Hilton(HLT) - 2025 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements Hilton's unaudited condensed consolidated financial statements and notes for Q3 2025 and FY 2024 are presented here Condensed Consolidated Balance Sheets Hilton's balance sheet, detailing assets, liabilities, and equity, is presented for Q3 2025 and FY 2024 | Metric | September 30, 2025 (in millions) | December 31, 2024 (in millions) | Change (2025 vs 2024) | | :--------------------------------- | :------------------------------- | :------------------------------- | :-------------------- | | Assets | | | | | Cash and cash equivalents | $1,057 | $1,301 | -$244 | | Total current assets | $3,119 | $3,272 | -$153 | | Goodwill | $5,079 | $5,035 | +$44 | | Brands | $5,022 | $4,990 | +$32 | | Management and franchise contracts, net | $1,366 | $1,235 | +$131 | | Total assets | $16,641 | $16,522 | +$119 | | Liabilities & Equity (Deficit) | | | | | Accounts payable, accrued expenses and other | $2,597 | $2,124 | +$473 | | Current maturities of long-term debt | $35 | $535 | -$500 | | Total current liabilities | $4,698 | $4,700 | -$2 | | Long-term debt | $11,603 | $10,616 | +$987 | | Total liabilities | $21,532 | $20,211 | +$1,321 | | Total Hilton stockholders' deficit | ($4,932) | ($3,727) | -$1,205 | | Total deficit | ($4,905) | ($3,706) | -$1,199 | - Total assets increased by $119 million to $16,641 million as of September 30, 2025, primarily driven by increases in goodwill, brands, and management/franchise contracts[8] - Total liabilities increased by $1,321 million to $21,532 million, mainly due to a significant increase in long-term debt and accounts payable, accrued expenses and other, while current maturities of long-term debt decreased substantially[8] - Hilton's stockholders' deficit widened by $1,205 million to ($4,932) million, primarily influenced by an increase in treasury stock[8] Condensed Consolidated Statements of Operations Hilton's financial performance, including revenues, expenses, and net income, is presented for Q3 and nine months ended September 30, 2025 and 2024 | Metric (in millions, except per share data) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :---------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Franchise and licensing fees | $739 | $698 | $2,109 | $1,958 | | Total revenues | $3,120 | $2,867 | $8,952 | $8,391 | | Total expenses | $2,343 | $2,242 | $6,861 | $6,515 | | Operating income | $777 | $623 | $2,091 | $1,881 | | Net income attributable to Hilton stockholders | $420 | $344 | $1,160 | $1,030 | | Basic EPS | $1.79 | $1.40 | $4.89 | $4.13 | | Diluted EPS | $1.78 | $1.38 | $4.84 | $4.09 | | Cash dividends declared per share | $0.15 | $0.15 | $0.45 | $0.45 | - Total revenues increased by 8.8% to $3,120 million for the three months and by 6.7% to $8,952 million for the nine months ended September 30, 2025[11] - Operating income saw a significant increase of 24.7% to $777 million for the three months and 11.2% to $2,091 million for the nine months ended September 30, 2025[11] - Net income attributable to Hilton stockholders grew by 22.1% to $420 million for the three months and 12.6% to $1,160 million for the nine months ended September 30, 2025[11] - Diluted EPS increased by 29.0% to $1.78 for the three months and 18.3% to $4.84 for the nine months ended September 30, 2025[11] Condensed Consolidated Statements of Comprehensive Income This section details Hilton's comprehensive income, including net income and other comprehensive income (loss) components, for Q3 and nine months ended September 30, 2025 and 2024 | Metric (in millions) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income | $421 | $344 | $1,163 | $1,034 | | Total other comprehensive income (loss) | ($9) | $24 | $69 | ($9) | | Comprehensive income | $412 | $368 | $1,232 | $1,025 | | Comprehensive income attributable to Hilton stockholders | $412 | $366 | $1,229 | $1,020 | - Total other comprehensive income (loss) shifted from a gain of $24 million in Q3 2024 to a loss of $9 million in Q3 2025, primarily due to currency translation adjustments and cash flow hedge adjustments[12] - For the nine months ended September 30, 2025, total other comprehensive income was $69 million, a significant improvement from a loss of $9 million in the prior year, mainly driven by a positive currency translation adjustment[12] Condensed Consolidated Statements of Cash Flows This section summarizes Hilton's cash flows from operating, investing, and financing activities for the nine months ended September 30, 2025 and 2024 | Metric (in millions) | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $1,926 | $1,431 | | Net cash used in investing activities | ($130) | ($367) | | Net cash used in financing activities | ($2,052) | ($274) | | Net increase (decrease) in cash, restricted cash and cash equivalents | ($250) | $780 | | Cash, restricted cash and cash equivalents, end of period | $1,126 | $1,655 | - Net cash provided by operating activities increased by 34.6% to $1,926 million for the nine months ended September 30, 2025, driven by higher net income and favorable working capital changes[15][116] - Net cash used in investing activities decreased by 64.6% to $130 million, primarily due to lower cash paid for acquisitions compared to the prior year which included the Graduate brand and Sydell Group acquisitions[15][117] - Net cash used in financing activities significantly increased to $2,052 million, mainly due to higher debt repayments and increased share repurchases, partially offset by new debt issuance[15][118][119] Note 1: Organization and Basis of Presentation This note describes Hilton's global hospitality operations and the basis for preparing its unaudited condensed consolidated financial statements in accordance with U.S. GAAP - Hilton Worldwide Holdings