UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 205-19 Form 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 194 For the transition period from to Commission File Number 001-362-13 Hilton Worldwide Holdings Inc. (Exact name of registrant as specified in its charter) Delaware 27-438-4691 (State or other jurisdiction of incorporation or organization) (LR.S. Employer Identification Na) 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 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading symbol(s) Name of each exchange on which registered Common Stock, S0.01 par value per share HLT New York Stock Exchange Securities registered pursuant to Section 12(e) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No 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 filo such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No D Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files) Yes 3 No o Indicate by check mark whether the registrant is a large accelerated filar, an accelerated filer, a non-accelerated filer, a smaller reporting company or energing growth company. See the definitions of "large acelerated filer," "accelerated filer," sanaller reporting company and 'emerging growth company in Rule 126-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer D 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 126-2 of the Exchange Act) Yes No As of June 28, 2019, the last business day of the registrant's most recently completad second fiscal quarter, the aggregate market value of the registrant's common stock held by non-affiliates of the registrant was approximately $27,521 million (based upon the closing sale price of the common stock on that date on the New York Stock Exchange). The number of shares of common stock outstanding on February 6, 2020 was 277,447,716 DOCUMENTS INCORPORATED BY REFERENCE Items 10, 11, 12, 13 and 14 of Part III incorporate information by reference from the registrant's definitive proxy statement relating to its 2020 annual meeting of stockholders to be filed with the Securities and Exchange Commission within 120 days afler the close of the registrant's fiscal year HILTON WORLDWIDE HOLDINGS INC. CONSOLIDATED BALANCE SHEETS (in millions, except share data) December 31. 2019 2018 538 92 1,261 403 81 1.150 160 31892 1,983 130 12 2,093 5,160 5.159 4,877 780 872 415 421 867 380 100 280 12,864 $14.957 S 367 90 2339 12,012 13.995 ASSETS Current Assets: Cash and cash equivalents Restricted cash and cash equivalents Accounts receivable, net of allowance for doubtfil accounts of 844 and 542 Prepaid expenses Other VET Total current assets (variable interest entities - $100 and $90) Intangibles and Other Assets: Goodwill Brands Management and franchise contracts, net S Other intangible assets, net Operating lease right-of-use assets Property and equipment, net Deferred income tax assets Other Total intangibles and other assets (variable interest entities - $179 and $178) TOTAL ASSETS LIABILITIES AND EQUITY (DEFICIT) Current Liabilities: Accounts payable, accrued expenses and other Current maturities of long-term debt Current portion of deferred revenues Current portion of liability for guest loyalty program Total current liabilities (variable interest entities - $64 and $56) Long-term debt Operating lease liabilities Deferred revenues Deferred income tax liabilities L Liability for guest loyalty program Other Total liabilities (variable interest entities - $260 and $263) Commitments and contingencies - see Note 19 Equity (Deficit): Preferred stock, $0.01 par value; 3,000,000,000 authorized shares, none issued or outstanding as of December 31, 2019 and 2018 Common stock, $0.01 par value, 10,000,000,000 authorized shares, 333, 159,770 issued and 278,985, 125 outstanding as of December 31, 2019 and 332,105,163 issued and 294,815,890 outstanding as of December 31, 2018 Treasury stock, at cost; 54,174,645 shares as of December 31, 2019 and 37,289,273 shares as of December 31, 2018 Additional paid-in capital Accumulated delicit Accumulated other comprehensive loss Total Hilton stockholders' equity (deficit) Noncontrolling interests. Total equity (deficit) TOTAL LIABILITIES AND EQUITY (DEFICIT) 1,549 16 350 700 2,615 7.266 1,703 $ 37 332 799 2,871 7,956 1,037 827 795 1,060 883 15,429 826 969 863 13,437 SU (4,169) 10,489 (5,965) (840) (482) 10 (472) 14.957 S (2,625) 10,372 (6,417) (782) 551 7 558 13.995 See notes to consolidated financial statements. HILTON WORLDWIDE HOLDINGS INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) Year Ended December 31, 2018 2017 2019 Revenues Franchise and licensing fees Base and other management fees Incentive management fees Owned and leased hotels Other revenues 1.681 $ 1,530 5 332321 230 235 1.422 1,484 101 98 3.766 3,668 3,686 3.238 9452 1,321 324 222 1,432 105 3404 4.727 8.131 Other revenues from managed and franchised properties Total revenues 8.906 Expenses Owned and leased hotels Depreciation and amortization General and administrative Other expenses 1,254 346 441 72 2,113 5.763 7.876 1,332 325 443 51 2.151 5323 7,474 1.269 336 439 56 2.100 4,899 6,999 Other expenses from managed and franchised properties Total expenses Gain on sale of assets, net 81 Operating income 1,657 1,432 1.132 (414) (2) (371) (11) Interest expense Gain (loss) on foreign currency transactions Loss on debt extinguishment Other non-operating income, net (351) 3 (60) 29 3 28 Income before income taxes 1.244 1,078 753 Income tax benefit (expense) (358) (309) 336 Na income Net income attributable to non controlling interests Net income attributable to Hilton stocldholders 886 (5) 881 769 (5) 1,089 (5) 1084 764 S 3,07 253 Lanniog per share: Basic Diluted 334 32 Cash dividends declared per share 0.60 See notes to consolidated financial statements HILTON WORLDWIDE HOLDINGS INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Year Ended December 31, 2019 2018 2017 Se 8869 769 1089 (Toy Net income Other comprehensive income (loss), net of tax benefit (expense) Currency translation adjustment, tief of tax of S(8), S6 and $32 Pension liability adjustment, nct of tax of $3. $3 and S(8) Cash flow hedge adjustment, net of tax of $15, $(8) and S(7) Total other comprehensive income (loss) (9) (45) (58) 162 22 13 197 22 (57) Comprehensive income Comprehensive income attributable to doncontrolling interests Comprehensive income attributable to Hilton stockholders 828 05 823 S 712 (5) 707 S 1.286 (5 1281 See notes to consolidated financial statements HILTON WORLDWIDE HOLDINGS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Year Ended December Jl. 2018 2019 2017 886 S 7695 1,089 27 325 17 336 29 346 (81) 2 11 154 16 2 (20) (90) 127 16 4 (14) (103) (3) D 121 15 1 (729) (161) (39) 13 148 Operating Activities: Net income Adjustments to reconcile nat income to net cash provided by operating activibes Amortization of contract acquisition costs Depreciation and amortization Gain on sale of assets.net Loss (grin) on foreign currency transactions Loss on debt extinguishment Share-based compensation Amortization of deferred mancing costs and other Distributions from unconsolidated affiliates Deferred income taxes Contract acquisition costs Changes in operating assets and liabilities Accounts receivable, net Prepaid eponses Other current assets Accounts payable, accrued expenses and other Change in operating lease right-of-use assets Change in operating lease liabilities Change in deferred revenues Change in liability for guest loyalty program Change in other liabilities Other Ne cash provided by operating activities Investing Activities: Capital expenditures for property and equipment Payments received on other financing receivables Proceeds from as disposition Capitalized software costs Other Na cash used in investing activities Financing Activities: Borrowings Repayment of debt Debt issuance costs and redemption premium Dividends paid Cash transferred in spin-offs Repurchases of common stock Share-based compensation tax withholdings and other Other Net cash used in financing activities (204) (11) (24) (17) (105) 6 15 99 43 (80) (17) 191 (14) n-5wHSIME MWE --%, (18) 207 (53) 334 29 (95) 1384 1.235 349 (58) (72) SO (81) 3 120 (124) (41) (123) (87) 23 (131) (75) 21) (147 2.200 (1,347) (29) (172) 1,676 (1,005) (21) (181) 1.824 (1,860) (69) (1,721) (1,538) (27) (195) (501) (891) (31) (1) (1.724 (1.113) (1 300) Effect of exchange rate changes on cash, restricted cash and cash equivalents Net increase (decrease) in cash, restricted cash and cash equivalents Cash, restricted cash and cash equivalents, beginning of period Cash, restricted cash and cash equivalents, end of period (2) 146 484 630 (10) (186) 670 4845 (1.014) 1.684 670 Sec notes to consolidated financial statements. For supplemental disclosures, see Note 21: 'Supplemental Disclosures of Cash Flow Information 70 APPLICATION EXERCISE P&L AND BALANCE SHEET ANALYSIS - HILTON WORLDWIDE BALANCE SHEET: What is the accounting equation? Prove the equation by using the amounts presented on Hilton's 2019 Balance Sheet. . Is the Balance Sheet presenting figures at a point of time or for a period of time? (Hint: Answer can be found in the column header of the Balance Sheet). What are the units of the numbers being presented. (Hint: Answer can be found in the header of the Balance Sheet). . Cash and Cash Equivalents is being reported as $538 and $403 for 2019 and 2018 respectively. What is the actual amounts for both periods? What is the most liquid asset on the Balance Sheet? . How much did current assets increase from 2018 to 2019? Please provide answer in actual dollars. Did current liabilities increase or decrease from 2018 to 2019? . How much did long term debt increase from 2018 to 2019? What is a possible reason why this may have occurred? CONSSOLIDATED STATEMENT OF OPERATIONS: Is the Consolidated Statement of Operations presenting figures at a point of time or for a period of time? (Hint: Answer can be found in the column header of the Consolidated Statement of Operations). What is the trend for Hiltons Total Revenue? What is the ratio of total expense to total revenue for 2017, 2018 and 2019? . How much did operating income increase from 2018 to 2019? Please provide both the $ as well as the % increase