increase overall return on invested capital and cash available for return to stockholders.

As of June 30, 2018, we had a total of 2,373 hotels in our development pipeline that we expect to add as open hotels in our system, representing 362,000 rooms under construction or approved for development throughout 105 countries and territories, including 38 countries and territories where we do not currently have any open hotels. All of the rooms in the pipeline are within our management and franchise segment. Additionally, 194,000 rooms in the pipeline, or more than half, were located outside the U.S., and 186,000 rooms, or more than half, were under construction. We do not consider any individual development project to be material to us.

Key Business and Financial Metrics Used by Management

Comparable Hotels

We define our comparable hotels as those that: (i) were active and operating in our system for at least one full calendar year as of the end of the current period, and open January 1st of the previous year; (ii) have not undergone a change in brand or ownership type during the current or comparable periods reported, excluding the hotels distributed in the spin-offs; and (iii) have not sustained substantial property damage, business interruption, undergone large-scale capital projects or for which comparable results are not available. Of the 5,405 hotels in our system as of June 30, 2018, 4,306 hotels have been classified as comparable hotels. Our 1,099 non-comparable hotels included 194 hotels, or approximately four percent of the total hotels in our system, that were removed from the comparable group during the last twelve months because they sustained substantial property damage, business interruption, underwent large-scale capital projects or comparable results were not available.

Occupancy

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. Occupancy measures the utilization of our hotels' available capacity. Management uses occupancy to gauge demand at a specific hotel or group of hotels in a given period. Occupancy levels also help us determine achievable average daily rate pricing levels as demand for hotel rooms increases or decreases.

Average Daily Rate ("ADR")

ADR represents hotel room revenue divided by total number of room nights sold for a given period. ADR measures average room price attained by a hotel, and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in the industry, and we use ADR to assess pricing levels that we are able to generate by type of customer, as changes in rates have a different effect on overall revenues and incremental profitability than changes in occupancy, as described above.

Revenue per Available Room ("RevPAR")

RevPAR is calculated by dividing hotel room revenue by total number of room nights available to guests for a given period. We consider RevPAR to be a meaningful indicator of our performance as it provides a metric correlated to two primary and key drivers of operations at a hotel or group of hotels: occupancy and ADR. RevPAR is also a useful indicator in measuring performance over comparable periods for comparable hotels.

38

References to RevPAR, ADR and occupancy are presented on a comparable basis and references to RevPAR and ADR 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, 2018 and 2017 use the exchange rates for the three and six months ended June 30, 2018.

EBITDA and Adjusted EBITDA

EBITDA reflects net income (loss), excluding interest expense, a provision for income taxes and depreciation and amortization.

Adjusted EBITDA is calculated as EBITDA, as previously defined, further adjusted to exclude certain items, including gains, losses, revenues and expenses in connection with: (i) asset dispositions for both consolidated and unconsolidated investments; (ii) foreign currency transactions; (iii) debt restructurings and retirements; (iv) furniture, fixtures and equipment ("FF&E") replacement reserves required under certain lease agreements; (v) reorganization costs; (vi) share-based compensation expense; (vii) non-cash impairment losses; (viii) severance, relocation and other expenses; (ix) amortization of contract acquisition costs; (x) the net effect of reimbursable costs included in other revenues and expenses from managed and franchised properties; and (xi) other items.

During the first quarter of 2018, we modified the definition of Adjusted EBITDA to exclude the amortization of contract acquisition costs and the net effect of reimbursable costs included in other revenues and expenses from managed and franchised properties. We believe that excluding these items is useful for the reasons set forth below and have applied the modified definition of Adjusted EBITDA to all prior periods.

We believe that EBITDA and Adjusted EBITDA provide useful information to investors about us and our financial condition and results of operations for the following reasons: (i) these measures are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions; and (ii) these measures are frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in our industry. Additionally, these measures exclude certain items that can vary widely across different industries and among competitors within our industry. For instance, interest expense and the provision for income taxes are dependent on company specifics, including, among other things, capital structure and operating jurisdictions, respectively, and, therefore could vary significantly across companies. Depreciation and amortization, as well as amortization of contract acquisition costs, are dependent upon company policies, including the method of acquiring and depreciating assets and the useful lives that are used. For Adjusted EBITDA, we also exclude items such as: (i) FF&E replacement reserves to be consistent with the treatment of FF&E for owned and leased hotels where it is capitalized and depreciated over the life of the FF&E; (ii) share-based compensation expense, as this could vary widely among companies due to the different plans in place and the usage of them; (iii) the net effect of our reimbursable revenues and related expenses, as we contractually do not operate the related programs to generate a profit over the terms of the respective agreements; and (iv) other items that are not core to our operations and are not reflective of our performance.

EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be considered as alternatives to net income (loss) or other measures of financial performance or liquidity derived in accordance with GAAP. EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered as alternatives, either in isolation or as a substitute, for net income (loss), cash flow or other methods of analyzing our results as reported under GAAP. Some of these limitations are:

• EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

• EBITDA and Adjusted EBITDA do not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;

• EBITDA and Adjusted EBITDA do not reflect a provision for income taxes or the cash requirements to pay our taxes;

• EBITDA and Adjusted EBITDA do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;

• EBITDA and Adjusted EBITDA do not reflect the effect on earnings or changes resulting from matters that we consider not to be indicative of our future operations;

39

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; and

• other companies in our industry may calculate EBITDA and Adjusted EBITDA differently, limiting their usefulness as comparative measures.

Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as discretionary cash available to us to reinvest in the growth of our business or as measures of cash that will be available to us to meet our obligations.

Results of Operations

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

	Three Months Ended			Variance			Six Months Ended			Variance
	June 30, 2018			2018 vs. 2017			June 30, 2018			2018 vs. 2017
U.S.
Occupancy	80.9		%	0.9	%	pts.	76.7		%	1.0	%	pts.
ADR	$	152.49		2.3	%		$	149.76		1.8	%
RevPAR	$	123.38		3.5	%		$	114.89		3.2	%
Americas (excluding U.S.)
Occupancy	73.4		%	1.1	%	pts.	70.5		%	1.9	%	pts.
ADR	$	128.52		5.0	%		$	129.99		4.1	%
RevPAR	$	94.37		6.5	%		$	91.66		7.0	%
Europe
Occupancy	79.0		%	2.0	%	pts.	74.6		%	2.9	%	pts.
ADR	$	157.62		3.7	%		$	148.97		2.5	%
RevPAR	$	124.46		6.3	%		$	111.11		6.7	%
MEA
Occupancy	69.1		%	3.6	%	pts.	71.5		%	4.4	%	pts.
ADR	$	155.52		(5.3	)%		$	156.20		(3.6	)%
RevPAR	$	107.49		(0.1	)%		$	111.73		2.7	%
Asia Pacific
Occupancy	72.6		%	3.8	%	pts.	71.4		%	4.6	%	pts.
ADR	$	133.55		1.7	%		$	137.13		2.0	%
RevPAR	$	96.93		7.3	%		$	97.88		9.1	%
System-wide
Occupancy	79.5		%	1.3	%	pts.	75.7		%	1.6	%	pts.
ADR	$	150.76		2.3	%		$	148.14		1.8	%
RevPAR	$	119.89		4.0	%		$	112.20		3.9	%

During the three and six months ended June 30, 2018, we experienced system-wide RevPAR growth, particularly attributable to the Americas, Europe and Asia Pacific regions. In the Americas, increases in RevPAR were largely driven by positive performance related to group travel in both periods, as well as leisure travel during the six months ended June 30, 2018. Strength in Europe was driven by performance in Turkey as it continues to recover from geopolitical and economic turmoil. Growth in Asia Pacific was primarily attributable to increased occupancy in China resulting from new hotels maturing in the system. RevPAR was relatively flat in MEA during the three months ended June 30, 2018 as compared to 2017, due to soft demand in certain local markets in the region.

40

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018		2017
	(in millions)
Net income	$	217		$	151		$	380	$	199
Interest expense	95			86			178		175
Income tax expense	81			99			139		117
Depreciation and amortization	79			83			161		169
EBITDA	472			419			858		660
Loss (gain) on foreign currency transactions	12			(5		)	1		(1		)
Loss on debt extinguishment	—			—			—		60
FF&E replacement reserves	15			15			27		21
Share-based compensation expense	40			34			68		59
Amortization of contract acquisition costs	7			5			14		8
Net other expenses (revenues) from managed and franchised properties	(3		)	23			18		68
Other adjustment items(1)	12			13			14		39
Adjusted EBITDA	$	555		$	504		$	1,000	$	914

____________

⁽¹⁾  Includes adjustments for severance, transaction costs and other items.

Revenues

	Three Months Ended				Percent	Six Months Ended				Percent
	June 30,				Change	June 30,				Change
	2018		2017		2018 vs. 2017	2018		2017		2018 vs. 2017
	(in millions)					(in millions)
Franchise fees	$	404	$	355	13.8	$	735	$	637	15.4
Base and other management fees	$	84	$	81	3.7	$	161	$	162	(0.6)
Incentive management fees	59		57		3.5	114		106		7.5
Total management fees	$	143	$	138	3.6	$	275	$	268	2.6

Theincreasesin management and franchise fees during the three and six months ended June 30, 2018 were driven by increases in RevPAR at our comparable managed hotels of 5.0 percent and 5.2 percent, respectively, and at our franchised hotels of 3.5 percent and 3.4 percent, respectively. The increases in RevPAR resulted from increases in both ADR and occupancy across all periods.

The addition of new managed and franchised properties to our portfolio also increased management and franchise fees in all periods. Including new development and ownership type transfers, from January 1, 2017 to June 30, 2018, we added 600 managed and franchised properties on a net basis, providing an additional 110,541 rooms to our managed and franchised segment. As new hotels stabilize in our system, we expect the fees received from such hotels to increase as they are part of our system for full periods.

Additionally, franchise fees increased during the three and six months ended June 30, 2018 as a result of increases in franchise sales and license and other fees. The increase in base and other management fees for the six months ended June 30, 2018 was offset by termination fees that were recognized during the six months ended June 30, 2017.

41

	Three Months Ended				Percent	Six Months Ended				Percent
	June 30,				Change	June 30,				Change
	2018		2017		2018 vs. 2017	2018		2017		2018 vs. 2017
	(in millions)					(in millions)
Owned and leased hotels	$	392	$	373	5.1	$	726	$	669	8.5

Owned and leased hotel revenuesincreasedduring the three and six months ended June 30, 2018 primarily as a result of favorable foreign currency exchange rates, which increased revenues by $16 million and $45 million, respectively. On a currency neutral basis, owned and leased hotel revenues increased $3 million and $12 million, respectively, primarily as a resultof increases atour comparable owned and leased hotels of $9 million and $22 million, respectively, due toincreasesin RevPAR of 4.5 percent and 5.1 percent, respectively. The increases in RevPAR resulted fromincreases in both occupancy and ADR. Additionally, owned and leased hotel revenues decreasedat our non-comparable owned and leased hotels due to decreases in revenues from hotels that underwent renovations in 2018 and properties that were disposed of between January 1, 2017 and June 30, 2018, only partially offset by the increase in revenues from a property that opened in June 2017.

	Three Months Ended				Percent	Six Months Ended				Percent
	June 30,				Change	June 30,				Change
	2018		2017		2018 vs. 2017	2018		2017		2018 vs. 2017
	(in millions)					(in millions)
Other revenues	$	22	$	20	10.0	$	45	$	57	(21.1)

Other revenues decreased during the six months ended June 30, 2018 primarily as a result of a recovery from the settlement of a claim by Hilton to a third party relating to our defined benefit plans during the six months ended June 30, 2017. The decrease was partially offset by an increase in revenues from our purchasing operations.

Operating Expenses

	Three Months Ended				Percent	Six Months Ended				Percent
	June 30,				Change	June 30,				Change
	2018		2017		2018 vs. 2017	2018		2017		2018 vs. 2017
	(in millions)					(in millions)
Owned and leased hotels	$	352	$	327	7.6	$	672	$	595	12.9

During the three andsix months ended June 30, 2018, owned and leased hotel expenses increased primarily as a result of the effect of foreign currency exchange rate changes of $15 million and $42 million, respectively. On a currency neutral basis, owned and leased hotel expenses increased $10 million and $35 million, respectively, primarily due to increased variable operating costs at ourcomparable owned and leased hotels resulting fromincreased occupancy in both periods.Owned and leased hotel expenses at our non-comparable owned and leased hotels remained relatively consistent during the three months ended June 30, 2018 and increased $4 million during the six months ended June 30, 2018, which was attributable to a refund of rent related to a lease termination that was recognized in 2017. Properties that underwent renovations in 2018 and properties that opened or were disposed of between January 1, 2017 and June 30, 2018 had no net effect on owned and leased hotel expenses.

	Three Months Ended				Percent	Six Months Ended				Percent
	June 30,				Change	June 30,				Change
	2018		2017		2018 vs. 2017	2018		2017		2018 vs. 2017
	(in millions)					(in millions)
Depreciation and amortization	$	79	$	83	(4.8)	$	161	$	169	(4.7)
General and administrative	115		118		(2.5)	219		224		(2.2)
Other expenses	12		11		9.1	26		34		(23.5)

The decreases in depreciation and amortization expense during the three and six months ended June 30, 2018were primarily a result of decreases in amortization expense due to certain capitalized software costs being fully amortized between June 30, 2017 and June 30, 2018.

The decreases in general and administrative expenses during the three and six months ended June 30, 2018 were primarily a result of decreases of $1 million and $6 million, respectively, in severance costs related to the 2015 sale of the Waldorf

42

Astoria New York, as well as decreases of $5 million and $15 million, respectively, in costs associated with the spin-offs. These decreases were partially offset by increases in payroll and compensation costs, including share-based compensation.

Other expenses decreased during the six months ended June 30, 2018 primarily as a result of costs relating to the settlement of the claim relating to our defined benefit plans that were recognized during the six months ended June 30, 2017.

Non-operating Income and Expenses

	Three Months Ended						Percent	Six Months Ended						Percent
	June 30,						Change	June 30,						Change
	2018			2017			2018 vs. 2017	2018			2017			2018 vs. 2017
	(in millions)							(in millions)
Interest expense	$	(95	)	$	(86	)	10.5	$	(178	)	$	(175	)	1.7
Gain (loss) on foreign currency transactions	(12		)	5			NM(1)	(1		)	1			NM(1)
Loss on debt extinguishment	—			—			NM(1)	—			(60		)	NM(1)
Other non-operating income (loss), net	(1		)	7			NM(1)	13			9			44.4
Income tax expense	(81		)	(99		)	(18.2)	(139		)	(117		)	18.8

____________

⁽¹⁾  Fluctuation in terms of percentage change is not meaningful.

The increase in interest expense during the three and six months ended June 30, 2018 was primarily attributable to the issuance of the 2026 Senior Notes in April 2018 and, for the six months ended June 30, 2018, also from the issuances of the 2025 and 2027 Senior Notes in March 2017. The increase during the six months ended June 30, 2018 was largely offset by the decrease in interest expense due to the repayment of the 2021 Senior Notes. See Note 6: "Debt" in our unaudited condensed consolidated financial statements for additional information.

The gains and losses on foreign currency transactions primarily related to changes in foreign currency exchange rates on our short-term cross-currency intercompany loans for all periods. For the three and six months ended June 30, 2018 and 2017, the changes were predominantly for loans denominated in the British pound and euro and, for the six months ended June 30, 2018 and 2017, also for loans denominated in the Australian dollar.

The loss on debt extinguishment related to the repayment of the 2021 Senior Notes and included a redemption premium of $42 million and the accelerated recognition of $18 million of unamortized debt issuance costs during the six months ended June 30, 2017.

The change in other non-operating income (loss), net during the three months ended June 30, 2018 was attributable to the accelerated recognition of $5 million of unamortized debt issuance costs and discount for the repayment on the Term Loans and fees incurred to amend the Term Loans. The increase in other non-operating income (loss), net for the six months ended was attributable to a $6 million gain on the refinancing of a loan that financed the construction of a hotel that we manage and a reduction in fees incurred relating to the amendments of our Term Loans in 2018 and 2017, partially offset by the accelerated recognition of unamortized deferred issuance costs and discount.

During the three months ended June 30, 2018, income tax expense decreased primarily due to the benefit recorded to adjust a provisional amount related to the TCJ Act, as well as the decrease in the annual effective rate as a result of the TCJ Act, partially offset by the increase in income before income taxes. The increase in income tax expense during the six months ended June 30, 2018 was primarily attributable to the increase in income before income taxes, partially offset by the decrease in the annual effective tax rate. See Note 9: "Income Taxes" in our unaudited condensed consolidated financial statements for additional information.

43

Segment Results

We evaluate our business segment operating performance using operating income. Refer to Note 13: "Business Segments" in our unaudited condensed consolidated financial statements for a reconciliation of segment operating income to income before income taxes and additional information on the evaluation of the performance of our segments using operating income. The following table sets forth revenues and operating income by segment:

	Three Months Ended						Percent	Six Months Ended						Percent
	June 30,						Change	June 30,						Change
	2018			2017			2018 vs. 2017	2018			2017			2018 vs. 2017
	(in millions)							(in millions)
Revenues:
Management and franchise(1)	$	565		$	508		11.2	$	1,043		$	930		12.2
Ownership	392			373			5.1	726			669			8.5
Segment revenues	957			881			8.6	1,769			1,599			10.6
Amortization of contract acquisition costs	(7		)	(5		)	40.0	(14		)	(8		)	75.0
Other revenues	22			20			10.0	45			57			(21.1)
Other revenues from managed and franchised properties	1,330			1,190			11.8	2,584			2,341			10.4
Intersegment fees elimination(1)	(11		)	(10		)	10.0	(19		)	(17		)	11.8
Total revenues	$	2,291		$	2,076		10.4	$	4,365		$	3,972		9.9
Operating Income(1):
Management and franchise	$	565		$	508		11.2	$	1,043		$	930		12.2
Ownership	29			36			(19.4)	35			57			(38.6)
Segment operating income	$	594		$	544		9.2	$	1,078		$	987		9.2

____________

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

Management and franchise segment revenues and operating income increased $57 million and $113 million during the three and six months ended June 30, 2018, respectively, as a result of increases in RevPAR at our comparable managed and franchised properties of 3.9 percent for both periods, the net addition of managed and franchised hotels to our system and increases in franchise sales and license and other fees. Refer to "—Revenues" for further discussion of the increases in revenues from our managed and franchised properties.

Ownership segment revenues increased $19 million and $57 million during the three and six months ended June 30, 2018, respectively, as a result of increases in hotel revenues, which were primarily attributable to favorable foreign currency exchange rates and increases in revenue at our comparable owned and leased hotels due to increases in RevPAR. Ownership operating income decreased $7 million and $22 million during the three and six months ended June 30, 2018, respectively, as a result of the increases in operating expenses at owned and leased hotels, only partially offset by increases in segment revenues. Refer to "—Revenues" and "—Operating Expenses" for further discussion of the changes in revenues and operating expenses at our owned and leased hotels.

Liquidity and Capital Resources

Overview

As of June 30, 2018, we had total cash and cash equivalents of $505 million, including $82 million of restricted cash and cash equivalents. The majority of our restricted cash and cash equivalents balance related to cash collateral on our self-insurance programs.

Our known short-term liquidity requirements primarily consist of funds necessary to pay for operating and other expenditures, including costs associated with the management and franchising of hotels, corporate expenses, payroll and related benefits, taxes and compliance costs, interest payments on our outstanding indebtedness, contract acquisition costs and capital expenditures for renovations and maintenance at the hotels within our ownership segment. Our long-term liquidity requirements primarily consist of funds necessary to pay for scheduled debt maturities, capital improvements to the hotels

44

within our ownership segment, commitments to owners in our management and franchise segment, dividends as declared, share repurchases and corporate capital and information technology expenditures.

We finance our business activities primarily with existing cash and cash generated from our operations. We believe that this cash will be adequate to meet anticipated requirements for operating and other expenditures, including corporate expenses, payroll and related benefits, taxes and compliance costs and other commitments for the foreseeable future. The objectives of our cash management policy are to maintain the availability of liquidity and minimize operational costs. Further, we have an 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.

We and our affiliates may from time to time purchase our outstanding debt through open market purchases, privately negotiated transactions or otherwise. Purchases or retirement of debt, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

During the six months ended June 30, 2018, we repurchased 19.8 million shares of our common stock for $1,439 million, which we funded with borrowings and available cash. See Note 6: "Debt" and Note 11: "Stockholders' Equity and Accumulated Other Comprehensive Loss" in our unaudited condensed consolidated financial statements for additional information.

Sources and Uses of Our Cash and Cash Equivalents

The following table summarizes our net cash flows:

	Six Months Ended June 30,						Percent Change
	2018			2017			2018 vs. 2017
	(in millions)
Net cash provided by operating activities	$	532		$	344		54.7
Net cash used in investing activities	(75		)	(65		)	15.4
Net cash used in financing activities	(616		)	(1,061		)	(41.9)

Operating Activities

Cash flows from operating activities were primarily generated from management and franchise fee revenue and operating income from our owned and leased hotels.

The $188 millionincrease in net cash provided by operating activities was primarily a result of improved operating results in our management and franchise business, as well as decreases in net cash paid for income taxes and cash paid for interest of $88 million and $9 million, respectively. These increases were partially offset by an increase in contract acquisition costs.

Investing Activities

For the six months ended June 30, 2018 and 2017, net cash used in investing activities consisted primarily of capital expenditures for property and equipment and capitalized software costs. Our capital expenditures for property and equipment primarily consisted of expenditures related to the renovation of hotels in our ownership segment and our corporate facilities. Our capitalized software costs related to various systems initiatives, both for the benefit of our hotel owners and our overall corporate operations.

Financing Activities

The $445 milliondecrease in net cash used in financing activities was primarily attributable to the transfer of cash in connection with the spin-offs during the six months ended June 30, 2017 and the issuance of the $1.5 billion 2026 Senior Notes during the six months ended June 30, 2018. These decreases were partially offset by the $500 million repayment of the Term Loans, as well as $1.5 billion of capital returned to our stockholders, which includes dividends and share repurchases, during the six months ended June 30, 2018 compared to $450 million of capital returned during the six months ended June 30, 2017.

Debt and Borrowing Capacity

As of June 30, 2018, our total indebtedness, excluding unamortized deferred financing costs and discount, was approximately $7.7 billion. For additional information on our total indebtedness, debt issuances and repayments, availability

45

under our Revolving Credit Facility and guarantees on our debt, refer to Note 6: "Debt" and Note 15: "Condensed Consolidating Guarantor Financial Information" in our unaudited condensed consolidated financial statements.

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, issue additional equity securities or draw on our Revolving Credit Facility. 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.

Contractual Obligations

Other than the issuance of the 2026 Senior Notes and the repayment of the Term Loans as described above, 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, 2017.

Off-Balance Sheet Arrangements

See Note 14: "Commitments and Contingencies" in our unaudited condensed consolidated financial statements for a discussion of our off-balance sheet arrangements.

Critical Accounting Policies and Estimates

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 policies and estimates that we believe are critical and require the use of complex judgment in their application in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. Since the date of our Annual Report on Form 10-K, we adopted ASU 2014-09, which has changed our critical accounting policies and estimates related to Hilton Honors. See Note 2: "Basis of Presentation and Summary of Significant Accounting Policies" in our unaudited condensed consolidated financial statements for additional information.

Hilton Honors

Hilton Honors records a point redemption liability for amounts received from participating hotels and program partners in an amount equal to the estimated cost per point of the future redemption obligation. We engage outside actuaries to assist in determining the fair value of the future award redemption obligation using statistical formulas that project future point redemptions based on factors that require judgment, including an estimate of "breakage" (points that will never be redeemed), an estimate of the points that will eventually be redeemed and the cost of the points to be redeemed. The cost of the points to be redeemed includes further estimates of available room nights, occupancy rates, room rates and any devaluation or appreciation of points based on changes in reward prices or changes in points earned per stay. Any amounts received from participating hotels and program partners in excess of the actuarial determined cost per point are recorded as deferred revenues and recognized as revenue upon point redemption.

In addition to the Hilton Honors fees we receive from hotel owners to operate the program, we earn fees from co-brand credit card arrangements for the use of our IP license and the issuance of Hilton Honors points. The allocation of the overall fees from the co-brand credit card arrangements between the IP license and the Hilton Honors points is based on their estimated standalone selling prices. The estimated standalone selling price of the IP license is determined using a relief-from-royalty method using statistical formulas based on factors that require significant judgment, including estimates of credit card usage, an appropriate royalty rate and a discount rate to be applied to the projected cash flows. The estimated standalone selling price of the future reward redemptions under the co-brand credit card arrangements is calculated using a discounted cash flow analysis with the same assumptions related to the point redemption liability as discussed above, adjusted for an appropriate margin.

As of June 30, 2018, we had a guest loyalty program liability of $1,601 million, including $725 million reflected as a current liability, and deferred revenues of $509 million, including $205 million reflected as a current liability. Changes in the estimates used in developing our breakage rate or other expected future program operations could result in material changes to our guest loyalty program liability and deferred revenues.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk primarily from changes in interest rates and foreign currency exchange rates, which may affect future income, cash flows and the fair value of the Company, depending on changes to interest rates or foreign currency

46

exchange rates. In certain situations, we may seek to reduce cash flow volatility associated with changes in interest rates and foreign currency exchange rates by entering into financial arrangements intended to provide a hedge against a portion of the risks associated with such volatility. We continue to have exposure to such risks to the extent that they are not hedged. We enter into derivative financial arrangements to the extent they meet the objectives described above and we do not use derivatives for trading or speculative purposes. See Note 7: "Derivative Instruments and Hedging Activities" in our unaudited condensed consolidated financial statements for additional information. Our exposure to market risk has not materially changed from what we previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

Item 4.    Controls and Procedures

Disclosure Controls and Procedures

The Company maintains a set of disclosure controls and procedures as that term is defined in Rules 13a-15(e) and

15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission ("SEC") rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. The design of any disclosure controls and procedures is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. In accordance with Rule 13a-15(b) of the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this Quarterly Report on Form 10-Q, were effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control

There has been no change in the Company’s internal control over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

47

PART II. OTHER INFORMATION

Item 1.     Legal Proceedings

We are involved in various claims and lawsuits arising in the ordinary course of business, some of which include claims for substantial sums, including proceedings involving tort and other general liability claims, employee claims, consumer protection claims and claims related to our management of certain hotel properties. We recognize a liability when we believe the loss is probable and can be reasonably estimated. Most occurrences involving liability, claims of negligence and employees are covered by insurance with solvent insurance carriers. The ultimate results of claims and litigation cannot be predicted with certainty. We believe we have adequate reserves against such matters. We currently believe that the ultimate outcome of such lawsuits and proceedings will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position, results of operations or cash flows. However, depending on the amount and timing, an unfavorable resolution of some or all of these matters could materially affect our future results of operations in a particular period.

Item 1A.     Risk Factors

As of June 30, 2018, there have been no material changes from the risk factors previously disclosed in response to "Part I —Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds

(a) Unregistered Sales of Securities

None.

(b) Use of Proceeds

None.

(c) Issuer Purchases of Equity Securities

The following table sets forth information regarding our purchases of shares of our common stock during the three months ended June 30, 2018:

	Total Number of Shares Purchased	Average Price Paid per Share(1)		Total Number of Shares Purchased as Part of Publicly Announced Program(2)(3)	Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program(2) (in millions)
April 1, 2018 to April 30, 2018	16,570,000	$	71.03	70,000	$	994
May 1, 2018 to May 31, 2018	1,568,700	80.33		1,568,700	868
June 1, 2018 to June 30, 2018	325,300	81.82		325,300	841
Total	18,464,000	72.01		1,964,000

____________

⁽¹⁾  This price includes per share commissions paid.

⁽²⁾  During 2017, our board of directors authorized a publicly announced stock repurchase program for up to $2.0 billion of the Company's common stock. Under the program, the Company is authorized to repurchase shares through open market purchases, privately-negotiated transactions or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act. The repurchase program does not have an expiration date and may be suspended or discontinued at any time.

⁽³⁾  The number of shares repurchased from April 1, 2018 to April 30, 2018 as reflected in this column excludes the 16,500,000 shares repurchased from HNA, since this repurchase was not made under the publicly announced stock repurchase program.

Item 3.     Defaults Upon Senior Securities

None.

Item 4.     Mine Safety Disclosures

Not applicable.

48

Item 5.     Other Information

Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, which added Section 13(r) of the Exchange Act, we hereby incorporate by reference herein Exhibit 99.1 of this report.

Item 6.     Exhibits

Exhibit Number	Exhibit Description
3.1	Certificate of Incorporation of Hilton Worldwide Holdings Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-36243) filed on December 17, 2013).
3.2	Certificate of Amendment to Certificate of Incorporation of Hilton Worldwide Holdings Inc. effective as of January 3, 2017 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K (File No. 001-36243) filed on January 4, 2017).
3.3	Amended and Restated By-Laws of Hilton Worldwide Holdings Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K (File No. 001-36243) filed on November 17, 2017).
4.1	Indenture, dated as of April 13, 2018, by and among Hilton Domestic Operating Company Inc., the guarantors from time to time party thereto and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K (File No. 001-36243) filed on April 13, 2018).
4.2	Form of 5.125% Senior Notes Due 2026 (included in Exhibit 4.1).
4.3	Registration Rights Agreement, dated as of April 13, 2018, by and among Hilton Domestic Operating Company Inc., the guarantors from time to time party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated, on behalf of the initial purchasers (incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K (File No. 001-36243) filed on April 13, 2018).
10.1	Master Amendment and Option Agreement, dated as of April 9, 2018, between Hilton Worldwide Holdings Inc., HNA Tourism Group Co., Ltd., and HNA HLT Holdco I LLC (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No. 001-36243) filed on April 9, 2018).
10.2	Amendment No. 4, dated as of April 19, 2018, to the Credit Agreement, dated as of October 25, 2013 (as amended by Amendment No. 1 to the Credit Agreement dated as of August  18, 2016, as further amended by Amendment No. 2 to the Credit Agreement dated as of November 21, 2016 and as further amended by that certain Amendment No. 3 to the Credit Agreement dated as of March  16, 2017), by and among Hilton Worldwide Holdings Inc., Hilton Worldwide Parent LLC, Hilton Worldwide Finance LLC, the other guarantors party thereto from time to time, Deutsche Bank AG New York Branch as administrative agent, collateral agent, swing line lender and L/C issuer and the other lenders party thereto from time to time (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-36243) filed on April 19, 2018).
12	Computation of Ratio of Earnings to Fixed Charges.
31.1	Certificate of Christopher J. Nassetta, President and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certificate of Kevin J. Jacobs, Executive Vice President and Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certificate of Christopher J. Nassetta, President and Chief Executive Officer, pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2	Certificate of Kevin J. Jacobs, Executive Vice President and Chief Financial Officer, pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
99.1	Section 13(r) Disclosure.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

49

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

HILTON WORLDWIDE HOLDINGS INC.
By:	/s/ Christopher J. Nassetta
Name:	Christopher J. Nassetta
	President and Chief Executive Officer
By:	/s/ Kevin J. Jacobs
Name:	Kevin J. Jacobs
	Executive Vice President and Chief Financial Officer

Date: July 25, 2018

50

EX-12

Exhibit 12

HILTON WORLDWIDE HOLDINGS INC.

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(in millions, except ratio amounts)

(unaudited)

	Six Months Ended
	June 30,
	2018			2017
Earnings:
Income before income taxes	$	519		$	316
Equity in earnings from unconsolidated affiliates	—			(1		)
	519			315
Add:
Fixed charges	233			229
Distributed income of equity method investees	4			3
Subtract:
Interest capitalized	(1		)	—
Earnings available for fixed charges	$	755		$	547
Fixed Charges:
Interest expense(1)	$	178		$	175
Interest capitalized	1			—
Estimated interest included in rent expense	54			54
Total Fixed Charges	$	233		$	229
Ratio of Earnings to Fixed Charges	3.2			2.4

____________

⁽¹⁾    Includes the amortization of debt discount and capitalized expenses related to indebtedness.

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Christopher J. Nassetta, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018 of Hilton Worldwide Holdings Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By:	/s/ Christopher J. Nassetta
	Christopher J. Nassetta
	President and Chief Executive Officer
	(Principal Executive Officer)
	July 25, 2018

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Kevin J. Jacobs, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018 of Hilton Worldwide Holdings Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By:	/s/ Kevin J. Jacobs
	Kevin J. Jacobs
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)
	July 25, 2018

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY

ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Hilton Worldwide Holdings Inc. (the "Company") for the fiscal quarter ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Christopher J. Nassetta, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Christopher J. Nassetta
	Christopher J. Nassetta
	President and Chief Executive Officer
	(Principal Executive Officer)

July 25, 2018

A signed original of this certification required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY

ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Hilton Worldwide Holdings Inc. (the "Company") for the fiscal quarter ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Kevin J. Jacobs, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Kevin J. Jacobs
	Kevin J. Jacobs
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

July 25, 2018

A signed original of this certification required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-99.1

Exhibit 99.1

SECTION 13(r) DISCLOSURE

During the reporting period, Iranian government officials purchased a number of room nights at the Hilton Colombo, Sri Lanka, which is managed by an affiliate of Hilton Worldwide Holdings Inc. ("Hilton"). The hotel received approximately $6,600 for these stays and net profit to Hilton was approximately $400. Hilton believes that the hotel stays were exempt from the Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560, pursuant to the International Emergency Economic Powers Act ("IEEPA"). The Hilton Colombo may engage in future similar transactions to the extent they remain permissible under IEEPA.

XML

Document and Entity Information Document - shares	6 Months Ended
	Jun. 30, 2018	Jul. 19, 2018
Entity Information [Line Items]
Entity Registrant Name	Hilton Worldwide Holdings Inc.
Entity Central Index Key	0001585689
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Amendment Flag	false
Trading Symbol	hlt
Entity Common Stock, Shares Outstanding		298,186,104

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Current Assets:
Cash and cash equivalents	$ 423	$ 570
Restricted cash and cash equivalents	82	100
Accounts receivable, net of allowance for doubtful accounts	1,041	1,005
Prepaid expenses	151	127
Income taxes receivable	11	36
Other	136	169
Total current assets	1,844	2,007
Intangibles and Other Assets:
Goodwill	5,174	5,190
Brands	4,878	4,890
Management and franchise contracts, net	893	953
Other intangible assets, net	419	433
Property and equipment, net	351	353
Deferred income tax assets	111	111
Other	316	291
Total intangibles and other assets	12,142	12,221
Total assets	13,986	14,228
Current Liabilities:
Accounts payable, accrued expenses and other	1,312	1,416
Current portion of deferred revenues	308	366
Current maturities of long-term debt	11	46
Income taxes payable	22	12
Current portion of liability for guest loyalty program	725	622
Total current liabilities	2,378	2,462
Long-term debt	7,564	6,556
Deferred revenues	819	829
Deferred income tax liabilities	908	931
Liability for guest loyalty program	876	839
Other	881	920
Total liabilities	13,426	12,537
Commitments and contingencies - see Note 14
Equity:
Preferred Stock	0	0
Common stock	3	3
Treasury stock, at cost	(2,330)	(891)
Additional paid-in capital	10,321	10,298
Accumulated deficit	(6,697)	(6,981)
Accumulated other comprehensive loss	(742)	(741)
Total Hilton stockholders' equity	555	1,688
Noncontrolling interests	5	3
Total equity	560	1,691
Total liabilities and equity	$ 13,986	$ 14,228

XML

Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Allowance for doubtful accounts	$ 38	$ 29
Variable interest entities - current assets	92	93
Variable interest entities - non-current assets	176	171
Variable interest entities - current liabilities	49	58
Variable interest entities - total liabilities	$ 261	$ 271
Preferred stock, par value (per share)	$ 0.01	$ 0.01
Preferred stock, authorized shares	3,000,000,000	3,000,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value (per share)	$ 0.01	$ 0.01
Common stock, authorized shares	10,000,000,000	10,000,000,000
Common stock, issued shares	331,911,793	331,054,014
Common stock, outstanding shares	298,487,855	317,420,933
Treasury stock, shares	33,423,938	13,633,081

XML

Condensed Consolidated Statements of Operations - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues
Franchise fees	$ 404	$ 355	$ 735	$ 637
Base and other management fees	84	81	161	162
Incentive management fees	59	57	114	106
Owned and leased hotels	392	373	726	669
Other revenues	22	20	45	57
Total revenues excluding reimburseable revenues	961	886	1,781	1,631
Other revenues from managed and franchised properties	1,330	1,190	2,584	2,341
Total revenues	2,291	2,076	4,365	3,972
Expenses
Owned and leased hotels	352	327	672	595
Depreciation and amortization	79	83	161	169
General and administrative	115	118	219	224
Other expenses	12	11	26	34
Total expenses excluding reimbursable expenses	558	539	1,078	1,022
Other expenses from managed and franchised properties	1,327	1,213	2,602	2,409
Total expenses	1,885	1,752	3,680	3,431
Operating income	406	324	685	541
Interest expense	(95)	(86)	(178)	(175)
Gain (loss) on foreign currency transactions	(12)	5	(1)	1
Loss on debt extinguishment	0	0	0	(60)
Other non-operating income (loss), net	(1)	7	13	9
Income before income taxes	298	250	519	316
Income tax expense	(81)	(99)	(139)	(117)
Net income	217	151	380	199
Net income attributable to noncontrolling interests	0	(1)	(2)	(2)
Net Income attributable to Hilton Stockholders	$ 217	$ 150	$ 378	$ 197
Earnings per share, basic
Net income per share	$ 0.72	$ 0.46	$ 1.22	$ 0.60
Earnings per share, diluted
Net income per share	0.71	0.46	1.21	0.60
Cash dividends declared per share	$ 0.15	$ 0.15	$ 0.30	$ 0.30

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income	$ 217	$ 151	$ 380	$ 199
Other comprehensive income (loss), net of tax:
Currency translation adjustment	(77)	53	(45)	73
Pension liability adjustment	2	3	3	4
Cash flow hedge adjustment	13	(5)	41	(7)
Total other comprehensive income (loss)	(62)	51	(1)	70
Comprehensive income	155	202	379	269
Comprehensive income attributable to noncontrolling interests	0	(2)	(2)	(2)
Comprehensive income attributable to Hilton stockholders	$ 155	$ 200	$ 377	$ 267

XML

Condensed Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement of Comprehensive Income [Abstract]
Currency translation adjustment, tax	$ 0	$ 0	$ 1	$ 1
Pension liability adjustment, tax	(1)	0	(1)	(1)
Cash flow hedge adjustment, tax	$ (4)	$ 2	$ (14)	$ 4

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Operating Activities:
Net income	$ 380	$ 199
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	161	169
Amortization of contract acquisition costs	14	8
Loss (gain) on foreign currency transactions	1	(1)
Loss on debt extinguishment	0	60
Share-based compensation	68	59
Deferred income taxes	(39)	(123)
Contract acquisition costs	(38)	(32)
Working capital changes and other	(15)	5
Net cash provided by operating activities	532	344
Investing Activities:
Capital expenditures for property and equipment	(28)	(18)
Capitalized software costs	(38)	(29)
Other	(9)	(18)
Net cash used in investing activities	(75)	(65)
Financing Activities:
Borrowings	1,650	1,823
Repayment of debt	(672)	(1,836)
Debt issuance costs and redemption premium	(21)	(68)
Dividends paid	(92)	(98)
Cash transferred in spin-offs of Park and HGV	0	(501)
Repurchases of common stock	(1,439)	(352)
Distributions to noncontrolling interests	0	(1)
Tax withholdings on share-based compensation	(42)	(28)
Net cash used in financing activities	(616)	(1,061)
Effect of exchange rate changes on cash, restricted cash and cash equivalents	(6)	7
Net decrease in cash, restricted cash and cash equivalents	(165)	(775)
Cash, restricted cash and cash equivalents from continuing operations, beginning of period	670	1,183
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period	0	501
Cash, restricted cash and cash equivalents, beginning of period	670	1,684
Cash, restricted cash and cash equivalents, end of period	505	909
Supplemental Disclosures:
Interest	149	158
Income taxes, net of refunds	149	237
Non-cash spin-offs of Park and HGV (financing activities)	$ 0	$ 17

XML

Basis of Presentation and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements for the three and six months ended June 30, 2018 and 2017 have been prepared in accordance with United States of America ("U.S.") generally accepted accounting principles ("GAAP") and are unaudited. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP. Although we believe the disclosures made are adequate to prevent the information presented from being misleading, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and, accordingly, ultimate results could differ from those estimates. Additionally, interim results are not necessarily indicative of full year performance. In our opinion, the accompanying condensed consolidated financial statements reflect all adjustments, including normal recurring items, considered necessary for a fair presentation of the interim periods. All material intercompany transactions have been eliminated in consolidation.

On January 1, 2018, we adopted the requirements of Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09") using the full retrospective approach as of January 1, 2016. All amounts and disclosures set forth in this Form 10-Q reflect the necessary adjustments required for the adoption of this standard, including the reclassification of prior year balances to conform to current year presentation. See "Summary of Significant Accounting Policies" below for additional information.

Summary of Significant Accounting Policies

Our significant accounting policies are detailed in Note 2: "Basis of Presentation and Summary of Significant Accounting Policies" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The significant accounting policies that changed as a result of the adoption of ASU 2014-09 are set forth below.

Revenue Recognition

Revenues are primarily derived from management and franchise contracts with third-party hotel and resort owners, as well as from our owned and leased hotels. The majority of our performance obligations are a series of distinct goods or services, for which we receive variable consideration through our management and franchise fees or fixed consideration through our owned and leased hotels. We allocate the variable fees to the distinct services to which they relate applying the prescribed variable consideration allocation guidance, and we allocate fixed consideration to the related performance obligations based on the present value of the allocated variable cash flows. We do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised good or service to a customer and when the customer pays for that good or service will be one year or less, which it is in substantially all cases. Additionally, we do not typically include extended payment terms in our contracts with customers.

Management and franchise revenues

We identified the following performance obligations in connection with our management and franchise contracts:

• Intellectual Property ("IP") licenses grant the right to access our hotel system IP, including brand IP, reservations systems and property management systems.

• Hotel management services include providing day-to-day management services of the hotels for the property owners.

• Development services include providing consultative services (e.g., design assistance and contractor selection) to the property owner to assist with the construction of the hotel prior to the hotel opening.

• Pre-opening services include providing services (e.g., advertising, budgeting, e-commerce strategies, food and beverage testing) to the property owner to assist in preparing for the hotel opening.

• Material rights for free or discounted goods or services to hotel guests are satisfied at the earlier point in time of either when the material right expires or the underlying free or discounted good or service is provided to the hotel guest.

Each of the identified performance obligations related to management and franchise revenues is considered to be a series of distinct services transferred over time. While the underlying activities may vary from day to day, the nature of the promises are the same each day, and the property owner can independently benefit from each day's services. Management and franchise fees are typically based on the sales or usage of the underlying hotel, with the exception of fixed upfront fees, which usually represent an insignificant portion of the transaction price.

Franchise fees represent fees earned in connection with the licensing of one of our brands, usually under long-term contracts with the property owner, and include the following:

• Royalty fees are generally based on a percentage of the hotel's monthly gross room revenue and, in some cases, may also include a percentage of gross food and beverage revenues and other revenues, as applicable. These fees are typically billed and collected monthly, and revenue is generally recognized at the same time the fees are billed.

• Application, initiation and other fees are charged when: (i) new hotels enter our system; (ii) there is a change of ownership of a hotel; or (iii) contracts with properties already in our system are extended. These fees are typically fixed and collected upfront and are recognized as revenue over the term of the franchise contract. We do not consider this advance consideration to include a significant financing component, since it is used to protect us from the property owner failing to adequately complete some or all of its obligations under the contract.

• License fees are earned from: (i) a license agreement with HGV to use certain Hilton marks and IP in its timeshare business, which are typically billed and collected monthly, and revenue is generally recognized at the same time the fees are billed; and (ii) co-brand credit card arrangements, which are recognized as revenue when points for our guest loyalty program, Hilton Honors, are issued, generally as spend on the co-branded credit card occurs; see further discussion below under "Hilton Honors."

Franchise fees are reduced by any consideration paid or anticipated to be paid to incentivize hotel owners to enter into franchise contracts with us.

Management fees represent fees earned from hotels that we manage, usually under long-term contracts with the property owner, and include the following:

• Base management fees are generally based on a percentage of the hotel's monthly gross revenue. Base fees are typically billed and collected monthly, and revenue is generally recognized at the same time the fees are billed.

• Incentive management fees are generally based on a percentage of the hotel's operating profits and in some cases may be subject to a stated return threshold to the property owner, normally over a one-calendar year period (the "incentive period"). Incentive fee revenue is recognized on a monthly basis, but only to the extent the cumulative fee earned does not exceed the probable fee for the incentive period. Incentive fee payment terms vary, but they are generally billed and collected monthly or annually upon completion of the incentive period.

Base and other management fees are reduced by any consideration paid or anticipated to be paid to incentivize hotel owners to enter into management contracts with us.

Other revenues from managed and franchised properties represent amounts that are contractually reimbursed to us by property owners, either directly as costs are incurred or indirectly through fees that are billed and collected in advance related to certain costs and expenses of the related properties, and include the following:

• Direct reimbursements include payroll and related costs and certain other operating costs of the managed and franchised properties’ operations, which are contractually reimbursed to us by the property owners as expenses are incurred. Revenue is recognized based on the amount of expenses incurred by Hilton, which are presented as other expenses from managed and franchised properties in our consolidated statements of operations, that are then reimbursed to us by the property owner typically on a monthly basis, which results in no net effect on operating income (loss) or net income (loss).

• Indirect reimbursements include marketing expenses and other expenses associated with our brands and shared services, which are paid from fees collected by Hilton from the managed and franchised properties. Revenue is generally recognized as fees are billed, which are based on the underlying hotel's sales or usage (e.g., gross room revenues and number of reservations processed). System implementation fees charged to property owners are deferred and recognized as revenue over the term of the management or franchise contract. The corresponding expenses are expensed as incurred and are presented as other expenses from managed and franchised properties in our consolidated statements of operations and are expected to equal the revenues earned from indirect reimbursements over time.

The management and franchise fees and reimbursements from third-party hotel owners are allocated to the performance obligations and the distinct services to which they relate using their estimated standalone selling prices. The terms of the fees earned under the contract relate to a specific outcome of providing the services (e.g., hotel room sales) or to Hilton's efforts (e.g., costs) to satisfy the performance obligations. We use time as the measure of progress to recognize as revenue the fees that are allocated to the period earned per the contract or to the period when the reimbursable costs are incurred.

Owned and leased hotel revenues

We identified the following performance obligations in connection with our owned and leased hotel revenues, for which revenue is recognized as the respective performance obligations are satisfied, which results in recognizing the amount we expect to be entitled to for providing the goods or services:

• Cancellable room reservations or ancillary services are typically satisfied as the good or service is transferred to the hotel guest, which is generally when the room stay occurs.

• Noncancellable room reservations and banquet or conference reservations represent a series of distinct goods or services provided over time and satisfied as each distinct good or service is provided, which is reflected by the duration of the room reservation.

• Material rights for free or discounted goods or services are satisfied at the earlier point in time when the material right expires or the underlying free or discounted good or service is provided to the hotel guest.

• Other ancillary goods and services are purchased independently of the room reservation at standalone selling prices and are considered separate performance obligations, which are satisfied when the related good or service is provided to the hotel guest.

• Components of package reservations for which each component could be sold separately to other hotel guests are considered separate performance obligations and are satisfied as set forth above.

Owned and leased hotel revenues primarily consist of hotel room rentals, revenue from accommodations sold in conjunction with other services (e.g., package reservations), food and beverage sales and other ancillary goods and services (e.g., parking) related to owned, leased and consolidated non-wholly owned hotel properties. Revenue is recognized when rooms are occupied or goods and services have been delivered or rendered, respectively. Payment terms typically align with when the goods and services are provided. Owned and leased hotel revenues are reduced upon issuance of Hilton Honors points, for Hilton Honors members' paid stay transactions and are recognized when Hilton Honors points are redeemed for a free stay at an owned or leased hotel (see the "Hilton Honors" section below for additional information).

Although the transaction prices of room rentals, goods and other services are generally fixed and based on the respective room reservation or other agreement, an estimate to reduce the transaction price is required if a discount is expected to be provided to the customer. For package reservations, the transaction price is allocated to the performance obligations within the package based on the estimated standalone selling prices of each component. On occasion, the hotel may also provide the customer with a material right to a free or discounted good or service in conjunction with a room reservation or banquet contract (e.g., free breakfast and free room night for every four nights booked). These material rights are considered separate performance obligations to which a portion of the transaction price is allocated based on the estimated standalone selling prices of the good or service, adjusted for the likelihood the hotel guest will exercise the right.

Other revenues

Other revenues include revenues generated by the incidental support of hotel operations for owned, leased, managed and franchised hotels, including purchasing operations, and other operating income. Purchasing revenues include any amounts received for vendor rebate arrangements that we participate in as a manager of hotels.

Taxes and fees collected on behalf of governmental agencies

We are required to collect certain taxes and fees from customers on behalf of governmental agencies and remit these back to the applicable governmental agencies on a periodic basis. We have a legal obligation to act as a collection agent. We do not retain these taxes and fees and, therefore, they are not included in our measurement of transaction prices. We have elected to present revenue net of sales taxes and other similar taxes. We record a liability when the amounts are collected and relieve the liability when payments are made to the applicable taxing authority or other appropriate governmental agency.

Contract Assets

Contract assets relate to incentive management fees for which the period of service has passed, but for which our right to consideration is conditional upon completing the requirements of the incentive fee period. Contract assets are included in other current assets in our consolidated balance sheets and are reclassified as accounts receivable when our right to consideration becomes unconditional.

Contract Liabilities

Contract liabilities relate to: (i) advance consideration received from hotel owners at contract inception for services considered to be part of the contract performance obligations, such as management or franchise contract application, initiation, renewal and other fees; (ii) advance consideration received for certain indirect reimbursements, such as system implementation fees; and (iii) amounts received when points are issued under Hilton Honors, but for which revenue is not yet recognized, since the related points are not yet redeemed. Contract liabilities related to advance consideration received for fees, excluding Hilton Honors, and certain indirect reimbursements are recognized as revenue over the term of the related contract. Contract liabilities related to amounts received for Hilton Honors are recognized as revenue when the points are redeemed for a free good or service by the Hilton Honors member, which, on average, occurs within two years of points issuance. Contract liabilities are included in deferred revenues in our consolidated balance sheets.

Intangible Assets with Finite Useful Lives

We have certain finite lived intangible assets that were initially recorded at their fair value in connection with the October 24, 2007 transaction whereby we became a wholly owned subsidiary of an affiliate of The Blackstone Group L.P. ("Blackstone") (the "Merger"). These intangible assets consist of management contracts, franchise contracts, leases, certain proprietary technologies and our Hilton Honors guest loyalty program. Additionally, we capitalize cash consideration paid to incentivize hotel owners to enter into management and franchise contracts with us as contract acquisition costs and the incremental costs to obtain or fulfill the contracts as development commissions, which are generally fixed. We also capitalize costs incurred to develop internal-use computer software and costs to acquire software licenses, as well as internal and external costs incurred in connection with development of upgrades or enhancements that result in additional information technology functionality.

Intangible assets with finite useful lives are amortized using the straight-line method over their respective estimated useful lives, which for contract acquisition costs and development commissions is the contract term, including any renewal periods that are at our sole option. These estimated useful lives are generally as follows: management contracts recorded at the Merger (13 to 16 years); management contract acquisition costs and development commissions (20 to 30 years); franchise contracts recorded at the Merger (12 to 13 years); franchise contract acquisition costs and development commissions (10 to 20 years); leases (12 to 35 years); Hilton Honors (16 years); and capitalized software development costs (3 years).The amortization of these intangible assets, excluding contract acquisition costs, is included in depreciation and amortization expense in our consolidated statements of operations, and the amortization of contract acquisition costs is recognized as a reduction to franchise fees and base and other management fees in our consolidated statements of operations, based on contract type. Costs incurred prior to the acquisition of a contract, such as external legal costs, are expensed as incurred and included in general and administrative expenses in our consolidated statements of operations. Cash flows for contract acquisition costs and development commissions are included as operating activities in our consolidated statements of cash flows.

We review all finite lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess carrying value over the fair value in our consolidated statements of operations.

Hilton Honors

Hilton Honors is our guest loyalty and marketing program provided to our hotel and resort properties. Nearly all of our owned, leased, managed and franchised properties participate in the Hilton Honors program. Hilton Honors members earn points based on their spending at our participating properties and through participation in affiliated partner programs. When points are earned by Hilton Honors members, they are provided with a material right to free or discounted goods or services in the future upon accumulation of the required level of Hilton Honors points. Points may be redeemed for the right to stay at participating properties, as well as for other goods and services from third parties, including, but not limited to, airlines, car rentals, cruises, vacation packages, shopping and dining. As the points are issued to a Hilton Honors member, the property or affiliated partner pays Hilton Honors based on an estimated cost per point for the costs of operating the program, which include marketing, promotion, communication and administrative expenses, as well as the estimated cost of award redemptions.

We record liabilities for the payments received from participating hotels and program partners, which are typically due when the points are issued to a Hilton Honors member. Amounts equal to the estimated cost per point of the future redemption obligation are included in the liability for guest loyalty program and any amounts received in excess of the estimated cost per point are included in deferred revenues in our consolidated balance sheets. We engage outside actuaries to assist in determining the fair value of the future redemption obligation using statistical formulas that project future point redemptions based on factors that include historical experience, an estimate of points that will eventually be redeemed, which includes an estimate of "breakage" for points that will never be redeemed, and the cost of reimbursing properties and other third parties with respect to other redemption opportunities available to Hilton Honors members. When points are issued as a result of a stay at an owned or leased hotel, we recognize a reduction in owned and leased hotel revenues, since we are also the guest loyalty program sponsor. For the Hilton Honors fees that are charged to the participating properties, we allocate the fees to the material right created by the Hilton Honors points that are issued using the variable consideration allocation guidance, since the fees are directly related to the issuance of Hilton Honors points to the Hilton Honors member and Hilton's efforts to satisfy the future redemption of those Hilton Honors points.

The transaction prices for the Hilton Honors points are reduced by the expected payments to the third parties that will provide the free or discounted room or service using the actuarial projection of the cost per point. The remaining transaction price is then further allocated to the points that are expected to be redeemed, adjusting the points that are issued for estimated breakage, and recognized when those points are redeemed. While the points are outstanding, both the estimate of the expected payments to third parties (cost per point) and the estimated breakage are reevaluated, and the amount of revenue recognized when each point is redeemed is adjusted so that the final amount allocated to the material right is reflective of the amount retained for providing the free or discounted goods and services, net of the payments to third parties and points not redeemed.

We also earn license fees from co-brand credit card arrangements (see "Management and franchise revenues" within the "Revenue Recognition" section above). The co-brand license fee is allocated between two performance obligations based on their estimated standalone selling prices: (i) an IP license using the relief-from-royalty method; and (ii) material rights for free or discounted goods or services to the credit card customers using a cost plus method based on an evaluation of other third-party administrators.

We satisfy our performance obligation related to points issued under Hilton Honors when points are redeemed for a free good or service by the Hilton Honors member, and we satisfy our remaining performance obligations over time as the customer simultaneously receives and consumes the benefits of the goods or services provided. Hilton Honors reimburses participating properties when points are redeemed by members at the respective properties, at which time the redemption obligation is reduced and the related deferred revenue is recognized in other revenues from managed and franchised properties in our consolidated statements of operations. Additionally, when Hilton Honors members redeem award certificates at our owned and leased hotels, we recognize room revenue, included in owned and leased hotel revenues in our consolidated statements of operations.

Recently Issued Accounting Pronouncements

Adopted Accounting Standards

In March 2017, the Financial Accounting Standards Board ("FASB") issued ASU No. 2017-07 ("ASU 2017-07"), Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This ASU requires employers to report the service cost component of net periodic pension cost in the same line item or items of the statement of operations as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net periodic pension cost must be presented separately from the service cost component and outside of a subtotal of income (loss) from operations. We adopted ASU 2017-07 on January 1, 2018 on a retrospective basis in our condensed consolidated statements of operations, which includes presenting: (i) the service cost component of net periodic pension cost in owned and leased hotel expenses and general and administrative expenses; and (ii) the other components of net periodic pension cost in other non-operating income (loss), net in our condensed consolidated statements of operations. Prior to adoption, all net periodic pension costs were presented in owned and leased hotel expenses and general and administrative expenses. We have applied the practical expedient permitting us to use the amounts disclosed in our Employee Benefits Plans note in our Annual Report on Form 10-K for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. See the "Prior Period Financial Information" below for the effect of the adoption of ASU 2017-07 on our condensed consolidated statements of operations for the three and six months ended June 30, 2017.

In May 2014, the FASB issued ASU 2014-09. This ASU supersedes the revenue recognition requirements in Revenue Recognition (Topic 605) and requires entities to recognize revenue when a customer obtains control of promised goods or services and in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. Subsequent to ASU 2014-09, the FASB issued several related ASUs to clarify the application of the new revenue recognition standard, collectively referred to herein as ASU 2014-09. We adopted the requirements of ASU 2014-09 on January 1, 2018 using the full retrospective approach, as permitted by the standard, resulting in a cumulative adjustment to accumulated deficit of $212 million as of January 1, 2016.

The provisions of ASU 2014-09 affected our revenue recognition as follows:

• Application, initiation and other fees are recognized over the term of the franchise contract, rather than upon execution of the contract and the unamortized portion of these fees is included in deferred revenues in our condensed consolidated balance sheets.

• Contract acquisition costs related to our management and franchise contracts are recognized over the term of the contracts as a reduction to revenue, instead of as amortization expense. This change does not affect net income (loss).

• Incentive management fees are recognized to the extent that it is probable that a significant reversal will not occur as a result of future hotel profits or cash flows, as opposed to recognizing amounts that would be due if the management contract was terminated at the end of the reporting period. This change does not affect net income (loss) for any full year period.

• Revenue related to our Hilton Honors guest loyalty program is recognized upon point redemption, net of any reward reimbursement paid to a third party, as opposed to recognized on a gross basis at the time points are issued in conjunction with the accrual of the expected future cost of the reward reimbursement. Additionally, points issued at owned and leased hotels are accounted for as a reduction of revenue from owned and leased hotels, as opposed to expenses of owned and leased hotels. Fees received in excess of the estimated liability for guest loyalty program are included in deferred revenues in our condensed consolidated balance sheets.

• Reimbursable fees related to our management and franchise contracts are recognized as they are billed, as opposed to when we incur the related expenses. Timing differences related to the receipt and spend of these fees will no longer be recorded in other assets and other liabilities in our condensed consolidated balance sheets.

We have not retrospectively restated for contract modifications of management and franchise contracts that occurred before January 1, 2016. Instead, we have reflected the aggregate effect of all contract modifications when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price. The estimated effect of applying this practical expedient is to use a longer period over which to straight line any fixed consideration either received from the customer or paid to the customer, since all fees will be amortized over the full contract term beginning on the date of initial execution, rather than amortizing fees received upon contract modifications prospectively from the contract modification date. We do not anticipate that this effect is material given the insignificance of the fixed consideration compared to the overall consideration we expect to earn over the term of the contract. See the "Prior Period Financial Information" below for the effect of the adoption of ASU 2014-09 on our condensed consolidated balance sheet as of December 31, 2017 and our condensed consolidated statements of operations for the three and six months ended June 30, 2017.

Prior Period Financial Information

The following table presents the effect of the adoption of ASU 2014-09 for the line items affected in our condensed consolidated balance sheet:

	December 31, 2017
	As Previously Reported			Adoption of ASU 2014-09			As Adjusted
	(in millions)
ASSETS
Accounts receivable, net	$	998		$	7		$	1,005
Prepaid expenses	111			16			127
Other current assets	171			(2		)	169
Management and franchise contracts, net	909			44			953
Deferred income tax assets	113			(2		)	111
Other non-current assets	434			(143		)	291
TOTAL ASSETS	14,308			(80		)	14,228
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable, accrued expenses and other(1)(2)	1,487			(71		)	1,416
Current portion of deferred revenues(1)	41			325			366
Deferred revenues	97			732			829
Deferred income tax liabilities	1,063			(132		)	931
Other non-current liabilities	1,470			(550		)	920
Total liabilities	12,233			304			12,537
Equity:
Accumulated deficit	(6,596		)	(385		)	(6,981		)
Accumulated other comprehensive loss	(742		)	1			(741		)
Total equity	2,075			(384		)	1,691
TOTAL LIABILITIES AND EQUITY	14,308			(80		)	14,228

____________

⁽¹⁾  The current portion of deferred revenues has been separated from accounts payable, accrued expenses and other in the "As Previously Reported" column following the adoption of ASU 2014-09.

⁽²⁾  The current portion of liability for guest loyalty program has been separated from accounts payable, accrued expenses and other to conform with current presentation. The balance was $622 million as of December 31, 2017 and did not change as a result of the adoption of ASU 2014-09.

The following tables present the effect of the adoption of ASU 2014-09 and ASU 2017-07 on our condensed consolidated statement of operations:

	Three Months Ended June 30, 2017
	As Previously Reported			Adoption of ASU 2014-09			Adoption of ASU 2017-07			As Adjusted
	(in millions)
Revenues
Franchise fees	$	372		$	(17	)	$	—		$	355
Base and other management fees	85			(4		)	—			81
Incentive management fees	56			1			—			57
Owned and leased hotels	377			(4		)	—			373
Other revenues	20			—			—			20
	910			(24		)	—			886
Other revenues from managed and franchised properties	1,436			(246		)	—			1,190
Total revenues	2,346			(270		)	—			2,076
Expenses
Owned and leased hotels	330			(4		)	1			327
Depreciation and amortization	87			(4		)	—			83
General and administrative	117			—			1			118
Other expenses	11			—			—			11
	545			(8		)	2			539
Other expenses from managed and franchised properties	1,436			(223		)	—			1,213
Total expenses	1,981			(231		)	2			1,752
Operating income	365			(39		)	(2		)	324
Interest expense	(100		)	14			—			(86		)
Gain on foreign currency transactions	5			—			—			5
Other non-operating income, net	5			—			2			7
Income before income taxes	275			(25		)	—			250
Income tax expense	(108		)	9			—			(99		)
Net income	167			(16		)	—			151
Net income attributable to noncontrolling interests	(1		)	—			—			(1		)
Net income attributable to Hilton stockholders	$	166		$	(16	)	$	—		$	150
Earnings per share:
Basic	$	0.51								$	0.46
Diluted	$	0.51								$	0.46

	Six Months Ended June 30, 2017
	As Previously Reported			Adoption of ASU 2014-09			Adoption of ASU 2017-07			As Adjusted
	(in millions)
Revenues
Franchise fees	$	666		$	(29	)	$	—		$	637
Base and other management fees	168			(6		)	—			162
Incentive management fees	108			(2		)	—			106
Owned and leased hotels	677			(8		)	—			669
Other revenues	57			—			—			57
	1,676			(45		)	—			1,631
Other revenues from managed and franchised properties	2,831			(490		)	—			2,341
Total revenues	4,507			(535		)	—			3,972
Expenses
Owned and leased hotels	602			(8		)	1			595
Depreciation and amortization	176			(7		)	—			169
General and administrative	222			—			2			224
Other expenses	34			—			—			34
	1,034			(15		)	3			1,022
Other expenses from managed and franchised properties	2,831			(422		)	—			2,409
Total expenses	3,865			(437		)	3			3,431
Operating income	642			(98		)	(3		)	541
Interest expense	(204		)	29			—			(175		)
Gain on foreign currency transactions	1			—			—			1
Loss on debt extinguishment	(60		)	—			—			(60		)
Other non-operating income, net	6			—			3			9
Income before income taxes	385			(69		)	—			316
Income tax expense	(143		)	26			—			(117		)
Net income	242			(43		)	—			199
Net income attributable to noncontrolling interests	(2		)	—			—			(2		)
Net income attributable to Hilton stockholders	$	240		$	(43	)	$	—		$	197
Earnings per share:
Basic	$	0.73								$	0.60
Diluted	$	0.73								$	0.60

Accounting Standards Not Yet Adopted

In February 2018, the FASB issued ASU No. 2018-02 ("ASU 2018-02"), Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASU permits a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects that do not reflect the appropriate tax rates as a result of the Tax Cuts and Jobs Act of 2017 (the "TCJ Act"). The provisions of ASU 2018-02 are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years and should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the tax rate in the TCJ Act is recognized. Early adoption is permitted. We are currently evaluating the effect that ASU 2018-02 will have on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02 ("ASU 2016-02"), Leases (Topic 842), which supersedes existing guidance on accounting for leases in Leases (Topic 840) and generally requires all leases, including operating leases, to be recognized in the statement of financial position as right-of-use assets and lease liabilities by lessees. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach and are effective for reporting periods beginning after December 15, 2018; early adoption is permitted. We intend to adopt the standard on January 1, 2019 and apply the package of practical expedients available to us upon adoption. We are continuing to evaluate the effect that this ASU will have on our consolidated financial statements, but we expect this ASU to have a material effect on our consolidated balance sheet.

XML

Organization

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

Organization

Hilton Worldwide Holdings Inc. (the "Parent," or together with its subsidiaries, "Hilton," "we," "us," "our" or the "Company"), a Delaware corporation, is one of the largest hospitality companies in the world and is engaged in managing, franchising, owning and leasing hotels and resorts, including timeshare properties. As of June 30, 2018, we managed, franchised, owned or leased 5,456 hotels and resorts, totaling 879,349 rooms in 106 countries and territories.

In April 2018, HNA Tourism Group Co., Ltd. and certain of its affiliates (together, "HNA") sold its entire ownership interest in Hilton totaling 82.5 million shares of Hilton common stock, of which 66.0 million shares were sold in an underwritten, public offering and 16.5 million shares were repurchased by us. See Note 6: "Debt" for additional information.

On January 3, 2017, we completed the spin-offs of a portfolio of hotels and resorts, as well as our timeshare business, into two independent, publicly traded companies: Park Hotels & Resorts Inc. ("Park") and Hilton Grand Vacations Inc. ("HGV"), respectively (the "spin-offs").

XML

Revenues from Contracts with Customers

6 Months Ended

Jun. 30, 2018

Revenue from Contract with Customer [Abstract]

Revenues from Contracts with Customers

Revenues from Contracts with Customers

Contract Liabilities

Our contract liabilities, which are classified as a component of current and long-term deferred revenues, decreased $18 million during the six months ended June 30, 2018, from $1,087 million as of December 31, 2017 to $1,069 million as of June 30, 2018. The change included a $107 million decrease, which had no effect on revenues, resulting from changes in estimated transaction prices for our performance obligations related to points issued under Hilton Honors. This decrease was partially offset by a $90 million net increase from cash received in advance, for which revenue recognition was deferred, and revenue recognized during the period, mostly related to Hilton Honors. We recognized revenue that was previously deferred as a contract liability of $56 million and $38 million during the three months ended June 30, 2018 and 2017, respectively, and $116 million and $74 million during the six months ended June 30, 2018 and 2017, respectively.

Performance Obligations

As of June 30, 2018, we had $509 million of deferred revenues related to unsatisfied performance obligations under Hilton Honors that will be recognized in revenue as the points are redeemed, which is expected to occur over the next two years. Additionally, we had $560 million of deferred revenues related to application, initiation and other fees, which are expected to be recognized in revenue in future periods over the term of the related contract.

We did not estimate revenues expected to be recognized related to our unsatisfied performance obligations for our: (i) royalty fees since they are considered sales-based royalty fees recognized as hotel room sales occur in exchange for licenses of our brand names over the terms of the franchise contracts; and (ii) base management fees and incentive management fees since they are allocated entirely to the wholly unsatisfied promise to transfer management services, which form part of a single performance obligation in a series, over the term of the management contract.

As part of the adoption of ASU 2014-09, we elected not to disclose the amount of the transaction price allocated to our remaining performance obligations as of December 31, 2017 or provide an explanation of when we expect to recognize that amount as revenue.

XML

Consolidated Variable Interest Entities

6 Months Ended

Jun. 30, 2018

Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract]

Consolidated Variable Interest Entities

Consolidated Variable Interest Entities

As of June 30, 2018 and December 31, 2017, we consolidated three variable interest entities ("VIEs"): two entities that lease hotel properties and one management company. We are the primary beneficiaries of these consolidated VIEs as we have the power to direct the activities that most significantly affect their economic performance. Additionally, we have the obligation to absorb their losses and the right to receive benefits that could be significant to them. The assets of our consolidated VIEs are only available to settle the obligations of the respective entities. Our condensed consolidated balance sheets included the assets and liabilities of these entities, which primarily comprised the following:

	June 30,		December 31,
	2018		2017
	(in millions)
Cash and cash equivalents	$	73	$	73
Accounts receivable, net	12		16
Property and equipment, net	59		57
Deferred income tax assets	57		56
Other non-current assets	59		57
Accounts payable, accrued expenses and other	38		43
Long-term debt(1)	207		212
Other long-term liabilities	13		13

____________

⁽¹⁾  Includes capital lease obligations of $189 million and $191 million as of June 30, 2018 and December 31, 2017, respectively.

During the six months ended June 30,2018 and 2017, we did not provide any financial or other support to any VIEs that we were not previously contractually required to provide, nor do we intend to provide such support in the future.

XML

Amortizing Intangible Assets

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Amortizing Intangible Assets

Amortizing Intangible Assets

Amortizing intangible assets were as follows:

	June 30, 2018
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
	(in millions)
Management and franchise contracts:
Management and franchise contracts recorded at Merger(1)	$	2,234	$	(1,794	)	$	440
Contract acquisition costs	451		(87		)	364
Development commissions	102		(13		)	89
	$	2,787	$	(1,894	)	$	893
Other amortizing intangible assets:
Leases(1)	$	295	$	(157	)	$	138
Capitalized software costs	619		(455		)	164
Hilton Honors(1)	339		(226		)	113
Other	38		(34		)	4
	$	1,291	$	(872	)	$	419

	December 31, 2017
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
	(in millions)
Management and franchise contracts:
Management and franchise contracts recorded at Merger(1)	$	2,242	$	(1,716	)	$	526
Contract acquisition costs	416		(74		)	342
Development commissions	97		(12		)	85
	$	2,755	$	(1,802	)	$	953
Other amortizing intangible assets:
Leases(1)	$	301	$	(153	)	$	148
Capitalized software costs	585		(428		)	157
Hilton Honors(1)	341		(217		)	124
Other	38		(34		)	4
	$	1,265	$	(832	)	$	433

____________

⁽¹⁾  Represents intangible assets that were initially recorded at their fair value at the time of the Merger.

Amortization of our amortizing intangible assets was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
	(in millions)
Recognized in depreciation and amortization expense(1)	$	66	$	69	$	135	$	139
Recognized as a reduction of franchise fee and base and other management fee revenues	7		5		14		8

____________

⁽¹⁾  Includes amortization of $52 million and $50 millionfor the three months ended June 30, 2018 and 2017, respectively, and $103 million and $101 millionfor the six months ended June 30, 2018 and 2017, respectively, associated with assets recorded at their fair value at the time of the Merger.

We estimated future amortization of our amortizing intangible assets as of June 30, 2018 to be as follows:

	Recognized in Depreciation and Amortization Expense		Recognized as a Reduction of Franchise Fee and Base and Other Management Fee Revenues
Year	(in millions)
2018 (remaining)	$	136	$	13
2019	270		23
2020	219		22
2021	82		21
2022	60		21
Thereafter	181		264
	$	948	$	364

XML

Debt

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Debt

Debt

Long-term Debt

Long-term debt balances, including obligations for capital leases, and associated interest rates as of June 30, 2018, were as follows:

	June 30,			December 31,
	2018			2017
	(in millions)
Senior notes with a rate of 4.250%, due 2024	$	1,000		$	1,000
Senior notes with a rate of 4.625%, due 2025	900			900
Senior notes with a rate of 5.125%, due 2026	1,500			—
Senior notes with a rate of 4.875%, due 2027	600			600
Senior secured term loan facility with a rate of 3.84%, due 2023	3,419			3,929
Capital lease obligations with an average rate of 6.32%, due 2021 to 2030	229			233
Other debt with a rate of 3.08% due 2026	17			21
	7,665			6,683
Less: unamortized deferred financing costs and discount	(90		)	(81		)
Less: current maturities of long-term debt(1)	(11		)	(46		)
	$	7,564		$	6,556

____________

⁽¹⁾  Net of unamortized deferred financing costs and discount attributable to current maturities of long-term debt.

Senior Notes

In April 2018, we issued $1.5 billion aggregate principal amount of 5.125% Senior Notes due 2026 (the "2026 Senior Notes"), and incurred $21 million of debt issuance costs. Interest on the 2026 Senior Notes is payable semi-annually in arrears on May 1 and November 1 of each year, beginning November 2018. We used a portion of the net proceeds from the issuance of the 2026 Senior Notes, together with borrowings under our senior secured revolving credit facility (the "Revolving Credit Facility") and available cash to repurchase 16.5 million shares of our common stock from HNA for $1,171 million and repay $500 million outstanding under our senior secured term loan facility (the "Term Loans"). See "Senior Secured Credit Facility" below for additional information.

In March 2017, we used the proceeds from issuances of the 4.625% Senior Notes due 2025 (the "2025 Senior Notes") and the 4.875% Senior Notes due 2027 (the "2027 Senior Notes") to redeem in full $1.5 billion of Senior Notes due 2021 (the "2021 Senior Notes"). In connection with the repayment, we paid a redemption premium of $42 million and accelerated the recognition of $18 million of unamortized debt issuance costs, which were included in loss on debt extinguishment in our condensed consolidated statement of operations for the six months ended June 30, 2017.

The 4.250% Senior Notes due 2024 (the "2024 Senior Notes"), the 2025 Senior Notes, the 2026 Senior Notes and the 2027 Senior Notes are guaranteed on a senior unsecured basis by the Parent and certain of its wholly owned subsidiaries. See Note 15: "Condensed Consolidating Guarantor Financial Information" for additional details.

Senior Secured Credit Facility

Our senior secured credit facility consists of a $1.0 billion Revolving Credit Facility and the Term Loans. The obligations of our senior secured credit facility are unconditionally and irrevocably guaranteed by the Parent and substantially all of its direct and indirect wholly owned domestic subsidiaries.

In connection with the $500 million repayment of the Term Loans in April 2018, we accelerated the recognition of $5 million of unamortized debt issuance costs and discount, which were included in other non-operating income (loss), net in our condensed consolidated statements of operations for the three and six months ended June 30, 2018. Additionally, the interest rate on the remaining balance of the Term Loans was reduced by 25 basis points to LIBOR plus 175 basis points.

As of June 30, 2018, we had $64 million of letters of credit outstanding under our Revolving Credit Facility and a borrowing capacity of $936 million.

Debt Maturities

The contractual maturities of our long-term debt as of June 30, 2018 were as follows:

Year	(in millions)
2018 (remaining)	$	4
2019	16
2020	17
2021	18
2022	19
Thereafter	7,591
	$	7,665

XML

Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

Cash Flow Hedges

In May 2017, we began hedging foreign exchange-based cash flow variability in certain of our foreign currency denominated management and franchise fees using forward contracts (the "Fee Forward Contracts"). We elected to designate these Fee Forward Contracts as cash flow hedges for accounting purposes. As of June 30, 2018, the Fee Forward Contracts had an aggregate notional amount of $69 million and maturities of 24 months or less.

In March 2017, we entered into two interest rate swap agreements with notional amounts of $1.6 billion and $750 million to swap one-month LIBOR on the Term Loans to fixed rates of 1.98 percent and 2.02 percent, respectively, through March 2022. In May 2018, we settled the interest rate swap with a notional amount of $750 million and received $18 million from the counterparty. Concurrently, we entered into an interest rate swap agreement with a notional amount of $1.6 billion, which swaps one-month LIBOR on the Term Loans to a fixed rate of 3.03 percent, for a term from March 2022 to March 2023. We elected to designate these interest rate swaps as cash flow hedges for accounting purposes.

Non-designated Hedges

As of June 30, 2018, we held short-term forward contracts with an aggregate notional amount of $349 million to offset exposure to fluctuations in certain of our foreign currency denominated cash balances. We elected not to designate these forward contracts as hedging instruments. Depending on the fair value of each contract, we classify it as an asset or liability.

Fair Value of Derivative Instruments

We measure our derivative instruments at fair value, which is estimated using a discounted cash flow analysis, and we consider the inputs used to measure the fair value as Level 2 within the fair value hierarchy. The discounted cash flow analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs of similar instruments, including interest rate curves and spot and forward rates, as applicable, as well as option volatility. The fair values of our derivative instruments in our condensed consolidated balance sheets were as follows:

		June 30,		December 31,
	Balance Sheet Classification	2018		2017
		(in millions)
Cash Flow Hedges:
Interest rate swaps	Other non-current assets	$	41	$	11
Forward contracts	Other current assets	2		—
Forward contracts	Accounts payable, accrued expenses and other	—		1
Non-designated Hedges:
Forward contracts	Other current assets	3		4
Forward contracts	Accounts payable, accrued expenses and other	6		1

Earnings Effect of Derivative Instruments

The gains and losses recognized in our condensed consolidated statements of operations and condensed consolidated statements of comprehensive income before any effect for income taxes were as follows: 

		Three Months Ended						Six Months Ended
		June 30,						June 30,
	Classification of Gain (Loss) Recognized	2018			2017			2018			2017
		(in millions)
Cash Flow Hedges(1):
Interest rate swaps	Other comprehensive income (loss)	$	11		$	(15	)	$	45		$	(24	)
Interest rate swaps(2)	Interest expense	—			(6		)	(2		)	(8		)
Forward contracts(3)(4)	Other comprehensive income (loss)	4			—			3			—
Non-designated Hedges:
Interest rate swaps	Other non-operating income (loss), net	N/A			—			N/A			2
Interest rate swaps(5)	Interest expense	(2		)	(2		)	(5		)	(5		)
Forward contracts	Gain (loss) on foreign currency transactions	(7		)	6			(6		)	7

____________

⁽¹⁾  There were no amounts recognized in earnings related to hedge ineffectiveness or amounts excluded from hedge effectiveness testing during the three and six months ended June 30, 2018 and 2017.

⁽²⁾  The amount for the three months ended June 30, 2018 was less than $1 million.

⁽³⁾  The earnings effect of the Fee Forward Contracts on fee revenues for the three and six months ended June 30, 2018 and 2017 was less than $1 million.

⁽⁴⁾  Amounts for the three and six months ended June 30, 2017 were less than $1 million.

⁽⁵⁾  These amounts are related to the dedesignation of interest rate swaps in 2016 that no longer met the criteria for hedge accounting and were settled in 2017 and the interest rate swap that was settled in May 2018. The amounts were reclassified to interest expense from accumulated other comprehensive loss as the underlying transactions occurred.

XML

Fair Value Measurements

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

We did not elect the fair value measurement option for any of our financial assets or liabilities. The fair values of certain financial instruments and the hierarchy level we used to estimate the fair values are shown below, see Note 7: "Derivative Instruments and Hedging Activities" for the fair value information of our derivative instruments:

	June 30, 2018
			Hierarchy Level
	Carrying Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Cash equivalents	$	109	$	—	$	109	$	—
Restricted cash equivalents	15		—		15		—
Liabilities:
Long-term debt(1)	7,329		3,895		—		3,419

	December 31, 2017
			Hierarchy Level
	Carrying Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Cash equivalents	$	284	$	—	$	284	$	—
Restricted cash equivalents	12		—		12		—
Liabilities:
Long-term debt(1)	6,348		2,575		—		3,954

____________

⁽¹⁾ The carrying values include unamortized deferred financing costs and discount. The carrying values and fair values exclude capital lease obligations and other debt.

The fair values of financial instruments not included in these tables are estimated to be equal to their carrying values as of June 30, 2018 and December 31, 2017. Our estimates of the fair values were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop the estimated fair values.

Cash equivalents and restricted cash equivalents primarily consisted of short-term interest-bearing money market funds with maturities of less than 90 days and time deposits. The estimated fair values were based on available market pricing information of similar financial instruments.

The estimated fair values of our Level 1 long-term debt were based on prices in active debt markets. The estimated fair values of our Level 3 long-term debt were based on indicative quotes received for similar issuances.

XML

Income Taxes

6 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Income taxes

Income Taxes

On December 22, 2017, the TCJ Act, which permanently reduces the federal corporate income tax rate from a graduated 35 percent to a flat 21 percent rate and imposes a one-time transition tax on earnings of foreign subsidiaries that were previously deferred, was signed into law. As of June 30, 2018, we had not completed our accounting for the tax effects of enactment of the TCJ Act; however, where possible, as described below, we made a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax. In other cases, we were not able to make a reasonable estimate and continued to account for those items based on the provisions of the tax laws that were in effect immediately prior to enactment. For the items for which we were able to determine a reasonable estimate, we recognized a provisional benefit at December 31, 2017 of $665 million, of which $517 million was the result of the remeasurement of U.S. deferred tax assets and other tax liabilities. The provisional benefit of $517 million recorded at December 31, 2017 on our existing deferred tax balances excludes the income tax impact of the adoption of ASU 2014-09. As of June 30, 2018, we made adjustments to the provisional amounts recorded at December 31, 2017, as described below.

Provisional Amounts

• Deferred tax assets and liabilities and other tax liabilities. We remeasured deferred tax assets and liabilities and other tax liabilities based on the rates at which they are expected to reverse in the future, which is generally 21 percent. The provisional amounts recorded at December 31, 2017 related to the remeasurement of our deferred tax assets and liabilities, uncertain tax position reserves, and other tax liabilities were income tax benefits of $517 million, $33 million and $84 million, respectively. However, this remeasurement was based on estimates as of the enactment date of the TCJ Act and our existing analysis of the numerous complex tax law changes in the TCJ Act. Upon refinement of our calculations during the three months ended June 30, 2018, we adjusted our provisional amount by recording an additional tax benefit of $8 million, which is included as a component of income tax expense. We will continue to analyze the tax law changes in the TCJ Act, including the impact on our 2017 tax return filing positions throughout the 2018 fiscal year, and update our provisional amounts related to the remeasurement of these balances.

• Foreign taxation changes. A one-time transition tax is applied to foreign earnings previously not subjected to U.S. tax. The one-time transition tax is based on our total post-1986 earnings and profits ("E&P") that were previously deferred from U.S. income taxes, but is assessed at a lower tax rate than the federal corporate tax rate of 35 percent. We recorded a provisional amount for our one-time transition tax liability for our foreign subsidiaries based on estimates, as of the enactment date of the TCJ Act, for our controlled foreign subsidiaries and estimates of the total post-1986 E&P for noncontrolled foreign subsidiaries. Additionally, the language in the TCJ Act is not specific enough to address all aspects of the calculation of the transition tax and leaves certain components of the calculation open to interpretation. The U.S. Treasury department is expected to issue regulations to provide clarification. We previously recorded a federal deferred tax liability for our deferred earnings at the statutory 35 percent rate. The application of the transition tax results in the deferred earnings previously recorded at 35 percent being subjected to a lower rate, resulting in a provisional income tax benefit at December 31, 2017 of $15 million. As a result of additional guidance issued by the U.S. Treasury department during the three months ended June 30, 2018, we refined our calculations and recorded an additional tax benefit of $3 million. Additionally, we had not recorded certain deferred tax assets, related primarily to E&P deficits, for some foreign subsidiaries based upon an expectation that no tax benefit from such assets would be realized within the foreseeable future. The recognition of tax benefits from the deferred tax assets previously not recorded resulted in a provisional income tax benefit at December 31, 2017 of $16 million. We will continue to update our provisional amounts related to the transition tax as the U.S. Treasury department provides further guidance.

We continue to analyze the impact of the TCJ Act on our recognition of deferred tax assets and liabilities for outside basis differences in our investments in foreign subsidiaries and due to the complexity of these calculations on both our U.S. and foreign tax positions and uncertainty regarding the impact of new taxes on certain foreign earnings, we have not recorded provisional amounts. As of June 30, 2018, we had not recorded any deferred tax assets or liabilities for outside basis differences in our investments in foreign subsidiaries. We will further analyze the impact of these new taxes on foreign earnings and their impact on our tax positions throughout fiscal year 2018 to allow us to complete the required accounting for our outside basis differences in our investments in foreign subsidiaries. We continued to apply existing accounting guidance based on the provisions of the tax laws that were in effect immediately prior to the TCJ Act being enacted.

Global Intangible Low-Taxed Income ("GILTI") and Foreign Derived Intangible Income ("FDII")

The TCJ Act subjects a U.S. shareholder to current tax on GILTI earned by certain foreign subsidiaries. In addition, the TCJ Act provides for FDII to be taxed at a lower effective rate than the statutory rate by allowing a tax deduction against the income. Interpretive guidance on the accounting for GILTI states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. Given the complexity of the GILTI provisions, we are still evaluating the effects of the GILTI provisions and have not yet determined our accounting policy. As of June 30, 2018, because we are still evaluating the GILTI provisions and our analysis of future taxable income that is subject to GILTI, we have included GILTI and the FDII deduction related to current-year operations only in our estimated annual effective tax rate and have not provided additional GILTI on deferred items.

At the end of each quarter, we estimate the effective income tax rate expected to be applied for the full year. The effective income tax rate is determined by the level and composition of pre-tax income or loss, which is subject to federal, state, local and foreign income taxes.

Our total unrecognized tax benefit as of June 30, 2018 was $285 million. We accrued approximately $36 million for the payment of interest and penalties as of June 30, 2018. Included in the balance of unrecognized tax benefits as of June 30, 2018 was $285 million associated with positions that, if favorably resolved, would provide a benefit to our effective income tax rate.

In April 2014, we received 30-day Letters from the Internal Revenue Service ("IRS") and the Revenue Agents Report ("RAR") for the 2006 and October 2007 tax years. We disagreed with several of the proposed adjustments in the RAR, filed a formal appeals protest with the IRS and did not make any tax payments related to this audit. The issues being protested in appeals relate to assertions by the IRS that: (i) certain foreign currency denominated intercompany loans from our foreign subsidiaries to certain U.S. subsidiaries should be recharacterized as equity for U.S. federal income tax purposes and constitute deemed dividends from such foreign subsidiaries to our U.S. subsidiaries; (ii) in calculating the amount of U.S. taxable income resulting from our Hilton Honors guest loyalty program, we should not reduce gross income by the estimated costs of future redemptions, but rather such costs would be deductible at the time the points are redeemed; and (iii) certain foreign currency denominated loans issued by one of our Luxembourg subsidiaries whose functional currency is the U.S. dollar ("USD"), should instead be treated as issued by one of our Belgian subsidiaries whose functional currency is the euro, and thus foreign currency gains and losses with respect to such loans should have been measured in euros, instead of USD. Additionally, in January 2016, we received a 30-day Letter from the IRS and the RAR for the December 2007 through 2010 tax years. The RAR includes the proposed adjustments for tax years December 2007 through 2010, which reflect the carryover effect of the three protested issues from 2006 through October 2007. These proposed adjustments will also be protested in appeals and formal appeals protests have been submitted. In total, the proposed adjustments sought by the IRS would result in additional U.S. federal tax owed of approximately$874 million, excluding interest and penalties and potential state income taxes. The portion of this amount related to Hilton Honorswould result in a decrease to our future tax liability when the points are redeemed. We disagree with the IRS's position on each of these assertions and intend to vigorously contest them. However, based on continuing appeals process discussions with the IRS, we believe that it is more likely than not that we will not recognize the full benefit related to certain of the issues being appealed. Accordingly, as of June 30, 2018, we have recorded $47 million of unrecognized tax benefits related to these issues.

We file income tax returns, including returns for our subsidiaries, with federal, state, local and foreign tax jurisdictions. We are under regular and recurring audit by the IRS and other taxing authorities on open tax positions. The timing of the resolution of tax audits is highly uncertain, as are the amounts, if any, that may ultimately be paid upon such resolution. Changes may result from the conclusion of ongoing audits, appeals or litigation in federal, state, local and foreign tax jurisdictions or from the resolution of various proceedings between the U.S. and foreign tax authorities. We are no longer subject to U.S. federal income tax examination for years through 2004. As of June 30, 2018, we remain subject to federal examinations from 2005 through 2016, state examinations from 2005 through 2016 and foreign examinations of our income tax returns for the years 1996 through 2017.

XML

Share-Based Compensation

6 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

Share-Based Compensation

We grant time-vesting restricted stock units and restricted stock (collectively, "RSUs"), nonqualified stock options ("options") and performance-vesting restricted stock units and restricted stock (collectively, "performance shares") to our employees and deferred share units ("DSUs") to members of our board of directors. We recognized share-based compensation expense of $40 million and $34 million during the three months ended June 30, 2018 and 2017, respectively, and $68 million and $59 million during the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018, unrecognized compensation costs for unvested awards was approximately $190 million, which are expected to be recognized over a weighted-average period of 1.9 years on a straight-line basis. As of June 30, 2018, there were 16.1 million shares of common stock available for future issuance under our 2017 Omnibus Incentive Plan, plus any shares subject to awards outstanding under our 2013 Omnibus Incentive Plan, which will become available for issuance under our 2017 Omnibus Incentive Plan if such outstanding awards expire or are terminated or are canceled or forfeited.

RSUs

During the six months ended June 30, 2018, we granted 0.9 million RSUs with a weighted average grant date fair value per share of $79.32, 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, 2018, we granted 0.6 million options with a weighted average exercise price per share of $79.36, which vest over three years from the date of grant in equal annual installments and terminate 10 years from the date of grant or earlier if the individual’s service terminates under certain circumstances.

The weighted average grant date fair value per share of the options granted during the six months ended June 30, 2018 was $23.72, which was determined using the Black-Scholes-Merton option-pricing model with the following assumptions:

Expected volatility(1)	27.91	%
Dividend yield(2)	0.74	%
Risk-free rate(3)	2.73	%
Expected term (in years)(4)	6.0

____________

⁽¹⁾  Estimated using historical movement of Hilton's stock price.

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

⁽³⁾  Based on the yields of U.S. Department of Treasury instruments with similar expected lives.

⁽⁴⁾  Estimated using the average of the vesting periods and the contractual term of the options.

As of June 30, 2018, 1.2 million options were exercisable.

Performance Shares

During the six months ended June 30, 2018, we granted 0.3 million performance shares with a weighted average grant date fair value per share of $79.36. The performance shares are settled at the end of the three-year performance period with 50 percent of the awards subject to achievement based on the Company's adjusted earnings before interest expense, a provision for income taxes and depreciation and amortization ("Adjusted EBITDA") compound annual growth rate ("CAGR") ("EBITDA CAGR") and the other 50 percent of the awards subject to achievement based on the Company’s free cash flow ("FCF") per share CAGR ("FCF CAGR"). We determined that the performance conditions for performance shares issued in 2018 and 2017 are probable of achievement and, as of June 30, 2018, we recognized compensation expense based on the following anticipated achievement percentages for these performance shares:

	EBITDA CAGR		FCF CAGR
2017 performance shares	200	%	200	%
2018 performance shares	150	%	150	%

XML

Stockholders' Equity and Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2018

Stockholders' Equity Note [Abstract]

Stockholders' Equity and Accumulated Other Comprehensive Loss

Stockholders' Equity and Accumulated Other Comprehensive Loss

The changes in the components of stockholders' equity were as follows:

	Equity Attributable to Hilton Stockholders
					Treasury Stock			Additional Paid-in Capital		Accumulated Deficit(1)			Accumulated Other Comprehensive Loss
	Common Stock															Noncontrolling Interests
	Shares		Amount															Total
	(in millions)
Balance as of December 31, 2017	317		$	3	$	(891	)	$	10,298	$	(6,981	)	$	(741	)	$	3	$	1,691
Share-based compensation	1		—		—			23		—			—			—		23
Repurchases of common stock	(20	)	—		(1,439		)	—		—			—			—		(1,439		)
Net income	—		—		—			—		378			—			2		380
Other comprehensive loss	—		—		—			—		—			(1		)	—		(1		)
Dividends	—		—		—			—		(94		)	—			—		(94		)
Balance as of June 30, 2018	298		$	3	$	(2,330	)	$	10,321	$	(6,697	)	$	(742	)	$	5	$	560

	Equity Attributable to Hilton Stockholders
					Treasury Stock			Additional Paid-in Capital		Accumulated Deficit(1)			Accumulated Other Comprehensive Loss
	Common Stock															Noncontrolling Interests
	Shares		Amount																Total
	(in millions)
Balance as of December 31, 2016	329		$	3	$	—		$	10,220	$	(3,545	)	$	(1,001	)	$	(50	)	$	5,627
Share-based compensation	2		—		—			24		—			—			—			24
Repurchases of common stock	(6	)	—		(352		)	—		—			—			—			(352		)
Net income	—		—		—			—		197			—			2			199
Other comprehensive income	—		—		—			—		—			70			—			70
Dividends	—		—		—			—		(99		)	—			—			(99		)
Spin-offs of Park and HGV	—		—		—			—		(4,318		)	63			49			(4,206		)
Cumulative effect of the adoption of ASU 2016-09	—		—		—			1		(1		)	—			—			—
Distributions	—		—		—			—		—			—			(1		)	(1		)
Balance as of June 30, 2017	325		$	3	$	(352	)	$	10,245	$	(7,766	)	$	(868	)	$	—		$	1,262

___________

⁽¹⁾  Includes adjustments of $385 million and $222 million to the balances as of December 31, 2017 and 2016, respectively, as a result of the adoption of ASU 2014-09 as of January 1, 2016. See Note 2: "Basis of Presentation and Summary of Significant Accounting Policies" for additional information.

During 2017, our board of directors authorized a stock repurchase program for up to $2.0 billion of the Company's common stock (the "program"), and, as of June 30, 2018, approximately $841 million remained available for share repurchases under the program. During the six months ended June 30, 2018, we repurchased 19.8 million shares of common stock, including 1.25 million shares that were repurchased pursuant to the program from affiliates of Blackstone, as part of their full divestiture of their investment in Hilton, as well as 16.5 million shares that were repurchased from HNA outside of the program, as part of their full divestiture of their investment in Hilton. See Note 1: "Organization" for additional information on the HNA share repurchase.

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

	Currency Translation Adjustment(1)			Pension Liability Adjustment(2)			Cash Flow Hedge Adjustment(3)		Total
	(in millions)
Balance as of December 31, 2017	$	(513	)	$	(229	)	$	1	$	(741	)
Other comprehensive income (loss) before reclassifications	(45		)	—			36		(9		)
Amounts reclassified from accumulated other comprehensive loss	—			3			5		8
Net current period other comprehensive income (loss)	(45		)	3			41		(1		)
Balance as of June 30, 2018	$	(558	)	$	(226	)	$	42	$	(742	)

	Currency Translation Adjustment(1)			Pension Liability Adjustment(2)			Cash Flow Hedge Adjustment(3)			Total
	(in millions)
Balance as of December 31, 2016	$	(738	)	$	(251	)	$	(12	)	$	(1,001	)
Other comprehensive income (loss) before reclassifications	73			—			(15		)	58
Amounts reclassified from accumulated other comprehensive loss	—			4			8			12
Net current period other comprehensive income (loss)	73			4			(7		)	70
Spin-offs of Park and HGV	63			—			—			63
Balance as of June 30, 2017	$	(602	)	$	(247	)	$	(19	)	$	(868	)

____________

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

⁽²⁾  Amounts reclassified include the amortization of prior service cost and the amortization of net gain (loss) that were included in our computation of net periodic pension cost. They were recognized in other non-operating income (loss), net in our condensed consolidated statements of operations and are presented net of a tax benefit of $1 million and $2 million for the six months ended June 30, 2018 and 2017, respectively.

⁽³⁾  Amounts reclassified relate to the designated interest rate swaps, as well as the interest rate swaps that were settled in 2017 and 2018. The amounts were recognized in interest expense in our condensed consolidated statements of operations and are presented net of a tax benefit of $2 million and $5 million for the six months ended June 30, 2018 and 2017, respectively. See Note 7: "Derivative Instruments and Hedging Activities" for additional information.

XML

Earnings Per Share

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
	(in millions, except per share amounts)
Basic EPS:
Numerator:
Net income attributable to Hilton stockholders	$	217	$	150	$	378	$	197
Denominator:
Weighted average shares outstanding	301		327		308		328
Basic EPS	$	0.72	$	0.46	$	1.22	$	0.60
Diluted EPS:
Numerator:
Net income attributable to Hilton stockholders	$	217	$	150	$	378	$	197
Denominator:
Weighted average shares outstanding	303		329		311		330
Diluted EPS	$	0.71	$	0.46	$	1.21	$	0.60

Less than 1 million share-based compensation awards were excluded from the weighted average shares outstanding in the computation of diluted EPS for the three and six months ended June 30, 2018 and 2017 because their effect would have been anti-dilutive under the treasury stock method.

XML

Business Segments

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Business Segments

Business Segments

We are a hospitality company with operations organized in two distinct operating segments: (i) management and franchise; and (ii) ownership. These segments are managed and reported separately because of their distinct economic characteristics.

The management and franchise segment includes all of the hotels we manage for third-party owners, as well as all franchised hotels operated or managed by someone other than us. As of June 30, 2018, this segment included 662 managed hotels and 4,672 franchised hotels consisting of 849,265 total rooms. This segment also earns license fees from HGV and co-brand credit card arrangements, as well as fees for managing properties in our ownership segment.

As of June 30, 2018, the ownership segment included 71 properties totaling 21,717 rooms, comprising 62 hotels that we wholly owned or leased, one hotel owned by a consolidated non-wholly owned entity, two hotels leased by consolidated VIEs and six hotels owned or leased by unconsolidated affiliates.

The performance of our operating segments is evaluated primarily on operating income, without allocating corporate and other revenues and expenses or general and administrative expenses.

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
	(in millions)
Franchise fees	$	405		$	356		$	738		$	639
Base and other management fees(1)	101			95			191			185
Incentive management fees	59			57			114			106
Management and franchise	565			508			1,043			930
Ownership	392			373			726			669
Segment revenues	957			881			1,769			1,599
Amortization of contract acquisition costs	(7		)	(5		)	(14		)	(8		)
Other revenues	22			20			45			57
Direct reimbursements from managed and franchised properties	730			636			1,429			1,299
Indirect reimbursements from managed and franchised properties	600			554			1,155			1,042
Intersegment fees elimination(1)	(11		)	(10		)	(19		)	(17		)
Total revenues	$	2,291		$	2,076		$	4,365		$	3,972

____________

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

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
	(in millions)
Management and franchise(1)	$	565		$	508		$	1,043		$	930
Ownership(1)	29			36			35			57
Segment operating income	594			544			1,078			987
Amortization of contract acquisition costs	(7		)	(5		)	(14		)	(8		)
Other revenues, less other expenses	10			9			19			23
Net other revenues (expenses) from managed and franchised properties	3			(23		)	(18		)	(68		)
Depreciation and amortization	(79		)	(83		)	(161		)	(169		)
General and administrative	(115		)	(118		)	(219		)	(224		)
Operating income	406			324			685			541
Interest expense	(95		)	(86		)	(178		)	(175		)
Gain (loss) on foreign currency transactions	(12		)	5			(1		)	1
Loss on debt extinguishment	—			—			—			(60		)
Other non-operating income (loss), net	(1		)	7			13			9
Income before income taxes	$	298		$	250		$	519		$	316

____________

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

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

	June 30,		December 31,
	2018		2017
	(in millions)
Management and franchise	$	11,366	$	11,505
Ownership	954		964
Corporate and other	1,666		1,759
	$	13,986	$	14,228

The following table presents capital expenditures for property and equipment for our reportable segments, reconciled to consolidated amounts:

	Six Months Ended
	June 30,
	2018		2017
	(in millions)
Ownership	$	19	$	10
Corporate and other	9		8
	$	28	$	18

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure

Commitments and Contingencies

We provide performance guarantees to certain owners of hotels that we operate under management contracts. Most of these guarantees allow us to terminate the contract, rather than fund shortfalls, if specified operating performance levels are not achieved. However, in limited cases, we are obligated to fund performance shortfalls. We may enter into new contracts containing performance guarantees in the future, which could increase our possible cash outlays. As of June 30, 2018, we had four operating contracts containing performance guarantees, with expirations ranging from 2019 to 2030, and possible cash outlays totaling approximately $45 million. Our obligations under these guarantees in future periods are dependent on the operating performance levels of these hotels over the remaining terms of the performance guarantees. We do not have any letters of credit pledged as collateral against these guarantees. As of June 30, 2018 and December 31, 2017, we recorded $11 million and $12 million, respectively, in accounts payable, accrued expenses and other and $5 million and $9 million, respectively, in other liabilities in our condensed consolidated balance sheets for one and two outstanding performance guarantees, respectively, that are related to VIEs for which we are not the primary beneficiary.

We receive fees from managed and franchised properties to operate our marketing, sales and brand programs on behalf of hotel and resort owners. As of June 30, 2018 and December 31, 2017, we had collected an aggregate of $414 million and $402 million in excess of amounts expended, respectively, across all programs.

We are involved in various claims and lawsuits arising in the ordinary course of business, some of which include claims for substantial sums. While the ultimate results of claims and litigation cannot be predicted with certainty, we expect that the ultimate resolution of all pending or threatened claims and litigation as of June 30, 2018 will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

XML

Condensed Consolidating Guarantor Financial Information

6 Months Ended

Jun. 30, 2018

Condensed Consolidating Guarantor Financial Information [Abstract]

Condensed Consolidating Guarantor Financial Information

Condensed Consolidating Guarantor Financial Information

In April 2018, Hilton Domestic Operating Company Inc. ("HOC"), which is 100 percent owned by Hilton Worldwide Finance LLC, issued the 2026 Senior Notes. In March 2017, Hilton Worldwide Finance LLC and Hilton Worldwide Finance Corp. (the "HWF Issuers"), entities that are 100 percent owned by Hilton Worldwide Parent LLC ("HWP"), which is 100 percent owned by the Parent, issued the 2025 Senior Notes and 2027 Senior Notes. In September 2016, HOC assumed the 2024 Senior Notes that were issued in August 2016 by escrow issuers. The HWF Issuers are guarantors of the 2026 Senior Notes and the 2024 Senior Notes. HOC is a guarantor of the 2025 Senior Notes and the 2027 Senior Notes. The 2024 Senior Notes, 2025 Senior Notes, 2026 Senior Notes and 2027 Senior Notes are collectively referred to as the Senior Notes. The HWF Issuers and HOC are collectively referred to as the Subsidiary Issuers.

The Senior Notes are guaranteed jointly and severally on a senior unsecured basis by HWP, the Parent and certain of the Parent's 100 percent owned domestic restricted subsidiaries that are themselves not issuers of the applicable series of Senior Notes (together, the "Guarantors''). The indentures that govern the Senior Notes provide that any subsidiary of the Company that provides a guarantee of our senior secured credit facility will guarantee the Senior Notes. As of June 30, 2018, none of our foreign subsidiaries or U.S. subsidiaries owned by foreign subsidiaries or conducting foreign operations or our non-wholly owned subsidiaries guarantee the Senior Notes (collectively, the "Non-Guarantors").

The condensed consolidating financial information presents the financial information for all periods based on the composition of the Guarantors and Non-Guarantors as of June 30, 2018.

The guarantees are full and unconditional, subject to certain customary release provisions. The indentures that govern the Senior Notes provide that any Guarantor may be released from its guarantee so long as: (i) the subsidiary is sold or sells all of its assets; (ii) the subsidiary is released from its guaranty under our senior secured credit facility; (iii) the subsidiary is declared "unrestricted" for covenant purposes; (iv) the subsidiary is merged with or into the applicable Subsidiary Issuers or another Guarantor or the Guarantor liquidates after transferring all of its assets to the applicable Subsidiary Issuers or another Guarantor; or (v) the requirements for legal defeasance or covenant defeasance or to discharge the indenture have been satisfied, in each case in compliance with applicable provisions of the indentures.

The following tables present the condensed consolidating financial information as of June 30, 2018 and December 31, 2017, and for the three and six months ended June 30, 2018 and 2017, for the Parent, HWF Issuers, HOC, Guarantors and Non-Guarantors.

	June 30, 2018
	Parent		HWF Issuers		HOC		Guarantors		Non-Guarantors		Eliminations			Total
	(in millions)
ASSETS
Current Assets:
Cash and cash equivalents	$	—	$	—	$	3	$	14	$	406	$	—		$	423
Restricted cash and cash equivalents	—		—		34		16		32		—			82
Accounts receivable, net	—		—		21		734		287		(1		)	1,041
Intercompany receivables	—		—		—		—		40		(40		)	—
Prepaid expenses	—		—		16		49		88		(2		)	151
Income taxes receivable	—		—		—		32		—		(21		)	11
Other	—		2		1		21		112		—			136
Total current assets	—		2		75		866		965		(64		)	1,844
Intangibles and Other Assets:
Investments in subsidiaries	553		5,397		8,095		553		—		(14,598		)	—
Goodwill	—		—		—		3,824		1,350		—			5,174
Brands	—		—		—		4,405		473		—			4,878
Management and franchise contracts, net	—		—		—		587		306		—			893
Other intangible assets, net	—		—		—		281		138		—			419
Property and equipment, net	—		—		21		65		265		—			351
Deferred income tax assets	5		—		102		—		111		(107		)	111
Other	—		49		31		65		171		—			316
Total intangibles and other assets	558		5,446		8,249		9,780		2,814		(14,705		)	12,142
TOTAL ASSETS	$	558	$	5,448	$	8,324	$	10,646	$	3,779	$	(14,769	)	$	13,986
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other	$	3	$	20	$	170	$	548	$	573	$	(2	)	$	1,312
Current portion of deferred revenues	—		—		37		261		11		(1		)	308
Intercompany payables	—		—		40		—		—		(40		)	—
Current maturities of long-term debt	—		—		—		—		11		—			11
Income taxes payable	—		—		—		—		43		(21		)	22
Current portion of liability for guest loyalty program	—		—		—		725		—		—			725
Total current liabilities	3		20		247		1,534		638		(64		)	2,378
Long-term debt	—		4,865		2,464		—		235		—			7,564
Deferred revenues	—		—		1		757		61		—			819
Deferred income tax liabilities	—		10		—		1,000		5		(107		)	908
Liability for guest loyalty program	—		—		—		876		—		—			876
Other	—		—		215		64		602		—			881
Total liabilities	3		4,895		2,927		4,231		1,541		(171		)	13,426
Equity:
Total Hilton stockholders' equity	555		553		5,397		6,415		2,233		(14,598		)	555
Noncontrolling interests	—		—		—		—		5		—			5
Total equity	555		553		5,397		6,415		2,238		(14,598		)	560
TOTAL LIABILITIES AND EQUITY	$	558	$	5,448	$	8,324	$	10,646	$	3,779	$	(14,769	)	$	13,986

	December 31, 2017
	Parent		HWF Issuers		HOC		Guarantors		Non-Guarantors		Eliminations			Total
	(in millions)
ASSETS
Current Assets:
Cash and cash equivalents	$	—	$	—	$	2	$	18	$	550	$	—		$	570
Restricted cash and cash equivalents	—		—		61		10		29		—			100
Accounts receivable, net	—		—		18		712		275		—			1,005
Intercompany receivables	—		—		—		—		40		(40		)	—
Prepaid expenses	—		—		25		24		84		(6		)	127
Income taxes receivable	—		—		—		60		—		(24		)	36
Other	—		—		1		13		155		—			169
Total current assets	—		—		107		837		1,133		(70		)	2,007
Intangibles and Other Assets:
Investments in subsidiaries	1,697		7,067		8,326		1,697		—		(18,787		)	—
Goodwill	—		—		—		3,824		1,366		—			5,190
Brands	—		—		—		4,405		485		—			4,890
Management and franchise contracts, net	—		—		2		645		306		—			953
Other intangible assets, net	—		—		1		283		149		—			433
Property and equipment, net	—		—		20		67		266		—			353
Deferred income tax assets	6		—		104		—		127		(126		)	111
Other	—		20		32		67		172		—			291
Total intangibles and other assets	1,703		7,087		8,485		10,988		2,871		(18,913		)	12,221
TOTAL ASSETS	$	1,703	$	7,087	$	8,592	$	11,825	$	4,004	$	(18,983	)	$	14,228
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other	$	15	$	20	$	184	$	576	$	624	$	(3	)	$	1,416
Current portion of deferred revenues	—		—		90		266		13		(3		)	366
Intercompany payables	—		—		40		—		—		(40		)	—
Current maturities of long-term debt	—		32		—		—		14		—			46
Income taxes payable	—		—		—		—		36		(24		)	12
Current portion of liability for guest loyalty program	—		—		—		622		—		—			622
Total current liabilities	15		52		314		1,464		687		(70		)	2,462
Long-term debt	—		5,333		983		—		240		—			6,556
Deferred revenues	—		—		—		770		59		—			829
Deferred income tax liabilities	—		5		—		1,052		—		(126		)	931
Liability for guest loyalty program	—		—		—		839		—		—			839
Other	—		—		228		64		628		—			920
Total liabilities	15		5,390		1,525		4,189		1,614		(196		)	12,537
Equity:
Total Hilton stockholders' equity	1,688		1,697		7,067		7,636		2,387		(18,787		)	1,688
Noncontrolling interests	—		—		—		—		3		—			3
Total equity	1,688		1,697		7,067		7,636		2,390		(18,787		)	1,691
TOTAL LIABILITIES AND EQUITY	$	1,703	$	7,087	$	8,592	$	11,825	$	4,004	$	(18,983	)	$	14,228

	Three Months Ended June 30, 2018
	Parent		HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Revenues
Franchise fees	$	—	$	—		$	50		$	322		$	36		$	(4	)	$	404
Base and other management fees	—		—			1			55			28			—			84
Incentive management fees	—		—			—			22			37			—			59
Owned and leased hotels	—		—			—			—			392			—			392
Other revenues	—		—			1			17			3			1			22
	—		—			52			416			496			(3		)	961
Other revenues from managed and franchised properties	—		—			62			1,110			158			—			1,330
Total revenues	—		—			114			1,526			654			(3		)	2,291
Expenses
Owned and leased hotels	—		—			—			—			352			—			352
Depreciation and amortization	—		—			2			58			19			—			79
General and administrative	—		—			83			—			32			—			115
Other expenses	—		—			2			8			6			(4		)	12
	—		—			87			66			409			(4		)	558
Other expenses from managed and franchised properties	—		—			62			1,114			151			—			1,327
Total expenses	—		—			149			1,180			560			(4		)	1,885
Operating income (loss)	—		—			(35		)	346			94			1			406
Interest expense	—		(57		)	(31		)	—			(9		)	2			(95		)
Gain (loss) on foreign currency transactions	—		—			6			(89		)	71			—			(12		)
Other non-operating income (loss), net	—		(7		)	1			4			4			(3		)	(1		)
Income (loss) before income taxes and equity in earnings from subsidiaries	—		(64		)	(59		)	261			160			—			298
Income tax benefit (expense)	—		16			14			(61		)	(50		)	—			(81		)
Income (loss) before equity in earnings from subsidiaries	—		(48		)	(45		)	200			110			—			217
Equity in earnings from subsidiaries	217		265			310			217			—			(1,009		)	—
Net income	217		217			265			417			110			(1,009		)	217
Net income attributable to noncontrolling interests	—		—			—			—			—			—			—
Net income attributable to Hilton stockholders	$	217	$	217		$	265		$	417		$	110		$	(1,009	)	$	217
Comprehensive income	$	155	$	227		$	266		$	416		$	38		$	(947	)	$	155
Comprehensive income attributable to noncontrolling interests	—		—			—			—			—			—			—
Comprehensive income attributable to Hilton stockholders	$	155	$	227		$	266		$	416		$	38		$	(947	)	$	155

	Three Months Ended June 30, 2017
	Parent		HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Revenues
Franchise fees	$	—	$	—		$	49		$	282		$	29		$	(5	)	$	355
Base and other management fees	—		—			—			52			29			—			81
Incentive management fees	—		—			—			21			36			—			57
Owned and leased hotels	—		—			—			—			373			—			373
Other revenues	—		—			2			16			2			—			20
	—		—			51			371			469			(5		)	886
Other revenues from managed and franchised properties	—		—			44			1,001			145			—			1,190
Total revenues	—		—			95			1,372			614			(5		)	2,076
Expenses
Owned and leased hotels	—		—			—			—			327			—			327
Depreciation and amortization	—		—			2			59			22			—			83
General and administrative	—		—			92			—			28			(2		)	118
Other expenses	—		—			3			7			4			(3		)	11
	—		—			97			66			381			(5		)	539
Other expenses from managed and franchised properties	—		—			45			1,006			162			—			1,213
Total expenses	—		—			142			1,072			543			(5		)	1,752
Operating income (loss)	—		—			(47		)	300			71			—			324
Interest expense	—		(60		)	(14		)	—			(12		)	—			(86		)
Gain (loss) on foreign currency transactions	—		—			2			53			(50		)	—			5
Other non-operating income, net	—		—			2			3			2			—			7
Income (loss) before income taxes and equity in earnings from subsidiaries	—		(60		)	(57		)	356			11			—			250
Income tax benefit (expense)	—		23			19			(138		)	(3		)	—			(99		)
Income (loss) before equity in earnings from subsidiaries	—		(37		)	(38		)	218			8			—			151
Equity in earnings from subsidiaries	150		187			225			150			—			(712		)	—
Net income	150		150			187			368			8			(712		)	151
Net income attributable to noncontrolling interests	—		—			—			—			(1		)	—			(1		)
Net income attributable to Hilton stockholders	$	150	$	150		$	187		$	368		$	7		$	(712	)	$	150
Comprehensive income	$	200	$	145		$	186		$	369		$	64		$	(762	)	$	202
Comprehensive income attributable to noncontrolling interests	—		—			—			—			(2		)	—			(2		)
Comprehensive income attributable to Hilton stockholders	$	200	$	145		$	186		$	369		$	62		$	(762	)	$	200

	Six Months Ended June 30, 2018
	Parent		HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Revenues
Franchise fees	$	—	$	—		$	94		$	584		$	65		$	(8	)	$	735
Base and other management fees	—		—			1			106			54			—			161
Incentive management fees	—		—			—			43			71			—			114
Owned and leased hotels	—		—			—			—			726			—			726
Other revenues	—		—			3			41			5			(4		)	45
	—		—			98			774			921			(12		)	1,781
Other revenues from managed and franchised properties	—		—			106			2,180			298			—			2,584
Total revenues	—		—			204			2,954			1,219			(12		)	4,365
Expenses
Owned and leased hotels	—		—			—			—			672			—			672
Depreciation and amortization	—		—			3			118			40			—			161
General and administrative	—		—			156			—			67			(4		)	219
Other expenses	—		—			4			15			15			(8		)	26
	—		—			163			133			794			(12		)	1,078
Other expenses from managed and franchised properties	—		—			108			2,198			296			—			2,602
Total expenses	—		—			271			2,331			1,090			(12		)	3,680
Operating income (loss)	—		—			(67		)	623			129			—			685
Interest expense	—		(118		)	(44		)	—			(19		)	3			(178		)
Gain (loss) on foreign currency transactions	—		—			3			(81		)	77			—			(1		)
Other non-operating income (loss), net	—		(7		)	4			12			7			(3		)	13
Income (loss) before income taxes and equity in earnings from subsidiaries	—		(125		)	(104		)	554			194			—			519
Income tax benefit (expense)	—		31			27			(134		)	(63		)	—			(139		)
Income (loss) before equity in earnings from subsidiaries	—		(94		)	(77		)	420			131			—			380
Equity in earnings from subsidiaries	378		472			549			378			—			(1,777		)	—
Net income	378		378			472			798			131			(1,777		)	380
Net income attributable to noncontrolling interests	—		—			—						(2		)	—			(2		)
Net income attributable to Hilton stockholders	$	378	$	378		$	472		$	798		$	129		$	(1,777	)	$	378
Comprehensive income	$	377	$	417		$	473		$	798		$	90		$	(1,776	)	$	379
Comprehensive income attributable to noncontrolling interests	—		—			—			—			(2		)	—			(2		)
Comprehensive income attributable to Hilton stockholders	$	377	$	417		$	473		$	798		$	88		$	(1,776	)	$	377

	Six Months Ended June 30, 2017
	Parent		HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Revenues
Franchise fees	$	—	$	—		$	68		$	526		$	52		$	(9	)	$	637
Base and other management fees	—		—			—			101			61			—			162
Incentive management fees	—		—			—			41			65			—			106
Owned and leased hotels	—		—			—			—			669			—			669
Other revenues	—		—			22			29			6			—			57
	—		—			90			697			853			(9		)	1,631
Other revenues from managed and franchised properties	—		—			85			1,982			274			—			2,341
Total revenues	—		—			175			2,679			1,127			(9		)	3,972
Expenses
Owned and leased hotels	—		—			—			—			595			—			595
Depreciation and amortization	—		—			3			121			45			—			169
General and administrative	—		—			171			2			53			(2		)	224
Other expenses	—		—			15			14			12			(7		)	34
	—		—			189			137			705			(9		)	1,022
Other expenses from managed and franchised properties	—		—			87			2,032			290			—			2,409
Total expenses	—		—			276			2,169			995			(9		)	3,431
Operating income (loss)	—		—			(101		)	510			132			—			541
Interest expense	—		(123		)	(30		)	—			(22		)	—			(175		)
Gain (loss) on foreign currency transactions	—		—			13			74			(86		)	—			1
Loss on debt extinguishment	—		(60		)	—			—			—			—			(60		)
Other non-operating income (loss), net	—		(3		)	3			4			5			—			9
Income (loss) before income taxes and equity in earnings from subsidiaries	—		(186		)	(115		)	588			29			—			316
Income tax benefit (expense)	—		73			43			(225		)	(8		)	—			(117		)
Income (loss) before equity in earnings from subsidiaries	—		(113		)	(72		)	363			21			—			199
Equity in earnings from subsidiaries	197		310			382			197			—			(1,086		)	—
Net income	197		197			310			560			21			(1,086		)	199
Net income attributable to noncontrolling interests	—		—			—			—			(2		)	—			(2		)
Net income attributable to Hilton stockholders	$	197	$	197		$	310		$	560		$	19		$	(1,086	)	$	197
Comprehensive income	$	267	$	190		$	313		$	561		$	94		$	(1,156	)	$	269
Comprehensive income attributable to noncontrolling interests	—		—			—			—			(2		)	—			(2		)
Comprehensive income attributable to Hilton stockholders	$	267	$	190		$	313		$	561		$	92		$	(1,156	)	$	267

	Six Months Ended June 30, 2018
	Parent			HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations		Total
	(in millions)
Operating Activities:
Net cash provided by (used in) operating activities	$	—		$	(102	)	$	(8	)	$	494		$	148		$	—	$	532
Investing Activities:
Capital expenditures for property and equipment	—			—			(4		)	(1		)	(23		)	—		(28		)
Capitalized software costs	—			—			—			(38		)	—			—		(38		)
Other	—			—			—			(3		)	(6		)	—		(9		)
Net cash used in investing activities	—			—			(4		)	(42		)	(29		)	—		(75		)
Financing Activities:
Borrowings	—			150			1,500			—			—			—		1,650
Repayment of debt	—			(660		)	—			—			(12		)	—		(672		)
Debt issuance costs	—			—			(21		)	—			—			—		(21		)
Intercompany transfers	1,531			612			(1,451		)	(450		)	(242		)	—		—
Dividends paid	(92		)	—			—			—			—			—		(92		)
Repurchases of common stock	(1,439		)	—			—			—			—			—		(1,439		)
Tax withholdings on share-based compensation	—			—			(42		)	—			—			—		(42		)
Net cash provided by (used in) financing activities	—			102			(14		)	(450		)	(254		)	—		(616		)
Effect of exchange rate changes on cash, restricted cash and cash equivalents	—			—			—			—			(6		)	—		(6		)
Net increase (decrease) in cash, restricted cash and cash equivalents	—			—			(26		)	2			(141		)	—		(165		)
Cash, restricted cash and cash equivalents, beginning of period	—			—			63			28			579			—		670
Cash, restricted cash and cash equivalents, end of period	$	—		$	—		$	37		$	30		$	438		$	—	$	505

	Six Months Ended June 30, 2017
	Parent			HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Operating Activities:
Net cash provided by (used in) operating activities	$	—		$	(69	)	$	(58	)	$	378		$	93		$	—		$	344
Investing Activities:
Capital expenditures for property and equipment	—			—			(3		)	(3		)	(12		)	—			(18		)
Capitalized software costs	—			—			—			(29		)	—			—			(29		)
Other	—			(13		)	—			(5		)	3			(3		)	(18		)
Net cash used in investing activities	—			(13		)	(3		)	(37		)	(9		)	(3		)	(65		)
Financing Activities:
Borrowings	—			1,823			—			—			—			—			1,823
Repayment of debt	—			(1,832		)	—			—			(4		)	—			(1,836		)
Debt issuance costs and redemption premium	—			(68		)	—			—			—			—			(68		)
Repayment of intercompany borrowings	—			—			(3		)	—			—			3			—
Intercompany transfers	450			159			92			(351		)	(350		)	—			—
Dividends paid	(98		)	—			—			—			—			—			(98		)
Cash transferred in spin-offs of Park and HGV	—			—			—			—			(501		)	—			(501		)
Repurchases of common stock	(352		)	—			—			—			—			—			(352		)
Distributions to noncontrolling interests	—			—			—			—			(1		)	—			(1		)
Tax withholdings on share-based compensation	—			—			(28		)	—			—			—			(28		)
Net cash provided by (used in) financing activities	—			82			61			(351		)	(856		)	3			(1,061		)
Effect of exchange rate changes on cash, restricted cash and cash equivalents	—			—			—			—			7			—			7
Net decrease in cash, restricted cash and cash equivalents	—			—			—			(10		)	(765		)	—			(775		)
Cash, restricted cash and cash equivalents from continuing operations, beginning of period	—			—			90			31			1,062			—			1,183
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period	—			—			—			—			501			—			501
Cash, restricted cash and cash equivalents, beginning of period	—			—			90			31			1,563			—			1,684
Cash, restricted cash and cash equivalents, end of period	$	—		$	—		$	90		$	21		$	798		$	—		$	909

XML

Basis of Presentation and Summary of Significant Accounting Policies - (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Revenue Recognition

Revenue Recognition

Revenues are primarily derived from management and franchise contracts with third-party hotel and resort owners, as well as from our owned and leased hotels. The majority of our performance obligations are a series of distinct goods or services, for which we receive variable consideration through our management and franchise fees or fixed consideration through our owned and leased hotels. We allocate the variable fees to the distinct services to which they relate applying the prescribed variable consideration allocation guidance, and we allocate fixed consideration to the related performance obligations based on the present value of the allocated variable cash flows. We do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised good or service to a customer and when the customer pays for that good or service will be one year or less, which it is in substantially all cases. Additionally, we do not typically include extended payment terms in our contracts with customers.

Management and franchise revenues

We identified the following performance obligations in connection with our management and franchise contracts:

• Intellectual Property ("IP") licenses grant the right to access our hotel system IP, including brand IP, reservations systems and property management systems.

• Hotel management services include providing day-to-day management services of the hotels for the property owners.

• Development services include providing consultative services (e.g., design assistance and contractor selection) to the property owner to assist with the construction of the hotel prior to the hotel opening.

• Pre-opening services include providing services (e.g., advertising, budgeting, e-commerce strategies, food and beverage testing) to the property owner to assist in preparing for the hotel opening.

• Material rights for free or discounted goods or services to hotel guests are satisfied at the earlier point in time of either when the material right expires or the underlying free or discounted good or service is provided to the hotel guest.

Each of the identified performance obligations related to management and franchise revenues is considered to be a series of distinct services transferred over time. While the underlying activities may vary from day to day, the nature of the promises are the same each day, and the property owner can independently benefit from each day's services. Management and franchise fees are typically based on the sales or usage of the underlying hotel, with the exception of fixed upfront fees, which usually represent an insignificant portion of the transaction price.

Franchise fees represent fees earned in connection with the licensing of one of our brands, usually under long-term contracts with the property owner, and include the following:

• Royalty fees are generally based on a percentage of the hotel's monthly gross room revenue and, in some cases, may also include a percentage of gross food and beverage revenues and other revenues, as applicable. These fees are typically billed and collected monthly, and revenue is generally recognized at the same time the fees are billed.

• Application, initiation and other fees are charged when: (i) new hotels enter our system; (ii) there is a change of ownership of a hotel; or (iii) contracts with properties already in our system are extended. These fees are typically fixed and collected upfront and are recognized as revenue over the term of the franchise contract. We do not consider this advance consideration to include a significant financing component, since it is used to protect us from the property owner failing to adequately complete some or all of its obligations under the contract.

• License fees are earned from: (i) a license agreement with HGV to use certain Hilton marks and IP in its timeshare business, which are typically billed and collected monthly, and revenue is generally recognized at the same time the fees are billed; and (ii) co-brand credit card arrangements, which are recognized as revenue when points for our guest loyalty program, Hilton Honors, are issued, generally as spend on the co-branded credit card occurs; see further discussion below under "Hilton Honors."

Franchise fees are reduced by any consideration paid or anticipated to be paid to incentivize hotel owners to enter into franchise contracts with us.

Management fees represent fees earned from hotels that we manage, usually under long-term contracts with the property owner, and include the following:

• Base management fees are generally based on a percentage of the hotel's monthly gross revenue. Base fees are typically billed and collected monthly, and revenue is generally recognized at the same time the fees are billed.

• Incentive management fees are generally based on a percentage of the hotel's operating profits and in some cases may be subject to a stated return threshold to the property owner, normally over a one-calendar year period (the "incentive period"). Incentive fee revenue is recognized on a monthly basis, but only to the extent the cumulative fee earned does not exceed the probable fee for the incentive period. Incentive fee payment terms vary, but they are generally billed and collected monthly or annually upon completion of the incentive period.

Base and other management fees are reduced by any consideration paid or anticipated to be paid to incentivize hotel owners to enter into management contracts with us.

Other revenues from managed and franchised properties represent amounts that are contractually reimbursed to us by property owners, either directly as costs are incurred or indirectly through fees that are billed and collected in advance related to certain costs and expenses of the related properties, and include the following:

• Direct reimbursements include payroll and related costs and certain other operating costs of the managed and franchised properties’ operations, which are contractually reimbursed to us by the property owners as expenses are incurred. Revenue is recognized based on the amount of expenses incurred by Hilton, which are presented as other expenses from managed and franchised properties in our consolidated statements of operations, that are then reimbursed to us by the property owner typically on a monthly basis, which results in no net effect on operating income (loss) or net income (loss).

• Indirect reimbursements include marketing expenses and other expenses associated with our brands and shared services, which are paid from fees collected by Hilton from the managed and franchised properties. Revenue is generally recognized as fees are billed, which are based on the underlying hotel's sales or usage (e.g., gross room revenues and number of reservations processed). System implementation fees charged to property owners are deferred and recognized as revenue over the term of the management or franchise contract. The corresponding expenses are expensed as incurred and are presented as other expenses from managed and franchised properties in our consolidated statements of operations and are expected to equal the revenues earned from indirect reimbursements over time.

The management and franchise fees and reimbursements from third-party hotel owners are allocated to the performance obligations and the distinct services to which they relate using their estimated standalone selling prices. The terms of the fees earned under the contract relate to a specific outcome of providing the services (e.g., hotel room sales) or to Hilton's efforts (e.g., costs) to satisfy the performance obligations. We use time as the measure of progress to recognize as revenue the fees that are allocated to the period earned per the contract or to the period when the reimbursable costs are incurred.

Owned and leased hotel revenues

We identified the following performance obligations in connection with our owned and leased hotel revenues, for which revenue is recognized as the respective performance obligations are satisfied, which results in recognizing the amount we expect to be entitled to for providing the goods or services:

• Cancellable room reservations or ancillary services are typically satisfied as the good or service is transferred to the hotel guest, which is generally when the room stay occurs.

• Noncancellable room reservations and banquet or conference reservations represent a series of distinct goods or services provided over time and satisfied as each distinct good or service is provided, which is reflected by the duration of the room reservation.

• Material rights for free or discounted goods or services are satisfied at the earlier point in time when the material right expires or the underlying free or discounted good or service is provided to the hotel guest.

• Other ancillary goods and services are purchased independently of the room reservation at standalone selling prices and are considered separate performance obligations, which are satisfied when the related good or service is provided to the hotel guest.

• Components of package reservations for which each component could be sold separately to other hotel guests are considered separate performance obligations and are satisfied as set forth above.

Owned and leased hotel revenues primarily consist of hotel room rentals, revenue from accommodations sold in conjunction with other services (e.g., package reservations), food and beverage sales and other ancillary goods and services (e.g., parking) related to owned, leased and consolidated non-wholly owned hotel properties. Revenue is recognized when rooms are occupied or goods and services have been delivered or rendered, respectively. Payment terms typically align with when the goods and services are provided. Owned and leased hotel revenues are reduced upon issuance of Hilton Honors points, for Hilton Honors members' paid stay transactions and are recognized when Hilton Honors points are redeemed for a free stay at an owned or leased hotel (see the "Hilton Honors" section below for additional information).

Although the transaction prices of room rentals, goods and other services are generally fixed and based on the respective room reservation or other agreement, an estimate to reduce the transaction price is required if a discount is expected to be provided to the customer. For package reservations, the transaction price is allocated to the performance obligations within the package based on the estimated standalone selling prices of each component. On occasion, the hotel may also provide the customer with a material right to a free or discounted good or service in conjunction with a room reservation or banquet contract (e.g., free breakfast and free room night for every four nights booked). These material rights are considered separate performance obligations to which a portion of the transaction price is allocated based on the estimated standalone selling prices of the good or service, adjusted for the likelihood the hotel guest will exercise the right.

Other revenues

Other revenues include revenues generated by the incidental support of hotel operations for owned, leased, managed and franchised hotels, including purchasing operations, and other operating income. Purchasing revenues include any amounts received for vendor rebate arrangements that we participate in as a manager of hotels.

Taxes and fees collected on behalf of governmental agencies

We are required to collect certain taxes and fees from customers on behalf of governmental agencies and remit these back to the applicable governmental agencies on a periodic basis. We have a legal obligation to act as a collection agent. We do not retain these taxes and fees and, therefore, they are not included in our measurement of transaction prices. We have elected to present revenue net of sales taxes and other similar taxes. We record a liability when the amounts are collected and relieve the liability when payments are made to the applicable taxing authority or other appropriate governmental agency.

Contract Assets

Contract assets relate to incentive management fees for which the period of service has passed, but for which our right to consideration is conditional upon completing the requirements of the incentive fee period. Contract assets are included in other current assets in our consolidated balance sheets and are reclassified as accounts receivable when our right to consideration becomes unconditional.

Contract Liabilities

Contract liabilities relate to: (i) advance consideration received from hotel owners at contract inception for services considered to be part of the contract performance obligations, such as management or franchise contract application, initiation, renewal and other fees; (ii) advance consideration received for certain indirect reimbursements, such as system implementation fees; and (iii) amounts received when points are issued under Hilton Honors, but for which revenue is not yet recognized, since the related points are not yet redeemed. Contract liabilities related to advance consideration received for fees, excluding Hilton Honors, and certain indirect reimbursements are recognized as revenue over the term of the related contract. Contract liabilities related to amounts received for Hilton Honors are recognized as revenue when the points are redeemed for a free good or service by the Hilton Honors member, which, on average, occurs within two years of points issuance. Contract liabilities are included in deferred revenues in our consolidated balance sheets.

Intangible Assets, Finite-Lived

Intangible Assets with Finite Useful Lives

We have certain finite lived intangible assets that were initially recorded at their fair value in connection with the October 24, 2007 transaction whereby we became a wholly owned subsidiary of an affiliate of The Blackstone Group L.P. ("Blackstone") (the "Merger"). These intangible assets consist of management contracts, franchise contracts, leases, certain proprietary technologies and our Hilton Honors guest loyalty program. Additionally, we capitalize cash consideration paid to incentivize hotel owners to enter into management and franchise contracts with us as contract acquisition costs and the incremental costs to obtain or fulfill the contracts as development commissions, which are generally fixed. We also capitalize costs incurred to develop internal-use computer software and costs to acquire software licenses, as well as internal and external costs incurred in connection with development of upgrades or enhancements that result in additional information technology functionality.

Intangible assets with finite useful lives are amortized using the straight-line method over their respective estimated useful lives, which for contract acquisition costs and development commissions is the contract term, including any renewal periods that are at our sole option. These estimated useful lives are generally as follows: management contracts recorded at the Merger (13 to 16 years); management contract acquisition costs and development commissions (20 to 30 years); franchise contracts recorded at the Merger (12 to 13 years); franchise contract acquisition costs and development commissions (10 to 20 years); leases (12 to 35 years); Hilton Honors (16 years); and capitalized software development costs (3 years).The amortization of these intangible assets, excluding contract acquisition costs, is included in depreciation and amortization expense in our consolidated statements of operations, and the amortization of contract acquisition costs is recognized as a reduction to franchise fees and base and other management fees in our consolidated statements of operations, based on contract type. Costs incurred prior to the acquisition of a contract, such as external legal costs, are expensed as incurred and included in general and administrative expenses in our consolidated statements of operations. Cash flows for contract acquisition costs and development commissions are included as operating activities in our consolidated statements of cash flows.

We review all finite lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess carrying value over the fair value in our consolidated statements of operations.

Hilton Honors

Hilton Honors

Hilton Honors is our guest loyalty and marketing program provided to our hotel and resort properties. Nearly all of our owned, leased, managed and franchised properties participate in the Hilton Honors program. Hilton Honors members earn points based on their spending at our participating properties and through participation in affiliated partner programs. When points are earned by Hilton Honors members, they are provided with a material right to free or discounted goods or services in the future upon accumulation of the required level of Hilton Honors points. Points may be redeemed for the right to stay at participating properties, as well as for other goods and services from third parties, including, but not limited to, airlines, car rentals, cruises, vacation packages, shopping and dining. As the points are issued to a Hilton Honors member, the property or affiliated partner pays Hilton Honors based on an estimated cost per point for the costs of operating the program, which include marketing, promotion, communication and administrative expenses, as well as the estimated cost of award redemptions.

We record liabilities for the payments received from participating hotels and program partners, which are typically due when the points are issued to a Hilton Honors member. Amounts equal to the estimated cost per point of the future redemption obligation are included in the liability for guest loyalty program and any amounts received in excess of the estimated cost per point are included in deferred revenues in our consolidated balance sheets. We engage outside actuaries to assist in determining the fair value of the future redemption obligation using statistical formulas that project future point redemptions based on factors that include historical experience, an estimate of points that will eventually be redeemed, which includes an estimate of "breakage" for points that will never be redeemed, and the cost of reimbursing properties and other third parties with respect to other redemption opportunities available to Hilton Honors members. When points are issued as a result of a stay at an owned or leased hotel, we recognize a reduction in owned and leased hotel revenues, since we are also the guest loyalty program sponsor. For the Hilton Honors fees that are charged to the participating properties, we allocate the fees to the material right created by the Hilton Honors points that are issued using the variable consideration allocation guidance, since the fees are directly related to the issuance of Hilton Honors points to the Hilton Honors member and Hilton's efforts to satisfy the future redemption of those Hilton Honors points.

The transaction prices for the Hilton Honors points are reduced by the expected payments to the third parties that will provide the free or discounted room or service using the actuarial projection of the cost per point. The remaining transaction price is then further allocated to the points that are expected to be redeemed, adjusting the points that are issued for estimated breakage, and recognized when those points are redeemed. While the points are outstanding, both the estimate of the expected payments to third parties (cost per point) and the estimated breakage are reevaluated, and the amount of revenue recognized when each point is redeemed is adjusted so that the final amount allocated to the material right is reflective of the amount retained for providing the free or discounted goods and services, net of the payments to third parties and points not redeemed.

We also earn license fees from co-brand credit card arrangements (see "Management and franchise revenues" within the "Revenue Recognition" section above). The co-brand license fee is allocated between two performance obligations based on their estimated standalone selling prices: (i) an IP license using the relief-from-royalty method; and (ii) material rights for free or discounted goods or services to the credit card customers using a cost plus method based on an evaluation of other third-party administrators.

We satisfy our performance obligation related to points issued under Hilton Honors when points are redeemed for a free good or service by the Hilton Honors member, and we satisfy our remaining performance obligations over time as the customer simultaneously receives and consumes the benefits of the goods or services provided. Hilton Honors reimburses participating properties when points are redeemed by members at the respective properties, at which time the redemption obligation is reduced and the related deferred revenue is recognized in other revenues from managed and franchised properties in our consolidated statements of operations. Additionally, when Hilton Honors members redeem award certificates at our owned and leased hotels, we recognize room revenue, included in owned and leased hotel revenues in our consolidated statements of operations.

New Accounting Pronouncements

Recently Issued Accounting Pronouncements

Adopted Accounting Standards

In March 2017, the Financial Accounting Standards Board ("FASB") issued ASU No. 2017-07 ("ASU 2017-07"), Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This ASU requires employers to report the service cost component of net periodic pension cost in the same line item or items of the statement of operations as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net periodic pension cost must be presented separately from the service cost component and outside of a subtotal of income (loss) from operations. We adopted ASU 2017-07 on January 1, 2018 on a retrospective basis in our condensed consolidated statements of operations, which includes presenting: (i) the service cost component of net periodic pension cost in owned and leased hotel expenses and general and administrative expenses; and (ii) the other components of net periodic pension cost in other non-operating income (loss), net in our condensed consolidated statements of operations. Prior to adoption, all net periodic pension costs were presented in owned and leased hotel expenses and general and administrative expenses. We have applied the practical expedient permitting us to use the amounts disclosed in our Employee Benefits Plans note in our Annual Report on Form 10-K for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. See the "Prior Period Financial Information" below for the effect of the adoption of ASU 2017-07 on our condensed consolidated statements of operations for the three and six months ended June 30, 2017.

In May 2014, the FASB issued ASU 2014-09. This ASU supersedes the revenue recognition requirements in Revenue Recognition (Topic 605) and requires entities to recognize revenue when a customer obtains control of promised goods or services and in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. Subsequent to ASU 2014-09, the FASB issued several related ASUs to clarify the application of the new revenue recognition standard, collectively referred to herein as ASU 2014-09. We adopted the requirements of ASU 2014-09 on January 1, 2018 using the full retrospective approach, as permitted by the standard, resulting in a cumulative adjustment to accumulated deficit of $212 million as of January 1, 2016.

The provisions of ASU 2014-09 affected our revenue recognition as follows:

• Application, initiation and other fees are recognized over the term of the franchise contract, rather than upon execution of the contract and the unamortized portion of these fees is included in deferred revenues in our condensed consolidated balance sheets.

• Contract acquisition costs related to our management and franchise contracts are recognized over the term of the contracts as a reduction to revenue, instead of as amortization expense. This change does not affect net income (loss).

• Incentive management fees are recognized to the extent that it is probable that a significant reversal will not occur as a result of future hotel profits or cash flows, as opposed to recognizing amounts that would be due if the management contract was terminated at the end of the reporting period. This change does not affect net income (loss) for any full year period.

• Revenue related to our Hilton Honors guest loyalty program is recognized upon point redemption, net of any reward reimbursement paid to a third party, as opposed to recognized on a gross basis at the time points are issued in conjunction with the accrual of the expected future cost of the reward reimbursement. Additionally, points issued at owned and leased hotels are accounted for as a reduction of revenue from owned and leased hotels, as opposed to expenses of owned and leased hotels. Fees received in excess of the estimated liability for guest loyalty program are included in deferred revenues in our condensed consolidated balance sheets.

• Reimbursable fees related to our management and franchise contracts are recognized as they are billed, as opposed to when we incur the related expenses. Timing differences related to the receipt and spend of these fees will no longer be recorded in other assets and other liabilities in our condensed consolidated balance sheets.

We have not retrospectively restated for contract modifications of management and franchise contracts that occurred before January 1, 2016. Instead, we have reflected the aggregate effect of all contract modifications when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price. The estimated effect of applying this practical expedient is to use a longer period over which to straight line any fixed consideration either received from the customer or paid to the customer, since all fees will be amortized over the full contract term beginning on the date of initial execution, rather than amortizing fees received upon contract modifications prospectively from the contract modification date. We do not anticipate that this effect is material given the insignificance of the fixed consideration compared to the overall consideration we expect to earn over the term of the contract. See the "Prior Period Financial Information" below for the effect of the adoption of ASU 2014-09 on our condensed consolidated balance sheet as of December 31, 2017 and our condensed consolidated statements of operations for the three and six months ended June 30, 2017.

Prior Period Financial Information

The following table presents the effect of the adoption of ASU 2014-09 for the line items affected in our condensed consolidated balance sheet:

	December 31, 2017
	As Previously Reported			Adoption of ASU 2014-09			As Adjusted
	(in millions)
ASSETS
Accounts receivable, net	$	998		$	7		$	1,005
Prepaid expenses	111			16			127
Other current assets	171			(2		)	169
Management and franchise contracts, net	909			44			953
Deferred income tax assets	113			(2		)	111
Other non-current assets	434			(143		)	291
TOTAL ASSETS	14,308			(80		)	14,228
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable, accrued expenses and other(1)(2)	1,487			(71		)	1,416
Current portion of deferred revenues(1)	41			325			366
Deferred revenues	97			732			829
Deferred income tax liabilities	1,063			(132		)	931
Other non-current liabilities	1,470			(550		)	920
Total liabilities	12,233			304			12,537
Equity:
Accumulated deficit	(6,596		)	(385		)	(6,981		)
Accumulated other comprehensive loss	(742		)	1			(741		)
Total equity	2,075			(384		)	1,691
TOTAL LIABILITIES AND EQUITY	14,308			(80		)	14,228

____________

⁽¹⁾  The current portion of deferred revenues has been separated from accounts payable, accrued expenses and other in the "As Previously Reported" column following the adoption of ASU 2014-09.

⁽²⁾  The current portion of liability for guest loyalty program has been separated from accounts payable, accrued expenses and other to conform with current presentation. The balance was $622 million as of December 31, 2017 and did not change as a result of the adoption of ASU 2014-09.

The following tables present the effect of the adoption of ASU 2014-09 and ASU 2017-07 on our condensed consolidated statement of operations:

	Three Months Ended June 30, 2017
	As Previously Reported			Adoption of ASU 2014-09			Adoption of ASU 2017-07			As Adjusted
	(in millions)
Revenues
Franchise fees	$	372		$	(17	)	$	—		$	355
Base and other management fees	85			(4		)	—			81
Incentive management fees	56			1			—			57
Owned and leased hotels	377			(4		)	—			373
Other revenues	20			—			—			20
	910			(24		)	—			886
Other revenues from managed and franchised properties	1,436			(246		)	—			1,190
Total revenues	2,346			(270		)	—			2,076
Expenses
Owned and leased hotels	330			(4		)	1			327
Depreciation and amortization	87			(4		)	—			83
General and administrative	117			—			1			118
Other expenses	11			—			—			11
	545			(8		)	2			539
Other expenses from managed and franchised properties	1,436			(223		)	—			1,213
Total expenses	1,981			(231		)	2			1,752
Operating income	365			(39		)	(2		)	324
Interest expense	(100		)	14			—			(86		)
Gain on foreign currency transactions	5			—			—			5
Other non-operating income, net	5			—			2			7
Income before income taxes	275			(25		)	—			250
Income tax expense	(108		)	9			—			(99		)
Net income	167			(16		)	—			151
Net income attributable to noncontrolling interests	(1		)	—			—			(1		)
Net income attributable to Hilton stockholders	$	166		$	(16	)	$	—		$	150
Earnings per share:
Basic	$	0.51								$	0.46
Diluted	$	0.51								$	0.46

	Six Months Ended June 30, 2017
	As Previously Reported			Adoption of ASU 2014-09			Adoption of ASU 2017-07			As Adjusted
	(in millions)
Revenues
Franchise fees	$	666		$	(29	)	$	—		$	637
Base and other management fees	168			(6		)	—			162
Incentive management fees	108			(2		)	—			106
Owned and leased hotels	677			(8		)	—			669
Other revenues	57			—			—			57
	1,676			(45		)	—			1,631
Other revenues from managed and franchised properties	2,831			(490		)	—			2,341
Total revenues	4,507			(535		)	—			3,972
Expenses
Owned and leased hotels	602			(8		)	1			595
Depreciation and amortization	176			(7		)	—			169
General and administrative	222			—			2			224
Other expenses	34			—			—			34
	1,034			(15		)	3			1,022
Other expenses from managed and franchised properties	2,831			(422		)	—			2,409
Total expenses	3,865			(437		)	3			3,431
Operating income	642			(98		)	(3		)	541
Interest expense	(204		)	29			—			(175		)
Gain on foreign currency transactions	1			—			—			1
Loss on debt extinguishment	(60		)	—			—			(60		)
Other non-operating income, net	6			—			3			9
Income before income taxes	385			(69		)	—			316
Income tax expense	(143		)	26			—			(117		)
Net income	242			(43		)	—			199
Net income attributable to noncontrolling interests	(2		)	—			—			(2		)
Net income attributable to Hilton stockholders	$	240		$	(43	)	$	—		$	197
Earnings per share:
Basic	$	0.73								$	0.60
Diluted	$	0.73								$	0.60

Accounting Standards Not Yet Adopted

In February 2018, the FASB issued ASU No. 2018-02 ("ASU 2018-02"), Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASU permits a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects that do not reflect the appropriate tax rates as a result of the Tax Cuts and Jobs Act of 2017 (the "TCJ Act"). The provisions of ASU 2018-02 are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years and should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the tax rate in the TCJ Act is recognized. Early adoption is permitted. We are currently evaluating the effect that ASU 2018-02 will have on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02 ("ASU 2016-02"), Leases (Topic 842), which supersedes existing guidance on accounting for leases in Leases (Topic 840) and generally requires all leases, including operating leases, to be recognized in the statement of financial position as right-of-use assets and lease liabilities by lessees. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach and are effective for reporting periods beginning after December 15, 2018; early adoption is permitted. We intend to adopt the standard on January 1, 2019 and apply the package of practical expedients available to us upon adoption. We are continuing to evaluate the effect that this ASU will have on our consolidated financial statements, but we expect this ASU to have a material effect on our consolidated balance sheet.

XML

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

Prior Period Financial Information

The following table presents the effect of the adoption of ASU 2014-09 for the line items affected in our condensed consolidated balance sheet:

	December 31, 2017
	As Previously Reported			Adoption of ASU 2014-09			As Adjusted
	(in millions)
ASSETS
Accounts receivable, net	$	998		$	7		$	1,005
Prepaid expenses	111			16			127
Other current assets	171			(2		)	169
Management and franchise contracts, net	909			44			953
Deferred income tax assets	113			(2		)	111
Other non-current assets	434			(143		)	291
TOTAL ASSETS	14,308			(80		)	14,228
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable, accrued expenses and other(1)(2)	1,487			(71		)	1,416
Current portion of deferred revenues(1)	41			325			366
Deferred revenues	97			732			829
Deferred income tax liabilities	1,063			(132		)	931
Other non-current liabilities	1,470			(550		)	920
Total liabilities	12,233			304			12,537
Equity:
Accumulated deficit	(6,596		)	(385		)	(6,981		)
Accumulated other comprehensive loss	(742		)	1			(741		)
Total equity	2,075			(384		)	1,691
TOTAL LIABILITIES AND EQUITY	14,308			(80		)	14,228

____________

⁽¹⁾  The current portion of deferred revenues has been separated from accounts payable, accrued expenses and other in the "As Previously Reported" column following the adoption of ASU 2014-09.

⁽²⁾  The current portion of liability for guest loyalty program has been separated from accounts payable, accrued expenses and other to conform with current presentation. The balance was $622 million as of December 31, 2017 and did not change as a result of the adoption of ASU 2014-09.

The following tables present the effect of the adoption of ASU 2014-09 and ASU 2017-07 on our condensed consolidated statement of operations:

	Three Months Ended June 30, 2017
	As Previously Reported			Adoption of ASU 2014-09			Adoption of ASU 2017-07			As Adjusted
	(in millions)
Revenues
Franchise fees	$	372		$	(17	)	$	—		$	355
Base and other management fees	85			(4		)	—			81
Incentive management fees	56			1			—			57
Owned and leased hotels	377			(4		)	—			373
Other revenues	20			—			—			20
	910			(24		)	—			886
Other revenues from managed and franchised properties	1,436			(246		)	—			1,190
Total revenues	2,346			(270		)	—			2,076
Expenses
Owned and leased hotels	330			(4		)	1			327
Depreciation and amortization	87			(4		)	—			83
General and administrative	117			—			1			118
Other expenses	11			—			—			11
	545			(8		)	2			539
Other expenses from managed and franchised properties	1,436			(223		)	—			1,213
Total expenses	1,981			(231		)	2			1,752
Operating income	365			(39		)	(2		)	324
Interest expense	(100		)	14			—			(86		)
Gain on foreign currency transactions	5			—			—			5
Other non-operating income, net	5			—			2			7
Income before income taxes	275			(25		)	—			250
Income tax expense	(108		)	9			—			(99		)
Net income	167			(16		)	—			151
Net income attributable to noncontrolling interests	(1		)	—			—			(1		)
Net income attributable to Hilton stockholders	$	166		$	(16	)	$	—		$	150
Earnings per share:
Basic	$	0.51								$	0.46
Diluted	$	0.51								$	0.46

	Six Months Ended June 30, 2017
	As Previously Reported			Adoption of ASU 2014-09			Adoption of ASU 2017-07			As Adjusted
	(in millions)
Revenues
Franchise fees	$	666		$	(29	)	$	—		$	637
Base and other management fees	168			(6		)	—			162
Incentive management fees	108			(2		)	—			106
Owned and leased hotels	677			(8		)	—			669
Other revenues	57			—			—			57
	1,676			(45		)	—			1,631
Other revenues from managed and franchised properties	2,831			(490		)	—			2,341
Total revenues	4,507			(535		)	—			3,972
Expenses
Owned and leased hotels	602			(8		)	1			595
Depreciation and amortization	176			(7		)	—			169
General and administrative	222			—			2			224
Other expenses	34			—			—			34
	1,034			(15		)	3			1,022
Other expenses from managed and franchised properties	2,831			(422		)	—			2,409
Total expenses	3,865			(437		)	3			3,431
Operating income	642			(98		)	(3		)	541
Interest expense	(204		)	29			—			(175		)
Gain on foreign currency transactions	1			—			—			1
Loss on debt extinguishment	(60		)	—			—			(60		)
Other non-operating income, net	6			—			3			9
Income before income taxes	385			(69		)	—			316
Income tax expense	(143		)	26			—			(117		)
Net income	242			(43		)	—			199
Net income attributable to noncontrolling interests	(2		)	—			—			(2		)
Net income attributable to Hilton stockholders	$	240		$	(43	)	$	—		$	197
Earnings per share:
Basic	$	0.73								$	0.60
Diluted	$	0.73								$	0.60

XML

Consolidated Variable Interest Entities (Tables)

6 Months Ended

Jun. 30, 2018

Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract]

Schedule of Variable Interest Entities

Our condensed consolidated balance sheets included the assets and liabilities of these entities, which primarily comprised the following:

	June 30,		December 31,
	2018		2017
	(in millions)
Cash and cash equivalents	$	73	$	73
Accounts receivable, net	12		16
Property and equipment, net	59		57
Deferred income tax assets	57		56
Other non-current assets	59		57
Accounts payable, accrued expenses and other	38		43
Long-term debt(1)	207		212
Other long-term liabilities	13		13

____________

⁽¹⁾  Includes capital lease obligations of $189 million and $191 million as of June 30, 2018 and December 31, 2017, respectively.

XML

Amortizing Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Amortizing Intangible Assets

Amortizing intangible assets were as follows:

	June 30, 2018
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
	(in millions)
Management and franchise contracts:
Management and franchise contracts recorded at Merger(1)	$	2,234	$	(1,794	)	$	440
Contract acquisition costs	451		(87		)	364
Development commissions	102		(13		)	89
	$	2,787	$	(1,894	)	$	893
Other amortizing intangible assets:
Leases(1)	$	295	$	(157	)	$	138
Capitalized software costs	619		(455		)	164
Hilton Honors(1)	339		(226		)	113
Other	38		(34		)	4
	$	1,291	$	(872	)	$	419

	December 31, 2017
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
	(in millions)
Management and franchise contracts:
Management and franchise contracts recorded at Merger(1)	$	2,242	$	(1,716	)	$	526
Contract acquisition costs	416		(74		)	342
Development commissions	97		(12		)	85
	$	2,755	$	(1,802	)	$	953
Other amortizing intangible assets:
Leases(1)	$	301	$	(153	)	$	148
Capitalized software costs	585		(428		)	157
Hilton Honors(1)	341		(217		)	124
Other	38		(34		)	4
	$	1,265	$	(832	)	$	433

____________

⁽¹⁾  Represents intangible assets that were initially recorded at their fair value at the time of the Merger.

Amortization of Amortizing Intangible Assets

Amortization of our amortizing intangible assets was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
	(in millions)
Recognized in depreciation and amortization expense(1)	$	66	$	69	$	135	$	139
Recognized as a reduction of franchise fee and base and other management fee revenues	7		5		14		8

____________

⁽¹⁾  Includes amortization of $52 million and $50 millionfor the three months ended June 30, 2018 and 2017, respectively, and $103 million and $101 millionfor the six months ended June 30, 2018 and 2017, respectively, associated with assets recorded at their fair value at the time of the Merger.

Schedule of Future Amortization Expense of Intangible Assets

We estimated future amortization of our amortizing intangible assets as of June 30, 2018 to be as follows:

	Recognized in Depreciation and Amortization Expense		Recognized as a Reduction of Franchise Fee and Base and Other Management Fee Revenues
Year	(in millions)
2018 (remaining)	$	136	$	13
2019	270		23
2020	219		22
2021	82		21
2022	60		21
Thereafter	181		264
	$	948	$	364

XML

Debt (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Long-term debt

Long-term debt balances, including obligations for capital leases, and associated interest rates as of June 30, 2018, were as follows:

	June 30,			December 31,
	2018			2017
	(in millions)
Senior notes with a rate of 4.250%, due 2024	$	1,000		$	1,000
Senior notes with a rate of 4.625%, due 2025	900			900
Senior notes with a rate of 5.125%, due 2026	1,500			—
Senior notes with a rate of 4.875%, due 2027	600			600
Senior secured term loan facility with a rate of 3.84%, due 2023	3,419			3,929
Capital lease obligations with an average rate of 6.32%, due 2021 to 2030	229			233
Other debt with a rate of 3.08% due 2026	17			21
	7,665			6,683
Less: unamortized deferred financing costs and discount	(90		)	(81		)
Less: current maturities of long-term debt(1)	(11		)	(46		)
	$	7,564		$	6,556

____________

⁽¹⁾  Net of unamortized deferred financing costs and discount attributable to current maturities of long-term debt.

Debt maturities

The contractual maturities of our long-term debt as of June 30, 2018 were as follows:

Year	(in millions)
2018 (remaining)	$	4
2019	16
2020	17
2021	18
2022	19
Thereafter	7,591
	$	7,665

XML

Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value of Derivative Instruments

The fair values of our derivative instruments in our condensed consolidated balance sheets were as follows:

		June 30,		December 31,
	Balance Sheet Classification	2018		2017
		(in millions)
Cash Flow Hedges:
Interest rate swaps	Other non-current assets	$	41	$	11
Forward contracts	Other current assets	2		—
Forward contracts	Accounts payable, accrued expenses and other	—		1
Non-designated Hedges:
Forward contracts	Other current assets	3		4
Forward contracts	Accounts payable, accrued expenses and other	6		1

Earnings Effect of Derivative Instruments

The gains and losses recognized in our condensed consolidated statements of operations and condensed consolidated statements of comprehensive income before any effect for income taxes were as follows: 

		Three Months Ended						Six Months Ended
		June 30,						June 30,
	Classification of Gain (Loss) Recognized	2018			2017			2018			2017
		(in millions)
Cash Flow Hedges(1):
Interest rate swaps	Other comprehensive income (loss)	$	11		$	(15	)	$	45		$	(24	)
Interest rate swaps(2)	Interest expense	—			(6		)	(2		)	(8		)
Forward contracts(3)(4)	Other comprehensive income (loss)	4			—			3			—
Non-designated Hedges:
Interest rate swaps	Other non-operating income (loss), net	N/A			—			N/A			2
Interest rate swaps(5)	Interest expense	(2		)	(2		)	(5		)	(5		)
Forward contracts	Gain (loss) on foreign currency transactions	(7		)	6			(6		)	7

____________

⁽¹⁾  There were no amounts recognized in earnings related to hedge ineffectiveness or amounts excluded from hedge effectiveness testing during the three and six months ended June 30, 2018 and 2017.

⁽²⁾  The amount for the three months ended June 30, 2018 was less than $1 million.

⁽³⁾  The earnings effect of the Fee Forward Contracts on fee revenues for the three and six months ended June 30, 2018 and 2017 was less than $1 million.

⁽⁴⁾  Amounts for the three and six months ended June 30, 2017 were less than $1 million.

⁽⁵⁾  These amounts are related to the dedesignation of interest rate swaps in 2016 that no longer met the criteria for hedge accounting and were settled in 2017 and the interest rate swap that was settled in May 2018. The amounts were reclassified to interest expense from accumulated other comprehensive loss as the underlying transactions occurred.

XML

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value of Financial Assets and Liabilities

The fair values of certain financial instruments and the hierarchy level we used to estimate the fair values are shown below, see Note 7: "Derivative Instruments and Hedging Activities" for the fair value information of our derivative instruments:

	June 30, 2018
			Hierarchy Level
	Carrying Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Cash equivalents	$	109	$	—	$	109	$	—
Restricted cash equivalents	15		—		15		—
Liabilities:
Long-term debt(1)	7,329		3,895		—		3,419

	December 31, 2017
			Hierarchy Level
	Carrying Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Cash equivalents	$	284	$	—	$	284	$	—
Restricted cash equivalents	12		—		12		—
Liabilities:
Long-term debt(1)	6,348		2,575		—		3,954

____________

⁽¹⁾ The carrying values include unamortized deferred financing costs and discount. The carrying values and fair values exclude capital lease obligations and other debt.

XML

Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Stock Options Valuation Assumptions

The weighted average grant date fair value per share of the options granted during the six months ended June 30, 2018 was $23.72, which was determined using the Black-Scholes-Merton option-pricing model with the following assumptions:

Expected volatility(1)	27.91	%
Dividend yield(2)	0.74	%
Risk-free rate(3)	2.73	%
Expected term (in years)(4)	6.0

____________

⁽¹⁾  Estimated using historical movement of Hilton's stock price.

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

⁽³⁾  Based on the yields of U.S. Department of Treasury instruments with similar expected lives.

⁽⁴⁾  Estimated using the average of the vesting periods and the contractual term of the options.

Schedule of Achievement Percentages for Performance Shares

We determined that the performance conditions for performance shares issued in 2018 and 2017 are probable of achievement and, as of June 30, 2018, we recognized compensation expense based on the following anticipated achievement percentages for these performance shares:

	EBITDA CAGR		FCF CAGR
2017 performance shares	200	%	200	%
2018 performance shares	150	%	150	%

XML

Stockholders' Equity and Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2018

Stockholders' Equity Note [Abstract]

Schedule of Stockholders' Equity

The changes in the components of stockholders' equity were as follows:

	Equity Attributable to Hilton Stockholders
					Treasury Stock			Additional Paid-in Capital		Accumulated Deficit(1)			Accumulated Other Comprehensive Loss
	Common Stock															Noncontrolling Interests
	Shares		Amount															Total
	(in millions)
Balance as of December 31, 2017	317		$	3	$	(891	)	$	10,298	$	(6,981	)	$	(741	)	$	3	$	1,691
Share-based compensation	1		—		—			23		—			—			—		23
Repurchases of common stock	(20	)	—		(1,439		)	—		—			—			—		(1,439		)
Net income	—		—		—			—		378			—			2		380
Other comprehensive loss	—		—		—			—		—			(1		)	—		(1		)
Dividends	—		—		—			—		(94		)	—			—		(94		)
Balance as of June 30, 2018	298		$	3	$	(2,330	)	$	10,321	$	(6,697	)	$	(742	)	$	5	$	560

	Equity Attributable to Hilton Stockholders
					Treasury Stock			Additional Paid-in Capital		Accumulated Deficit(1)			Accumulated Other Comprehensive Loss
	Common Stock															Noncontrolling Interests
	Shares		Amount																Total
	(in millions)
Balance as of December 31, 2016	329		$	3	$	—		$	10,220	$	(3,545	)	$	(1,001	)	$	(50	)	$	5,627
Share-based compensation	2		—		—			24		—			—			—			24
Repurchases of common stock	(6	)	—		(352		)	—		—			—			—			(352		)
Net income	—		—		—			—		197			—			2			199
Other comprehensive income	—		—		—			—		—			70			—			70
Dividends	—		—		—			—		(99		)	—			—			(99		)
Spin-offs of Park and HGV	—		—		—			—		(4,318		)	63			49			(4,206		)
Cumulative effect of the adoption of ASU 2016-09	—		—		—			1		(1		)	—			—			—
Distributions	—		—		—			—		—			—			(1		)	(1		)
Balance as of June 30, 2017	325		$	3	$	(352	)	$	10,245	$	(7,766	)	$	(868	)	$	—		$	1,262

___________

⁽¹⁾  Includes adjustments of $385 million and $222 million to the balances as of December 31, 2017 and 2016, respectively, as a result of the adoption of ASU 2014-09 as of January 1, 2016. See Note 2: "Basis of Presentation and Summary of Significant Accounting Policies" for additional information.

Schedule of Accumulated Other Comprehensive Loss

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

	Currency Translation Adjustment(1)			Pension Liability Adjustment(2)			Cash Flow Hedge Adjustment(3)		Total
	(in millions)
Balance as of December 31, 2017	$	(513	)	$	(229	)	$	1	$	(741	)
Other comprehensive income (loss) before reclassifications	(45		)	—			36		(9		)
Amounts reclassified from accumulated other comprehensive loss	—			3			5		8
Net current period other comprehensive income (loss)	(45		)	3			41		(1		)
Balance as of June 30, 2018	$	(558	)	$	(226	)	$	42	$	(742	)

	Currency Translation Adjustment(1)			Pension Liability Adjustment(2)			Cash Flow Hedge Adjustment(3)			Total
	(in millions)
Balance as of December 31, 2016	$	(738	)	$	(251	)	$	(12	)	$	(1,001	)
Other comprehensive income (loss) before reclassifications	73			—			(15		)	58
Amounts reclassified from accumulated other comprehensive loss	—			4			8			12
Net current period other comprehensive income (loss)	73			4			(7		)	70
Spin-offs of Park and HGV	63			—			—			63
Balance as of June 30, 2017	$	(602	)	$	(247	)	$	(19	)	$	(868	)

____________

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

⁽²⁾  Amounts reclassified include the amortization of prior service cost and the amortization of net gain (loss) that were included in our computation of net periodic pension cost. They were recognized in other non-operating income (loss), net in our condensed consolidated statements of operations and are presented net of a tax benefit of $1 million and $2 million for the six months ended June 30, 2018 and 2017, respectively.

⁽³⁾  Amounts reclassified relate to the designated interest rate swaps, as well as the interest rate swaps that were settled in 2017 and 2018. The amounts were recognized in interest expense in our condensed consolidated statements of operations and are presented net of a tax benefit of $2 million and $5 million for the six months ended June 30, 2018 and 2017, respectively. See Note 7: "Derivative Instruments and Hedging Activities" for additional information.

XML

Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Basic and Diluted Earnings Per Share

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
	(in millions, except per share amounts)
Basic EPS:
Numerator:
Net income attributable to Hilton stockholders	$	217	$	150	$	378	$	197
Denominator:
Weighted average shares outstanding	301		327		308		328
Basic EPS	$	0.72	$	0.46	$	1.22	$	0.60
Diluted EPS:
Numerator:
Net income attributable to Hilton stockholders	$	217	$	150	$	378	$	197
Denominator:
Weighted average shares outstanding	303		329		311		330
Diluted EPS	$	0.71	$	0.46	$	1.21	$	0.60

XML

Business Segments (Tables)

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Reconciliation of Revenue from Segment Amounts to Consolidated Amounts

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
	(in millions)
Franchise fees	$	405		$	356		$	738		$	639
Base and other management fees(1)	101			95			191			185
Incentive management fees	59			57			114			106
Management and franchise	565			508			1,043			930
Ownership	392			373			726			669
Segment revenues	957			881			1,769			1,599
Amortization of contract acquisition costs	(7		)	(5		)	(14		)	(8		)
Other revenues	22			20			45			57
Direct reimbursements from managed and franchised properties	730			636			1,429			1,299
Indirect reimbursements from managed and franchised properties	600			554			1,155			1,042
Intersegment fees elimination(1)	(11		)	(10		)	(19		)	(17		)
Total revenues	$	2,291		$	2,076		$	4,365		$	3,972

____________

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

Reconciliation of Segment Operating Income to Income Before Income Taxes

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
	(in millions)
Management and franchise(1)	$	565		$	508		$	1,043		$	930
Ownership(1)	29			36			35			57
Segment operating income	594			544			1,078			987
Amortization of contract acquisition costs	(7		)	(5		)	(14		)	(8		)
Other revenues, less other expenses	10			9			19			23
Net other revenues (expenses) from managed and franchised properties	3			(23		)	(18		)	(68		)
Depreciation and amortization	(79		)	(83		)	(161		)	(169		)
General and administrative	(115		)	(118		)	(219		)	(224		)
Operating income	406			324			685			541
Interest expense	(95		)	(86		)	(178		)	(175		)
Gain (loss) on foreign currency transactions	(12		)	5			(1		)	1
Loss on debt extinguishment	—			—			—			(60		)
Other non-operating income (loss), net	(1		)	7			13			9
Income before income taxes	$	298		$	250		$	519		$	316

____________

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

Schedule of Assets by Segment

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

	June 30,		December 31,
	2018		2017
	(in millions)
Management and franchise	$	11,366	$	11,505
Ownership	954		964
Corporate and other	1,666		1,759
	$	13,986	$	14,228

Schedule of Capital Expenditures by Segment

The following table presents capital expenditures for property and equipment for our reportable segments, reconciled to consolidated amounts:

	Six Months Ended
	June 30,
	2018		2017
	(in millions)
Ownership	$	19	$	10
Corporate and other	9		8
	$	28	$	18

XML

Condensed Consolidating Guarantor Financial Information (Tables)

6 Months Ended

Jun. 30, 2018

Condensed Consolidating Guarantor Financial Information [Abstract]

Condensed Balance Sheet

	June 30, 2018
	Parent		HWF Issuers		HOC		Guarantors		Non-Guarantors		Eliminations			Total
	(in millions)
ASSETS
Current Assets:
Cash and cash equivalents	$	—	$	—	$	3	$	14	$	406	$	—		$	423
Restricted cash and cash equivalents	—		—		34		16		32		—			82
Accounts receivable, net	—		—		21		734		287		(1		)	1,041
Intercompany receivables	—		—		—		—		40		(40		)	—
Prepaid expenses	—		—		16		49		88		(2		)	151
Income taxes receivable	—		—		—		32		—		(21		)	11
Other	—		2		1		21		112		—			136
Total current assets	—		2		75		866		965		(64		)	1,844
Intangibles and Other Assets:
Investments in subsidiaries	553		5,397		8,095		553		—		(14,598		)	—
Goodwill	—		—		—		3,824		1,350		—			5,174
Brands	—		—		—		4,405		473		—			4,878
Management and franchise contracts, net	—		—		—		587		306		—			893
Other intangible assets, net	—		—		—		281		138		—			419
Property and equipment, net	—		—		21		65		265		—			351
Deferred income tax assets	5		—		102		—		111		(107		)	111
Other	—		49		31		65		171		—			316
Total intangibles and other assets	558		5,446		8,249		9,780		2,814		(14,705		)	12,142
TOTAL ASSETS	$	558	$	5,448	$	8,324	$	10,646	$	3,779	$	(14,769	)	$	13,986
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other	$	3	$	20	$	170	$	548	$	573	$	(2	)	$	1,312
Current portion of deferred revenues	—		—		37		261		11		(1		)	308
Intercompany payables	—		—		40		—		—		(40		)	—
Current maturities of long-term debt	—		—		—		—		11		—			11
Income taxes payable	—		—		—		—		43		(21		)	22
Current portion of liability for guest loyalty program	—		—		—		725		—		—			725
Total current liabilities	3		20		247		1,534		638		(64		)	2,378
Long-term debt	—		4,865		2,464		—		235		—			7,564
Deferred revenues	—		—		1		757		61		—			819
Deferred income tax liabilities	—		10		—		1,000		5		(107		)	908
Liability for guest loyalty program	—		—		—		876		—		—			876
Other	—		—		215		64		602		—			881
Total liabilities	3		4,895		2,927		4,231		1,541		(171		)	13,426
Equity:
Total Hilton stockholders' equity	555		553		5,397		6,415		2,233		(14,598		)	555
Noncontrolling interests	—		—		—		—		5		—			5
Total equity	555		553		5,397		6,415		2,238		(14,598		)	560
TOTAL LIABILITIES AND EQUITY	$	558	$	5,448	$	8,324	$	10,646	$	3,779	$	(14,769	)	$	13,986

	December 31, 2017
	Parent		HWF Issuers		HOC		Guarantors		Non-Guarantors		Eliminations			Total
	(in millions)
ASSETS
Current Assets:
Cash and cash equivalents	$	—	$	—	$	2	$	18	$	550	$	—		$	570
Restricted cash and cash equivalents	—		—		61		10		29		—			100
Accounts receivable, net	—		—		18		712		275		—			1,005
Intercompany receivables	—		—		—		—		40		(40		)	—
Prepaid expenses	—		—		25		24		84		(6		)	127
Income taxes receivable	—		—		—		60		—		(24		)	36
Other	—		—		1		13		155		—			169
Total current assets	—		—		107		837		1,133		(70		)	2,007
Intangibles and Other Assets:
Investments in subsidiaries	1,697		7,067		8,326		1,697		—		(18,787		)	—
Goodwill	—		—		—		3,824		1,366		—			5,190
Brands	—		—		—		4,405		485		—			4,890
Management and franchise contracts, net	—		—		2		645		306		—			953
Other intangible assets, net	—		—		1		283		149		—			433
Property and equipment, net	—		—		20		67		266		—			353
Deferred income tax assets	6		—		104		—		127		(126		)	111
Other	—		20		32		67		172		—			291
Total intangibles and other assets	1,703		7,087		8,485		10,988		2,871		(18,913		)	12,221
TOTAL ASSETS	$	1,703	$	7,087	$	8,592	$	11,825	$	4,004	$	(18,983	)	$	14,228
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other	$	15	$	20	$	184	$	576	$	624	$	(3	)	$	1,416
Current portion of deferred revenues	—		—		90		266		13		(3		)	366
Intercompany payables	—		—		40		—		—		(40		)	—
Current maturities of long-term debt	—		32		—		—		14		—			46
Income taxes payable	—		—		—		—		36		(24		)	12
Current portion of liability for guest loyalty program	—		—		—		622		—		—			622
Total current liabilities	15		52		314		1,464		687		(70		)	2,462
Long-term debt	—		5,333		983		—		240		—			6,556
Deferred revenues	—		—		—		770		59		—			829
Deferred income tax liabilities	—		5		—		1,052		—		(126		)	931
Liability for guest loyalty program	—		—		—		839		—		—			839
Other	—		—		228		64		628		—			920
Total liabilities	15		5,390		1,525		4,189		1,614		(196		)	12,537
Equity:
Total Hilton stockholders' equity	1,688		1,697		7,067		7,636		2,387		(18,787		)	1,688
Noncontrolling interests	—		—		—		—		3		—			3
Total equity	1,688		1,697		7,067		7,636		2,390		(18,787		)	1,691
TOTAL LIABILITIES AND EQUITY	$	1,703	$	7,087	$	8,592	$	11,825	$	4,004	$	(18,983	)	$	14,228

Condensed Statement of Income and Comprehensive Income

	Three Months Ended June 30, 2018
	Parent		HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Revenues
Franchise fees	$	—	$	—		$	50		$	322		$	36		$	(4	)	$	404
Base and other management fees	—		—			1			55			28			—			84
Incentive management fees	—		—			—			22			37			—			59
Owned and leased hotels	—		—			—			—			392			—			392
Other revenues	—		—			1			17			3			1			22
	—		—			52			416			496			(3		)	961
Other revenues from managed and franchised properties	—		—			62			1,110			158			—			1,330
Total revenues	—		—			114			1,526			654			(3		)	2,291
Expenses
Owned and leased hotels	—		—			—			—			352			—			352
Depreciation and amortization	—		—			2			58			19			—			79
General and administrative	—		—			83			—			32			—			115
Other expenses	—		—			2			8			6			(4		)	12
	—		—			87			66			409			(4		)	558
Other expenses from managed and franchised properties	—		—			62			1,114			151			—			1,327
Total expenses	—		—			149			1,180			560			(4		)	1,885
Operating income (loss)	—		—			(35		)	346			94			1			406
Interest expense	—		(57		)	(31		)	—			(9		)	2			(95		)
Gain (loss) on foreign currency transactions	—		—			6			(89		)	71			—			(12		)
Other non-operating income (loss), net	—		(7		)	1			4			4			(3		)	(1		)
Income (loss) before income taxes and equity in earnings from subsidiaries	—		(64		)	(59		)	261			160			—			298
Income tax benefit (expense)	—		16			14			(61		)	(50		)	—			(81		)
Income (loss) before equity in earnings from subsidiaries	—		(48		)	(45		)	200			110			—			217
Equity in earnings from subsidiaries	217		265			310			217			—			(1,009		)	—
Net income	217		217			265			417			110			(1,009		)	217
Net income attributable to noncontrolling interests	—		—			—			—			—			—			—
Net income attributable to Hilton stockholders	$	217	$	217		$	265		$	417		$	110		$	(1,009	)	$	217
Comprehensive income	$	155	$	227		$	266		$	416		$	38		$	(947	)	$	155
Comprehensive income attributable to noncontrolling interests	—		—			—			—			—			—			—
Comprehensive income attributable to Hilton stockholders	$	155	$	227		$	266		$	416		$	38		$	(947	)	$	155

	Three Months Ended June 30, 2017
	Parent		HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Revenues
Franchise fees	$	—	$	—		$	49		$	282		$	29		$	(5	)	$	355
Base and other management fees	—		—			—			52			29			—			81
Incentive management fees	—		—			—			21			36			—			57
Owned and leased hotels	—		—			—			—			373			—			373
Other revenues	—		—			2			16			2			—			20
	—		—			51			371			469			(5		)	886
Other revenues from managed and franchised properties	—		—			44			1,001			145			—			1,190
Total revenues	—		—			95			1,372			614			(5		)	2,076
Expenses
Owned and leased hotels	—		—			—			—			327			—			327
Depreciation and amortization	—		—			2			59			22			—			83
General and administrative	—		—			92			—			28			(2		)	118
Other expenses	—		—			3			7			4			(3		)	11
	—		—			97			66			381			(5		)	539
Other expenses from managed and franchised properties	—		—			45			1,006			162			—			1,213
Total expenses	—		—			142			1,072			543			(5		)	1,752
Operating income (loss)	—		—			(47		)	300			71			—			324
Interest expense	—		(60		)	(14		)	—			(12		)	—			(86		)
Gain (loss) on foreign currency transactions	—		—			2			53			(50		)	—			5
Other non-operating income, net	—		—			2			3			2			—			7
Income (loss) before income taxes and equity in earnings from subsidiaries	—		(60		)	(57		)	356			11			—			250
Income tax benefit (expense)	—		23			19			(138		)	(3		)	—			(99		)
Income (loss) before equity in earnings from subsidiaries	—		(37		)	(38		)	218			8			—			151
Equity in earnings from subsidiaries	150		187			225			150			—			(712		)	—
Net income	150		150			187			368			8			(712		)	151
Net income attributable to noncontrolling interests	—		—			—			—			(1		)	—			(1		)
Net income attributable to Hilton stockholders	$	150	$	150		$	187		$	368		$	7		$	(712	)	$	150
Comprehensive income	$	200	$	145		$	186		$	369		$	64		$	(762	)	$	202
Comprehensive income attributable to noncontrolling interests	—		—			—			—			(2		)	—			(2		)
Comprehensive income attributable to Hilton stockholders	$	200	$	145		$	186		$	369		$	62		$	(762	)	$	200

	Six Months Ended June 30, 2018
	Parent		HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Revenues
Franchise fees	$	—	$	—		$	94		$	584		$	65		$	(8	)	$	735
Base and other management fees	—		—			1			106			54			—			161
Incentive management fees	—		—			—			43			71			—			114
Owned and leased hotels	—		—			—			—			726			—			726
Other revenues	—		—			3			41			5			(4		)	45
	—		—			98			774			921			(12		)	1,781
Other revenues from managed and franchised properties	—		—			106			2,180			298			—			2,584
Total revenues	—		—			204			2,954			1,219			(12		)	4,365
Expenses
Owned and leased hotels	—		—			—			—			672			—			672
Depreciation and amortization	—		—			3			118			40			—			161
General and administrative	—		—			156			—			67			(4		)	219
Other expenses	—		—			4			15			15			(8		)	26
	—		—			163			133			794			(12		)	1,078
Other expenses from managed and franchised properties	—		—			108			2,198			296			—			2,602
Total expenses	—		—			271			2,331			1,090			(12		)	3,680
Operating income (loss)	—		—			(67		)	623			129			—			685
Interest expense	—		(118		)	(44		)	—			(19		)	3			(178		)
Gain (loss) on foreign currency transactions	—		—			3			(81		)	77			—			(1		)
Other non-operating income (loss), net	—		(7		)	4			12			7			(3		)	13
Income (loss) before income taxes and equity in earnings from subsidiaries	—		(125		)	(104		)	554			194			—			519
Income tax benefit (expense)	—		31			27			(134		)	(63		)	—			(139		)
Income (loss) before equity in earnings from subsidiaries	—		(94		)	(77		)	420			131			—			380
Equity in earnings from subsidiaries	378		472			549			378			—			(1,777		)	—
Net income	378		378			472			798			131			(1,777		)	380
Net income attributable to noncontrolling interests	—		—			—						(2		)	—			(2		)
Net income attributable to Hilton stockholders	$	378	$	378		$	472		$	798		$	129		$	(1,777	)	$	378
Comprehensive income	$	377	$	417		$	473		$	798		$	90		$	(1,776	)	$	379
Comprehensive income attributable to noncontrolling interests	—		—			—			—			(2		)	—			(2		)
Comprehensive income attributable to Hilton stockholders	$	377	$	417		$	473		$	798		$	88		$	(1,776	)	$	377

	Six Months Ended June 30, 2017
	Parent		HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Revenues
Franchise fees	$	—	$	—		$	68		$	526		$	52		$	(9	)	$	637
Base and other management fees	—		—			—			101			61			—			162
Incentive management fees	—		—			—			41			65			—			106
Owned and leased hotels	—		—			—			—			669			—			669
Other revenues	—		—			22			29			6			—			57
	—		—			90			697			853			(9		)	1,631
Other revenues from managed and franchised properties	—		—			85			1,982			274			—			2,341
Total revenues	—		—			175			2,679			1,127			(9		)	3,972
Expenses
Owned and leased hotels	—		—			—			—			595			—			595
Depreciation and amortization	—		—			3			121			45			—			169
General and administrative	—		—			171			2			53			(2		)	224
Other expenses	—		—			15			14			12			(7		)	34
	—		—			189			137			705			(9		)	1,022
Other expenses from managed and franchised properties	—		—			87			2,032			290			—			2,409
Total expenses	—		—			276			2,169			995			(9		)	3,431
Operating income (loss)	—		—			(101		)	510			132			—			541
Interest expense	—		(123		)	(30		)	—			(22		)	—			(175		)
Gain (loss) on foreign currency transactions	—		—			13			74			(86		)	—			1
Loss on debt extinguishment	—		(60		)	—			—			—			—			(60		)
Other non-operating income (loss), net	—		(3		)	3			4			5			—			9
Income (loss) before income taxes and equity in earnings from subsidiaries	—		(186		)	(115		)	588			29			—			316
Income tax benefit (expense)	—		73			43			(225		)	(8		)	—			(117		)
Income (loss) before equity in earnings from subsidiaries	—		(113		)	(72		)	363			21			—			199
Equity in earnings from subsidiaries	197		310			382			197			—			(1,086		)	—
Net income	197		197			310			560			21			(1,086		)	199
Net income attributable to noncontrolling interests	—		—			—			—			(2		)	—			(2		)
Net income attributable to Hilton stockholders	$	197	$	197		$	310		$	560		$	19		$	(1,086	)	$	197
Comprehensive income	$	267	$	190		$	313		$	561		$	94		$	(1,156	)	$	269
Comprehensive income attributable to noncontrolling interests	—		—			—			—			(2		)	—			(2		)
Comprehensive income attributable to Hilton stockholders	$	267	$	190		$	313		$	561		$	92		$	(1,156	)	$	267

Condensed Cash Flow Statement

	Six Months Ended June 30, 2018
	Parent			HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations		Total
	(in millions)
Operating Activities:
Net cash provided by (used in) operating activities	$	—		$	(102	)	$	(8	)	$	494		$	148		$	—	$	532
Investing Activities:
Capital expenditures for property and equipment	—			—			(4		)	(1		)	(23		)	—		(28		)
Capitalized software costs	—			—			—			(38		)	—			—		(38		)
Other	—			—			—			(3		)	(6		)	—		(9		)
Net cash used in investing activities	—			—			(4		)	(42		)	(29		)	—		(75		)
Financing Activities:
Borrowings	—			150			1,500			—			—			—		1,650
Repayment of debt	—			(660		)	—			—			(12		)	—		(672		)
Debt issuance costs	—			—			(21		)	—			—			—		(21		)
Intercompany transfers	1,531			612			(1,451		)	(450		)	(242		)	—		—
Dividends paid	(92		)	—			—			—			—			—		(92		)
Repurchases of common stock	(1,439		)	—			—			—			—			—		(1,439		)
Tax withholdings on share-based compensation	—			—			(42		)	—			—			—		(42		)
Net cash provided by (used in) financing activities	—			102			(14		)	(450		)	(254		)	—		(616		)
Effect of exchange rate changes on cash, restricted cash and cash equivalents	—			—			—			—			(6		)	—		(6		)
Net increase (decrease) in cash, restricted cash and cash equivalents	—			—			(26		)	2			(141		)	—		(165		)
Cash, restricted cash and cash equivalents, beginning of period	—			—			63			28			579			—		670
Cash, restricted cash and cash equivalents, end of period	$	—		$	—		$	37		$	30		$	438		$	—	$	505

	Six Months Ended June 30, 2017
	Parent			HWF Issuers			HOC			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Operating Activities:
Net cash provided by (used in) operating activities	$	—		$	(69	)	$	(58	)	$	378		$	93		$	—		$	344
Investing Activities:
Capital expenditures for property and equipment	—			—			(3		)	(3		)	(12		)	—			(18		)
Capitalized software costs	—			—			—			(29		)	—			—			(29		)
Other	—			(13		)	—			(5		)	3			(3		)	(18		)
Net cash used in investing activities	—			(13		)	(3		)	(37		)	(9		)	(3		)	(65		)
Financing Activities:
Borrowings	—			1,823			—			—			—			—			1,823
Repayment of debt	—			(1,832		)	—			—			(4		)	—			(1,836		)
Debt issuance costs and redemption premium	—			(68		)	—			—			—			—			(68		)
Repayment of intercompany borrowings	—			—			(3		)	—			—			3			—
Intercompany transfers	450			159			92			(351		)	(350		)	—			—
Dividends paid	(98		)	—			—			—			—			—			(98		)
Cash transferred in spin-offs of Park and HGV	—			—			—			—			(501		)	—			(501		)
Repurchases of common stock	(352		)	—			—			—			—			—			(352		)
Distributions to noncontrolling interests	—			—			—			—			(1		)	—			(1		)
Tax withholdings on share-based compensation	—			—			(28		)	—			—			—			(28		)
Net cash provided by (used in) financing activities	—			82			61			(351		)	(856		)	3			(1,061		)
Effect of exchange rate changes on cash, restricted cash and cash equivalents	—			—			—			—			7			—			7
Net decrease in cash, restricted cash and cash equivalents	—			—			—			(10		)	(765		)	—			(775		)
Cash, restricted cash and cash equivalents from continuing operations, beginning of period	—			—			90			31			1,062			—			1,183
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period	—			—			—			—			501			—			501
Cash, restricted cash and cash equivalents, beginning of period	—			—			90			31			1,563			—			1,684
Cash, restricted cash and cash equivalents, end of period	$	—		$	—		$	90		$	21		$	798		$	—		$	909

XML

Organization (Details)		6 Months Ended
	Apr. 01, 2018 shares	Jun. 30, 2018 Room Country Hotel shares
Organization and Basis of Presentation [Line Items]
Number of hotel and resort properties | Hotel		5,456
Number of hotel and resort rooms | Room		879,349
Number of countries and territories | Country		106
Repurchases of common stock, shares		19,800,000
HNA Tourism Group Co., Ltd. [Member]
Organization and Basis of Presentation [Line Items]
Shares sold by significant stockholder	82,500,000
Number of shares offered in secondary offering	66,000,000
Repurchases of common stock, shares	16,500,000	16,500,000

XML

Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jan. 01, 2016
Accounting Policies [Line Items]
Cumulative effect of the adoption of an ASU		$ 0
Accounting Standards Update 2014-09 [Member]
Accounting Policies [Line Items]
Cumulative effect of the adoption of an ASU			$ 212
Management contracts [Member] | Minimum [member]
Accounting Policies [Line Items]
Useful life, intangibles	13 years
Management contracts [Member] | Maximum [member]
Accounting Policies [Line Items]
Useful life, intangibles	16 years
Management contract acquisition costs [Member] | Minimum [member]
Accounting Policies [Line Items]
Useful life, intangibles	20 years
Management contract acquisition costs [Member] | Maximum [member]
Accounting Policies [Line Items]
Useful life, intangibles	30 years
Franchise contracts [Member] | Minimum [member]
Accounting Policies [Line Items]
Useful life, intangibles	12 years
Franchise contracts [Member] | Maximum [member]
Accounting Policies [Line Items]
Useful life, intangibles	13 years
Franchise contract acquisition costs [Member] | Minimum [member]
Accounting Policies [Line Items]
Useful life, intangibles	10 years
Franchise contract acquisition costs [Member] | Maximum [member]
Accounting Policies [Line Items]
Useful life, intangibles	20 years
Leases [member] | Minimum [member]
Accounting Policies [Line Items]
Useful life, intangibles	12 years
Leases [member] | Maximum [member]
Accounting Policies [Line Items]
Useful life, intangibles	35 years
Hilton Honors intangible [Member]
Accounting Policies [Line Items]
Useful life, intangibles	16 years
Capitalized software development costs [Member]
Accounting Policies [Line Items]
Useful life, intangibles	3 years

XML

Basis of Presentation and Summary of Significant Accounting Policies - Prior Period Financial Information (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accounts receivable, net		$ 1,041		$ 1,041		$ 1,005
Prepaid expenses		151		151		127
Other current assets		136		136		169
Management and franchise contracts, net		893		893		953
Deferred income tax assets		111		111		111
Other non-current assets		316		316		291
Total assets		13,986		13,986		14,228
Accounts payable, accrued expenses and other		1,312		1,312		1,416
Current portion of deferred revenues		308		308		366
Deferred revenues		819		819		829
Deferred income tax liabilities		908		908		931
Other non-current liabilities		881		881		920
Total liabilities		13,426		13,426		12,537
Accumulated deficit		(6,697)		(6,697)		(6,981)
Accumulated other comprehensive loss		(742)	$ (868)	(742)	$ (868)	(741)	$ (1,001)
Total equity		560	1,262	560	1,262	1,691	5,627
Total liabilities and equity		13,986		13,986		14,228
Current portion of liability for guest loyalty program		725		725		622
Franchise fees		404	355	735	637
Base and other management fees		84	81	161	162
Incentive management fees		59	57	114	106
Owned and leased hotels		392	373	726	669
Other revenues		22	20	45	57
Total revenues excluding reimburseable revenues.		961	886	1,781	1,631
Other revenues from managed and franchised properties		1,330	1,190	2,584	2,341
Total revenues		2,291	2,076	4,365	3,972
Owned and leased hotels		352	327	672	595
Depreciation and amortization		79	83	161	169
General and administrative		115	118	219	224
Other expenses		12	11	26	34
Total expenses excluding reimbursable expenses		558	539	1,078	1,022
Other expenses from managed and franchised properties		1,327	1,213	2,602	2,409
Total expenses		1,885	1,752	3,680	3,431
Operating income		406	324	685	541
Interest expense		(95)	(86)	(178)	(175)
Loss on foreign currency transactions		(12)	5	(1)	1
Loss on debt extinguishment		0	0	0	(60)
Other non-operating income (loss), net		(1)	7	13	9
Income before income taxes		298	250	519	316
Income tax expense		(81)	(99)	(139)	(117)
Net income		217	151	380	199
Net income attributable to noncontrolling interests		0	(1)	(2)	(2)
Net Income attributable to Hilton Stockholders		$ 217	$ 150	$ 378	$ 197
Net income per share, basic		$ 0.72	$ 0.46	$ 1.22	$ 0.60
Net income per share, diluted		$ 0.71	$ 0.46	$ 1.21	$ 0.60
Scenario, Previously Reported [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accounts receivable, net						998
Prepaid expenses						111
Other current assets						171
Management and franchise contracts, net						909
Deferred income tax assets						113
Other non-current assets						434
Total assets						14,308
Accounts payable, accrued expenses and other	[1],[2]					1,487
Current portion of deferred revenues	[1]					41
Deferred revenues						97
Deferred income tax liabilities						1,063
Other non-current liabilities						1,470
Total liabilities						12,233
Accumulated deficit						(6,596)
Accumulated other comprehensive loss						(742)
Total equity						2,075
Total liabilities and equity						14,308
Franchise fees			$ 372		$ 666
Base and other management fees			85		168
Incentive management fees			56		108
Owned and leased hotels			377		677
Other revenues			20		57
Total revenues excluding reimburseable revenues.			910		1,676
Other revenues from managed and franchised properties			1,436		2,831
Total revenues			2,346		4,507
Owned and leased hotels			330		602
Depreciation and amortization			87		176
General and administrative			117		222
Other expenses			11		34
Total expenses excluding reimbursable expenses			545		1,034
Other expenses from managed and franchised properties			1,436		2,831
Total expenses			1,981		3,865
Operating income			365		642
Interest expense			(100)		(204)
Loss on foreign currency transactions			5		1
Loss on debt extinguishment					(60)
Other non-operating income (loss), net			5		6
Income before income taxes			275		385
Income tax expense			(108)		(143)
Net income			167		242
Net income attributable to noncontrolling interests			(1)		(2)
Net Income attributable to Hilton Stockholders			$ 166		$ 240
Net income per share, basic			$ 0.51		$ 0.73
Net income per share, diluted			$ 0.51		$ 0.73
Accounting Standards Update 2014-09 [Member] | Restatement Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accounts receivable, net						7
Prepaid expenses						16
Other current assets						(2)
Management and franchise contracts, net						44
Deferred income tax assets						(2)
Other non-current assets						(143)
Total assets						(80)
Accounts payable, accrued expenses and other						(71)
Current portion of deferred revenues						325
Deferred revenues						732
Deferred income tax liabilities						(132)
Other non-current liabilities						(550)
Total liabilities						304
Accumulated deficit						(385)	$ (222)
Accumulated other comprehensive loss						1
Total equity						(384)
Total liabilities and equity						$ (80)
Franchise fees			$ (17)		$ (29)
Base and other management fees			(4)		(6)
Incentive management fees			1		(2)
Owned and leased hotels			(4)		(8)
Other revenues			0		0
Total revenues excluding reimburseable revenues.			(24)		(45)
Other revenues from managed and franchised properties			(246)		(490)
Total revenues			(270)		(535)
Owned and leased hotels			(4)		(8)
Depreciation and amortization			(4)		(7)
General and administrative			0		0
Other expenses			0		0
Total expenses excluding reimbursable expenses			(8)		(15)
Other expenses from managed and franchised properties			(223)		(422)
Total expenses			(231)		(437)
Operating income			(39)		(98)
Interest expense			14		29
Loss on foreign currency transactions			0		0
Loss on debt extinguishment					0
Other non-operating income (loss), net			0		0
Income before income taxes			(25)		(69)
Income tax expense			9		26
Net income			(16)		(43)
Net income attributable to noncontrolling interests			0		0
Net Income attributable to Hilton Stockholders			(16)		(43)
Accounting Standards Update 2017-07 [Member] | Restatement Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Franchise fees			0		0
Base and other management fees			0		0
Incentive management fees			0		0
Owned and leased hotels			0		0
Other revenues			0		0
Total revenues excluding reimburseable revenues.			0		0
Other revenues from managed and franchised properties			0		0
Total revenues			0		0
Owned and leased hotels			1		1
Depreciation and amortization			0		0
General and administrative			1		2
Other expenses			0		0
Total expenses excluding reimbursable expenses			2		3
Other expenses from managed and franchised properties			0		0
Total expenses			2		3
Operating income			(2)		(3)
Interest expense			0		0
Loss on foreign currency transactions			0		0
Loss on debt extinguishment					0
Other non-operating income (loss), net			2		3
Income before income taxes			0		0
Income tax expense			0		0
Net income			0		0
Net income attributable to noncontrolling interests			0		0
Net Income attributable to Hilton Stockholders			$ 0		$ 0

[1] The current portion of deferred revenues has been separated from accounts payable, accrued expenses and other in the "As Previously Reported" column following the adoption of ASU 2014-09.

[2] The current portion of liability for guest loyalty program has been separated from accounts payable, accrued expenses and other to conform with current presentation. The balance was $622 million as of December 31, 2017 and did not change as a result of the adoption of ASU 2014-09.

XML

Revenues from Contracts with Customers (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities	$ 1,069		$ 1,069		$ 1,087
Net increase (decrease) in contract liabilities			(18)
Other			(107)
Deferred revenue, additions, and revenue recognized, net			90
Revenue recognized	56	$ 38	116	$ 74
Loyalty Program Revenues [Member]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligations	509		$ 509
Expected timing of satisfaction of remaining performance obligations			2 years
Application, initiation and other fees [Member]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligations	$ 560		$ 560

XML

Consolidated Variable Interest Entities - Additional Information (Details) - Entity	Jun. 30, 2018	Dec. 31, 2017
Variable Interest Entity [Line Items]
Number of consolidated variable interest entities	3	3
Hotel VIEs [member]
Variable Interest Entity [Line Items]
Number of consolidated variable interest entities	2	2
Management company VIE [member]
Variable Interest Entity [Line Items]
Number of consolidated variable interest entities	1	1

XML

Consolidated Variable Interest Entities - Schedule of Consolidated Variable Interest Entities (Details) - USD ($) $ in Millions		Jun. 30, 2018	Dec. 31, 2017
Variable Interest Entity [Line Items]
Cash and cash equivalents		$ 423	$ 570
Accounts receivable, net		1,041	1,005
Property and equipment, net		351	353
Deferred income tax assets		111	111
Other non-current assets		316	291
Accounts payable, accrued expenses and other		1,312	1,416
Long-term debt		7,564	6,556
Consolidated VIEs [member]
Variable Interest Entity [Line Items]
Cash and cash equivalents		73	73
Accounts receivable, net		12	16
Property and equipment, net		59	57
Deferred income tax assets		57	56
Other non-current assets		59	57
Accounts payable, accrued expenses and other		38	43
Long-term debt	[1]	207	212
Other long-term liabilities		13	13
Capital lease obligations [member] | Consolidated VIEs [member]
Variable Interest Entity [Line Items]
Long-term debt		$ 189	$ 191

[1] Includes capital lease obligations of $189 million and $191 million as of June 30, 2018 and December 31, 2017, respectively.

XML

Amortizing Intangible Assets - Schedule of Finite Lived Intangible Assets (Details) - USD ($) $ in Millions		Jun. 30, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Management and franchise contracts, gross		$ 2,787	$ 2,755
Other intangible assets, gross		1,291	1,265
Management and franchise contracts, accumulated amortization		(1,894)	(1,802)
Other intangible assets, accumulated amortization		(872)	(832)
Management and franchise contracts, net		893	953
Other intangible assets, net		419	433
Management and franchise contracts recorded at merger [member]
Finite-Lived Intangible Assets [Line Items]
Management and franchise contracts, gross	[1]	2,234	2,242
Management and franchise contracts, accumulated amortization	[1]	(1,794)	(1,716)
Management and franchise contracts, net	[1]	440	526
Contract acquisition costs [member]
Finite-Lived Intangible Assets [Line Items]
Management and franchise contracts, gross		451	416
Management and franchise contracts, accumulated amortization		(87)	(74)
Management and franchise contracts, net		364	342
Development commissions [member]
Finite-Lived Intangible Assets [Line Items]
Management and franchise contracts, gross		102	97
Management and franchise contracts, accumulated amortization		(13)	(12)
Management and franchise contracts, net		89	85
Leases [member]
Finite-Lived Intangible Assets [Line Items]
Other intangible assets, gross	[1]	295	301
Other intangible assets, accumulated amortization	[1]	(157)	(153)
Other intangible assets, net	[1]	138	148
Capitalized software [member]
Finite-Lived Intangible Assets [Line Items]
Other intangible assets, gross		619	585
Other intangible assets, accumulated amortization		(455)	(428)
Other intangible assets, net		164	157
Hilton Honors [member]
Finite-Lived Intangible Assets [Line Items]
Other intangible assets, gross	[1]	339	341
Other intangible assets, accumulated amortization	[1]	(226)	(217)
Other intangible assets, net	[1]	113	124
Other [member]
Finite-Lived Intangible Assets [Line Items]
Other intangible assets, gross		38	38
Other intangible assets, accumulated amortization		(34)	(34)
Other intangible assets, net		$ 4	$ 4

[1] Represents intangible assets that were initially recorded at their fair value at the time of the Merger.

XML

Amortizing Intangible Assets - Amortization of Amortizing Intangible Assets (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Depreciation and amortization [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	[1]	$ 66	$ 69	$ 135	$ 139
Depreciation and amortization [Member] | Intangible assets recorded at fair value at the time of the Merger [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets		52	50	103	101
Franchise fee and base and other management fee revenues [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets		$ 7	$ 5	$ 14	$ 8

[1] Includes amortization of $52 million and $50 million for the three months ended June 30, 2018 and 2017, respectively, and $103 million and $101 million for the six months ended June 30, 2018 and 2017, respectively, associated with assets recorded at their fair value at the time of the Merger.

XML

Amortizing Intangible Assets - Schedule of Future Amortization (Details) $ in Millions	Jun. 30, 2018 USD ($)
Depreciation and amortization [Member]
Finite-Lived Intangible Assets [Line Items]
2018 (remaining)	$ 136
2019	270
2020	219
2021	82
2022	60
Thereafter	181
Amortizing intangible assets, net	948
Franchise fee and base and other management fee revenues [Member]
Finite-Lived Intangible Assets [Line Items]
2018 (remaining)	13
2019	23
2020	22
2021	21
2022	21
Thereafter	264
Amortizing intangible assets, net	$ 364

XML

Debt - Long-term Debt (Details) - USD ($) $ in Millions		Jun. 30, 2018	Apr. 01, 2018	Dec. 31, 2017	Mar. 01, 2017
Debt Instrument [Line Items]
Long-term debt, gross		$ 7,665		$ 6,683
Unamortized deferred financing costs and discount		(90)		(81)
Long-term debt, current maturities	[1]	(11)		(46)
Long-term debt		7,564		6,556
Senior notes due 2024 [member]
Debt Instrument [Line Items]
Long-term debt, gross		$ 1,000		1,000
Debt instrument, interest rate, stated percentage		4.25%
Senior notes due 2025 [member]
Debt Instrument [Line Items]
Long-term debt, gross		$ 900		900
Debt instrument, interest rate, stated percentage		4.625%			4.625%
Senior notes due 2026 [Member]
Debt Instrument [Line Items]
Long-term debt, gross		$ 1,500		0
Debt instrument, interest rate, stated percentage		5.125%	5.125%
Senior notes due 2027 [member]
Debt Instrument [Line Items]
Long-term debt, gross		$ 600		600
Debt instrument, interest rate, stated percentage		4.875%			4.875%
Senior secured term loan facility due 2023 [member]
Debt Instrument [Line Items]
Long-term debt, gross		$ 3,419		3,929
Unamortized deferred financing costs and discount			$ 5
Debt instrument, interest rate, stated percentage		3.84%
Capital lease obligations [member]
Debt Instrument [Line Items]
Long-term debt, gross		$ 229		233
Debt instrument, weighted average interest rate		6.32%
Other debt obligations [member]
Debt Instrument [Line Items]
Long-term debt, gross		$ 17		$ 21
Debt instrument, weighted average interest rate		3.08%

[1] Net of unamortized deferred financing costs and discount attributable to current maturities of long-term debt.

XML

Debt - Additional Information (Details) - USD ($) $ in Millions		6 Months Ended
	Apr. 01, 2018	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Mar. 01, 2017
Debt Instrument [Line Items]
Long-term debt, gross		$ 7,665		$ 6,683
Repurchases of common stock, shares		19,800,000
Repurchases of common stock, purchase price		$ 1,439	$ 352
Unamortized deferred financing costs and discount		(90)		(81)
Senior notes due 2024 [member]
Debt Instrument [Line Items]
Long-term debt, gross		$ 1,000		1,000
Debt instrument, interest rate, stated percentage		4.25%
Senior notes due 2025 [member]
Debt Instrument [Line Items]
Long-term debt, gross		$ 900		900
Debt instrument, interest rate, stated percentage		4.625%			4.625%
Senior notes due 2026 [Member]
Debt Instrument [Line Items]
Senior notes	$ 1,500
Long-term debt, gross		$ 1,500		0
Debt instrument, interest rate, stated percentage	5.125%	5.125%
Debt issuance costs, gross	$ 21
Senior notes due 2027 [member]
Debt Instrument [Line Items]
Long-term debt, gross		$ 600		600
Debt instrument, interest rate, stated percentage		4.875%			4.875%
Senior secured term loan facility due 2023 [member]
Debt Instrument [Line Items]
Long-term debt, gross		$ 3,419		$ 3,929
Debt instrument, interest rate, stated percentage		3.84%
Repayments of debt	500
Unamortized deferred financing costs and discount	$ 5
Debt instrument, decrease in basis spread on variable rate	0.25%
Debt instrument, basis spread on variable rate	1.75%
Senior notes due 2021 [member]
Debt Instrument [Line Items]
Long-term debt, gross					$ 1,500
Premium paid to redeem debt instrument			42
Write off of deferred debt issuance cost			$ 18
Senior secured revolving credit facility [member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		$ 1,000
Letters of credit outstanding, amount		64
Line of credit facility, remaining borrowing capacity		$ 936
HNA Tourism Group Co., Ltd. [Member]
Debt Instrument [Line Items]
Repurchases of common stock, shares	16,500,000	16,500,000
Repurchases of common stock, purchase price	$ 1,171

XML

Debt - Debt Maturities (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
2018 (remaining)	$ 4
2019	16
2020	17
2021	18
2022	19
Thereafter	7,591
Gross long-term debt and capital lease obligations, including current maturities	$ 7,665	$ 6,683

XML

Derivative Instruments and Hedging Activities - Fair Value of Derivative Instruments (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Other Noncurrent Assets [Member] | Designated as hedging instrument [member] | Interest rate swaps [member]
Derivative [Line Items]
Derivative asset	$ 41	$ 11
Other current assets [member] | Designated as hedging instrument [member] | Foreign exchange forward contracts [member]
Derivative [Line Items]
Derivative asset	2	0
Other current assets [member] | Not designated as hedging instrument [member] | Foreign exchange forward contracts [member]
Derivative [Line Items]
Derivative asset	3	4
Accounts payable, accrued expenses and other [member] | Designated as hedging instrument [member] | Foreign exchange forward contracts [member]
Derivative [Line Items]
Derivative liability	0	1
Accounts payable, accrued expenses and other [member] | Not designated as hedging instrument [member] | Foreign exchange forward contracts [member]
Derivative [Line Items]
Derivative liability	$ 6	$ 1

XML

Derivative Instruments and Hedging Activities - Earnings Effect of Derivative Instruments (Details) - USD ($) $ in Millions		3 Months Ended				6 Months Ended
		Jun. 30, 2018		Jun. 30, 2017		Jun. 30, 2018	Jun. 30, 2017
Designated as hedging instrument [member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instruments, gain (loss) recognized in income, ineffective portion and amount excluded from effectiveness testing, net	[1]	$ 0		$ 0		$ 0	$ 0
Interest rate swaps [member] | Designated as hedging instrument [member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instruments, gain (loss) recognized in other comprehensive income (loss), effective portion, net		11		(15)		45	(24)
Foreign exchange forward contracts [member] | Designated as hedging instrument [member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instruments, gain (loss) recognized in other comprehensive income (loss), effective portion, net	[2]	$ 4		$ 0	[3]	$ 3	$ 0	[3]
Derivative instruments, expense reclassified from accumulated OCI into income, effective portion, net	[2]	less than $1 million		less than $1 million		less than $1 million	less than $1 million
Other non-operating income, net [member] | Interest rate swaps [member] | Not designated as hedging instrument [member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) on interest rate derivative instruments not designated as hedging instruments				$ 0			$ 2
Interest expense [member] | Interest rate swaps [member] | Designated as hedging instrument [member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instruments, gain (loss) reclassified from accumulated OCI into income, effective portion, net		$ 0	[4]	(6)		$ (2)	(8)
Interest expense [member] | Interest rate swaps [member] | Not designated as hedging instrument [member]
Derivative Instruments, Gain (Loss) [Line Items]
Loss reclassified to earnings, net from discontinued cash flow hedges	[5]	(2)		(2)		(5)	(5)
Gain (loss) on foreign currency transactions [member] | Foreign exchange forward contracts [member] | Not designated as hedging instrument [member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) on foreign exchange forward contracts not designated as hedging instruments		$ (7)		$ 6		$ (6)	$ 7

[1] There were no amounts recognized in earnings related to hedge ineffectiveness or amounts excluded from hedge effectiveness testing during the three and six months ended June 30, 2018 and 2017.

[2] The earnings effect of the Fee Forward Contracts on fee revenues for the three and six months ended June 30, 2018 and 2017 was less than $1 million.

[3] Amounts for the three and six months ended June 30, 2017 were less than $1 million.

[4] The amount for the three months ended June 30, 2018 was less than $1 million.

[5] These amounts are related to the dedesignation of interest rate swaps in 2016 that no longer met the criteria for hedge accounting and were settled in 2017 and the interest rate swap that was settled in May 2018. The amounts were reclassified to interest expense from accumulated other comprehensive loss as the underlying transactions occurred.

XML

Derivative Instruments and Hedging Activities - Additional Information (Details) $ in Millions	6 Months Ended
	Jun. 30, 2018 USD ($)	May 01, 2018 USD ($)	Mar. 01, 2017 USD ($) Derivative
Designated as hedging instrument [member] | Foreign exchange forward contracts [member]
Derivative [Line Items]
Derivative, notional amount	$ 69
Derivative, remaining maturity	24 months
Not designated as hedging instrument [member] | Foreign exchange forward contracts [member]
Derivative [Line Items]
Derivative, notional amount	$ 349
Interest Rate Swaps Maturing 2022 [Member] | Designated as hedging instrument [member] | Interest rate swaps [member]
Derivative [Line Items]
Number of interest rate derivatives entered into | Derivative			2
Derivative, maturity date	Mar. 01, 2022
Interest Rate Swaps Maturing 2022 [Member] | $1.6 billion notional [Member] | Designated as hedging instrument [member] | Interest rate swaps [member]
Derivative [Line Items]
Derivative, notional amount			$ 1,600
Derivative, swaption interest rate			1.98%
Interest Rate Swaps Maturing 2022 [Member] | $750 million notional [Member] | Designated as hedging instrument [member] | Interest rate swaps [member]
Derivative [Line Items]
Derivative, notional amount			$ 750
Proceeds received for settlement of interest rate swap	$ 18
Derivative, swaption interest rate			2.02%
Interest Rate Swaps Maturing 2023 [Member] | $1.6 billion notional [Member] | Designated as hedging instrument [member] | Interest rate swaps [member]
Derivative [Line Items]
Derivative, notional amount		$ 1,600
Derivative, swaption interest rate		3.03%
Derivative, Term of Contract	March 2022 to March 2023

XML

Fair Value Measurements - Schedule by Balance Sheet Grouping (Details) - USD ($) $ in Millions		Jun. 30, 2018	Dec. 31, 2017
Level 1 [member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	[1]	$ 3,895	$ 2,575
Level 2 [member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents		109	284
Restricted cash equivalents		15	12
Level 3 [member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	[1]	3,419	3,954
Carrying value [member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents		109	284
Restricted cash equivalents		15	12
Long-term debt	[1]	$ 7,329	$ 6,348

[1] The carrying values include unamortized deferred financing costs and discount. The carrying values and fair values exclude capital lease obligations and other debt.

XML

Income Taxes - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Operating Loss Carryforwards [Line Items]
Effective income tax rate reconciliation, change in enacted tax rate, amount	$ 8		$ 665
Unrecognized tax benefits	285	$ 285
Accrual for interest and penalties	36	36
Unrecognized tax benefits that would impact effective tax rate	285	285
Income tax examination, estimate of possible loss		874
Accrual for taxing authority proposed tax owed adjustment	47	$ 47
Pre-enactment [Member]
Operating Loss Carryforwards [Line Items]
Effective income tax rate reconciliation, change in enacted tax rate, percent			35.00%
Post-enactment [Member]
Operating Loss Carryforwards [Line Items]
Effective income tax rate reconciliation, change in enacted tax rate, percent			21.00%
Remeasurement of U.S. DTAs/DTLs [Member]
Operating Loss Carryforwards [Line Items]
Effective income tax rate reconciliation, change in enacted tax rate, amount			$ 517
Uncertain tax position reserves [Member]
Operating Loss Carryforwards [Line Items]
Effective income tax rate reconciliation, change in enacted tax rate, amount			33
Other tax liabilities [Member]
Operating Loss Carryforwards [Line Items]
Effective income tax rate reconciliation, change in enacted tax rate, amount			84
Recognition of tax benefits [Member]
Operating Loss Carryforwards [Line Items]
Effective income tax rate reconciliation, change in enacted tax rate, amount			16
Transition tax results [Member]
Operating Loss Carryforwards [Line Items]
Effective income tax rate reconciliation, change in enacted tax rate, amount	$ 3		$ 15

XML

Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 40	$ 34	$ 68	$ 59
Unrecognized compensation costs related to unvested awards	$ 190		$ 190
Unrecognized compensation costs related to unvested awards, weighted-average period			1 year 11 months
Shares of common stock reserved for future issuance, in millions	16.1		16.1
Restricted stock units (RSUs) [member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, in millions			0.9
Weighted average grant date fair value, granted			$ 79.32
Restricted stock units (RSUs) [member] | Minimum [member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			2 years
Restricted stock units (RSUs) [member] | Maximum [member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			3 years
Employee stock option [member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			3 years
Options granted in period, in millions			0.6
Options granted in period, weighted average exercise price			$ 79.36
Options, expiration period			10 years
Options, grants in period, grant date fair value			$ 23.72
Exercisable, in millions	1.2		1.2
EBITDA CAGR [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting rights, percentage			50.00%
Free cash flow CAGR [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting rights, percentage			50.00%
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, in millions			0.3
Weighted average grant date fair value, granted			$ 79.36

XML

Share-Based Compensation - Schedule of Stock Options Valuation Assumptions (Details) - Employee stock option [member]	6 Months Ended
	Jun. 30, 2018 Rate
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	27.91%	[1]
Dividend yield	0.74%	[2]
Risk-free rate	2.73%	[3]
Expected term (in years)	6 years	[4]

[1] Estimated using historical movement of Hilton's stock price.

[2] Estimated based on the current quarterly dividend and the three-month average stock price at the date of grant.

[3] Based on the yields of U.S. Department of Treasury instruments with similar expected lives.

[4] Estimated using the average of the vesting periods and the contractual term of the options.

XML

Share-Based Compensation - Performance Share Acheivement Percentages (Details)	6 Months Ended
	Jun. 30, 2018 Rate
2017 awards [Member] | EBITDA CAGR [Member]
Schedule of Additional Information on Performance Shares [Line Items]
Performance Shares achievement percentage	200.00%
2017 awards [Member] | Free cash flow CAGR [Member]
Schedule of Additional Information on Performance Shares [Line Items]
Performance Shares achievement percentage	200.00%
2018 awards [Member] | EBITDA CAGR [Member]
Schedule of Additional Information on Performance Shares [Line Items]
Performance Shares achievement percentage	150.00%
2018 awards [Member] | Free cash flow CAGR [Member]
Schedule of Additional Information on Performance Shares [Line Items]
Performance Shares achievement percentage	150.00%

XML

Stockholders' Equity and Accumulated Other Comprehensive Loss - Schedule of Stockholders' Equity (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017		Dec. 31, 2016		Jan. 01, 2016
Class of Stock [Line Items]
Accumulated deficit	$ 6,697		$ 6,697		$ 6,981
Total Hilton stockholders' equity	555		555		1,688
Beginning Balance			$ 1,691	$ 5,627
Beginning Balance, shares			317,420,933
Share-based compensation			$ 23	24
Repurchases of common stock, shares			(19,800,000)
Repurchases of common stock, purchase price			$ (1,439)	(352)
Net Income attributable to Hilton Stockholders	217	$ 150	378	197
Net income attributable to noncontrolling interests	0	(1)	(2)	(2)
Net income	217	151	380	199
Comprehensive income attributable to Hilton stockholders	155	200	377	267
Total other comprehensive income (loss)	(62)	51	(1)	70
Dividends			(94)	(99)
Spin-offs of Park and HGV				(4,206)
Cumulative effect of the adoption of an ASU		0		0
Distributions				(1)
Stockholders' Equity Attributable to Noncontrolling Interest	(5)		(5)		(3)
Ending Balance	$ 560	1,262	$ 560	1,262
Ending Balance, shares	298,487,855		298,487,855
Common Stock [member]
Class of Stock [Line Items]
Total Hilton stockholders' equity	$ 3	$ 3	$ 3	$ 3	3		$ 3
Beginning Balance, shares			317,000,000	329,000,000
Share-based payment award transactions net shares			1,000,000	2,000,000
Repurchases of common stock, shares			(20,000,000)	(6,000,000)
Ending Balance, shares	298,000,000	325,000,000	298,000,000	325,000,000
Treasury Stock [member]
Class of Stock [Line Items]
Total Hilton stockholders' equity	$ (2,330)	$ (352)	$ (2,330)	$ (352)	(891)		0
Repurchases of common stock, purchase price			(1,439)	(352)
Additional Paid-in Capital [member]
Class of Stock [Line Items]
Total Hilton stockholders' equity	10,321	10,245	10,321	10,245	10,298		10,220
Share-based compensation			23	24
Cumulative effect of the adoption of an ASU		1		1
Accumulated Deficit [member]
Class of Stock [Line Items]
Total Hilton stockholders' equity	(6,697)	(7,766)	(6,697)	(7,766)	(6,981)	[1]	(3,545)	[1]
Net Income attributable to Hilton Stockholders			378	197
Dividends			(94)	(99)
Spin-offs of Park and HGV				(4,318)
Cumulative effect of the adoption of an ASU		(1)		(1)
Accumulated Other Comprehensive Loss [member]
Class of Stock [Line Items]
Total Hilton stockholders' equity	(742)	(868)	(742)	(868)	(741)		(1,001)
Comprehensive income attributable to Hilton stockholders			(1)	70
Spin-offs of Park and HGV				63
Noncontrolling Interest [member]
Class of Stock [Line Items]
Net income attributable to noncontrolling interests			2	2
Spin-offs of Park and HGV				49
Distributions				(1)
Stockholders' Equity Attributable to Noncontrolling Interest	$ 5	0	5	0	3		(50)
Accounting Standards Update 2014-09 [Member]
Class of Stock [Line Items]
Cumulative effect of the adoption of an ASU									$ 212
Accounting Standards Update 2014-09 [Member] | Restatement Adjustment [Member]
Class of Stock [Line Items]
Accumulated deficit					$ 385		$ 222
Beginning Balance			$ (384)
Net Income attributable to Hilton Stockholders		(16)		(43)
Net income attributable to noncontrolling interests		0		0
Net income		$ (16)		$ (43)

[1] Includes adjustments of $385 million and $222 million to the balances as of December 31, 2017 and 2016, respectively, as a result of the adoption of ASU 2014-09 as of January 1, 2016. See Note 2: "Basis of Presentation and Summary of Significant Accounting Policies" for additional information.

XML

Stockholders' Equity and Accumulated Other Comprehensive Loss - Additional Information (Details) - USD ($) $ in Millions		6 Months Ended
	Apr. 01, 2018	Jun. 30, 2018	Jun. 30, 2017
Equity, Class of Treasury Stock [Line Items]
Stock repurchase program, authorized amount		$ 2,000
Repurchases of common stock, shares		19,800,000
Stock repurchase program, remaining authorized repurchase amount		$ 841
Repurchases of common stock, purchase price		1,439	$ 352
Treasury Stock [member]
Equity, Class of Treasury Stock [Line Items]
Repurchases of common stock, purchase price		$ 1,439	$ 352
HNA Tourism Group Co., Ltd. [Member]
Equity, Class of Treasury Stock [Line Items]
Repurchases of common stock, shares	16,500,000	16,500,000
Repurchases of common stock, purchase price	$ 1,171
The Blackstone Group And Affiliates [Member]
Equity, Class of Treasury Stock [Line Items]
Repurchases of common stock, shares		1,250,000

XML

Stockholders' Equity and Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance		$ (741)	$ (1,001)
Other comprehensive income (loss) before reclassifications		(9)	58
Amounts reclassified from accumulated other comprehensive loss		8	12
Net current period other comprehensive income (loss)		(1)	70
Spin-offs of Park and HGV			(4,206)
Ending balance		(742)	(868)
Currency translation adjustment [member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	[1]	(513)	(738)
Other comprehensive income (loss) before reclassifications	[1]	(45)	73
Amounts reclassified from accumulated other comprehensive loss	[1]	0	0
Net current period other comprehensive income (loss)	[1]	(45)	73
Spin-offs of Park and HGV			63
Ending balance	[1]	(558)	(602)
Pension liability adjustment [member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance		(229)	(251)
Tax benefit on pension liability adjustment reclassifications	[2]	1	2
Other comprehensive income (loss) before reclassifications		0	0
Amounts reclassified from accumulated other comprehensive loss	[2]	3	4
Net current period other comprehensive income (loss)		3	4
Spin-offs of Park and HGV			0
Ending balance		(226)	(247)
Cash flow hedge adjustment [member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance		1	(12)
Tax benefit on cash flow hedge adjustment reclassifications	[3]	2	5
Other comprehensive income (loss) before reclassifications		36	(15)
Amounts reclassified from accumulated other comprehensive loss	[3]	5	8
Net current period other comprehensive income (loss)		41	(7)
Spin-offs of Park and HGV			0
Ending balance		$ 42	(19)
Spin-offs of Park and HGV
Accumulated Other Comprehensive Income (Loss) [Line Items]
Spin-offs of Park and HGV			$ 63

[1] Includes net investment hedges and intra-entity foreign currency transactions that are of a long-term investment nature.

[2] Amounts reclassified include the amortization of prior service cost and the amortization of net gain (loss) that were included in our computation of net periodic pension cost. They were recognized in other non-operating income (loss), net in our condensed consolidated statements of operations and are presented net of a tax benefit of $1 million and $2 million for the six months ended June 30, 2018 and 2017, respectively.

[3] Amounts reclassified relate to the designated interest rate swaps, as well as the interest rate swaps that were settled in 2017 and 2018. The amounts were recognized in interest expense in our condensed consolidated statements of operations and are presented net of a tax benefit of $2 million and $5 million for the six months ended June 30, 2018 and 2017, respectively. See Note 7: "Derivative Instruments and Hedging Activities" for additional information.

XML

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of EPS, Amount	Less than 1 million	Less than 1 million	Less than 1 million	Less than 1 million
Net Income (Loss) Available to Common Stockholders, Operations, Basic [Abstract]
Net income attributable to Hilton stockholders	$ 217	$ 150	$ 378	$ 197
Net Income (Loss) Available to Common Stockholders, Operations, Diluted [Abstract]
Net income attributable to Hilton stockholders	$ 217	$ 150	$ 378	$ 197
Basic EPS:
Weighted average shares outstanding, basic	301	327	308	328
Net income per share	$ 0.72	$ 0.46	$ 1.22	$ 0.60
Diluted EPS:
Weighted average shares outstanding, diluted	303	329	311	330
Net income per share	$ 0.71	$ 0.46	$ 1.21	$ 0.60

XML

Business Segments - Hotel Properties by Segment (Detail)	6 Months Ended
	Jun. 30, 2018 Room Hotel Segment
Segment Reporting Information [Line Items]
Number of operating business segments | Segment	2
Management and franchise [member]
Segment Reporting Information [Line Items]
Number of managed hotels	662
Number of franchised hotels	4,672
Number of managed and franchised hotel rooms | Room	849,265
Ownership [member]
Segment Reporting Information [Line Items]
Number of owned and leased hotels	71
Number of owned and leased hotel rooms | Room	21,717
Number of wholly owned and leased hotels	62
Number of non-wholly owned hotels	1
Number of hotels of consolidated VIEs	2
Number of hotels owned or leased by unconsolidated joint ventures	6

XML

Business Segments - Reconciliation of Revenue from Segment Amounts to Consolidated Amounts (Detail) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Segment Reporting, Revenue Reconciling Item [Line Items]
Franchise fees		$ 404	$ 355	$ 735	$ 637
Base and other management fees		84	81	161	162
Incentive management fees		59	57	114	106
Revenues		2,291	2,076	4,365	3,972
Amortization of contract acquisition costs		(7)	(5)	(14)	(8)
Other revenues		22	20	45	57
Direct reimbursements from managed and franchised properties		730	636	1,429	1,299
Indirect reimbursements from managed and franchised properties		600	554	1,155	1,042
Ownership [member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues		392	373	726	669
Management and franchise [member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Franchise fees		405	356	738	639
Base and other management fees	[1]	101	95	191	185
Incentive management fees		59	57	114	106
Revenues		565	508	1,043	930
Operating segments [member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues		957	881	1,769	1,599
Intersegment eliminations [member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	[1]	$ (11)	$ (10)	$ (19)	$ (17)

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

XML

Business Segments - Reconciliation of Segment Operating Income to Income Before Income Taxes (Detail) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating income		$ 406	$ 324	$ 685	$ 541
Amortization of contract acquisition costs		(7)	(5)	(14)	(8)
Other revenues, less other expenses		10	9	19	23
Net other revenues (expenses) from managed and franchised properties		3	(23)	(18)	(68)
Depreciation and amortization		(79)	(83)	(161)	(169)
General and administrative		(115)	(118)	(219)	(224)
Interest expense		(95)	(86)	(178)	(175)
Gain (loss) on foreign currency transactions		(12)	5	(1)	1
Loss on debt extinguishment		0	0	0	(60)
Other non-operating income (loss), net		(1)	7	13	9
Income before income taxes		298	250	519	316
Management and franchise [member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating income	[1]	565	508	1,043	930
Ownership [member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating income	[1]	29	36	35	57
Operating segments [member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating income		$ 594	$ 544	$ 1,078	$ 987

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

XML

Business Segments - Schedule of Assets by Segment (Detail) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	$ 13,986	$ 14,228
Corporate and other [member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	1,666	1,759
Management and franchise [member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	11,366	11,505
Ownership [member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	$ 954	$ 964

XML

Business Segments - Schedule of Capital Expenditures by Segment (Detail) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Segment Reporting, Capital Expenditure Reconciling Item [Line Items]
Capital expenditures for property and equipment	$ 28	$ 18
Corporate and other [member]
Segment Reporting, Capital Expenditure Reconciling Item [Line Items]
Capital expenditures for property and equipment	9	8
Ownership [member]
Segment Reporting, Capital Expenditure Reconciling Item [Line Items]
Capital expenditures for property and equipment	$ 19	$ 10

XML

Commitments and Contingencies (Details) $ in Millions	6 Months Ended
	Jun. 30, 2018 USD ($) Contract	Dec. 31, 2017 USD ($) Contract
Commitments and Contingencies [Line Items]
Accounts payable, accrued expenses and other	$ 1,312	$ 1,416
Other liabilities	881	920
Marketing, sales and brand program commitments	$ 414	402
Management contract performance guarantees [member]
Commitments and Contingencies [Line Items]
Number of contracts with performance guarantees | Contract	4
Guarantor obligations, maximum exposure, undiscounted	$ 45
Guarantor obligations, term	2019 to 2030
Accounts payable, accrued expenses and other	$ 11	12
Other liabilities	$ 5	$ 9
Number of contracts with performance guarantees with recorded liabilities | Contract	1	2

XML

Condensed Consolidating Guarantor Financial Information - Condensed Balance Sheet (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016
Current Assets:
Cash and cash equivalents	$ 423	$ 570
Restricted cash and cash equivalents	82	100
Accounts receivable, net	1,041	1,005
Intercompany receivables	0	0
Prepaid expenses	151	127
Income taxes receivable	11	36
Other	136	169
Total current assets	1,844	2,007
Intangibles and Other Assets:
Investments in subsidiaries	0	0
Goodwill	5,174	5,190
Brands	4,878	4,890
Management and franchise contracts, net	893	953
Other intangible assets, net	419	433
Property and equipment, net	351	353
Deferred income tax assets	111	111
Other	316	291
Total intangibles and other assets	12,142	12,221
Total assets	13,986	14,228
Current Liabilities:
Accounts payable, accrued expenses and other	1,312	1,416
Current portion of deferred revenues	308	366
Intercompany payables	0	0
Current maturities of long-term debt	11	46
Income taxes payable	22	12
Current portion of liability for guest loyalty program	725	622
Total current liabilities	2,378	2,462
Long-term debt	7,564	6,556
Deferred revenues	819	829
Deferred income tax liabilities	908	931
Liability for guest loyalty program	876	839
Other	881	920
Total liabilities	13,426	12,537
Equity:
Total Hilton stockholders' equity	555	1,688
Noncontrolling interests	5	3
Total equity	560	1,691	$ 1,262	$ 5,627
Total liabilities and equity	13,986	14,228
Eliminations [Member]
Current Assets:
Cash and cash equivalents	0	0
Restricted cash and cash equivalents	0	0
Accounts receivable, net	(1)	0
Intercompany receivables	(40)	(40)
Prepaid expenses	(2)	(6)
Income taxes receivable	(21)	(24)
Other	0	0
Total current assets	(64)	(70)
Intangibles and Other Assets:
Investments in subsidiaries	(14,598)	(18,787)
Goodwill	0	0
Brands	0	0
Management and franchise contracts, net	0	0
Other intangible assets, net	0	0
Property and equipment, net	0	0
Deferred income tax assets	(107)	(126)
Other	0	0
Total intangibles and other assets	(14,705)	(18,913)
Total assets	(14,769)	(18,983)
Current Liabilities:
Accounts payable, accrued expenses and other	(2)	(3)
Current portion of deferred revenues	(1)	(3)
Intercompany payables	(40)	(40)
Current maturities of long-term debt	0	0
Income taxes payable	(21)	(24)
Current portion of liability for guest loyalty program	0	0
Total current liabilities	(64)	(70)
Long-term debt	0	0
Deferred revenues	0	0
Deferred income tax liabilities	(107)	(126)
Liability for guest loyalty program	0	0
Other	0	0
Total liabilities	(171)	(196)
Equity:
Total Hilton stockholders' equity	(14,598)	(18,787)
Noncontrolling interests	0	0
Total equity	(14,598)	(18,787)
Total liabilities and equity	(14,769)	(18,983)
Parent [Member]
Current Assets:
Cash and cash equivalents	0	0
Restricted cash and cash equivalents	0	0
Accounts receivable, net	0	0
Intercompany receivables	0	0
Prepaid expenses	0	0
Income taxes receivable	0	0
Other	0	0
Total current assets	0	0
Intangibles and Other Assets:
Investments in subsidiaries	553	1,697
Goodwill	0	0
Brands	0	0
Management and franchise contracts, net	0	0
Other intangible assets, net	0	0
Property and equipment, net	0	0
Deferred income tax assets	5	6
Other	0	0
Total intangibles and other assets	558	1,703
Total assets	558	1,703
Current Liabilities:
Accounts payable, accrued expenses and other	3	15
Current portion of deferred revenues	0	0
Intercompany payables	0	0
Current maturities of long-term debt	0	0
Income taxes payable	0	0
Current portion of liability for guest loyalty program	0	0
Total current liabilities	3	15
Long-term debt	0	0
Deferred revenues	0	0
Deferred income tax liabilities	0	0
Liability for guest loyalty program	0	0
Other	0	0
Total liabilities	3	15
Equity:
Total Hilton stockholders' equity	555	1,688
Noncontrolling interests	0	0
Total equity	555	1,688
Total liabilities and equity	558	1,703
Guarantor Subsidiaries [Member]
Current Assets:
Cash and cash equivalents	14	18
Restricted cash and cash equivalents	16	10
Accounts receivable, net	734	712
Intercompany receivables	0	0
Prepaid expenses	49	24
Income taxes receivable	32	60
Other	21	13
Total current assets	866	837
Intangibles and Other Assets:
Investments in subsidiaries	553	1,697
Goodwill	3,824	3,824
Brands	4,405	4,405
Management and franchise contracts, net	587	645
Other intangible assets, net	281	283
Property and equipment, net	65	67
Deferred income tax assets	0	0
Other	65	67
Total intangibles and other assets	9,780	10,988
Total assets	10,646	11,825
Current Liabilities:
Accounts payable, accrued expenses and other	548	576
Current portion of deferred revenues	261	266
Intercompany payables	0	0
Current maturities of long-term debt	0	0
Income taxes payable	0	0
Current portion of liability for guest loyalty program	725	622
Total current liabilities	1,534	1,464
Long-term debt	0	0
Deferred revenues	757	770
Deferred income tax liabilities	1,000	1,052
Liability for guest loyalty program	876	839
Other	64	64
Total liabilities	4,231	4,189
Equity:
Total Hilton stockholders' equity	6,415	7,636
Noncontrolling interests	0	0
Total equity	6,415	7,636
Total liabilities and equity	10,646	11,825
Non-Guarantor Subsidiaries [Member]
Current Assets:
Cash and cash equivalents	406	550
Restricted cash and cash equivalents	32	29
Accounts receivable, net	287	275
Intercompany receivables	40	40
Prepaid expenses	88	84
Income taxes receivable	0	0
Other	112	155
Total current assets	965	1,133
Intangibles and Other Assets:
Investments in subsidiaries	0	0
Goodwill	1,350	1,366
Brands	473	485
Management and franchise contracts, net	306	306
Other intangible assets, net	138	149
Property and equipment, net	265	266
Deferred income tax assets	111	127
Other	171	172
Total intangibles and other assets	2,814	2,871
Total assets	3,779	4,004
Current Liabilities:
Accounts payable, accrued expenses and other	573	624
Current portion of deferred revenues	11	13
Intercompany payables	0	0
Current maturities of long-term debt	11	14
Income taxes payable	43	36
Current portion of liability for guest loyalty program	0	0
Total current liabilities	638	687
Long-term debt	235	240
Deferred revenues	61	59
Deferred income tax liabilities	5	0
Liability for guest loyalty program	0	0
Other	602	628
Total liabilities	1,541	1,614
Equity:
Total Hilton stockholders' equity	2,233	2,387
Noncontrolling interests	5	3
Total equity	2,238	2,390
Total liabilities and equity	3,779	4,004
HWF Issuers [Member]
Current Assets:
Cash and cash equivalents	0	0
Restricted cash and cash equivalents	0	0
Accounts receivable, net	0	0
Intercompany receivables	0	0
Prepaid expenses	0	0
Income taxes receivable	0	0
Other	2	0
Total current assets	2	0
Intangibles and Other Assets:
Investments in subsidiaries	5,397	7,067
Goodwill	0	0
Brands	0	0
Management and franchise contracts, net	0	0
Other intangible assets, net	0	0
Property and equipment, net	0	0
Deferred income tax assets	0	0
Other	49	20
Total intangibles and other assets	5,446	7,087
Total assets	5,448	7,087
Current Liabilities:
Accounts payable, accrued expenses and other	20	20
Current portion of deferred revenues	0	0
Intercompany payables	0	0
Current maturities of long-term debt	0	32
Income taxes payable	0	0
Current portion of liability for guest loyalty program	0	0
Total current liabilities	20	52
Long-term debt	4,865	5,333
Deferred revenues	0	0
Deferred income tax liabilities	10	5
Liability for guest loyalty program	0	0
Other	0	0
Total liabilities	4,895	5,390
Equity:
Total Hilton stockholders' equity	553	1,697
Noncontrolling interests	0	0
Total equity	553	1,697
Total liabilities and equity	5,448	7,087
HOC [Member]
Current Assets:
Cash and cash equivalents	3	2
Restricted cash and cash equivalents	34	61
Accounts receivable, net	21	18
Intercompany receivables	0	0
Prepaid expenses	16	25
Income taxes receivable	0	0
Other	1	1
Total current assets	75	107
Intangibles and Other Assets:
Investments in subsidiaries	8,095	8,326
Goodwill	0	0
Brands	0	0
Management and franchise contracts, net	0	2
Other intangible assets, net	0	1
Property and equipment, net	21	20
Deferred income tax assets	102	104
Other	31	32
Total intangibles and other assets	8,249	8,485
Total assets	8,324	8,592
Current Liabilities:
Accounts payable, accrued expenses and other	170	184
Current portion of deferred revenues	37	90
Intercompany payables	40	40
Current maturities of long-term debt	0	0
Income taxes payable	0	0
Current portion of liability for guest loyalty program	0	0
Total current liabilities	247	314
Long-term debt	2,464	983
Deferred revenues	1	0
Deferred income tax liabilities	0	0
Liability for guest loyalty program	0	0
Other	215	228
Total liabilities	2,927	1,525
Equity:
Total Hilton stockholders' equity	5,397	7,067
Noncontrolling interests	0	0
Total equity	5,397	7,067
Total liabilities and equity	$ 8,324	$ 8,592

XML

Condensed Consolidating Guarantor Financial Information - Condensed Income Statement (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues
Franchise fees	$ 404	$ 355	$ 735	$ 637
Base and other management fees	84	81	161	162
Incentive management fees	59	57	114	106
Owned and leased hotels	392	373	726	669
Other revenues	22	20	45	57
Total revenues excluding reimburseable revenues	961	886	1,781	1,631
Other revenues from managed and franchised properties	1,330	1,190	2,584	2,341
Total revenues	2,291	2,076	4,365	3,972
Expenses
Owned and leased hotels	352	327	672	595
Depreciation and amortization	79	83	161	169
General and administrative	115	118	219	224
Other expenses	12	11	26	34
Total expenses excluding reimbursable expenses	558	539	1,078	1,022
Other expenses from managed and franchised properties	1,327	1,213	2,602	2,409
Total expenses	1,885	1,752	3,680	3,431
Operating income	406	324	685	541
Interest expense	(95)	(86)	(178)	(175)
Gain (loss) on foreign currency transactions	(12)	5	(1)	1
Other non-operating income (loss), net	(1)	7	13	9
Loss on debt extinguishment	0	0	0	(60)
Income (loss) before income taxes and equity in earnings from subsidiaries	(298)	(250)	(519)	(316)
Income tax expense	(81)	(99)	(139)	(117)
Income (loss) before equity in earnings from subsidiaries	217	151	380	199
Equity in earnings from subsidiaries	0	0	0	0
Net income	217	151	380	199
Net income attributable to noncontrolling interests	0	(1)	(2)	(2)
Net Income attributable to Hilton Stockholders	217	150	378	197
Comprehensive income	155	202	379	269
Comprehensive income attributable to noncontrolling interests	0	(2)	(2)	(2)
Comprehensive income attributable to Hilton stockholders	155	200	377	267
Eliminations [Member]
Revenues
Franchise fees	(4)	(5)	(8)	(9)
Base and other management fees	0	0	0	0
Incentive management fees	0	0	0	0
Owned and leased hotels	0	0	0	0
Other revenues	1	0	(4)	0
Total revenues excluding reimburseable revenues	(3)	(5)	(12)	(9)
Other revenues from managed and franchised properties	0	0	0	0
Total revenues	(3)	(5)	(12)	(9)
Expenses
Owned and leased hotels	0	0	0	0
Depreciation and amortization	0	0	0	0
General and administrative	0	(2)	(4)	(2)
Other expenses	(4)	(3)	(8)	(7)
Total expenses excluding reimbursable expenses	(4)	(5)	(12)	(9)
Other expenses from managed and franchised properties	0	0	0	0
Total expenses	(4)	(5)	(12)	(9)
Operating income	1	0	0	0
Interest expense	2	0	3	0
Gain (loss) on foreign currency transactions	0	0	0	0
Other non-operating income (loss), net	(3)	0	(3)	0
Loss on debt extinguishment				0
Income (loss) before income taxes and equity in earnings from subsidiaries	0	0	0	0
Income tax expense	0	0	0	0
Income (loss) before equity in earnings from subsidiaries	0	0	0	0
Equity in earnings from subsidiaries	(1,009)	(712)	(1,777)	(1,086)
Net income	(1,009)	(712)	(1,777)	(1,086)
Net income attributable to noncontrolling interests	0	0	0	0
Net Income attributable to Hilton Stockholders	(1,009)	(712)	(1,777)	(1,086)
Comprehensive income	(947)	(762)	(1,776)	(1,156)
Comprehensive income attributable to noncontrolling interests	0	0	0	0
Comprehensive income attributable to Hilton stockholders	(947)	(762)	(1,776)	(1,156)
Parent [Member]
Revenues
Franchise fees	0	0	0	0
Base and other management fees	0	0	0	0
Incentive management fees	0	0	0	0
Owned and leased hotels	0	0	0	0
Other revenues	0	0	0	0
Total revenues excluding reimburseable revenues	0	0	0	0
Other revenues from managed and franchised properties	0	0	0	0
Total revenues	0	0	0	0
Expenses
Owned and leased hotels	0	0	0	0
Depreciation and amortization	0	0	0	0
General and administrative	0	0	0	0
Other expenses	0	0	0	0
Total expenses excluding reimbursable expenses	0	0	0	0
Other expenses from managed and franchised properties	0	0	0	0
Total expenses	0	0	0	0
Operating income	0	0	0	0
Interest expense	0	0	0	0
Gain (loss) on foreign currency transactions	0	0	0	0
Other non-operating income (loss), net	0	0	0	0
Loss on debt extinguishment				0
Income (loss) before income taxes and equity in earnings from subsidiaries	0	0	0	0
Income tax expense	0	0	0	0
Income (loss) before equity in earnings from subsidiaries	0	0	0	0
Equity in earnings from subsidiaries	217	150	378	197
Net income	217	150	378	197
Net income attributable to noncontrolling interests	0	0	0	0
Net Income attributable to Hilton Stockholders	217	150	378	197
Comprehensive income	155	200	377	267
Comprehensive income attributable to noncontrolling interests	0	0	0	0
Comprehensive income attributable to Hilton stockholders	155	200	377	267
Guarantor Subsidiaries [Member]
Revenues
Franchise fees	322	282	584	526
Base and other management fees	55	52	106	101
Incentive management fees	22	21	43	41
Owned and leased hotels	0	0	0	0
Other revenues	17	16	41	29
Total revenues excluding reimburseable revenues	416	371	774	697
Other revenues from managed and franchised properties	1,110	1,001	2,180	1,982
Total revenues	1,526	1,372	2,954	2,679
Expenses
Owned and leased hotels	0	0	0	0
Depreciation and amortization	58	59	118	121
General and administrative	0	0	0	2
Other expenses	8	7	15	14
Total expenses excluding reimbursable expenses	66	66	133	137
Other expenses from managed and franchised properties	1,114	1,006	2,198	2,032
Total expenses	1,180	1,072	2,331	2,169
Operating income	346	300	623	510
Interest expense	0	0	0	0
Gain (loss) on foreign currency transactions	(89)	53	(81)	74
Other non-operating income (loss), net	4	3	12	4
Loss on debt extinguishment				0
Income (loss) before income taxes and equity in earnings from subsidiaries	(261)	(356)	(554)	(588)
Income tax expense	(61)	(138)	(134)	(225)
Income (loss) before equity in earnings from subsidiaries	200	218	420	363
Equity in earnings from subsidiaries	217	150	378	197
Net income	417	368	798	560
Net income attributable to noncontrolling interests	0	0		0
Net Income attributable to Hilton Stockholders	417	368	798	560
Comprehensive income	416	369	798	561
Comprehensive income attributable to noncontrolling interests	0	0	0	0
Comprehensive income attributable to Hilton stockholders	416	369	798	561
Non-Guarantor Subsidiaries [Member]
Revenues
Franchise fees	36	29	65	52
Base and other management fees	28	29	54	61
Incentive management fees	37	36	71	65
Owned and leased hotels	392	373	726	669
Other revenues	3	2	5	6
Total revenues excluding reimburseable revenues	496	469	921	853
Other revenues from managed and franchised properties	158	145	298	274
Total revenues	654	614	1,219	1,127
Expenses
Owned and leased hotels	352	327	672	595
Depreciation and amortization	19	22	40	45
General and administrative	32	28	67	53
Other expenses	6	4	15	12
Total expenses excluding reimbursable expenses	409	381	794	705
Other expenses from managed and franchised properties	151	162	296	290
Total expenses	560	543	1,090	995
Operating income	94	71	129	132
Interest expense	(9)	(12)	(19)	(22)
Gain (loss) on foreign currency transactions	71	(50)	77	(86)
Other non-operating income (loss), net	4	2	7	5
Loss on debt extinguishment				0
Income (loss) before income taxes and equity in earnings from subsidiaries	(160)	(11)	(194)	(29)
Income tax expense	(50)	(3)	(63)	(8)
Income (loss) before equity in earnings from subsidiaries	110	8	131	21
Equity in earnings from subsidiaries	0	0	0	0
Net income	110	8	131	21
Net income attributable to noncontrolling interests	0	(1)	(2)	(2)
Net Income attributable to Hilton Stockholders	110	7	129	19
Comprehensive income	38	64	90	94
Comprehensive income attributable to noncontrolling interests	0	(2)	(2)	(2)
Comprehensive income attributable to Hilton stockholders	38	62	88	92
HWF Issuers [Member]
Revenues
Franchise fees	0	0	0	0
Base and other management fees	0	0	0	0
Incentive management fees	0	0	0	0
Owned and leased hotels	0	0	0	0
Other revenues	0	0	0	0
Total revenues excluding reimburseable revenues	0	0	0	0
Other revenues from managed and franchised properties	0	0	0	0
Total revenues	0	0	0	0
Expenses
Owned and leased hotels	0	0	0	0
Depreciation and amortization	0	0	0	0
General and administrative	0	0	0	0
Other expenses	0	0	0	0
Total expenses excluding reimbursable expenses	0	0	0	0
Other expenses from managed and franchised properties	0	0	0	0
Total expenses	0	0	0	0
Operating income	0	0	0	0
Interest expense	(57)	(60)	(118)	(123)
Gain (loss) on foreign currency transactions	0	0	0	0
Other non-operating income (loss), net	(7)	0	(7)	(3)
Loss on debt extinguishment				(60)
Income (loss) before income taxes and equity in earnings from subsidiaries	64	60	125	186
Income tax expense	16	23	31	73
Income (loss) before equity in earnings from subsidiaries	(48)	(37)	(94)	(113)
Equity in earnings from subsidiaries	265	187	472	310
Net income	217	150	378	197
Net income attributable to noncontrolling interests	0	0	0	0
Net Income attributable to Hilton Stockholders	217	150	378	197
Comprehensive income	227	145	417	190
Comprehensive income attributable to noncontrolling interests	0	0	0	0
Comprehensive income attributable to Hilton stockholders	227	145	417	190
HOC [Member]
Revenues
Franchise fees	50	49	94	68
Base and other management fees	1	0	1	0
Incentive management fees	0	0	0	0
Owned and leased hotels	0	0	0	0
Other revenues	1	2	3	22
Total revenues excluding reimburseable revenues	52	51	98	90
Other revenues from managed and franchised properties	62	44	106	85
Total revenues	114	95	204	175
Expenses
Owned and leased hotels	0	0	0	0
Depreciation and amortization	2	2	3	3
General and administrative	83	92	156	171
Other expenses	2	3	4	15
Total expenses excluding reimbursable expenses	87	97	163	189
Other expenses from managed and franchised properties	62	45	108	87
Total expenses	149	142	271	276
Operating income	(35)	(47)	(67)	(101)
Interest expense	(31)	(14)	(44)	(30)
Gain (loss) on foreign currency transactions	6	2	3	13
Other non-operating income (loss), net	1	2	4	3
Loss on debt extinguishment				0
Income (loss) before income taxes and equity in earnings from subsidiaries	59	57	104	115
Income tax expense	14	19	27	43
Income (loss) before equity in earnings from subsidiaries	(45)	(38)	(77)	(72)
Equity in earnings from subsidiaries	310	225	549	382
Net income	265	187	472	310
Net income attributable to noncontrolling interests	0	0	0	0
Net Income attributable to Hilton Stockholders	265	187	472	310
Comprehensive income	266	186	473	313
Comprehensive income attributable to noncontrolling interests	0	0	0	0
Comprehensive income attributable to Hilton stockholders	$ 266	$ 186	$ 473	$ 313

XML

Condensed Consolidating Guarantor Financial Information - Condensed Cash Flow Statement (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Operating Activities:
Net cash provided by (used in) operating activities	$ 532	$ 344
Investing Activities:
Capital expenditures for property and equipment	(28)	(18)
Capitalized software costs	(38)	(29)
Other	(9)	(18)
Net cash used in investing activities	(75)	(65)
Financing Activities:
Borrowings	1,650	1,823
Repayment of debt	(672)	(1,836)
Debt issuance costs and redemption premium	(21)	(68)
Repayment of intercompany borrowings		0
Intercompany transfers	0	0
Dividends paid	(92)	(98)
Cash transferred in spin-offs of Park and HGV	0	(501)
Repurchases of common stock	(1,439)	(352)
Distributions to noncontrolling interests	0	(1)
Tax withholdings on share-based compensation	(42)	(28)
Net cash used in financing activities	(616)	(1,061)
Effect of exchange rate changes on cash, restricted cash and cash equivalents	(6)	7
Net decrease in cash, restricted cash and cash equivalents	(165)	(775)
Cash, restricted cash and cash equivalents from continuing operations, beginning of period	670	1,183
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period	0	501
Cash, restricted cash and cash equivalents, beginning of period	670	1,684
Cash, restricted cash and cash equivalents, end of period	505	909
Eliminations [Member]
Operating Activities:
Net cash provided by (used in) operating activities	0	0
Investing Activities:
Capital expenditures for property and equipment	0	0
Capitalized software costs	0	0
Other	0	(3)
Net cash used in investing activities	0	(3)
Financing Activities:
Borrowings	0	0
Repayment of debt	0	0
Debt issuance costs and redemption premium	0	0
Repayment of intercompany borrowings		3
Intercompany transfers	0	0
Dividends paid	0	0
Cash transferred in spin-offs of Park and HGV		0
Repurchases of common stock	0	0
Distributions to noncontrolling interests		0
Tax withholdings on share-based compensation	0	0
Net cash used in financing activities	0	3
Effect of exchange rate changes on cash, restricted cash and cash equivalents	0	0
Net decrease in cash, restricted cash and cash equivalents	0	0
Cash, restricted cash and cash equivalents from continuing operations, beginning of period	0	0
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period		0
Cash, restricted cash and cash equivalents, beginning of period		0
Cash, restricted cash and cash equivalents, end of period	0	0
Parent [Member]
Operating Activities:
Net cash provided by (used in) operating activities	0	0
Investing Activities:
Capital expenditures for property and equipment	0	0
Capitalized software costs	0	0
Other	0	0
Net cash used in investing activities	0	0
Financing Activities:
Borrowings	0	0
Repayment of debt	0	0
Debt issuance costs and redemption premium	0	0
Repayment of intercompany borrowings		0
Intercompany transfers	1,531	450
Dividends paid	(92)	(98)
Cash transferred in spin-offs of Park and HGV		0
Repurchases of common stock	(1,439)	(352)
Distributions to noncontrolling interests		0
Tax withholdings on share-based compensation	0	0
Net cash used in financing activities	0	0
Effect of exchange rate changes on cash, restricted cash and cash equivalents	0	0
Net decrease in cash, restricted cash and cash equivalents	0	0
Cash, restricted cash and cash equivalents from continuing operations, beginning of period	0	0
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period		0
Cash, restricted cash and cash equivalents, beginning of period		0
Cash, restricted cash and cash equivalents, end of period	0	0
Guarantor Subsidiaries [Member]
Operating Activities:
Net cash provided by (used in) operating activities	494	378
Investing Activities:
Capital expenditures for property and equipment	(1)	(3)
Capitalized software costs	(38)	(29)
Other	(3)	(5)
Net cash used in investing activities	(42)	(37)
Financing Activities:
Borrowings	0	0
Repayment of debt	0	0
Debt issuance costs and redemption premium	0	0
Repayment of intercompany borrowings		0
Intercompany transfers	(450)	(351)
Dividends paid	0	0
Cash transferred in spin-offs of Park and HGV		0
Repurchases of common stock	0	0
Distributions to noncontrolling interests		0
Tax withholdings on share-based compensation	0	0
Net cash used in financing activities	(450)	(351)
Effect of exchange rate changes on cash, restricted cash and cash equivalents	0	0
Net decrease in cash, restricted cash and cash equivalents	2	(10)
Cash, restricted cash and cash equivalents from continuing operations, beginning of period	28	31
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period		0
Cash, restricted cash and cash equivalents, beginning of period		31
Cash, restricted cash and cash equivalents, end of period	30	21
Non-Guarantor Subsidiaries [Member]
Operating Activities:
Net cash provided by (used in) operating activities	148	93
Investing Activities:
Capital expenditures for property and equipment	(23)	(12)
Capitalized software costs	0	0
Other	(6)	3
Net cash used in investing activities	(29)	(9)
Financing Activities:
Borrowings	0	0
Repayment of debt	(12)	(4)
Debt issuance costs and redemption premium	0	0
Repayment of intercompany borrowings		0
Intercompany transfers	(242)	(350)
Dividends paid	0	0
Cash transferred in spin-offs of Park and HGV		(501)
Repurchases of common stock	0	0
Distributions to noncontrolling interests		(1)
Tax withholdings on share-based compensation	0	0
Net cash used in financing activities	(254)	(856)
Effect of exchange rate changes on cash, restricted cash and cash equivalents	(6)	7
Net decrease in cash, restricted cash and cash equivalents	(141)	(765)
Cash, restricted cash and cash equivalents from continuing operations, beginning of period	579	1,062
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period		501
Cash, restricted cash and cash equivalents, beginning of period		1,563
Cash, restricted cash and cash equivalents, end of period	438	798
HWF Issuers [Member]
Operating Activities:
Net cash provided by (used in) operating activities	(102)	(69)
Investing Activities:
Capital expenditures for property and equipment	0	0
Capitalized software costs	0	0
Other	0	(13)
Net cash used in investing activities	0	(13)
Financing Activities:
Borrowings	150	1,823
Repayment of debt	(660)	(1,832)
Debt issuance costs and redemption premium	0	(68)
Repayment of intercompany borrowings		0
Intercompany transfers	612	159
Dividends paid	0	0
Cash transferred in spin-offs of Park and HGV		0
Repurchases of common stock	0	0
Distributions to noncontrolling interests		0
Tax withholdings on share-based compensation	0	0
Net cash used in financing activities	102	82
Effect of exchange rate changes on cash, restricted cash and cash equivalents	0	0
Net decrease in cash, restricted cash and cash equivalents	0	0
Cash, restricted cash and cash equivalents from continuing operations, beginning of period	0	0
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period		0
Cash, restricted cash and cash equivalents, beginning of period		0
Cash, restricted cash and cash equivalents, end of period	0	0
HOC [Member]
Operating Activities:
Net cash provided by (used in) operating activities	(8)	(58)
Investing Activities:
Capital expenditures for property and equipment	(4)	(3)
Capitalized software costs	0	0
Other	0	0
Net cash used in investing activities	(4)	(3)
Financing Activities:
Borrowings	1,500	0
Repayment of debt	0	0
Debt issuance costs and redemption premium	(21)	0
Repayment of intercompany borrowings		(3)
Intercompany transfers	(1,451)	92
Dividends paid	0	0
Cash transferred in spin-offs of Park and HGV		0
Repurchases of common stock	0	0
Distributions to noncontrolling interests		0
Tax withholdings on share-based compensation	(42)	(28)
Net cash used in financing activities	(14)	61
Effect of exchange rate changes on cash, restricted cash and cash equivalents	0	0
Net decrease in cash, restricted cash and cash equivalents	(26)	0
Cash, restricted cash and cash equivalents from continuing operations, beginning of period	63	90
Cash, restricted cash and cash equivalents from discontinued operations, beginning of period		0
Cash, restricted cash and cash equivalents, beginning of period		90
Cash, restricted cash and cash equivalents, end of period	$ 37	$ 90

XML

Condensed Consolidating Guarantor Financial Information - Additional Information (Details)	Jun. 30, 2018 Rate
Guarantor Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Ownership percentage of equity interest	100.00%
Hilton Worldwide Parent [Member]
Condensed Financial Statements, Captions [Line Items]
Ownership percentage of equity interest	100.00%
HOC [Member]
Condensed Financial Statements, Captions [Line Items]
Ownership percentage of equity interest	100.00%
HWF Issuers [Member]
Condensed Financial Statements, Captions [Line Items]
Ownership percentage of equity interest	100.00%