HILTON WORLDWIDE HOLDINGS INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)


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, 2021.

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 impact of and recovery from the pandemic, 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, such as challenges due to labor
shortages and supply chain disruptions, risks related to the impact of the
pandemic, including as a result of new strains and variants of the virus and
uncertainty of acceptance of the COVID-19 vaccines and their effectiveness,
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., risks associated with the
Russian invasion of Ukraine 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, 2021 and "Part II-Item 1A. Risk Factors" of this Quarterly Report
on Form 10-Q. 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.

Insight

Our business

Hilton is one of the largest hospitality companies in the world, with 6,892
properties comprising 1,082,728 rooms in 122 countries and territories as of
March 31, 2022. Our premier brand portfolio includes: our luxury hotel brands,
Waldorf Astoria Hotels & Resorts, LXR Hotels & Resorts and Conrad Hotels &
Resorts; our emerging lifestyle hotel brands, Canopy by Hilton, Tempo by Hilton
and Motto by Hilton; our full service hotel brands, Signia by Hilton, Hilton
Hotels & Resorts, Curio Collection by Hilton, DoubleTree by Hilton and Tapestry
Collection by Hilton; our focused service hotel brands, Hilton Garden Inn,
Hampton by Hilton and Tru by Hilton; our all-suites hotel brands, Embassy Suites
by Hilton, Homewood Suites by Hilton and Home2 Suites by Hilton; and our
timeshare brand, Hilton Grand Vacations. As of March 31, 2022, we had 133
million members in our award-winning guest loyalty program, Hilton Honors, a 15
percent increase from March 31, 2021.

Segments and regions

We analyze 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 IP. This segment generates its revenue from: (i)
management and franchise fees charged to third-party hotel owners; (ii)
licensing fees for the right to use our IP from HGV and strategic partnerships,
including co-branded credit card arrangements; and (iii) fees for managing
hotels in our ownership segment. As a manager of hotels, we typically are
responsible for supervising or operating the hotel 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, while a third
party manages or operates such franchised hotels. The ownership segment
primarily derives revenues from providing nightly hotel room sales, food and
beverage sales and other services at our consolidated owned and leased hotels.

Geographically, we conduct 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
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America, including all Caribbean nations. Although the U.S., which represented
70 percent of our system-wide hotel rooms as of March 31, 2022, is included in
the Americas region, it is often analyzed separately and apart from the Americas
region 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 development pipeline

Our strategic objectives include the continued expansion of our global hotel
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 services or license our IP. Prior to approving
the addition of new hotels to our management and franchise development pipeline,
we evaluate the economic viability of the hotel 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, over time we expect to increase revenues, overall return on invested
capital and cash available to support our business needs; see further discussion
on our cash management policy in "-Liquidity and Capital Resources." While these
objectives have not changed as a result of the pandemic, the current economic
environment has posed certain challenges to the execution of our strategy, which
have included and may continue to include delays in openings and new
development.

We are focused on growing our business by expanding our share of the global hotel network through our development pipeline, which represents the hotels we plan to add to our system in the future. The following table summarizes our development activity:

                                                  As of and for the
                                                  Three Months Ended
                                                    March 31, 2022
                                             Hotels              Rooms(1)
               Hotel system
               Openings                        76                13,200
               Net additions(2)                55                 7,800

               Development pipeline(3)
               Additions                      176                22,200
               Count as of period end(4)    2,730               410,400

____________

(1)Rounded to the nearest hundred.
(2)Represents room additions, net of rooms removed from our system, during the
period. Contributed to net unit growth from March 31, 2021 of 5.0 percent.
(3)Hotels in our system are under development throughout 113 countries and
territories, including 27 countries and territories where we do not currently
have any existing hotels.
(4)In our development pipeline, as of March 31, 2022, 199,900 of the rooms were
under construction and 245,500 of the rooms were located outside of the U.S.
Nearly all of the rooms in our development pipeline are within our management
and franchise segment. We do not consider any individual development project to
be material to us.

Recent Developments

COVID-19 Pandemic

The pandemic significantly impacted the global economy and strained the
hospitality industry beginning in 2020. Since the beginning of the pandemic, the
pervasiveness and severity of travel restrictions and stay-at-home directives
has varied by country and state; however, consistent with other countries, as of
March 31, 2022, most of the states in the U.S., where the majority of our hotels
are located, had completely lifted or eased restrictions. While the pandemic
negatively affected our results of operations for the three months ended March
31, 2022 and 2021, we have experienced strong signs of economic recovery since
early 2021, particularly in our management and franchise segment. Although all
periods were impacted by the pandemic, none of these periods are considered
comparable, and no periods affected by the pandemic are expected to be
comparable to future periods. The continued spreading of COVID-19 and its
related variants could result in travel and other restrictions being reinstated
or demand for our hotel properties being reduced in the affected areas, yielding
further negative effects on our operations.
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Russian invasion of Ukraine

In February 2022, Russia commenced a military invasion of Ukraine. While this
has affected our operations in Ukraine and Russia, our financial results for the
three months ended March 31, 2022 were not materially affected by this conflict,
as hotels in these countries represented less than 1 percent of our total
managed and franchised hotels and, for the year ended December 31, 2021,
contributed less than 1 percent of total management and franchise fee revenues.
We are prioritizing the safety and security of our employees and the guests of
these hotels and have taken the following actions in response to the current
crisis:

•donating up to 1 million room nights in EMEA to support Ukrainian refugees and humanitarian relief efforts, in partnership with American Express, #HospitalityHelps and our community of owners;

•closed our head office at Moscow while ensuring the continuity of work and remuneration of the employees concerned;

•suspended all new development activity Russia;

• Pledged to donate all Hilton profits from business operations in Russia to humanitarian aid efforts to Ukraine; and

•contribute funds through our Hilton Global Foundation for World Central Cuisine and Project Hope to provide additional humanitarian assistance.

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; and (iii) have not sustained substantial property damage, business
interruption, undergone large-scale capital projects or for which comparable
results were not available. Of the 6,832 hotels in our system as of March 31,
2022, 6,069 hotels were classified as comparable hotels. Our 763 non-comparable
hotels included 99 hotels, or approximately one percent of the total hotels in
our system, that were removed from the comparable group during the last twelve
months because they have sustained substantial property damage, business
interruption, undergone large-scale capital projects or comparable results were
otherwise not available.

When considering business interruption in the context of our definition of
comparable hotels, no hotel that had completely or partially suspended
operations on a temporary basis at any time as a result of the pandemic was
excluded from the definition of comparable hotels on that basis alone. Despite
these temporary suspensions of hotel operations, we believe that including these
hotels within our hotel operating statistics of occupancy, average daily rate
("ADR") and revenue per available room ("RevPAR"), if they would have otherwise
been included, reflects the underlying results of our business for the three
months ended March 31, 2022 and 2021.

Occupation

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 ADR
pricing levels as demand for hotel rooms increases or decreases.

ADR

ADR represents hotel room revenue divided by the total number of room nights
sold for a given period. ADR measures the 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 charged to customers have different effects on overall revenues
and incremental profitability than changes in occupancy, as described above.

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RevPAR

RevPAR is calculated by dividing hotel room revenue by the 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, as
previously described: occupancy and ADR. RevPAR is also a useful indicator in
measuring performance over comparable periods for comparable hotels.

References to occupancy, ADR and RevPAR are presented on a comparable basis,
based on the comparable hotels as of March 31, 2022, and references to ADR and
RevPAR are presented on a currency neutral basis, unless otherwise noted. As
such, comparisons of these hotel operating statistics for the three months ended
March 31, 2022 and 2021 or 2019, use the foreign currency exchange rates used to
translate the results of the Company's foreign operations within its unaudited
condensed consolidated financial statements for the three months ended March 31,
2022.

EBITDA and Adjusted EBITDA

EBITDA reflects net income (loss), excluding interest expense, a provision for
income tax benefit (expense) and depreciation and amortization expenses.
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) share-based compensation;
(vi) reorganization, severance, relocation and other expenses; (vii) non-cash
impairment; (viii) amortization of contract acquisition costs; (ix) the net
effect of reimbursable costs included in other revenues and other expenses from
managed and franchised properties; and (x) other items.

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 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 expenses, 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 for leased hotels to
be consistent with the treatment of capital expenditures for property and
equipment, where payments for such capitalized assets are depreciated over their
useful lives; (ii) share-based compensation, 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 cost reimbursement revenues and reimbursed expenses, as we
contractually do not operate the related programs to generate a profit over the
terms of the respective contracts; and (iv) other items, such as amounts related
to debt restructurings and debt retirements and reorganization and related
severance costs, that are not core to our operations and are not reflective of
our operating performance.

EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be
considered as alternatives, either in isolation or as a substitute, for net
income (loss) or other measures of financial performance or liquidity, including
cash flows, derived in accordance with GAAP. Further, EBITDA and Adjusted EBITDA
have limitations as analytical tools, including:

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

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

•EBITDA and Adjusted EBITDA do not reflect income tax expense or cash requirements to pay our taxes;

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

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

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

•Other companies in our industry may calculate EBITDA and Adjusted EBITDA differently, which limits 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                           Change
                                                                      March 31, 2022                         2022 vs. 2021
U.S.
Occupancy                                                                                        61.8  %                14.1  % pts.
ADR                                                                                     $      144.32                   36.4  %
RevPAR                                                                                  $       89.12                   76.8  %

Americas (excluding U.S.)
Occupancy                                                                                        50.7  %                21.7  % pts.
ADR                                                                                     $      126.05                   35.7  %
RevPAR                                                                                  $       63.92                  137.0  %

Europe
Occupancy                                                                                        47.9  %                29.2  % pts.
ADR                                                                                     $      120.70                   74.8  %
RevPAR                                                                                  $       57.77                  348.8  %

MEA
Occupancy                                                                                        66.2  %                26.0  % pts.
ADR                                                                                     $      159.07                   34.6  %
RevPAR                                                                                  $      105.28                  121.4  %

Asia Pacific
Occupancy                                                                                        42.5  %                (0.4) % pts.
ADR                                                                                     $      104.13                   12.0  %
RevPAR                                                                                  $       44.28                   11.0  %

System-wide
Occupancy                                                                                        58.1  %                14.6  % pts.
ADR                                                                                     $      139.17                   35.2  %
RevPAR                                                                                  $       80.84                   80.5  %



Although the pandemic continued to negatively impact our business and hotel
operating statistics during the three months ended March 31, 2022, we
experienced significant improvement in our results compared to the same period
in 2021 with the continued recovery of the travel and hospitality industry and
the rebound of cross-border international travel. All regions showed improvement
in RevPAR during the three months ended March 31, 2022 as compared to the same
period in 2021, and, compared to the same period in 2019, our system-wide
RevPAR, occupancy and ADR were only down 17.0 percent, 11.4 percentage points
and 0.7 percent, respectively, on a comparable and currency neutral basis. The
Asia Pacific region experienced a more muted increase in RevPAR during the
period than the other regions primarily due to certain restrictions in China,
which included tightening of controls related to the Beijing Winter Olympics, as
well as lockdowns in certain areas due to COVID-19 surges.

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

                                                                         Three Months Ended
                                                                             March 31,
                                                                                   2022                2021
                                                                                        (in millions)
Net income (loss)                                                              $      211          $    (109)
Interest expense                                                                       90                103
Income tax expense (benefit)                                                           80                (35)
Depreciation and amortization expenses                                                 44                 51
EBITDA                                                                                425                 10
Loss (gain) on foreign currency transactions                                            4                 (2)
Loss on debt extinguishment                                                             -                 69
FF&E replacement reserves                                                              12                  4
Share-based compensation expense                                                       37                 39
Amortization of contract acquisition costs                                              8                  7
Net other expenses (revenues) from managed and franchised                             (30)                64
properties
Other adjustments(1)                                                                   (8)                 7
Adjusted EBITDA                                                                $      448          $     198


____________

(1)Amount for the three months ended March 31, 2022 primarily includes a gain
related to investments in unconsolidated affiliates. Both periods include
severance and other items.

Revenues

                                                     Three Months Ended         Percent
                                                         March 31,               Change
                                                                     2022         2021         2022 vs. 2021
                                                       (in millions)
    Franchise and licensing fees                                    $ 413      $    242            70.7

    Base and other management fees                                  $  55      $     25            NM(1)
    Incentive management fees                                          34            13            NM(1)
    Total management fees                                           $  89      $     38            NM(1)


____________

(1)The fluctuation in terms of percentage change is not significant.

In the three months ended March 31, 2022fee-based revenue increased primarily due to improved travel and tourism demand, including our customers’ ability and desire to travel, as a result of the continued recovery from the negative impacts of the pandemic .

Accordingly, on a comparable basis, franchise and management fees increased for
the three months ended March 31, 2022 as a result of increases in RevPAR of 71.3
percent at our comparable franchised properties and 115.7 percent at our
comparable managed properties, respectively. These increases in RevPAR at our
comparable franchised and managed properties were the result of increased
occupancy of 13.8 percentage points and 16.9 percentage points, respectively,
and increased ADR of 32.5 percent and 42.3 percent, respectively.

Further, as new hotels are part of our system for full periods, we expect such
hotels to increase our franchise and management fees during the period.
Including new development and ownership type transfers, from January 1, 2021 to
March 31, 2022, we added nearly 420 managed and franchised properties on a net
basis, providing an additional 64,200 rooms to our management and franchise
segment, which contributed to the increase in franchise and management fees.

Additionally, licensing fees increased $41 million primarily due to increases in
licensing fees from our strategic partnerships and HGV, which were the result of
increased co-branded credit cardholder spend and timeshare revenues,
respectively, both resulting from the rise in travel and tourism, as well as
increased overall consumer spending.

Incentive management fees increased during the period as they are based on hotel operating profits, which improved over the prior year due to increased demand at our properties, in line to recovery from the pandemic.

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                                                  Three Months Ended         Percent
                                                      March 31,               Change
                                                                  2022         2021         2022 vs. 2021
                                                    (in millions)
       Owned and leased hotels                                   $ 150      $     56            NM(1)


____________

(1)The fluctuation in terms of percentage change is not significant.

The increase in owned and leased hotel revenues included, on a currency neutral
basis, $89 million and $11 million of increases from our comparable and
non-comparable owned and leased hotels, respectively, which were partially
offset by a $6 million decrease as a result of unfavorable fluctuations in
foreign currency exchange rates. The currency neutral increase in revenues from
our comparable owned and leased hotels was the result of increased RevPAR of
301.1 percent, due to increases in occupancy of 25.4 percentage points and ADR
of 35.0 percent, due to the ongoing recovery from the pandemic. The currency
neutral increase in revenues from our non-comparable owned and leased hotels,
which also benefited from an increase in occupancy, was net of a decrease from
properties that were sold or for which the lease agreements were terminated
after March 31, 2021.

                                              Three Months Ended         Percent
                                                  March 31,               Change
                                                               2022        2021         2022 vs. 2021
                                                (in millions)
            Other revenues                                    $ 18      $     17             5.9



The increase in other revenues was primarily due to increased revenues from our
purchasing operations related to improved hotel demand resulting from the rise
in travel and tourism during the period.

Operating Expenses

                                                  Three Months Ended         Percent
                                                      March 31,               Change
                                                                  2022         2021         2022 vs. 2021
                                                    (in millions)
       Owned and leased hotels                                   $ 185      $    110            68.2



The increase in owned and leased hotel expenses included, on a currency neutral
basis, $73 million and $10 million of increases from our comparable and
non-comparable owned and leased hotels, respectively, which were partially
offset by an $8 million decrease as a result of favorable fluctuations in
foreign currency exchange rates. Our owned and leased hotels had currency
neutral increases in certain operating expenses as a result of increased
occupancy during the three months ended March 31, 2022, including variable rent
costs, which are generally based on a percentage of hotel revenues or profits,
as well as increased expenses related to FF&E replacement reserves.
Additionally, the currency neutral increase in expenses from our non-comparable
owned and leased hotels was net of a decrease from properties that were sold or
for which the lease agreements were terminated after March 31, 2021.

                                                                  Three Months Ended             Percent
                                                                      March 31,                  Change
                                                                               2022               2021               2022 vs. 2021
                                                                    (in millions)
Depreciation and amortization expenses                                     $      44          $       51                 (13.7)
General and administrative expenses                                               91                  97                 (6.2)
Other expenses                                                                    11                  10                  10.0



The decrease in depreciation and amortization expenses was due to a decrease in
amortization expense, primarily resulting from the full amortization of certain
software project costs between the periods.

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The decrease in general and administrative expenses was primarily due to lower
severance costs and legal expenses, as well as a decrease in bad debt expense
attributable to improved collections related to recovery from the pandemic.
These decreases were partially offset by an increase in corporate operating
expenses, which aligns with the recovery from the pandemic.

The increase in other expenses is mainly attributable to our purchasing operations related to the improvement in hotel demand.

Non-operating income and expenses

                                                                  Three Months Ended             Percent
                                                                       March 31,                 Change
                                                                               2022               2021               2022 vs. 2021
                                                                     (in millions)
Interest expense                                                           $     (90)         $     (103)                (12.6)
Gain (loss) on foreign currency transactions                                      (4)                  2                 NM(1)
Loss on debt extinguishment                                                        -                 (69)               (100.0)
Other non-operating income, net                                                   16                   5                 NM(1)
Income tax benefit (expense)                                                     (80)                 35                 NM(1)


____________

(1)The fluctuation in terms of percentage change is not significant.

The decrease in interest expense included the decrease resulting from the
February 2021 issuance of new senior unsecured notes and the use of such
proceeds for the redemption of previously outstanding senior unsecured notes,
which reduced the weighted average interest rate on our outstanding senior
unsecured notes. Additionally, while the Revolving Credit Facility was partially
drawn during the three months ended March 31, 2021, we had repaid the entire
outstanding balance by June 2021, resulting in a decrease in the related
interest expense for the three months ended March 31, 2022. See Note 5: "Debt"
in our unaudited condensed consolidated financial statements for additional
information on our indebtedness.

The gains and losses on foreign currency transactions included the impact of
changes in foreign currency exchange rates on certain intercompany financing
arrangements, including short-term cross-currency intercompany loans, and other
transactions denominated in foreign currencies.

Loss on debt extinguishment related to the February 2021 redemption of senior
unsecured notes and included a redemption premium of $55 million and the
accelerated recognition of unamortized deferred financing costs on those senior
unsecured notes of $14 million.

Other non-operating income, net consists of interest income, equity in earnings
(losses) from unconsolidated affiliates, certain income and costs related to our
defined employee benefit plans and other non-operating gains and losses. Other
non-operating income, net for the three months ended March 31, 2022 primarily
related to an $11 million gain resulting from the remeasurement of investments
in unconsolidated affiliates.

The increase in income tax expense is mainly attributable to the increase in earnings before income taxes. For more information, see Note 7: “Income Taxes” to our unaudited condensed consolidated financial statements.

Sector results

Refer to Note 11: "Business Segments" in our unaudited condensed consolidated
financial statements for reconciliations of revenues for our reportable segments
to consolidated total revenues and of segment operating income to consolidated
income (loss) before income taxes.

Refer to "-Revenues" for further discussion of the increase in revenues from our
managed and franchised properties, which is correlated to our management and
franchise segment revenues and segment operating income. Refer to "-Revenues"
and "-Operating Expenses" for further discussion of the increases in revenues
and operating expenses at our owned and leased hotels, which are correlated with
our ownership segment revenues and segment operating losses. Although we saw
significant improvement in revenues from our ownership segment during the three
months ended March 31, 2022 compared to the prior year, due to the nature of the
fixed rent commitments and other fixed operating costs at our leased hotels, our
ownership segment continued to experience an operating loss for the three months
ended March 31, 2022.

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Cash and capital resources

Insight

As of March 31, 2022, we had total cash and cash equivalents of $1,510 million,
including $78 million of restricted cash and cash equivalents. The majority of
our restricted cash and cash equivalents is related to cash collateral and cash
held for FF&E reserves.

Our known short-term liquidity requirements primarily consist of funds necessary
to pay for operating and other expenditures, including: (i) costs associated
with the management and franchising of hotels; (ii) costs, other than
compensation and rent that are noted separately, associated with the operations
of owned and leased hotels, including, but not limited to, utilities and
operating supplies; (iii) corporate expenses; (iv) payroll and compensation
costs; (v) taxes and compliance costs; (vi) scheduled debt maturities and
interest payments on our outstanding indebtedness; (vii) lease payments under
our finance and operating leases; (viii) committed contract acquisition costs;
(ix) dividends as declared; (x) share repurchases; and
(xi) capital expenditures for required renovations and maintenance at the hotels
within our ownership segment.

Our known long-term liquidity requirements primarily consist of funds necessary
to pay for: (i) scheduled debt maturities and interest payments on our
outstanding indebtedness; (ii) lease payments under our finance and operating
leases; (iii) committed contract acquisition costs; (iv) capital improvements to
the hotels within our ownership segment; (v) corporate capital and information
technology expenditures; (vi) dividends as declared; (vii) share repurchases;
and (viii) commitments to owners in our management and franchise segment made in
the normal course of business for which we are reimbursed by these owners
through program fees to operate our marketing, sales and brands programs. 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, 2021.

In March 2022, we resumed share repurchases, which we had previously suspended
in an effort to preserve cash during the pandemic, and, since they resumed, we
repurchased approximately 907,000 shares of our common stock with available cash
for $130 million as of March 31, 2022. As of March 31, 2022, approximately $2.1
billion remained available for share repurchases under our $5.5 billion stock
repurchase program. Additionally, although dividend payments were suspended
beginning in 2020, in May 2022, Hilton's board of directors authorized a
quarterly cash dividend of $0.15 per share of common stock to be paid during the
second quarter of 2022, with the expectation to continue regular quarterly cash
dividends in the future.

In circumstances where we have the opportunity to support our strategic
objectives by growing our global hotel network, we may provide performance or
debt guarantees or loan commitments, as necessary, for hotels that we currently
or plan to manage or franchise, as applicable, as well as letters of credit that
support hotel financing or other obligations of hotel owners. See Note 12:
"Commitments and Contingencies" in our unaudited condensed consolidated
financial statements for additional information on our commitments that were
outstanding as of March 31, 2022.

We have a long-term 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.
Within the framework of our investment policy, we currently intend to continue
to finance our business activities primarily with cash on our balance sheet as
of March 31, 2022, cash generated from our operations and, as needed, the use of
the available capacity of our Revolving Credit Facility. Additionally, we have
continued access to debt markets and expect to be able to obtain financing as a
source of liquidity as required and to extend maturities of existing borrowings,
if necessary.

After considering our approach to liquidity and our available sources of cash,
we believe that our cash position and sources of liquidity will meet anticipated
requirements for operating and other expenditures, including corporate expenses,
payroll and other compensation costs, taxes and compliance costs and other
commitments for the foreseeable future based on current conditions. The
objectives of our cash management policy are to maintain the availability of
liquidity while minimizing operational costs.

We may from time to time issue or incur or increase our capacity to incur new
debt and/or purchase our outstanding debt through underwritten offerings, open
market transactions, privately negotiated transactions or otherwise. Issuances
or incurrence of new debt (or an increase in our capacity to incur new debt)
and/or purchases or retirements of outstanding debt, if any, will depend on
prevailing market conditions, liquidity requirements, contractual restrictions
and other factors. The amounts involved may be material.
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