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Business Segments (Tables)
 9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Segment Reporting [Abstract]    
Reconciliation of Revenues and Adjusted EBITDA from Segment Amounts to Consolidated Amounts

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

 

     Nine Months Ended
September 30,		  
         2014              2013      
     (in millions)  

Revenues

      

Ownership(1)(2)

    $  3,165        $  3,003    

Management and franchise(3)

      1,085          938    

Timeshare

      850          809    
  

 

 

     

 

 

  

Segment revenues

      5,100          4,750    

Other revenues from managed and franchised properties

      2,653          2,433    

Other revenues(4)

      70          48    

Intersegment fees elimination(1)(2)(3)(4)

      (149)         (139)   
  

 

 

     

 

 

  

Total revenues

    $ 7,674        $ 7,092    
  

 

 

     

 

 

  

Adjusted EBITDA

      

Ownership(1)(2)(3)(4)(5)

    $ 730        $ 672    

Management and franchise(3)

      1,085          938    

Timeshare(1)(3)

      232          205    

Corporate and other(2)(4)

      (207)         (208)   
  

 

 

     

 

 

  

Adjusted EBITDA

    $ 1,840        $ 1,607    
  

 

 

     

 

 

  

 

(1)  Includes charges to timeshare operations for rental fees and fees for other amenities, which were eliminated in our condensed consolidated financial statements. These charges totaled $21 million and $19 million for the nine months ended September 30, 2014 and 2013, respectively. While the net effect is zero, our measures of segment revenues and Adjusted EBITDA include these fees as a benefit to the ownership segment and a cost to timeshare Adjusted EBITDA.
(2)  Includes other intercompany charges of $3 million and $2 million for the nine months ended September 30, 2014 and 2013, respectively.
(3)  Includes management, royalty and intellectual property fees of $86 million and $71 million for the nine months ended September 30, 2014 and 2013, respectively. These fees are charged to consolidated owned and leased properties and were eliminated in our condensed consolidated financial statements. Also includes a licensing fee of $33 million and $40 million for the nine months ended September 30, 2014 and 2013, respectively, which is charged to our timeshare segment by our management and franchise segment and was eliminated in our condensed consolidated financial statements. While the net effect is zero, our measures of segment revenues and Adjusted EBITDA include these fees as a benefit to the management and franchise segment and a cost to ownership Adjusted EBITDA and timeshare Adjusted EBITDA.
(4)  Includes charges to consolidated owned and leased properties for services provided by our wholly owned laundry business of $6 million and $7 million for the nine months ended September 30, 2014 and 2013, respectively. These charges were eliminated in our condensed consolidated financial statements.
(5)  Includes unconsolidated affiliate Adjusted EBITDA.

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

 

     Year Ended December 31,  
     2013      2012      2011  
     (in millions)  

Revenues:

         

Ownership(1)(4)

    $ 4,075        $ 4,006        $ 3,926    

Management and franchise(2)

      1,271          1,180          1,095    

Timeshare

      1,109          1,085          944    
  

 

 

     

 

 

     

 

 

  

Segment revenues

      6,455          6,271          5,965    

Other revenues from managed and franchised properties

      3,405          3,124          2,927    

Other revenues(3)

      69          66          58    

Intersegment fees elimination(1)(2)(3)(4)

      (194)         (185)         (167)   
  

 

 

     

 

 

     

 

 

  

Total revenues

    $  9,735        $  9,276        $  8,783    
  

 

 

     

 

 

     

 

 

  

Adjusted EBITDA:

         

Ownership(1)(2)(3)(4)(5)

    $ 926        $ 793        $ 725    

Management and franchise(2)

      1,271          1,180          1,095    

Timeshare(1)(2)

      297          252          207    

Corporate and other(3)(4)

      (284)         (269)         (274)   
  

 

 

     

 

 

     

 

 

  

Adjusted EBITDA

    $ 2,210        $ 1,956        $ 1,753    
  

 

 

     

 

 

     

 

 

  

 

 

(1) Includes charges to timeshare operations for rental fees and fees for other amenities, which are eliminated in our consolidated financial statements. These charges totaled $26 million, $24 million and $27 million for the years ended December 31, 2013, 2012 and 2011, respectively. While the net effect is zero, our measures of segment revenues and Adjusted EBITDA include these fees as a benefit to the ownership segment and a cost to timeshare Adjusted EBITDA.
(2)  Includes management, royalty and intellectual property fees of $100 million, $96 million and $88 million for the years ended December 31, 2013, 2012 and 2011, respectively. These fees are charged to consolidated owned and leased properties and are eliminated in our consolidated financial statements. Also includes a licensing fee of $56 million, $52 million and $43 million for the years ended December 31, 2013, 2012 and 2011, respectively, which is charged to our timeshare segment by our management and franchise segment and is eliminated in our consolidated financial statements. While the net effect is zero, our measures of segment revenues and Adjusted EBITDA include these fees as a benefit to the management and franchise segment and a cost to ownership Adjusted EBITDA and timeshare Adjusted EBITDA.
(3) Includes charges to consolidated owned and leased properties for services provided by our wholly owned laundry business of $9 million, $10 million and $9 million for the years ended December 31, 2013, 2012 and 2011, respectively. These charges are eliminated in our consolidated financial statements.
(4)  Includes various other intercompany charges of $3 million for the years ended December 31, 2013 and 2012.
(5) Includes unconsolidated affiliate Adjusted EBITDA.
Reconciliation of Adjusted EBITDA to Net Income (Loss) Attributable to Hilton Stockholders

The following table provides a reconciliation of Adjusted EBITDA to EBITDA and EBITDA to net income attributable to Hilton stockholders:

 

     Nine Months Ended
September 30,		  
     2014      2013  
     (in millions)  

Adjusted EBITDA

    $    1,840        $    1,607    

Net income attributable to noncontrolling interests

      (8)         (9)   

Gain (loss) on foreign currency transactions

      41          (43)   

FF&E replacement reserve

      (32)         (29)   

Share-based compensation expense

      (25)         (5)   

Other gain, net

      38          5    

Other adjustment items

      (41)         (56)   
  

 

 

     

 

 

  

EBITDA

      1,813          1,470    

Interest expense

      (467)         (401)   

Interest expense included in equity in earnings from unconsolidated affiliates

      (8)         (10)   

Income tax expense

      (331)         (192)   

Depreciation and amortization

      (470)         (455)   

Depreciation and amortization included in equity in earnings from unconsolidated affiliates

      (22)         (23)   
  

 

 

     

 

 

  

Net income attributable to Hilton stockholders

    $ 515        $ 389    
  

 

 

     

 

 

  

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

 

     Year Ended December 31,  
     2013      2012      2011  
     (in millions)  

Adjusted EBITDA

    $    2,210        $    1,956        $    1,753    

Net income attributable to noncontrolling interests

      (45)         (7)         (2)   

Gain (loss) on foreign currency transactions

      (45)         23          (21)   

FF&E replacement reserve

      (46)         (68)         (57)   

Share-based compensation expense

      (313)         (50)         (19)   

Impairment losses

      —          (54)         (20)   

Impairment losses included in equity in earnings (losses) from unconsolidated affiliates

      —          (19)         (141)   

Gain on debt extinguishment

      229          —          —    

Other gain, net

      7          15          19    

Other adjustment items(1)

      (76)         (64)         (51)   
  

 

 

     

 

 

     

 

 

  

EBITDA

      1,921          1,732          1,461    

Interest expense

      (620)         (569)         (643)   

Interest expense included in equity in earnings (losses) from unconsolidated affiliates

      (13)         (13)         (12)   

Income tax benefit (expense)

      (238)         (214)         59    

Depreciation and amortization

      (603)         (550)         (564)   

Depreciation and amortization included in equity in earnings (losses) from unconsolidated affiliates

      (32)         (34)         (48)   
  

 

 

     

 

 

     

 

 

  

Net income attributable to Hilton stockholders

    $ 415        $ 352        $ 253    
  

 

 

     

 

 

     

 

 

  

 

(1)  Represents adjustments for legal expenses, severance and other items.
Schedule of Assets by Segment

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

 

     September 30,
2014		      December 31,
2013		  
     (in millions)  

Assets:

      

Ownership

    $  11,769       $  11,936   

Management and franchise

      10,626         11,016   

Timeshare

      1,757         1,871   

Corporate and other

      2,172         1,739   
  

 

 

     

 

 

  
   $ 26,324       $ 26,562   
  

 

 

     

 

 

  

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

 

     December 31,  
     2013      2012  
     (in millions)  

Assets:

      

Ownership

    $ 11,936       $ 12,476   

Management and franchise

      11,016         11,650   

Timeshare

      1,871         1,911   

Corporate and other

      1,739         1,029   
  

 

 

     

 

 

  
   $  26,562       $  27,066   
  

 

 

     

 

 

  
Schedule of Capital Expenditures by Segment

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

 

     Nine Months Ended
September 30,		  
        2014            2013     
     (in millions)  

Capital expenditures for property and equipment:

      

Ownership

    $  173       $  158   

Timeshare

      5         4   

Corporate and other

      6         5   
  

 

 

     

 

 

  
   $ 184       $ 167   
  

 

 

     

 

 

  

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

 

     Year Ended December 31,  
     2013      2012      2011  
     (in millions)  

Capital expenditures for property and equipment:

         

Ownership

    $ 240       $ 396       $ 368   

Timeshare

      8         28         12   

Corporate and other

      6         9         9   
  

 

 

     

 

 

     

 

 

  
   $     254       $     433       $     389   
  

 

 

     

 

 

     

 

 

  
Revenue from External Customers by Geographic Areas  

Revenues by country were as follows:

 

     Year Ended December 31,  
     2013      2012      2011  
     (in millions)  

U.S.

    $ 7,262       $ 6,743       $ 6,293   

All other

      2,473         2,533         2,490   
  

 

 

     

 

 

     

 

 

  
   $  9,735       $  9,276       $  8,783   
  

 

 

     

 

 

     

 

 

  
Property and Equipment, Net by Country  

Property and equipment, net by country were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

U.S.

    $ 8,204       $ 8,252   

All other

      854         945   
  

 

 

     

 

 

  
   $  9,058       $  9,197