Business Segments (Tables)

3 Months Ended

Mar. 31, 2026

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
	March 31,
		2026		2025
		(in millions)
Franchise and licensing fees		$	703	$	631
Base and other management fees(1)		108		101
Incentive management fees(1)		82		72
Management and franchise		893		804
Ownership		249		234
Segment revenues		1,142		1,038
Amortization of contract acquisition costs		(15)		(14)
Other revenues		66		46
Cost reimbursement revenues(2)		1,755		1,630
Intersegment fees elimination(1)		(11)		(5)
Total revenues		$	2,937	$	2,695

____________

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

(2)Amounts include revenues from the operation of programs conducted for the benefit of property owners and exclude cash receipts recorded as deferred revenues on our condensed consolidated balance sheets related to these programs. Under the terms of the related contracts, we do not operate these programs to generate a profit and have contractual rights to adjust future collections to recover prior period expenditures.

Reconciliation of Adjusted EBITDA from Segments to Consolidated Income Before Income Taxes

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


	Three Months Ended
	March 31,
		2026		2025
		(in millions)
Management and franchise(1)(2)		$	893	$	804
Ownership(1)(2)		15		8
Segment Adjusted EBITDA		908		812
Corporate and other(3)		(7)		(17)
Interest expense		(162)		(145)
Depreciation and amortization expenses		(50)		(41)
Gain (loss) on foreign currency transactions		(5)		2
FF&E replacement reserves		(10)		(13)
Share-based compensation expense		(45)		(36)
Amortization of contract acquisition costs		(15)		(14)
Cost reimbursement revenues(4)		1,755		1,630
Reimbursed expenses(4)		(1,849)		(1,759)
Other adjustments(5)		(2)		(9)
Income before income taxes		$	518	$	410

____________

(2)No expenses are allocated to the management and franchise segment. For the ownership segment, rent expense is the significant expense regularly provided to the CODM; rent expense was $41 million for both periods and total other ownership expenses were $195 million and $186 million for the three months ended March 31, 2026 and 2025, respectively, comprising (i) room expenses; (ii) food and beverage costs; (iii) property expenses; and (iv) other support costs. Ownership segment Adjusted EBITDA also includes income (loss) from hotels owned or leased by entities in which we own a noncontrolling financial interest.

(3)Amounts primarily include general and administrative expenses, excluding share-based compensation expense, and activity related to our purchasing operations.

(4)Amounts include results from the operation of programs conducted for the benefit of property owners and exclude cash receipts recorded as deferred revenues on our condensed consolidated balance sheets related to these programs. Under the terms of the related contracts, we do not operate these programs to generate a profit and have contractual rights to adjust future collections to recover prior period expenditures.

(5)Amount for the three months ended March 31, 2025 includes restructuring costs related to one of our leased hotels. Amounts for both periods include gains (losses) related to severance and other items, including non-cash charges, such as net gains (losses) related to certain of our investments in unconsolidated affiliates.

Hilton Worldwide Holdings Inc. 10-Q