HILTON WORLDWIDE HOLDINGS INC., S-4/A filed on 11/19/2014
Registration Statement for securities to be issued in business combination transactions
Document and Entity Information
9 Months Ended
Sep. 30, 2014
Document And Entity Information [Abstract]
 
Document Type
S-4/A 
Amendment Flag
true 
Amendment Description
Amendment No. 1 to S-4 filed on 9/11/14 
Document Period End Date
Sep. 30, 2014 
Trading Symbol
HLT 
Entity Registrant Name
Hilton Worldwide Finance LLC 
Entity Central Index Key
0001617386 
Entity Filer Category
Non-accelerated Filer 
Condensed Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Current Assets:
 
 
 
Cash and cash equivalents
$ 543 
$ 594 
$ 755 
Restricted cash and cash equivalents
288 
266 
550 
Accounts receivable, net of allowance for doubtful accounts
862 
731 
719 
Inventories
350 
396 
415 
Deferred income tax assets
23 
23 
76 
Current portion of financing receivables, net
56 
94 
119 
Current portion of securitized financing receivables, net
64 
27 
Prepaid expenses
172 
148 
153 
Other
56 
104 
40 
Total current assets
2,414 
2,383 
2,827 
Property, Investments and Other Assets:
 
 
 
Property and equipment, net
9,124 
9,058 
9,197 
Financing receivables, net
381 
635 
815 
Securitized financing receivables, net
433 
194 
Investments in affiliates
174 
260 
291 
Goodwill
6,185 
6,220 
6,197 
Brands
4,987 
5,013 
5,029 
Management and franchise contracts, net
1,346 
1,452 
1,600 
Other intangible assets, net
695 
751 
744 
Deferred income tax assets
195 
193 
104 
Other
390 
403 
262 
Total property, investments and other assets
23,910 
24,179 
24,239 
TOTAL ASSETS
26,324 
26,562 
27,066 
Current Liabilities:
 
 
 
Accounts payable, accrued expenses and other
2,003 
2,079 
1,922 
Current maturities of long-term debt
392 
Current maturities of non-recourse debt
124 
48 
15 
Income taxes payable
10 
11 
20 
Total current liabilities
2,140 
2,142 
2,349 
Long-term debt
11,124 
11,751 
15,183 
Non-recourse debt
813 
920 
405 
Deferred revenues
544 
674 
82 
Deferred income tax liabilities
5,137 
5,053 
4,948 
Liability for guest loyalty program
637 
597 
503 
Other
1,179 
1,149 
1,441 
Total liabilities
21,574 
22,286 
24,911 
Commitments and contingencies
   
   
   
Equity:
 
 
 
Preferred stock
Common stock
10 
10 
Additional paid-in capital
10,000 
9,948 
8,452 
Accumulated deficit
(4,816)
(5,331)
(5,746)
Accumulated other comprehensive loss
(404)
(264)
(406)
Total Hilton stockholders' equity
4,790 
4,363 
2,301 
Noncontrolling interests
(40)
(87)
(146)
Total equity
4,750 
4,276 
2,155 
TOTAL LIABILITIES AND EQUITY
$ 26,324 
$ 26,562 
$ 27,066 
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Statement of Financial Position [Abstract]
 
 
 
Allowance for doubtful accounts receivable
$ 28 
$ 32 
$ 39 
Variable interest entities - current assets
206 
97 
49 
Variable interest entities - property, investments and other assets
664 
408 
168 
Variable interest entities - current liabilities
234 
86 
51 
Variable interest entities - liabilities
$ 922 
$ 583 
$ 485 
Preferred stock, par value (per share)
$ 0.01 
$ 0.01 
$ 0.01 
Preferred stock, authorized shares
3,000,000,000 
3,000,000,000 
3,000,000,000 
Preferred stock, issued shares
Preferred stock, outstanding shares
Common stock, par value (per share)
$ 0.01 
$ 0.01 
$ 0.01 
Common stock, authorized shares
30,000,000,000 
30,000,000,000 
9,205,128,000 
Common stock, issued shares
984,617,365 
984,615,364 
920,512,800 1
Common stock, outstanding shares
984,617,365 
984,615,364 
920,512,800 1
Condensed Consolidated Statements of Operations (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
Owned and leased hotels
 
 
 
 
 
 
 
 
$ 3,141 
$ 2,982 
$ 4,046 
$ 3,979 
$ 3,898 
Management and franchise fees and other
 
 
 
 
 
 
 
 
1,030 
868 
1,175 
1,088 
1,014 
Timeshare
 
 
 
 
 
 
 
 
850 
809 
1,109 
1,085 
944 
Total revenues excluding reimbursement revenue
 
 
 
 
 
 
 
 
5,021 
4,659 
6,330 
6,152 
5,856 
Other revenues from managed and franchised properties
 
 
 
 
 
 
 
 
2,653 
2,433 
3,405 
3,124 
2,927 
Total revenues
2,643 
2,449 
2,380 
2,263 
2,338 
2,417 
2,390 
2,131 
7,674 
7,092 
9,735 
9,276 
8,783 
Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
Owned and leased hotels
 
 
 
 
 
 
 
 
2,420 
2,327 
3,147 
3,230 
3,213 
Timeshare
 
 
 
 
 
 
 
 
564 
545 
730 
758 
668 
Depreciation and amortization
 
 
 
 
 
 
 
 
470 
455 
603 
550 
564 
Impairment losses
 
 
 
 
 
 
 
 
 
 
54 
20 
General, administrative and other
 
 
 
 
 
 
 
 
349 
319 
748 
460 
416 
Total expenses excluding cost of reimbursable expense
 
 
 
 
 
 
 
 
3,803 
3,646 
5,228 
5,052 
4,881 
Other expenses from managed and franchised properties
 
 
 
 
 
 
 
 
2,653 
2,433 
3,405 
3,124 
2,927 
Total expenses
 
 
 
 
 
 
 
 
6,456 
6,079 
8,633 
8,176 
7,808 
Operating income
89 
357 
404 
252 
263 
345 
298 
194 
1,218 
1,013 
1,102 
1,100 
975 
Interest income
 
 
 
 
 
 
 
 
15 
11 
Interest expense
 
 
 
 
 
 
 
 
(467)
(401)
(620)
(569)
(643)
Equity in earnings (losses) from unconsolidated affiliates
 
 
 
 
 
 
 
 
16 
11 
16 
(11)
(145)
Gain (loss) on foreign currency transactions
 
 
 
 
 
 
 
 
41 
(43)
(45)
23 
(21)
Gain on debt extinguishment
 
 
 
 
 
 
 
 
 
 
229 
Other gain (loss), net
 
 
 
 
 
 
 
 
38 
15 
19 
Income before income taxes
 
 
 
 
 
 
 
 
854 
590 
698 
573 
196 
Income tax benefit (expense)
 
 
 
 
 
 
 
 
(331)
(192)
(238)
(214)
59 
Net income
62 
203 
157 
38 
64 
179 
69 
47 
523 
398 
460 
359 
255 
Net income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
(8)
(9)
(45)
(7)
(2)
Net income (loss) attributable to Hilton Stockholders
$ 26 
$ 200 
$ 155 
$ 34 
$ 61 
$ 177 
$ 66 
$ 48 
$ 515 
$ 389 
$ 415 
$ 352 
$ 253 
Earnings per share:
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic and diluted
$ 0.03 
$ 0.22 
$ 0.17 
$ 0.03 
$ 0.07 
$ 0.19 
$ 0.07 
$ 0.05 
$ 0.52 
$ 0.42 
$ 0.45 
$ 0.38 
$ 0.27 
Condensed Consolidated Statements of Comprehensive Income (Loss) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Statement of Comprehensive Income [Abstract]
 
 
 
 
 
Net income (loss)
$ 523 
$ 398 
$ 460 
$ 359 
$ 255 
Other comprehensive income (loss), net of tax benefit (expense):
 
 
 
 
 
Currency translation adjustment
(131)
(7)
94 
138 
(82)
Net actuarial gain (loss)
 
 
48 
(35)
(21)
Prior service credit (cost)
   
   
(8)
Amortization of net gain
 
 
Pension liability adjustment
10 
60 
(41)
(13)
Cash flow hedge adjustment
(4)
 
 
Total other comprehensive income (loss)
(132)
160 
97 
(94)
Comprehensive income (loss)
391 
401 
620 
456 
161 
Comprehensive loss (income) attributable to noncontrolling interests
(10)
(23)
(63)
(21)
Comprehensive income (loss) attributable to Hilton stockholders
$ 381 
$ 378 
$ 557 
$ 435 
$ 162 
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Statement of Comprehensive Income [Abstract]
 
 
 
 
 
Foreign currency translation adjustment, tax
$ 7 
$ 24 
$ 39 
$ 102 
$ (2)
Net actuarial gain (loss), tax
 
 
(31)
20 
10 
Pension liability adjustment, tax
(3)
 
 
 
Prior service credit (cost), tax
 
 
(3)
(2)
Amortization of net gain, tax
 
 
(3)
(1)
(2)
Cash flow hedge adjustment, tax
$ 2 
 
$ (4)
 
$ (1)
Condensed Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Operating Activities:
 
 
 
 
 
Net income
$ 523 
$ 398 
$ 460 
$ 359 
$ 255 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
470 
455 
603 
550 
564 
Impairment losses
 
 
54 
20 
Equity in earnings from unconsolidated affiliates
(16)
(11)
(16)
11 
145 
Loss (gain) on foreign currency transactions
(41)
43 
45 
(23)
21 
Gain on debt extinguishment
 
 
(229)
Other gain, net
(38)
(5)
(7)
(15)
(19)
Share-based compensation
57 
262 
50 
19 
Amortization of deferred financing costs and other
 
 
25 
(5)
Distributions from unconsolidated affiliates
20 
18 
27 
31 
13 
Deferred income taxes
(62)
66 
65 
73 
(187)
Increase (decrease) in accounts receivable
 
 
(16)
(82)
(43)
Increase (decrease) in inventories
 
 
19 
137 
119 
Increase (decrease) in prepaid expense
 
 
(15)
(7)
Increase (decrease) in other current assets
 
 
(65)
51 
(29)
Increase (decrease) in accounts payable, accrued liabilities and other
 
 
132 
71 
151 
Increase (decrease) in income taxes payable
 
 
(8)
 
Change in restricted cash and cash equivalents
(3)
(66)
91 
(79)
(14)
Increase (decrease) in timeshare financing receivables
 
 
(15)
(68)
(53)
Increase (decrease) in deferred revenues
 
 
592 
(8)
Increase (decrease) in liability for guest loyalty program
 
 
139 
128 
Increase (decrease) in other liabilities
 
 
14 
(48)
83 
Working capital changes and other
(11)
121 
(21)
57 
(5)
Net cash provided by operating activities
899 
1,024 
2,101 
1,110 
1,167 
Investing Activities:
 
 
 
 
 
Capital expenditures for property and equipment
(184)
(167)
(254)
(433)
(389)
Acquisitions
 
(30)
(30)
 
(12)
Payments received on other financing receivables
18 
Issuance of other financing receivables
(1)
(8)
(10)
(4)
 
Investments in affiliates
(6)
(4)
(4)
(3)
(11)
Distributions from unconsolidated affiliates
32 
16 
33 
23 
Proceeds from asset dispositions
40 
 
 
 
65 
Contract acquisition costs
(54)
(12)
(44)
(31)
(53)
Software capitalization costs
(45)
(50)
(78)
(103)
(93)
Net cash used in investing activities
(200)
(252)
(382)
(558)
(463)
Financing Activities:
 
 
 
 
 
Proceeds from issuance of common stock
 
 
1,243 
 
 
Borrowings
350 
702 
14,088 
96 
40 
Repayment of debt
(1,075)
(1,602)
(17,203)
(854)
(726)
Debt issuance costs
(9)
 
(180)
 
 
Change in restricted cash and cash equivalents
(19)
114 
193 
187 
(25)
Capital contribution
13 
 
 
 
 
Distributions to noncontrolling interests
(3)
(3)
(4)
(4)
(3)
Acquisition of noncontrolling interests
 
 
 
(1)
 
Net cash used in financing activities
(743)
(789)
(1,863)
(576)
(714)
Effect of exchange rate changes on cash and cash equivalents
(7)
(14)
(17)
(2)
(5)
Net increase (decrease) in cash and cash equivalents
(51)
(31)
(161)
(26)
(15)
Cash and cash equivalents, beginning of period
594 
755 
755 
781 
796 
Cash and cash equivalents, end of period
543 
724 
594 
755 
781 
Supplemental Disclosures:
 
 
 
 
 
Interest
353 
395 
535 
486 
470 
Income taxes, net of refunds
284 
84 
233 
103 
114 
Acquisition of property and equipment
144 
 
 
 
 
Acquisition of other intangible assets
 
 
 
 
Disposition of equity investments
(59)
 
 
 
 
Non-Cash Capital Lease Asset Increase
11 
 
 
15 
 
Non-cash capital lease asset reduction
 
(44)
(44)
 
(76)
Assumption of long-term debt
64 
 
 
 
 
Non-Cash Capital Lease Obligation Increase
11 
 
 
 
 
Non-Cash Capital Lease Obligation Reduction
 
$ (48)
$ (48)
 
$ (73)
Condensed Consolidated Statements of Stockholders' Equity (USD $)
In Millions, except Share data, unless otherwise specified
Total
Common Stock [member]
Additional Paid-in Capital [member]
Accumulated Deficit [member]
Accumulated Other Comprehensive Loss [member]
Noncontrolling Interests [member]
Balance at Dec. 31, 2010
$ 1,544 
$ 1 
$ 8,454 
$ (6,351)
$ (398)
$ (162)
Balance (shares) at Dec. 31, 20101
 
921,000,000 
 
 
 
 
Net income
255 
 
 
253 
 
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
Currency translation adjustment
(82)
 
 
 
(79)
(3)
Pension liability adjustment
(13)
 
 
 
(13)
 
Cash flow hedge adjustment
 
 
 
 
Total other comprehensive income (loss)
(94)
 
 
 
(91)
(3)
Distributions
(3)
 
 
 
 
(3)
Balance at Dec. 31, 2011
1,702 
8,454 
(6,098)
(489)
(166)
Balance (shares) at Dec. 31, 20111
 
921,000,000 
 
 
 
 
Share-based compensation
 
 
 
 
Net income
359 
 
 
352 
 
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
Currency translation adjustment
138 
 
 
 
124 
14 
Pension liability adjustment
(41)
 
 
 
(41)
 
Total other comprehensive income (loss)
97 
 
 
 
83 
14 
Distributions
(4)
 
 
 
 
(4)
Equity contributions to consolidated variable interest entities
(1)
 
(4)
 
 
Balance at Dec. 31, 2012
2,155 
 
8,452 
(5,746)
(406)
(146)
Balance (shares) at Dec. 31, 20122
920,512,800 
 
 
 
 
 
Net income
398 
 
 
389 
 
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
Currency translation adjustment
(7)
 
 
 
(21)
14 
Pension liability adjustment
10 
 
 
 
10 
 
Total other comprehensive income (loss)
 
 
 
(11)
14 
Distributions
(3)
 
 
 
 
(3)
Balance at Sep. 30, 2013
2,553 
8,452 
(5,357)
(417)
(126)
Balance (shares) at Sep. 30, 2013
 
921,000,000 
 
 
 
 
Balance at Dec. 31, 2012
2,155 
8,452 
(5,746)
(406)
(146)
Balance (shares) at Dec. 31, 2012
920,512,800 2
921,000,000 1
 
 
 
 
Issuance of common stock (shares)
64,102,564 
64,000,000 1
 
 
 
 
Issuance of common stock, value
1,243 
1,234 
 
 
 
Share-based compensation
262 
 
262 
 
 
 
Net income
460 
 
 
415 
 
45 
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
Currency translation adjustment
94 
 
 
 
76 
18 
Pension liability adjustment
60 
 
 
 
60 
 
Cash flow hedge adjustment
 
 
 
 
Total other comprehensive income (loss)
160 
 
 
 
142 
18 
Distributions
(4)
 
 
 
 
(4)
Balance at Dec. 31, 2013
4,276 
10 
9,948 
(5,331)
(264)
(87)
Balance (shares) at Dec. 31, 2013
984,615,364 
985,000,000 1
 
 
 
 
Net income
523 
 
 
515 
 
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
Currency translation adjustment
(131)
 
 
 
(133)
Pension liability adjustment
 
 
 
 
Cash flow hedge adjustment
(4)
 
 
 
(4)
 
Total other comprehensive income (loss)
(132)
 
 
 
(134)
Share-based compensation
73 
 
73 
 
 
 
Capital contribution
13 
 
13 
 
 
 
Distributions
(3)
 
 
 
 
(3)
Equity contributions to consolidated variable interest entities
 
(34)
 
(6)
40 
Balance at Sep. 30, 2014
$ 4,750 
$ 10 
$ 10,000 
$ (4,816)
$ (404)
$ (40)
Balance (shares) at Sep. 30, 2014
984,617,365 
985,000,000 
 
 
 
 
Organization
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Organization

Note 1: Organization and Basis of Presentation

Organization

Hilton Worldwide Holdings Inc. (“Hilton” together with its subsidiaries, “we,” “us,” “our” or the “Company”), a Delaware corporation, is one of the largest hospitality companies in the world based upon the number of hotel rooms and timeshare units under our 12 distinct brands. We are engaged in owning, leasing, managing, developing and franchising hotels, resorts and timeshare properties. As of September 30, 2014, we owned, leased, managed or franchised 4,221 hotel and resort properties, totaling 698,402 rooms in 93 countries and territories, as well as 44 timeshare properties comprising 6,794 units.

In December 2013, we completed a 9,205,128-for-1 stock split on issued and outstanding shares, which is reflected in all share and per share data presented in our condensed consolidated financial statements and accompanying notes.

Basis of Presentation and Use of Estimates

The accompanying condensed consolidated financial statements for the nine months ended September 30, 2014 and 2013 have been prepared in accordance with United States of America (“U.S.”) generally accepted accounting principles (“GAAP”) and are unaudited. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. GAAP. Although we believe the disclosures made are adequate to prevent the information presented from being misleading, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and, accordingly, ultimate results could differ from those estimates. Interim results are not necessarily indicative of full year performance.

In our opinion, the accompanying condensed consolidated financial statements reflect all adjustments, including normal recurring items, considered necessary for a fair presentation of the interim periods. All material intercompany transactions have been eliminated in consolidation.

Organization

Note 1: Organization

Hilton Worldwide Holdings Inc. (“Hilton” together with its subsidiaries, “we,” “us,” “our” or the “Company”) was incorporated in Delaware on March 18, 2010 to hold, directly or indirectly, all of the equity of Hilton Worldwide, Inc. (“HWI”). The accompanying financial statements present the consolidated financial position of Hilton, which includes consolidation of HWI. Hilton is one of the largest hospitality companies in the world based upon the number of hotel rooms and timeshare units under our 10 distinct brands. We are engaged in owning, leasing, managing, developing and franchising hotels, resorts and timeshare properties. As of December 31, 2013, we owned, leased, managed or franchised 4,073 hotel and resort properties, totaling 672,083 rooms in 91 countries and territories, as well as 42 timeshare properties comprising 6,547 units.

On October 24, 2007, HWI became a wholly owned subsidiary of BH Hotels Holdco, LLC (“BH Hotels”), an affiliate of The Blackstone Group L.P. (“Blackstone” or “our Sponsor”), following the completion of a merger (the “Merger”). BH Hotels and its subsidiaries subsequently formed Hilton Global Holdings, LLC (“HGH” or our “Parent”), which owned 100 percent of our stock. On December 17, 2013, we completed a 9,205,128-for-1 stock split on issued and outstanding shares, which is reflected in all share and per share data presented in the consolidated financial statements and accompanying notes, and an initial public offering (the “IPO”) in which we sold 64,102,564 newly issued shares of common stock and a selling stockholder of the Company sold 71,184,153 shares of existing common stock at a public offering price of $20.00 per share. As of December 31, 2013, our Sponsor beneficially owned approximately 76.4 percent of our common stock. The common stock is listed on the New York Stock Exchange under the symbol “HLT” and began trading publicly on December 12, 2013.

Basis of Presentation and Summary of Significant Accounting Policies
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Basis of Presentation and Summary of Significant Accounting Policies

Note 2: Recently Issued Accounting Pronouncements

Adopted Accounting Standards

In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11 (“ASU 2013-11”), Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This ASU provides guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists in the applicable jurisdiction to settle any additional income taxes that would result from disallowance of the tax position. The provisions of ASU 2013-11 were effective, prospectively, for reporting periods beginning after December 15, 2013. The adoption of this ASU resulted in the reclassification of $108 million of unrecognized tax benefits against deferred income tax assets.

In March 2013, the FASB issued ASU No. 2013-05 (“ASU 2013-05”),Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. This ASU clarifies when a cumulative translation adjustment should be released to net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate) within a foreign entity. The provisions of ASU 2013-05 were effective, prospectively, for reporting periods beginning after December 15, 2013. The adoption did not have a material effect on our condensed consolidated financial statements.

Accounting Standards Not Yet Adopted

In August 2014, the FASB issued ASU No. 2014-15 (“ASU 2014-15”), Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU requires management to assess and evaluate whether conditions or events exist, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements issue date. The provisions of ASU 2014-15 are effective for annual periods beginning after December 15, 2016 and for annual and interim periods thereafter; early adoption is permitted. The adoption of ASU 2014-15 is not expected to have a material effect on our consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers (Topic 606). This ASU supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605),” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The provisions of ASU 2014-09 are effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period and are to be applied retrospectively; early application is not permitted. We are currently evaluating the effect that this ASU will have on our consolidated financial statements.

In April 2014, the FASB issued ASU No. 2014-08 (“ASU 2014-08”), Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU amends guidance on reporting discontinued operations only if the disposal of a component of an entity or group of components of an entity represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The provisions of ASU 2014-08 should be applied prospectively for all disposals of components of an entity and for all businesses that, on acquisition, are classified as held for sale that occurred within annual periods beginning on or after December 15, 2014, and interim periods within. We have elected, as permitted by the standard, to early adopt ASU 2014-08 effective for components disposed of or held for sale on or after October 1, 2014. The adoption is not expected to have a material effect on our consolidated financial statements.

Basis of Presentation and Summary of Significant Accounting Policies

Note 2: Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

Principles of Consolidation

The consolidated financial statements include the accounts of Hilton, our wholly owned subsidiaries and entities in which we have a controlling financial interest, including variable interest entities (“VIEs”) where we are the primary beneficiary. Entities in which we have a controlling financial interest generally comprise majority owned real estate ownership and management enterprises.

The determination of a controlling financial interest is based upon the terms of the governing agreements of the respective entities, including the evaluation of rights held by other ownership interests. If the entity is considered to be a VIE, we determine whether we are the primary beneficiary, and then consolidate those VIEs for which we have determined we are the primary beneficiary. If the entity in which we hold an interest does not meet the definition of a VIE, we evaluate whether we have a controlling financial interest through our voting interests in the entity. We consolidate entities when we own more than 50 percent of the voting shares of a company or have a controlling general partner interest of a partnership, assuming the absence of other factors determining control, including the ability of noncontrolling owners to participate in or block certain decisions. As of December 31, 2013, we consolidated six non-wholly owned entities in which we own more than 50 percent of the voting shares of the entities or we have determined we are the primary beneficiary of VIEs.

All material intercompany transactions and balances have been eliminated in consolidation. References in these financial statements to net income attributable to Hilton stockholders and Hilton stockholders’ equity do not include noncontrolling interests, which represent the outside ownership interests of our six consolidated, non-wholly owned entities and are reported separately.

 

Use of Estimates

The preparation of financial statements in conformity with United States of America (“U.S.”) generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported and, accordingly, ultimate results could differ from those estimates.

Reclassifications

Certain prior year amounts have been reclassified to conform to current presentation.

Summary of Significant Accounting Policies

Revenue Recognition

Revenues are primarily derived from the following sources and are generally recognized as services are rendered and when collectibility is reasonably assured. Amounts received in advance of revenue recognition are deferred as liabilities.

 

    Owned and leased hotel revenues primarily consist of room rentals and food and beverage sales from owned, leased and consolidated non-wholly owned hotel properties. Revenues are recorded when rooms are occupied or goods and services have been delivered or rendered.

 

    Management fees represent fees earned from hotels and timeshare properties that we manage, usually under long-term contracts with the property owner. Management fees from hotels usually include a base fee, which is generally a percentage of hotel revenues, and an incentive fee, which is typically based on a fixed or variable percentage of hotel profits and in some cases may be subject to a stated return threshold to the owner, normally over a one-calendar year period. Additionally, we receive one-time upfront fees upon execution of certain management contracts. We recognize base fees as revenue when earned in accordance with the terms of the management agreement. For incentive fees, we recognize those amounts that would be due if the contract was terminated at the financial statement date. One-time, upfront fees are recognized when all conditions have been substantially performed or satisfied by us. Management fees from timeshare properties are generally a fixed percent as stated in the management agreement and are recognized as the services are performed.

 

    Franchise fees represent fees earned in connection with the licensing of one of our hotel brands, usually under long-term contracts with the hotel owner. We charge a monthly franchise royalty fee, generally based on a percentage of room revenue, as well as application and initiation fees for new hotels entering the system. Royalty fees for our full-service brands may also include a percentage of gross food and beverage revenues and other revenues, where applicable. We recognize franchise fee revenue as the fees are earned, which is when all material services or conditions have been performed or satisfied.

 

    Other revenues include revenues generated by the incidental support of hotel operations for owned, leased, managed and franchised hotels and other rental income. This includes any revenues received for vendor rebate arrangements we participate in as a manager of hotel and timeshare properties.

 

   

Timeshare revenues consist of revenues generated from our Hilton Grand Vacations timeshare business. Timeshare revenues are principally generated from the sale and financing of timeshare intervals. Revenue from a deeded timeshare sale is recognized when the customer has executed a binding sales contract, a minimum ten percent down payment has been received, certain minimum sales thresholds for a timeshare project have been attained, the purchaser’s period to cancel for a refund has expired and the related receivable is deemed to be collectible. We defer revenue recognition for sales that do not meet these criteria. During periods of construction, revenue from timeshare sales is recognized under the percentage-of-completion method. One of our timeshare products is accounted for as a long-term lease with a reversionary interest, rather than the sale of a deeded interest in real estate. In this case, sales revenue is recognized on a straight-line basis over the term of the lease. Revenue from the financing of timeshare sales is recognized on the accrual method as earned based on the outstanding principal, interest rate and terms stated in each individual financing agreement. See “Financing Receivables” section below for further discussion of the policies applicable to our timeshare financing receivables. Additionally, we receive sales commissions from certain third-party developers that we assist in selling their timeshare inventory. We recognize revenue from commissions on these sales as intervals are sold and we fulfill the service requirements under the respective sales agreements with the developers. We also generate revenues from enrollment and other fees, rentals of timeshare units, food and beverage sales and other ancillary services at our timeshare properties that are recognized when units are rented or goods and services are delivered or rendered.

 

    Other revenues from managed and franchised properties represent payroll and related costs, certain other operating costs of the managed and franchised properties’ operations, marketing expenses and other expenses associated with our brands and shared services that are contractually reimbursed to us by the property owners or paid from fees collected in advance from these properties. The corresponding expenses are presented as other expenses from managed and franchised properties in our consolidated statements of operations, resulting in no effect on operating income (loss) or net income (loss).

We are required to collect certain taxes and fees from customers on behalf of government agencies and remit these back to the applicable governmental agencies on a periodic basis. We have a legal obligation to act as a collection agent. We do not retain these taxes and fees and, therefore, they are not included in revenues. We record a liability when the amounts are collected and relieve the liability when payments are made to the applicable taxing authority or other appropriate governmental agency.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with original maturities, when purchased, of three months or less.

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents include cash balances established as security for certain guarantees, lender reserves, ground rent and property tax escrows, reserves statutorily required to be held by our captive insurance subsidiary and advance deposits received on timeshare sales that are held in escrow until the contract is closed. For purposes of our consolidated statements of cash flows, changes in restricted cash and cash equivalents caused by changes in lender reserves due to restrictions under our loan agreements are shown as financing activities. The remaining changes in restricted cash and cash equivalents are the result of our normal operations, and, as such, are reflected in operating activities.

Allowance for Doubtful Accounts

An allowance for doubtful accounts is provided on accounts receivable when losses are probable based on historical collection activity and current business conditions.

Inventories

Inventories comprise unsold timeshare intervals at our timeshare properties, as well as hotel inventories consisting of operating supplies that have a period of consumption of one year or less, guest room items and food and beverage items.

Timeshare inventory is carried at the lower of cost or market, based on the relative sales value or net realizable value. Capital expenditures associated with our non-lease timeshare products are reflected as inventory until the timeshare intervals are sold. Consistent with industry practice, timeshare inventory is classified as a current asset despite an operating cycle that exceeds 12 months. The majority of sales and marketing costs incurred to sell timeshare intervals are expensed when incurred. Certain direct and incremental selling and marketing costs are deferred on a contract until revenue from the interval sale has been recognized.

In accordance with the accounting standards for costs and the initial rental operations of real estate projects, we use the relative sales value method of costing our timeshare sales and relieving inventory. In addition, we continually assess our timeshare inventory and, if necessary, impose pricing adjustments to accelerate sales pace. It is possible that any future changes in our development and sales strategies could have a material effect on the carrying value of certain projects and inventory. We monitor our projects and inventory on an ongoing basis and complete an evaluation each reporting period to ensure that the inventory is stated at the lower of cost or market.

Hotel inventories are generally valued at the lower of cost (using “first-in, first-out”, or FIFO) or market.

Property and Equipment

Property and equipment are recorded at cost and interest applicable to major construction or development projects is capitalized. Costs of improvements that extend the economic life or improve service potential are also capitalized. Capitalized costs are depreciated over their estimated useful lives. Costs for normal repairs and maintenance are expensed as incurred.

Depreciation is recorded using the straight-line method over the assets’ estimated useful lives, which are generally as follows: buildings and improvements (8 to 40 years), furniture and equipment (3 to 8 years) and computer equipment and acquired software (3 years). Leasehold improvements are depreciated over the shorter of the estimated useful life, based on the lives estimates above, or the lease term.

We evaluate the carrying value of our property and equipment if there are indicators of potential impairment. We perform an analysis to determine the recoverability of the asset’s carrying value by comparing the expected undiscounted future cash flows to the net book value of the asset. If it is determined that the expected undiscounted future cash flows are less than the net book value of the asset, the excess of the net book value over the estimated fair value is recorded in our consolidated statements of operations within impairment losses. Fair value is generally estimated using valuation techniques that consider the discounted cash flows of the asset using discount and capitalization rates deemed reasonable for the type of asset, as well as prevailing market conditions, appraisals, recent similar transactions in the market and, if appropriate and available, current estimated net sales proceeds from pending offers.

If sufficient information exists to reasonably estimate the fair value of a conditional asset retirement obligation, including environmental remediation liabilities, we recognize the fair value of the obligation when the obligation is incurred, which is generally upon acquisition, construction or development and/or through the normal operation of the asset.

Financing Receivables

We define financing receivables as financing arrangements that represent a contractual right to receive money either on demand or on fixed or determinable dates, which are recognized as an asset in our consolidated balance sheets. We record all financing receivables at amortized cost in current and long-term financing receivables. We recognize interest income as earned and provide an allowance for cancellations and defaults. We have divided our financing receivables into two portfolio segments based on the level of aggregation at which we develop and document a systematic methodology to determine the allowance for credit losses. Based on their initial measurement, risk characteristics and our method for monitoring and assessing credit risk, we have determined the classes of financing receivables to correspond to our identified portfolio segments as follows:

 

   

Timeshare financing receivables comprise loans related to our financing of timeshare interval sales and secured by the underlying timeshare properties. We determine our timeshare financing receivables to be past due based on the contractual terms of the individual mortgage loans. We recognize interest income on our timeshare financing receivables as earned. The interest rate charged on the notes correlates to the risk profile of the borrower at the time of purchase and the percentage of the purchase that is financed, among other factors. We record an estimate of uncollectibility as a reduction of sales revenue at the time revenue is recognized on a timeshare interval sale. We evaluate this portfolio collectively, since we hold a large group of homogeneous timeshare financing receivables, which are individually immaterial. We monitor the credit quality of our receivables on an ongoing basis. There are no significant concentrations of credit risk with any individual counterparty or groups of counterparties. With the exception of the financing provided to customers of our timeshare business, we do not normally require collateral or other security to support credit sales. We use a technique referred to as static pool analysis as the basis for determining our general reserve requirements on our timeshare financing receivables. The adequacy of the related allowance is determined by management through analysis of several factors, such as current economic conditions and industry trends, as well as the specific risk characteristics of the portfolio including assumed default rates, aging and historical write-offs of these receivables. The allowance is maintained at a level deemed adequate by management based on a periodic analysis of the mortgage portfolio. Once a note is 90 days past due or is determined to be uncollectible prior to 90 days past due, we cease accruing interest and reverse the accrued interest recognized up to that point. We apply payments we receive for loans, including those in non-accrual status, to amounts due in the following order: servicing fees, late charges, interest and principal. We resume interest accrual for loans for which we had previously ceased accruing interest once the loan is less than 90 days past due. We fully reserve for a timeshare financing receivable in the month following the date that the loan is 120 days past due and, subsequently, we write off the uncollectible note against the reserve once the foreclosure process is complete and we receive the deed for the foreclosed unit.

 

    Other financing receivables primarily comprise individual loans and other types of unsecured financing arrangements provided to hotel owners. We individually assess all financing receivables in this portfolio for collectibility and impairment. We measure loan impairment based on the present value of expected future cash flows discounted at the loan’s effective interest rate. For impaired loans, we establish a specific impairment reserve for the difference between the recorded investment in the loan and the present value of the expected future cash flows. We do not recognize interest income on unsecured financing to hotel owners for notes that are greater than 90 days past due and only resume interest recognition if the financing receivable becomes current. We fully reserve unsecured financing to hotel owners when we determine that the receivables are uncollectible and when all commercially reasonable means of recovering the receivable balances have been exhausted.

Investments in Affiliates

We hold investments in affiliates that primarily own or lease hotels under one of our nine distinct hotel brands. If the entity does not meet the definition of a VIE, we evaluate our voting interest or general partnership interest to determine if we have a controlling financial interest in the entity. Investments in affiliates over which we exercise significant influence, but lack a controlling financial interest, are accounted for using the equity method. We account for investments using the equity method when we own more than a minimal investment, but have no more than a 50 percent voting interest or do not otherwise control the investment. Investments in affiliates over which we are not able to exercise significant influence are accounted for under the cost method.

Our proportionate share of earnings (losses) from our equity method investments is presented as equity in earnings (losses) from unconsolidated affiliates in our consolidated statements of operations. Distributions from investments in unconsolidated entities are presented as an operating activity in our consolidated statements of cash flows when such distributions are a return on investment. Distributions from unconsolidated affiliates are recorded as an investing activity in our consolidated statements of cash flows when such distributions are a return of investment.

 

We assess the recoverability of our equity method and cost method investments if there are indicators of potential impairment. If an identified event or change in circumstances requires an evaluation to determine if an investment may have an other-than-temporary impairment, we assess the fair value of the investment based on accepted valuation methodologies, which include discounted cash flows, estimates of sales proceeds and external appraisals. If an investment’s fair value is below its carrying value and the decline is considered to be other-than-temporary, we will recognize an impairment loss in equity in earnings (losses) from unconsolidated affiliates for equity method investments or impairment losses for cost method investments in our consolidated statements of operations.

Goodwill

Goodwill represents the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. We do not amortize goodwill, but rather evaluate goodwill for potential impairment on an annual basis or at other times during the year if events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is below the carrying amount.

We review the carrying value of our goodwill by comparing the carrying value of our reporting units to their fair value. Our reporting units are the same as our operating segments as described in Note 24: “Business Segments”. We perform this evaluation annually or at an interim date if indicators of impairment exist. In any year we may elect to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is in excess of its carrying value. If we cannot determine qualitatively that the fair value is in excess of the carrying value, or we decide to bypass the qualitative assessment, we proceed to the two-step quantitative process. In the first step, we determine the fair value of each of our reporting units. The valuation is based on internal projections of expected future cash flows and operating plans, as well as market conditions relative to the operations of our reporting units. If the estimated fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired and the second step of the impairment test is not necessary. However, if the carrying amount of a reporting unit exceeds its estimated fair value, then the second step must be performed. In the second step, we estimate the implied fair value of goodwill, which is determined by taking the fair value of the reporting unit and allocating it to all of its assets and liabilities (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

Brands

We own, operate and franchise hotels under our portfolio of brands. There are no legal, regulatory, contractual, competitive, economic or other factors that limit the useful lives of these brands and, accordingly, the useful lives of these brands are considered to be indefinite. Our hotel brand portfolio includes Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Hilton Hotels & Resorts, DoubleTree by Hilton (including DoubleTree Suites by Hilton), Embassy Suites Hotels, Hilton Garden Inn, Hampton Inn (including Hampton Inn & Suites and, outside of the U.S., Hampton by Hilton), Homewood Suites by Hilton and Home2 Suites by Hilton. In addition, we also develop and operate timeshare properties under our Hilton Grand Vacations brand.

At the time of the Merger, our brands were assigned a fair value based on a common valuation technique known as the relief from royalty approach. Home2 Suites by Hilton was launched post-Merger and, as such, it was not assigned a fair value. We evaluate our brands for impairment on an annual basis or at other times during the year if events or circumstances indicate that it is more likely than not that the fair value of the brand is below the carrying value. If a brand’s estimated current fair value is less than its respective carrying value, the excess of the carrying value over the estimated fair value is recorded in our consolidated statements of operations within impairment losses.

 

Intangible Assets with Finite Useful Lives

We have certain finite lived intangible assets that were initially recorded at their fair value at the time of the Merger. These intangible assets consist of management agreements, franchise contracts, leases, certain proprietary technologies and our guest loyalty program, Hilton HHonors. Additionally, we capitalize management and franchise contract acquisition costs as finite-lived intangible assets. Intangible assets with finite useful lives are amortized using the straight-line method over their respective estimated useful lives.

We capitalize costs incurred to develop internal-use computer software. Internal and external costs incurred in connection with development of upgrades or enhancements that result in additional functionality are also capitalized. These capitalized costs are amortized on a straight-line basis over the estimated useful life of the software. These capitalized costs are recorded in other intangible assets in our consolidated balance sheets.

We review all finite lived intangible assets for impairment when circumstances indicate that their carrying amounts may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess of carrying value over the fair value in our consolidated statements of operations.

Hilton HHonors

Hilton HHonors is a guest loyalty program provided to hotels. Most of our owned, leased, managed and franchised hotels and timeshare properties participate in the Hilton HHonors program. Hilton HHonors members earn points based on their spending at our participating hotel and timeshare properties and through participation in affiliated partner programs. When points are earned by Hilton HHonors members, the property or affiliated partner pays Hilton HHonors based on an estimated cost per point for the costs of operating the program, which include marketing, promotion, communication, administration and the estimated cost of award redemptions. Hilton HHonors member points are accumulated and may be redeemed for certificates that entitle the holder to the right to stay at participating properties, as well as other opportunities with third parties, including, but not limited to, airlines, car rentals, cruises, vacation packages, shopping and dining. We provide Hilton HHonors as a marketing program to participating hotels, with the objective of operating the program on a break-even basis to us.

Hilton HHonors defers revenue received from participating hotels and program partners in an amount equal to the estimated cost per point of the future redemption obligation. We engage outside actuaries to assist in determining the fair value of the future award redemption obligation using statistical formulas that project future point redemptions based on factors that include historical experience, an estimate of “breakage” (points that will never be redeemed), an estimate of the points that will eventually be redeemed and the cost of reimbursing hotels and other third parties in respect to other redemption opportunities available to members. Revenue is recognized by participating hotels and resorts only when points that have been redeemed for hotel stay certificates are used by members or their designees at the respective properties. Additionally, when members of the Hilton HHonors loyalty program redeem award certificates at our owned and leased hotels, we recognize room rental revenue.

Fair Value Measurements—Valuation Hierarchy

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (an exit price). We use the three-level valuation hierarchy for classification of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized below:

 

    Level 1 - Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

    Level 2 - Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument.

 

    Level 3 - Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

The classification of assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement in its entirety.

Derivative Instruments

We use derivative instruments as part of our overall strategy to manage our exposure to market risks associated with fluctuations in interest rates and foreign currency exchange rates. We regularly monitor the financial stability and credit standing of the counterparties to our derivative instruments. Under the terms of our loan agreements, we are required to maintain derivative financial instruments to manage interest rates. We do not enter into derivative financial instruments for trading or speculative purposes.

We record all derivatives at fair value. On the date the derivative contract is entered, we designate the derivative as one of the following: a hedge of a forecasted transaction or the variability of cash flows to be paid (cash flow hedge), a hedge of the fair value of a recognized asset or liability (fair value hedge), a hedge of our foreign currency exposure (net investment hedge) or an undesignated hedge instrument. Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge or net investment hedge are recorded in other comprehensive income (loss) in the consolidated statements of comprehensive income (loss) until they are reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Changes in the fair value of a derivative that is qualified, designated and highly effective as a fair value hedge, along with the gain or loss on the hedged asset or liability that is attributable to the hedged risk, are recorded in current period earnings. Changes in the fair value of undesignated derivative instruments and the ineffective portion of designated derivative instruments are reported in current period earnings. Cash flows from designated derivative financial instruments are classified within the same category as the item being hedged in the consolidated statements of cash flows. Cash flows from undesignated derivative financial instruments are included as an investing activity in the consolidated statements of cash flows.

If we determine that we qualify for and will designate a derivative as a hedging instrument, at the designation date we formally document all relationships between hedging activities, including the risk management objective and strategy for undertaking various hedge transactions. This process includes matching all derivatives that are designated as cash flow hedges to specific forecasted transactions, linking all derivatives designated as fair value hedges to specific assets and liabilities in our consolidated balance sheets, and determining the foreign currency exposure of net investment of the foreign operation for a net investment hedge.

On a quarterly basis, we assess the effectiveness of our designated hedges in offsetting the variability in the cash flows or fair values of the hedged assets or obligations via use of the Hypothetical Derivative Method. This method compares the cumulative change in fair value of each hedging instrument to the cumulative change in fair value of a hypothetical hedging instrument, which has terms that identically match the critical terms of the respective hedged transactions. Thus, the hypothetical hedging instrument is presumed to perfectly offset the hedged cash flows. Ineffectiveness results when the cumulative change in the fair value of the hedging instrument exceeds the cumulative change in the fair value of the hypothetical hedging instrument. We discontinue hedge accounting prospectively, when the derivative is not highly effective as a hedge, the underlying hedged transaction is no longer probable, or the hedging instrument expires, is sold, terminated or exercised.

 

Currency Translation

The United States Dollar (“USD”) is our reporting currency and is the functional currency of our consolidated and unconsolidated entities operating in the U.S. The functional currency for our consolidated and unconsolidated entities operating outside of the U.S. is the currency of the primary economic environment in which the respective entity operates. Assets and liabilities measured in foreign currencies are translated into USD at the prevailing exchange rates in effect as of the financial statement date and the related gains and losses, net of applicable deferred income taxes, are reflected in equity. Income and expense accounts are translated at the average exchange rate for the period. Gains and losses from foreign exchange rate changes related to intercompany receivables and payables denominated in a currency other than an entity’s functional currency that are not of a long-term investment nature are reported as a component of gain (loss) on foreign currency transactions in our consolidated statements of operations.

Self-Insurance

We are self-insured for various levels of general liability, auto liability, workers’ compensation and employee health insurance coverage at our owned properties. Additionally, the majority of employees at managed hotels, of which we are the employer, participate in our workers’ compensation and employee health insurance coverage. Also, a number of our managed hotels participate in our general liability, auto liability, excess liability and property insurance programs. We purchase insurance coverage for claim amounts that exceed our self-insured retentions. Our insurance reserves are accrued based on estimates of the ultimate cost of claims that occurred during the covered period, which includes claims incurred but not reported. These estimates are prepared with the assistance of outside actuaries and consultants. The ultimate cost of claims for a covered period may differ from our original estimates. Our provision for insured events for the years ended December 31, 2013, 2012 and 2011 was $38 million, $27 million and $33 million, respectively. Our insured claims and adjustments paid for the years ended December 31, 2013, 2012 and 2011 were $36 million, $37 million and $33 million, respectively.

Share-based Compensation

We recognize the cost of services received in a share-based payment transaction with an employee as services are received and recognize either a corresponding increase in equity or a liability, depending on whether the instruments granted satisfy the equity or liability classification criteria.

The measurement objective for these equity awards is the estimated fair value at the grant date of the equity instruments that we are obligated to issue when employees have rendered the requisite service and satisfied any other conditions necessary to earn the right to benefit from the instruments. The compensation cost for an award classified as an equity instrument is recognized ratably over the requisite service period, including an estimate of forfeitures. The requisite service period is the period during which an employee is required to provide service in exchange for an award.

Liability awards under a share-based payment arrangement are measured based on the award’s fair value, and the fair value is remeasured at each reporting date until the date of settlement. Compensation cost for each period until settlement is based on the change (or a portion of the change, depending on the percentage of the requisite service that has been rendered at the reporting date) in the fair value of the instrument for each reporting period, including an estimate of forfeitures.

Compensation cost for awards with performance conditions is recognized over the requisite service period if it is probable that the performance condition will be satisfied. If such performance conditions are not considered probable until they occur, no compensation expense for these awards is recognized.

 

Income Taxes

We account for income taxes using the asset and liability method. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year, to recognize the deferred tax assets and liabilities that relate to tax consequences in future years, which result from differences between the respective tax basis of assets and liabilities and their financial reporting amounts, and tax loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the respective temporary differences or operating loss or tax credit carry forwards are expected to be recovered or settled. The realization of deferred tax assets and tax loss and tax credit carry forwards is contingent upon the generation of future taxable income and other restrictions that may exist under the tax laws of the jurisdiction in which a deferred tax asset exists. Valuation allowances are provided to reduce such deferred tax assets to amounts more likely than not to be ultimately realized.

We use a prescribed recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. For all income tax positions, we first determine whether it is “more-likely-than-not” that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. If it is determined that a position meets the more-likely-than-not recognition threshold, the benefit recognized in the financial statements is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement.

Recently Issued Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11 (“ASU 2013-11”), Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This ASU provides guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists in the applicable jurisdiction to settle any additional income taxes that would result from disallowance of the tax position. The provisions of ASU 2013-11 are effective, prospectively, for reporting periods beginning after December 15, 2013. The adoption of ASU 2013-11 is not expected to materially affect our consolidated financial statements.

In March 2013, the FASB issued ASU No. 2013-05 (“ASU 2013-05”), Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. The ASU clarifies when a cumulative translation adjustment should be released to net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate) within a foreign entity. The provisions of ASU 2013-05 are effective for reporting periods beginning after December 15, 2013. The adoption of ASU 2013-05 is not expected to materially affect our consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02 (“ASU 2013-02”), Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This ASU amends existing guidance by requiring companies to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required to be reclassified in its entirety to net income in the same reporting period. For amounts which are not required to be reclassified in their entirety to net income in the same reporting period, companies are required to cross reference other disclosures that provide information about those amounts. The provisions of ASU 2013-02 were effective, prospectively, for reporting periods beginning after December 15, 2012. The adoption of this ASU resulted in additional disclosures within Note 23: “Accumulated Other Comprehensive Loss.”

In July 2012, the FASB issued ASU No. 2012-02 (“ASU 2012-02”), Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This ASU permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative impairment test. This ASU was effective for annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 14, 2012. The adoption of ASU 2012-02 did not have a material effect on our consolidated financial statements.

Acquisitions
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Acquisitions

Note 3: Acquisitions

Equity Investments Exchange

We had a portfolio of 11 hotels we owned through noncontrolling interests in equity investments with one other partner. In July 2014, we entered into an agreement to exchange with our partner our ownership interest in six of these hotels for the remaining interest in the other five hotels. As a result of this exchange, we have a 100 percent ownership interest in five of the 11 hotels and no longer have any ownership interest in the remaining six hotels. The following is a listing of all 11 hotels involved in this exchange, including pre-exchange and post-exchange ownership percentages:

 

Property

   Pre-Exchange
Ownership %
    Post-Exchange
Ownership %
 

Embassy Suites Atlanta—Perimeter Center

     50     100

Embassy Suites Kansas City—Overland Park

     50     100

Embassy Suites Kansas City—Plaza

     50     100

Embassy Suites Parsippany

     50     100

Embassy Suites San Rafael—Marin County

     50     100

Embassy Suites Austin—Central

     50    

Embassy Suites Chicago—Lombard/Oak Brook

     50    

Embassy Suites Raleigh—Crabtree

     50    

Embassy Suites San Antonio—International Airport

     50    

Embassy Suites San Antonio—NW I-10

     50    

DoubleTree Guest Suites Austin

     10    

This transaction was accounted for as a business combination achieved in stages, resulting in a remeasurement gain based upon the fair values of the equity investments. The carrying values of these equity investments immediately before the exchange were $59 million and the fair values of these equity investments immediately before the exchange were $83 million, resulting in a pre-tax gain of $24 million recognized in other gain, net in our condensed consolidated statements of operations for the nine months ended September 30, 2014. We also incurred transaction-related costs of $1 million recognized in other gain, net in our condensed consolidated statements of operations for the nine months ended September 30, 2014. Following the exchange, we consolidated the five hotels we owned 100 percent.

The fair value of the assets and liabilities acquired as a result of the exchange were as follows:

 

     (in millions)  

Cash and cash equivalents

   $   

Property and equipment

      144    

Other intangible assets

       

Long-term debt

     (64)   
  

 

 

 

Net assets acquired

   $ 83    
  

 

 

 

See Note 10: “Fair Value Measurements” for additional details on the fair value techniques and inputs used for the remeasurement of the assets and liabilities.

The results of operations from the five wholly owned hotels included in the condensed consolidated statements of operations for the nine months ended September 30, 2014 following the exchange were not material.

Land Parcel

During the nine months ended September 30, 2013, we acquired a parcel of land for $28 million, which we previously leased under a long-term ground lease.

Acquisitions

Note 3: Acquisitions

In conjunction with business combinations, we record the assets acquired, liabilities assumed and noncontrolling interests at fair value as of the acquisition date, including any contingent consideration. Furthermore, acquisition-related costs, such as due diligence, legal and accounting fees, are expensed in the period incurred and are not capitalized or applied in determining the fair value of the acquired assets.

Hilton Bradford

In October 2013, we purchased the land and building associated with the Hilton Bradford, which we previously leased under a capital lease, for a cash payment of British Pound Sterling (“GBP”) 9 million, or approximately $15 million. As a result of the acquisition, we released our capital lease obligation of $17 million and recognized a gain of $2 million that was included in other gain, net in our consolidated statement of operations for the year ended December 31, 2013.

Land Parcel Acquisition

In April 2013, we acquired a parcel of land for $28 million, which we previously leased under a long-term ground lease.

Odawara Hilton Co., LTD

In December 2012, we purchased the remaining 53.5 percent ownership interest in Odawara Hilton Co., LTD (“OHC”), which leased the Hilton Odawara that we managed, for a cash payment of Japanese Yen (“JPY”) 155 million, or approximately $1 million. Prior to the acquisition, we had a 46.5 percent ownership interest in OHC, with the remaining interest held by nine stockholders each of whom had no more than a 10 percent ownership interest. We were considered to be the primary beneficiary of this VIE and, as such, OHC was consolidated in our consolidated financial statements. Upon completion of the acquisition of the remaining interests, we wholly own OHC. The equity transaction resulted in a decrease of approximately $4 million to additional paid-in capital.

In conjunction with this acquisition and predicated upon the fact that it would occur, in December 2012, OHC executed a binding purchase agreement with the owner of the Hilton Odawara to purchase the building and the surrounding land. However, the closing of the sale, which will include the exchange of cash and the acquisition of the title by Hilton, will not occur until December 2015. As a result of this purchase agreement and other factors, the Hilton Odawara lease, which was previously accounted for as an operating lease, was recorded as a capital lease asset and obligation of $15 million as of December 31, 2012.

Oakbrook Suites and Garden Inn, LLC

In August 2011, we purchased the remaining 50 percent ownership interest in Oakbrook Suites and Garden Inn, LLC (“Oakbrook LLC”), which owned the Hilton Suites Oakbrook and the Hilton Garden Inn Oakbrook Terrace, for a cash payment of $12 million. Prior to the acquisition, we had a 50 percent ownership interest in Oakbrook LLC, which was accounted for using the equity method. Upon completion of the acquisition of the remaining interests, we wholly owned Oakbrook LLC, and it was consolidated in our consolidated financial statements. The fair value of the net assets acquired was $24 million. Our cash paid for the acquisition, along with the carrying value of our investment in Oakbrook LLC, was allocated to the net assets acquired, which consisted primarily of land, buildings and furniture and equipment.

Disposals
Disposals

Note 4: Disposals

Conrad Istanbul

In December 2013, we completed the sale of our 25 percent equity interest in a joint venture entity that owns the Conrad Istanbul for $17 million. As a result of the sale, we reclassified a currency translation adjustment of $14 million, which was previously included in accumulated other comprehensive loss, to earnings and included this in our calculation of the loss on sale of our equity interest. In total, we recognized a pre-tax loss on the sale of $1 million that was included in other gain, net in our consolidated statement of operations for the year ended December 31, 2013.

India Joint Venture

In December 2011, we completed the sale of our 26 percent interest in a hotel development joint venture located in India for GBP 15 million, or approximately $23 million. As a result of the sale, we reclassified the currency translation adjustment of $8 million, which was previously recognized in accumulated other comprehensive loss, to earnings within our consolidated statement of operations for the year ended December 31, 2011. Further, we recognized a related pre-tax loss on the sale of $10 million that was included in other gain, net in our consolidated statement of operations for the year ended December 31, 2011.

Beverly Hills Office Building

In January 2011, we completed the sale of our former corporate headquarters office building in Beverly Hills, California for approximately $65 million and recognized a pre-tax gain of $16 million that was included in other gain, net in our consolidated statement of operations for the year ended December 31, 2011.

Inventories
Inventories

Note 5: Inventories

Inventories were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

Timeshare

   $        371       $        389   

Hotel

     25         26   
  

 

 

    

 

 

 
   $ 396       $ 415   
  

 

 

    

 

 

 
Property and Equipment
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Property and Equipment

Note 4: Property and Equipment

Property and equipment were as follows:

 

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

Land

   $ 4,115        $ 4,098    

Buildings and leasehold improvements

     5,706          5,511    

Furniture and equipment

     1,203          1,172    

Construction-in-progress

     97          67    
  

 

 

    

 

 

 
      11,121           10,848    

Accumulated depreciation and amortization

     (1,997)         (1,790)   
  

 

 

    

 

 

 
   $ 9,124        $ 9,058    
  

 

 

    

 

 

 

Depreciation and amortization expense on property and equipment, including amortization of assets recorded under capital leases, was $235 million and $243 million during the nine months ended September 30, 2014 and 2013, respectively.

As of September 30, 2014 and December 31, 2013, property and equipment included approximately $150 million and $130 million, respectively, of capital lease assets primarily consisting of buildings and leasehold improvements, net of $64 million and $59 million, respectively, of accumulated depreciation and amortization.

During the nine months ended September 30, 2014, we completed the sale of two hotels for approximately $9 million and a vacant parcel of land for approximately $6 million. As a result of these sales, we recognized a pre-tax gain of $13 million, including the reclassification of a currency translation adjustment of $3 million, which was previously recognized in accumulated other comprehensive loss. The gain was included in other gain, net in our condensed consolidated statement of operations. Additionally, we completed the sale of certain land and easement rights to a related party in connection with a timeshare project during the nine months ended September 30, 2014. As a result, the related party acquired the rights to the name, plans, designs, contracts and other documents related to the timeshare project. The total consideration received for this transaction was approximately $37 million. We recognized $13 million, net of tax, as a capital contribution within additional paid-in capital, representing the excess of the fair value of the consideration received over the carrying value of the assets sold.

Property and Equipment

Note 6: Property and Equipment

Property and equipment were as follows:

     December 31,  
     2013      2012  
     (in millions)  

Land

   $ 4,098        $ 4,090    

Buildings and leasehold improvements

     5,511          5,450    

Furniture and equipment

     1,172          1,111    

Construction-in-progress

     67          88    
  

 

 

    

 

 

 
      10,848           10,739    

Accumulated depreciation and amortization

     (1,790)         (1,542)   
  

 

 

    

 

 

 
   $ 9,058        $ 9,197    
  

 

 

    

 

 

 

Depreciation and amortization expense on property and equipment, including amortization of assets recorded under capital leases, was $318 million, $290 million and $323 million during the years ended December 31, 2013, 2012 and 2011, respectively.

 

As of December 31, 2013 and 2012, property and equipment included approximately $130 million and $157 million, respectively, of capital lease assets primarily consisting of buildings and leasehold improvements, net of $59 million and $71 million, respectively, of accumulated depreciation and amortization.

No impairment losses were recognized on property and equipment for the year ended December 31, 2013. The following table details the impairment losses recognized on our assets included in property and equipment, by property type, for the years ended December 31, 2012 and 2011:

 

     Year Ended December 31,  
       2012          2011    
     (in millions)  

Owned and leased hotels

   $  42       $  17   

Timeshare properties

             3   

Corporate office facilities

     11           
  

 

 

    

 

 

 
   $ 53       $ 20   
  

 

 

    

 

 

 
Financing Receivables
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Financing Receivables

Note 5: Financing Receivables

Financing receivables were as follows:

 

     September 30, 2014  
     Securitized
Timeshare
     Unsecuritized
Timeshare
         Other              Total      
     (in millions)  

Financing receivables

   $  459        $  412        $  24        $  895    

Less: allowance

     (26)         (54)         (1)         (81)   
  

 

 

    

 

 

    

 

 

    

 

 

 
     433          358          23          814    
  

 

 

    

 

 

    

 

 

    

 

 

 

Current portion of financing receivables

     68          63                  133    

Less: allowance

     (4)         (9)         —          (13)   
  

 

 

    

 

 

    

 

 

    

 

 

 
     64          54                  120    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total financing receivables

   $ 497        $ 412        $ 25        $ 934    
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     December 31, 2013  
     Securitized
Timeshare
     Unsecuritized
Timeshare
         Other              Total      
     (in millions)  

Financing receivables

   $  205        $  654        $  49        $  908    

Less: allowance

     (11)         (67)         (1)         (79)   
  

 

 

    

 

 

    

 

 

    

 

 

 
     194          587          48          829    
  

 

 

    

 

 

    

 

 

    

 

 

 

Current portion of financing receivables

     29          106          —          135    

Less: allowance

     (2)         (12)         —          (14)   
  

 

 

    

 

 

    

 

 

    

 

 

 
     27          94          —          121    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total financing receivables

   $ 221        $ 681        $ 48        $ 950    
  

 

 

    

 

 

    

 

 

    

 

 

 

Timeshare Financing Receivables

As of September 30, 2014, we had 51,923 timeshare financing receivables with interest rates ranging from zero percent to 20.50 percent, a weighted average interest rate of 12.16 percent, a weighted average remaining term of 7.4 years and maturities through 2025. As of September 30, 2014 and December 31, 2013, we had ceased accruing interest on timeshare financing receivables with aggregate principal balances of $31 million and $32 million, respectively.

In June 2014, we completed a securitization of approximately $357 million of gross timeshare financing receivables and issued approximately $304 million of 1.77 percent notes and approximately $46 million of 2.07 percent notes, which have a stated maturity date in November 2026. The securitization transaction did not qualify as a sale for accounting purposes and, accordingly, no gain or loss was recognized. In August 2013, we completed a securitization of approximately $255 million of gross timeshare financing receivables and issued $250 million of 2.28 percent notes that have a stated maturity date in January 2026. The proceeds from both transactions are presented as debt (collectively, the “Securitized Timeshare Debt”). See Note 8: “Debt” for additional details.

In May 2013, we entered into a revolving non-recourse timeshare financing receivables credit facility (“Timeshare Facility”) that is secured by certain of our timeshare financing receivables. As of September 30, 2014 and December 31, 2013, we had $164 million and $492 million, respectively, of gross timeshare financing receivables secured under our Timeshare Facility.

The changes in our allowance for uncollectible timeshare financing receivables were as follows:

 

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

Beginning balance

   $ 92        $ 93    

Write-offs

        (24)            (19)   

Provision for uncollectibles on sales

     25          20    
  

 

 

    

 

 

 

Ending balance

   $ 93        $ 94    
  

 

 

    

 

 

 

 

Our timeshare financing receivables as of September 30, 2014 mature as follows:

 

     Securitized
Timeshare
     Unsecuritized
Timeshare
 
Year    (in millions)  

2014 (remaining)

   $ 17        $ 27    

2015

     68          48    

2016

     71          51    

2017

     73          52    

2018

     72          52    

Thereafter

     226          245    
  

 

 

    

 

 

 
     527          475    

Less: allowance

     (30)         (63)   
  

 

 

    

 

 

 
   $  497        $  412    
  

 

 

    

 

 

 

The following table details an aged analysis of our gross timeshare financing receivables balance:

 

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

Current

   $ 958        $ 948    

30 - 89 days past due

     13          14    

90 - 119 days past due

               

120 days and greater past due

     28          28    
  

 

 

    

 

 

 
   $  1,002        $  994    
  

 

 

    

 

 

 
Financing Receivables

Note 7: Financing Receivables

Financing receivables were as follows:

 

     December 31, 2013  
     Securitized
Timeshare
     Unsecuritized
Timeshare
         Other              Total      
     (in millions)  

Financing receivables

   $  205        $  654        $  49        $  908    

Less: allowance

     (11)         (67)         (1)         (79)   
  

 

 

    

 

 

    

 

 

    

 

 

 
     194          587          48          829    
  

 

 

    

 

 

    

 

 

    

 

 

 

Current portion of financing receivables

     29          106          —          135    

Less: allowance

     (2)         (12)         —          (14)   
  

 

 

    

 

 

    

 

 

    

 

 

 
     27          94          —          121    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total financing receivables

   $ 221        $ 681        $ 48        $ 950    
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     December 31, 2012  
     Unsecuritized
Timeshare
         Other              Total      
     (in millions)  

Financing receivables

   $  853        $  44        $  897    

Less: allowance

     (81)         (1)         (82)   
  

 

 

    

 

 

    

 

 

 
     772          43          815    
  

 

 

    

 

 

    

 

 

 

Current portion of financing receivables

     131          —          131    

Less: allowance

     (12)         —          (12)   
  

 

 

    

 

 

    

 

 

 
     119          —          119    
  

 

 

    

 

 

    

 

 

 

Total financing receivables

   $ 891        $ 43        $ 934    
  

 

 

    

 

 

    

 

 

 

Timeshare Financing Receivables

In August 2013, we completed a securitization of approximately $255 million of gross timeshare financing receivables and issued $250 million in aggregate principal amount of 2.28 percent notes with maturities of January 2026 (“Securitized Timeshare Debt”). The securitization transaction did not qualify as a sale for accounting purposes and, accordingly, no gain or loss was recognized and the proceeds were presented as debt. See Note 13: “Debt” for additional details.

 

In May 2013, we entered into a revolving non-recourse timeshare financing receivables credit facility (“Timeshare Facility”) that is secured by certain of our timeshare financing receivables. As of December 31, 2013, we had $492 million of gross timeshare financing receivables secured under our Timeshare Facility. See Note 13: “Debt” for additional details.

As of December 31, 2013, we had 53,123 timeshare notes outstanding, including those which are collateral for our Securitized Timeshare Debt, with interest rates ranging from zero to 20.50 percent, an average interest rate of 11.97 percent, a weighted average remaining term of 7.5 years and maturities through 2025. As of December 31, 2013 and 2012, we had ceased accruing interest on timeshare notes with aggregate principal balances of $32 million and $30 million, respectively.

The changes in our allowance for uncollectible timeshare financing receivables were as follows:

 

     (in millions)  

Balance as of December 31, 2010

   $  101    

Write-offs

     (36)   

Provision for uncollectibles on sales

     32    
  

 

 

 

Balance as of December 31, 2011

     97    

Write-offs

     (33)   

Provision for uncollectibles on sales

     29    
  

 

 

 

Balance as of December 31, 2012

     93    

Write-offs

     (25)   

Provision for uncollectibles on sales

     24    
  

 

 

 

Balance as of December 31, 2013

   $ 92    
  

 

 

 

Our timeshare financing receivables as of December 31, 2013 mature as follows:

 

     Securitized
Timeshare
     Unsecuritized
Timeshare
 
Year    (in millions)  

2014

   $ 29        $ 106    

2015

     29          87    

2016

     30          90    

2017

     30          92    

2018

     30          89    

Thereafter

     86          296    
  

 

 

    

 

 

 
     234          760    

Less: allowance

     (13)         (79)   
  

 

 

    

 

 

 
   $  221        $  681    
  

 

 

    

 

 

 

The following table details an aged analysis of our gross timeshare financing receivables balance:

 

     December 31,  
         2013              2012      
     (in millions)  

Current

   $  948       $  940   

30 - 89 days past due

     14         14   

90 - 119 days past due

     4         4   

120 days and greater past due

     28         26   
  

 

 

    

 

 

 
   $ 994       $ 984   
  

 

 

    

 

 

 
Investments in Affiliates
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Investments in Affiliates

Note 6: Investments in Affiliates

Investments in affiliates were as follows:

 

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

Equity investments

   $ 157        $ 245    

Other investments

     17          15    
  

 

 

    

 

 

 
   $  174        $  260    
  

 

 

    

 

 

 

We maintain investments in affiliates accounted for under the equity method, which are primarily investments in entities that owned or leased 16 and 30 hotels as of September 30, 2014 and December 31, 2013, respectively. These entities had total debt of approximately $0.9 billion and $1.1 billion as of September 30, 2014 and December 31, 2013, respectively. Substantially all of the debt is secured solely by the affiliates’ assets or is guaranteed by other partners without recourse to us. We were the creditor on $2 million and $17 million of debt from unconsolidated affiliates as of September 30, 2014 and December 31, 2013, respectively, which was included in financing receivables, net in our condensed consolidated balance sheets.

In July 2014, we exchanged our noncontrolling ownership interest in six hotels, held as part of a portfolio that owned 11 hotels previously classified in investments in affiliates and accounted for under the equity method, for the remaining interest in the other five hotels, the acquisition of which we accounted for as a business combination. See Note 3: “Acquisitions” for additional details.

Investments in Affiliates

Note 8: Investments in Affiliates

Investments in affiliates were as follows:

 

     December 31,  
         2013              2012      
     (in millions)  

Equity investments

   $  245       $  276   

Other investments

     15         15   
  

 

 

    

 

 

 
   $ 260       $ 291   
  

 

 

    

 

 

 

We maintain investments in affiliates accounted for under the equity method, which are primarily investments in entities that owned or leased 30 and 32 hotels as of December 31, 2013 and 2012, respectively.

Our investments in affiliates accounted for under the equity method totaled $245 million and $276 million, representing approximately one percent of total assets as of December 31, 2013 and 2012. We are a partner in joint ventures with Felcor Hotels, LLC and affiliates that own 13 hotels in which our ownership interest ranges from 10 percent to 50 percent, as well as a management company in which we have a 50 percent interest. The total carrying amount of our investments with Felcor Hotels, LLC and affiliates was $99 million and $104 million as of December 31, 2013 and 2012, respectively. During the year ended December 31, 2013, we sold a joint venture investment with Felcor with a carrying value of $3 million. We are also partners in other significant joint ventures with the following ownership interests and carrying amounts: a 25 percent ownership interest in Ashford HHC Partners III, LP, which owns two hotels and had a carrying amount of $20 million and $37 million as of December 31, 2013 and 2012, respectively; and a 40 percent interest in Domhotel GmbH, Berlin, which owns one hotel and had a carrying amount of $38 million and $35 million as of December 31, 2013 and 2012, respectively. We also have investments in 14 other joint ventures in which our ownership interest ranges from 10 percent to 50 percent.

The equity investments had total debt of approximately $1.1 billion as of December 31, 2013 and 2012. Substantially all of the debt is secured solely by the affiliates’ assets or is guaranteed by other partners without recourse to us. We were the creditor on $17 million and $20 million of total debt from unconsolidated affiliates as of December 31, 2013 and 2012, respectively, which was included in financing receivables, net in our consolidated balance sheets.

We identified certain indicators of impairment in 2012 and 2011 relative to the carrying value of certain of our investments and, as a result, determined that we had impairments on these investments during the years ended December 31, 2012 and 2011. We recorded $19 million and $141 million of impairment losses on certain equity method investments during the years ended December 31, 2012 and 2011, respectively, which were included in equity in earnings (losses) from unconsolidated affiliates in our consolidated statements of operations. Additionally in 2012, we recorded a $1 million impairment loss on one of our other investments, which was included in impairment losses in our consolidated statement of operations for the year ended December 31, 2012.

In connection with the Merger, we recorded our equity method investments at their estimated fair value, which resulted in an increase to our historical basis in those entities, primarily as a result of an increase in the fair value of the real estate assets of the investee entities. The basis difference is being amortized as a component of equity in earnings (losses) from unconsolidated affiliates over a period of approximately 40 years and is also adjusted for impairment losses. The unamortized basis was $119 million and $120 million, as of December 31, 2013 and 2012, respectively. We estimate our future amortization expense to be approximately $3 million per year for the remaining amortization period.

Consolidated Variable Interest Entities
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Consolidated Variable Interest Entities

Note 7: Consolidated Variable Interest Entities

As of September 30, 2014 and December 31, 2013, we consolidated five and four variable interest entities (“VIEs”), respectively. During the nine months ended September 30, 2014 and 2013, we did not provide any financial or other support to any VIEs that we were not previously contractually required to provide, nor do we intend to provide such support in the future.

Two of these VIEs lease hotels from unconsolidated affiliates in Japan. We hold a significant ownership interest in these VIEs and have the power to direct the activities that most significantly affect their economic performance. Our condensed consolidated balance sheets included the assets and liabilities of these entities, which primarily comprised $32 million and $42 million of cash and cash equivalents, $45 million and $26 million of property and equipment, net, and $264 million and $284 million of non-recourse debt as of September 30, 2014 and December 31, 2013, respectively. The assets of these entities are only available to settle the obligations of these entities. Interest expense related to the non-recourse debt of these two consolidated VIEs was $13 million and $20 million during the nine months ended September 30, 2014 and 2013, respectively, and was included in interest expense in our condensed consolidated statements of operations.

In September 2014, we acquired an additional ownership interest in one of our consolidated VIEs in Japan. The effect of this acquisition was recognized during the nine months ended September 30, 2014, resulting in a decrease in additional paid-in capital of $6 million, a decrease in accumulated other comprehensive loss of $1 million and an increase in noncontrolling interests of $5 million. Additionally, we identified an immaterial error as of and for the years ended December 31, 2013, 2012 and 2011 with respect to accounting for the acquisition of additional ownership interests in our consolidated VIEs in Japan. The cumulative effect of the correction of these transactions resulted in a decrease in additional paid-in capital of $28 million, an increase in accumulated other comprehensive loss of $7 million and an increase in noncontrolling interests of $35 million, and had no net effect on total assets, total liabilities or total equity in any period. The correction has been reflected in our condensed consolidated balance sheet as of September 30, 2014 and within equity contributions to consolidated variable interest entities in our condensed consolidated statement of stockholders’ equity for the nine months ended September 30, 2014, and did not affect our condensed consolidated statements of operations, condensed consolidated statements of comprehensive income (loss) or condensed consolidated statements of cash flows for the nine months ended September 30, 2014.

In February 2013, one of our consolidated VIEs in Japan signed a Memorandum of Understanding to restructure the terms of its capital lease. The effect of the capital lease restructuring was recognized during the nine months ended September 30, 2013, resulting in a reduction in property and equipment, net of $44 million and a reduction in non-recourse debt of $48 million.

In June 2014 and August 2013, we formed VIEs associated with each of our securitization transactions to issue our Securitized Timeshare Debt. We are the primary beneficiaries of these VIEs as we have the power to direct the activities that most significantly affect their economic performance, the obligation to absorb their losses and the right to receive benefits that are significant to them. As of September 30, 2014 and December 31, 2013, our condensed consolidated balance sheets included the assets and liabilities of these entities, which primarily comprised $20 million and $8 million of restricted cash and cash equivalents, $497 million and $221 million of securitized financing receivables, net and $511 million and $222 million of non-recourse debt, respectively. Our condensed consolidated statements of operations included interest income related to these VIEs of $36 million and $9 million for the nine months ended September 30, 2014 and 2013, respectively, included in timeshare revenue, as well as interest expense related to these VIEs of $7 million and $1 million for the nine months ended September 30, 2014 and 2013, respectively, included in interest expense. See Note 5: “Financing Receivables” and Note 8: “Debt” for additional details.

We have an additional consolidated VIE that owns one hotel that was immaterial to our condensed consolidated financial statements.

Consolidated Variable Interest Entities

Note 9: Consolidated Variable Interest Entities

As of December 31, 2013, 2012 and 2011, we consolidated four, three and four VIEs, respectively. During the years ended December 31, 2013, 2012 and 2011, we did not provide any financial or other support to any VIEs that we were not previously contractually required to provide, nor do we intend to provide such support in the future.

Two of our VIEs lease hotels from unconsolidated affiliates in Japan. We hold a significant ownership interest in these VIEs and have the power to direct the activities that most significantly affect their economic performance. Our consolidated balance sheets included the assets and liabilities of these entities, which primarily comprised $42 million and $29 million of cash and cash equivalents, $26 million and $66 million of property and equipment, net and $284 million and $408 million of non-recourse debt as of December 31, 2013 and 2012, respectively. The assets of these entities are only available to settle the obligations of these entities. Interest expense related to the non-recourse debt of these two consolidated VIEs was $28 million during the year ended December 31, 2013 and $33 million during the years ended December 31, 2012 and 2011, and was included in interest expense in our consolidated statements of operations.

In February 2013, Osaka Hilton Co., Ltd., one of our consolidated VIEs in Japan, signed a Memorandum of Understanding to restructure the terms of their capital lease. The terms of the restructuring call for a reduction in future rent expense under the lease, as well as a commitment to fund capital improvements to the hotel. As of December 31, 2013, we no longer have a commitment to fund these capital improvements. The effect of the capital lease restructuring was recognized during the year ended December 31, 2013, resulting in a reduction in property and equipment, net of $44 million and a reduction in non-recourse debt of $48 million.

In 2012, we acquired the remaining ownership interest in OHC, which was previously one of our consolidated VIEs located in Japan. See Note 3: “Acquisitions” for further discussion of this transaction.

In 2011, two of our consolidated VIEs located in Japan restructured their lease agreements which were accounted for as capital leases. We recognized a gain associated with one of the lease restructurings of $13 million during the year ended December 31, 2011, resulting from the difference between the fair value of the new lease terms and the carrying value of the former lease. This gain was recognized in other gain, net, in our consolidated statement of operations for the year ended December 31, 2011. Additionally, $7 million of the gain was recognized as being attributable to noncontrolling interests based on their ownership interest in the VIE, and was included in net income attributable to noncontrolling interests in our consolidated statement of operations for the year ended December 31, 2011.

In August 2013, we formed a VIE to issue our Securitized Timeshare Debt. We are the primary beneficiary of this VIE as we have the power to direct the activities that most significantly affect the VIE’s economic performance, the obligation to absorb losses and the right to receive benefits that are significant to the VIE. As of December 31, 2013, our consolidated balance sheet included the assets and liabilities of this entity, which primarily comprised $8 million of restricted cash and cash equivalents, $221 million of securitized financing receivables, net and $222 million of non-recourse debt. Our consolidated statement of operations included interest income of $17 million, included in timeshare revenue, and interest expense of $3 million, included in interest expense, for the year ended December 31, 2013, related to this VIE. See Note 7: “Financing Receivables” and Note 13: “Debt” for additional details of the timeshare securitization transaction.

We have an additional VIE that owns one hotel that was immaterial to our consolidated financial statements.

Goodwill Disclosure
Goodwill Disclosure

Note 10 : Goodwill

As part of the purchase accounting for the Merger, we recorded $10.5 billion of goodwill representing the excess purchase price over the fair value of the other identified assets and liabilities. During the year ended December 31, 2008, we recognized approximately $4.3 billion of impairment charges relating to our goodwill, including impairment losses of $795 million on our goodwill assigned to our timeshare reporting unit, which had no remaining goodwill assigned to that reporting unit as of December 31, 2013, 2012 and 2011. In the fourth quarter of each year, we performed our annual assessment for impairment and concluded that there was no impairment of our goodwill for the years ended December 31, 2013, 2012 and 2011. Changes to our goodwill during the years ended December 31, 2013, 2012 and 2011 were due to foreign currency translations. Our goodwill balances, by reporting unit, were as follows:

 

     Ownership      Management
and Franchise
     Total  
     (in millions)  

Goodwill

   $ 4,555        $ 5,147       $ 9,702    

Accumulated impairment losses

      (3,527)                  (3,527)   
  

 

 

    

 

 

    

 

 

 

Balance as of December 31, 2011

     1,028          5,147         6,175    

Foreign currency translation

             18         22    

Goodwill

     4,559          5,165         9,724    

Accumulated impairment losses

     (3,527)                 (3,527)   
  

 

 

    

 

 

    

 

 

 

Balance as of December 31, 2012

     1,032          5,165         6,197    

Foreign currency translation

             19         23    

Goodwill

     4,563          5,184         9,747    

Accumulated impairment losses

     (3,527)                 (3,527)   
  

 

 

    

 

 

    

 

 

 

Balance as of December 31, 2013

   $ 1,036        $  5,184       $ 6,220    
  

 

 

    

 

 

    

 

 

 
Other Intangible Assets
Other Intangible Assets

Note 11 : Other Intangible Assets

Other intangible assets were as follows:

 

     December 31, 2013  
     Gross Carrying
Amount
     Accumulated
Amortization
     Net Carrying
Amount
 
     (in millions)  

Amortizing Intangible Assets:

        

Management and franchise agreements

   $ 2,573       $ (1,121)       $ 1,452   

Leases

     436         (132)         304   

Other(1)

     727         (280)         447   
  

 

 

    

 

 

    

 

 

 
   $  3,736       $  (1,533)       $  2,203   
  

 

 

    

 

 

    

 

 

 

Non-amortizing Intangible Assets:

        

Brands

   $ 5,013       $ —        $ 5,013   

 

     December 31, 2012  
     Gross Carrying
Amount
     Accumulated
Amortization
     Net Carrying
Amount
 
     (in millions)  

Amortizing Intangible Assets:

        

Management and franchise agreements

   $  2,542       $ (942)       $  1,600   

Leases

     408         (107)         301   

Other(1)

     646         (203)         443   
  

 

 

    

 

 

    

 

 

 
   $  3,596       $  (1,252)       $  2,344   
  

 

 

    

 

 

    

 

 

 

Non-amortizing Intangible Assets:

        

Brands

   $ 5,029       $ —        $ 5,029   

 

(1) 

Includes capitalized software with a net balance of $218 million and $191 million as of December 31, 2013 and 2012, respectively, and the Hilton HHonors intangible with a net balance of $215 million and $236 million as of December 31, 2013 and 2012, respectively. We recorded amortization expense on capitalized software of $52 million, $30 million and $15 million for the years ended December 31, 2013, 2012 and 2011, respectively, and amortization expense on the Hilton HHonors intangible of $22 million for the years ended December 31, 2013, 2012 and 2011.

Our amortizing intangible assets related to management and franchise agreements, leases, proprietary technologies, capitalized software and Hilton HHonors have finite lives and, accordingly, we recorded amortization expense of $285 million, $260 million and $241 million for the years ended December 31, 2013, 2012 and 2011, respectively. Changes to our brands intangible asset during the years ended December 31, 2013 and 2012 were due to foreign currency translations.

During the years ended December 31, 2013, 2012 and 2011, we recorded no impairment relating to our other intangible assets.

We estimate our future amortization expense for our amortizing intangible assets to be as follows:

 

Year    (in millions)  

2014

   $ 315   

2015

     307   

2016

     285   

2017

     239   

2018

     229   

Thereafter

     828   
  

 

 

 
   $  2,203   
  

 

 

 
Accounts Payable, Accrued Expenses and Other
Accounts Payable, Accrued Expenses and Other

Note 12 : Accounts Payable, Accrued Expenses and Other

Accounts payable, accrued expenses and other were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

Accrued employee compensation and benefits

   $ 547       $ 530   

Accounts payable

     319         286   

Liability for guest loyalty program, current

     366         321   

Deposit liabilities

     195         169   

Deferred revenues, current

     48         61   

Self-insurance reserves, current

     52         47   

Other accrued expenses

     552         508   
  

 

 

    

 

 

 
   $  2,079       $  1,922   
  

 

 

    

 

 

 

Deferred revenues and deposit liabilities are related to our timeshare business and hotel operations. Other accrued expenses consist of taxes, rent, interest and other accrued balances.

Debt
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Debt

Note 8: Debt

Long-term Debt

Long-term debt balances, including obligations for capital leases, and associated interest rates were as follows:

 

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

Senior secured term loan facility with a rate of 3.50%, due 2020

   $ 5,300        $ 6,000    

Senior notes with a rate of 5.625%, due 2021

     1,500          1,500    

Commercial mortgage-backed securities loan with an average rate of 4.05%, due 2018(1)

     3,500          3,500    

Mortgage loan with a rate of 2.30%, due 2018

     525          525    

Mortgage notes with an average rate of 5.17%, due 2016 to 2017

     196          133    

Other unsecured notes with a rate of 7.50%, due 2017

     54          53    

Capital lease obligations with an average rate of 6.06%, due 2015 to 2097

     76          73    
  

 

 

    

 

 

 
     11,151          11,784    

Less: current maturities of long-term debt

     (3)         (4)   

Less: unamortized discount on senior secured term loan facility

     (24)         (29)   
  

 

 

    

 

 

 
   $  11,124        $  11,751    
  

 

 

    

 

 

 

 

(1)  The initial maturity date of the variable-rate component of this borrowing is November 1, 2015. We assumed all extensions, which are solely at our option, were exercised.

During the nine months ended September 30, 2014, we made voluntary prepayments of $700 million on our senior secured term loan facility (the “Term Loans”).

As of September 30, 2014, we had $47 million of letters of credit outstanding under our $1.0 billion senior secured revolving credit facility (the “Revolving Credit Facility”), and a borrowing capacity of $953 million.

Under our commercial mortgage-backed securities loan secured by 23 of our U.S. owned real estate assets (the “CMBS Loan”), we are required to deposit with the lender certain cash reserves for restricted uses. As of September 30, 2014 and December 31, 2013, our condensed consolidated balance sheets included $47 million and $29 million, respectively, of restricted cash and cash equivalents related to the CMBS Loan.

Non-recourse Debt

Non-recourse debt, including obligations for capital leases, and associated interest rates were as follows:

 

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

Capital lease obligations of consolidated VIEs with a rate of 6.34%, due 2018 to 2026

  $       239       $       255    

Non-recourse debt of consolidated VIEs with an average rate of 3.46%, due 2015 to 2018(1)

    37         41    

Timeshare Facility with a rate of 1.40%, due 2016

    150         450    

Securitized Timeshare Debt with an average rate of 1.98%, due 2026

    511         222    
 

 

 

   

 

 

 
    937         968    

Less: current maturities of non-recourse debt

     (124)        (48)   
 

 

 

   

 

 

 
  $ 813       $  920    
 

 

 

   

 

 

 

 

(1)  Excludes the non-recourse debt of our VIEs that issued the Securitized Timeshare Debt, as this is presented separately.

 

In September 2014, we reduced our total borrowing capacity, as permitted by the loan agreement, under the Timeshare Facility from $450 million to $300 million.

In June 2014, we issued approximately $304 million of 1.77 percent notes and $46 million of 2.07 percent notes due November 2026, which are secured by a pledge of certain assets, consisting primarily of a pool of our timeshare financing receivables that are secured by a first mortgage or first deed of trust on a timeshare interest. We are required to make monthly payments of principal and interest under the notes. A majority of the proceeds from the asset-backed notes were used to reduce the outstanding balance on our Timeshare Facility.

We are required to deposit payments received from customers on the pledged timeshare financing receivables and securitized timeshare financing receivables related to the Timeshare Facility and Securitized Timeshare Debt, respectively, into a depository account maintained by a third party. On a monthly basis, the depository account will first be utilized to make any required principal, interest and other payments due with respect to the Timeshare Facility and Securitized Timeshare Debt. After payment of all amounts due under the respective agreements, any remaining amounts will be remitted to us for use in our operations. The balance in the depository account, totaling $24 million and $20 million as of September 30, 2014 and December 31, 2013, respectively, was included in restricted cash and cash equivalents in our condensed consolidated balance sheets.

Debt Maturities

The contractual maturities of our long-term debt and non-recourse debt as of September 30, 2014 were as follows:

 

Year    (in millions)  

2014 (remaining)

   $ 34   

2015

     136   

2016

     433   

2017

     164   

2018(1)

     4,097   

Thereafter

     7,224   
  

 

 

 
   $  12,088   
  

 

 

 

 

(1)  The CMBS Loan has three one-year extensions, solely at our option, that effectively extend maturity to November 1, 2018. We assumed all extensions for purposes of calculating maturity dates.
Debt

Note 13: Debt

Long-term Debt

Long-term debt balances, including obligations for capital leases, and associated interest rates were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

Senior secured term loan facility with a rate of 3.75%, due 2020

   $ 6,000        $ —    

Senior notes with a rate of 5.625%, due 2021

     1,500          —    

Commercial mortgage-backed securities loan with an average rate of 4.05%, due 2018(1)

     3,500          —    

Mortgage loan with a rate of 2.32%, due 2018

     525          —    

Senior mortgage loans with a rate of 2.51%, due 2015(2)

     —          7,271    

Secured mezzanine loans with an average rate of 4.12%, due 2015(2)

     —          7,697    

Secured mezzanine loans with a rate of 4.71%, due 2015(2)

     —          240    

Mortgage notes with an average rate of 6.13%, due 2014 to 2016

     133          134    

Other unsecured notes with a rate of 7.50%, due 2017(3)

     53          149    

Capital lease obligations with an average rate of 5.88%, due 2015 to 2093

     73          83    

Contingently convertible notes with a rate of 3.38%, due 2023(4)

     —            
  

 

 

    

 

 

 
     11,784          15,575    

Less: current maturities of long-term debt

     (4)         (392)   

Less: unamortized discount on senior secured term loan facility

     (29)         —    
  

 

 

    

 

 

 
   $  11,751        $  15,183    
  

 

 

    

 

 

 

 

(1)  The initial maturity date of the $875 million variable-rate component of this borrowing is November 1, 2015. We have assumed all extensions, which are solely at our option, were exercised.
(2) The rates are as of December 31, 2012, since the senior mortgage and secured mezzanine loans were paid in full on October 25, 2013.
(3) The balance as of December 31, 2012, included $96 million of our 8 percent unsecured notes due 2031 that were paid in full on November 25, 2013.
(4) The balance was less than $1 million as of December 31, 2013.

Debt Refinancing

In October 2013, we entered into the following borrowing arrangements:

 

    a senior secured credit facility (the “Senior Secured Credit Facility”) consisting of a $1.0 billion senior secured revolving credit facility (the “Revolving Credit Facility”) and a $7.6 billion senior secured term loan facility (the “Term Loans”);

 

    $1.5 billion of 5.625% senior notes due in 2021 (the “Senior Notes”);

 

    a $3.5 billion commercial mortgage-backed securities loan secured by 23 of our U.S. owned real estate assets (the “CMBS Loan”); and

 

    a $525 million mortgage loan secured by our Waldorf Astoria New York property (the “Waldorf Astoria Loan”).

On October 25, 2013, we used the cash proceeds from the transactions above and available cash to repay in full all $13.4 billion in borrowings outstanding, including accrued interest, under our senior mortgage loans and secured mezzanine loans (together, the “Secured Debt”).

 

In addition, on October 25, 2013, we issued a notice of redemption to holders of all of the outstanding $96 million aggregate principal amount of our unsecured notes due 2031. These bonds were redeemed in full on November 25, 2013 at a redemption price equal to 100 percent of the principal amount and accrued and unpaid interest on the principal amount, to, but not including November 25, 2013. We refer to the transactions discussed above as the “Debt Refinancing.”

Upon completion of the Debt Refinancing, we recognized a $229 million gain on extinguishment of debt in our consolidated statement of operations as follows:

 

     (in millions)  

Release of interest accrued under the interest method

   $  201    

Release of unamortized yield adjustments related to prior debt modifications

     43    

Release of unamortized debt issuance costs

     (15)   
  

 

 

 
   $ 229    
  

 

 

 

We also incurred $189 million of debt issuance costs across the respective arrangements, which will be amortized over the terms of each underlying debt agreement. As of December 31, 2013, the net balance of these debt issuance costs included in our consolidated balance sheet was $168 million.

Senior Secured Credit Facility

On October 25, 2013, we entered into our Senior Secured Credit Facility. Our Revolving Credit Facility, which matures on October 25, 2018, has a capacity of $1.0 billion and allows for up to $150 million to be drawn in the form of letters of credit. As of December 31, 2013, we had $43 million of letters of credit outstanding and $957 million of available borrowings under the Revolving Credit Facility. We are currently required to pay a commitment fee of 0.50 percent per annum under the Revolving Credit Facility in respect of the unused commitments thereunder. The commitment fee can be reduced upon achievement of certain leverage ratios.

The Term Loans, which mature on October 25, 2020, were issued with an original issue discount of 0.50 percent and required quarterly principal payments equal to 0.25 percent of the original principal amount. The Term Loans bear interest at variable rates, at our option, which is payable monthly or quarterly depending upon the variable rate that is chosen.

The obligations of the Senior Secured Credit Facility are unconditionally and irrevocably guaranteed by us and all of our direct or indirect wholly owned material domestic subsidiaries, excluding our subsidiaries that are prohibited from providing guarantees as a result of the agreements governing our Timeshare Facility and/or our Securitized Timeshare Debt and our subsidiaries that secure our CMBS Loan and our Waldorf Astoria Loan. Additionally, none of our foreign subsidiaries or our non-wholly owned domestic subsidiaries guarantee the Senior Secured Credit Facility.

In December 2013, we used the net proceeds of approximately $1,243 million received by us from our IPO and available cash to repay approximately $1,250 million of the Term Loans. Additionally, we have made voluntary prepayments of $350 million on our Term Loans since the date of the Debt Refinancing. As a result of the voluntary prepayments, the quarterly principal payments are no longer required for the remainder of the term of the loan. Additionally, with these repayments on the Term Loans, we paid down one tranche and released the debt issuance costs and unamortized original issue discount allocated to that tranche totaling $23 million, which was included in interest expense in our consolidated statement of operations for the year ended December 31, 2013.

 

Senior Notes

On October 4, 2013, we issued $1.5 billion aggregate principal of 5.625% Senior Notes due 2021. Interest on the Senior Notes is payable semi-annually in cash in arrears on April 15 and October 15 of each year, beginning on April 15, 2014. The Senior Notes are guaranteed on a senior unsecured basis by us and certain of our wholly owned subsidiaries.

CMBS Loan

On October 25, 2013, we entered into the $3.5 billion CMBS Loan, which is secured by 23 of our U.S. owned hotels. The CMBS loan has a fixed-rate component in the amount of $2.625 billion bearing interest at 4.47 percent with a term of five years and a $875 million variable-rate component based on one-month LIBOR plus 265 basis points that has an initial term of two years with three one-year extensions solely at our option, for which the rate would increase by 25 basis points during the final extension period. Interest for both components is payable monthly. Under this loan, we are required to deposit with the lender certain cash reserves for restricted uses. As of December 31, 2013, our consolidated balance sheet included $29 million of restricted cash and cash equivalents related to the CMBS Loan.

Waldorf Astoria Loan

On October 25, 2013, we entered into the $525 million Waldorf Astoria Loan, secured by our Waldorf Astoria New York property. The Waldorf Astoria Loan matures on October 25, 2018 and bears interest at a variable-rate based on one-month LIBOR plus 215 basis points that is payable monthly.

Secured Debt

The Secured Debt, which we repaid in full during our Debt Refinancing, totaled $15.2 billion as of December 31, 2012. Interest under the Secured Debt was payable monthly and included both variable and fixed components. The Secured Debt was secured by substantially all of our consolidated assets in which we held an ownership interest and contained significant restrictions on the incurrence of any additional indebtedness by us, including the prohibition of any additional indebtedness for borrowed money evidenced by bonds, debentures, notes or other similar instruments, except for permission to borrow up to $400 million against our timeshare financing receivables pursuant to the Timeshare Facility; see further discussion below. Additionally, under the terms of our Secured Debt, we were restricted from declaring dividends.

We were required to deposit with the lender certain cash reserves that could, upon our request, be used for, among other things, debt service, capital expenditures and general corporate purposes. As of December 31, 2013, we did not have cash reserves on deposit with the lender, as we used the balance previously deposited to repay a portion of our Secured Debt, as permitted by the lender. As of December 31, 2012, the cash reserves on deposit with the lender totaled $147 million and were included in restricted cash and cash equivalents in our consolidated balance sheet as a current asset because we had the ability to access the cash within the 12 months following that date, subject to necessary lender notification.

As a result of our Debt Refinancing, we repaid our outstanding Secured Debt, including accrued interest though the next debt service period, on October 25, 2013, totaling $13.4 billion.

 

Non-recourse Debt

Non-recourse debt, including obligations for capital leases, and associated interest rates were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

Capital lease obligations of consolidated VIEs with a rate of 6.34%, due 2018 to 2026

   $       255        $       373    

Non-recourse debt of consolidated VIEs with an average rate of 3.30%, due 2015 to 2018(1)

     41          47    

Timeshare Facility with a rate of 1.42%, due 2016

     450          —    

Securitized Timeshare Debt with a rate of 2.28%, due 2026

     222          —    
  

 

 

    

 

 

 
     968          420    

Less: current maturities of non-recourse debt

     (48)         (15)   
  

 

 

    

 

 

 
   $ 920        $ 405    
  

 

 

    

 

 

 

 

(1) Excludes the non-recourse debt of our VIE that issued the Securitized Timeshare Debt, as this is presented separately.

Timeshare Facility

In May 2013, we entered into a receivables loan agreement that is secured by certain of our timeshare financing receivables. See Note 7: “Financing Receivables” for further discussion. Under the terms of the loan agreement we were permitted to borrow up to a maximum amount of approximately $400 million based on the amount and credit quality characteristics of the timeshare financing receivables securing the loan. In August 2013, we repaid $250 million of the outstanding $400 million using proceeds from the Securitized Timeshare Debt issuance. Further, in October 2013, we amended the Timeshare Facility to increase the maximum borrowings to $450 million.

The Timeshare Facility is a non-recourse obligation and is payable solely from the timeshare financing receivables securing the loan and any deposit payments received from customers on the pledged receivables. The loan agreement allows for us to borrow up to the maximum amount until May 2015, and all amounts borrowed must be repaid by May 2016. Interest on the loan, at a variable rate, is payable monthly.

We are required to deposit payments received from customers on the pledged timeshare financing receivables into a depository account maintained by a third party. On a monthly basis, the depository account will first be utilized to make required interest and other payments due under the receivables loan agreement. After payment of all amounts due under the receivables loan agreement, any remaining amounts will be remitted to us for use in our operations. The balance in the depository account, totaling $12 million as of December 31, 2013, was included in restricted cash and cash equivalents in our consolidated balance sheet.

Securitized Timeshare Debt

In August 2013, we completed a securitization of approximately $255 million of gross timeshare financing receivables and issued notes secured by such timeshare receivables with an aggregate principal amount of $250 million. The Securitized Timeshare Debt is backed by a pledge of assets, consisting primarily of a pool of timeshare financing receivables secured by first mortgages or deeds of trust on timeshare interests. See Note 7: “Financing Receivables” for further discussion. The Securitized Timeshare Debt bears interest at a fixed rate of 2.28 percent per annum and has a stated maturity of January 2026. The Securitized Timeshare Debt is a non-recourse obligation and is payable solely from the pool of timeshare financing receivables pledged as collateral to the Securitized Timeshare Debt and related assets. The net proceeds from the Securitized Timeshare Debt were used to repay a portion of the Timeshare Facility.

 

We are required to deposit payments received from customers on the securitized timeshare financing receivables into a depository account maintained by a third party. On a monthly basis, the depository account will first be utilized to make required principal, interest and other payments due with respect to the Securitized Timeshare Debt. After payment of all amounts due with respect to the Securitized Timeshare Debt, any remaining amounts will be remitted to us for use in our operations. The balance in the depository account, totaling $8 million as of December 31, 2013, was included in restricted cash and cash equivalents in our consolidated balance sheet.

Debt Maturities

The contractual maturities of our long-term debt and non-recourse debt as of December 31, 2013 were as follows:

 

Year    (in millions)  

2014

   $ 52   

2015

     69   

2016

     622   

2017

     96   

2018(1)

     4,068   

Thereafter

     7,845   
  

 

 

 
   $  12,752   
  

 

 

 

 

(1) The CMBS Loan has three one-year extensions solely at our option that effectively extend maturity to November 1, 2018. We have assumed all extensions for purposes of calculating maturity dates.
Deferred Revenues
Deferred Revenues

Note 14 : Deferred Revenues

Deferred revenues were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

Hilton HHonors points sales

   $ 597       $   

Other

     77         82   
  

 

 

    

 

 

 
   $  674       $ 82   
  

 

 

    

 

 

 

Hilton HHonors Points Sales

In October 2013, we sold Hilton HHonors points to American Express Travel Related Services Company, Inc. (“Amex”), and Citibank, N.A. (“Citi”), for $400 million and $250 million, respectively, in cash. Amex and Citi and their respective designees (collectively, the “co-branded card issuers”) may use the points in connection with Hilton HHonors co-branded credit cards and for promotions, rewards and incentive programs or certain other activities as they may establish or engage in from time to time. Upon receipt of the cash, we recognized deferred revenues of $650 million in our consolidated balance sheet, which is reduced as the co-branded card issuers use the points for these activities.

Other

Other deferred revenues is primarily related to our timeshare business and hotel operations.

Other Liabilities Disclosure
Other Liabilities Disclosure

Note 15 : Other Liabilities

Other long-term liabilities were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

Program surplus

   $ 314       $ 263   

Pension obligations

     138         262   

Other long-term tax liabilities

     344         340   

Deferred employee compensation and benefits

     147         129   

Self-insurance reserves

     81         80   

Guarantee liability

     51         57   

Other

     74         310   
  

 

 

    

 

 

 
   $  1,149       $  1,441   
  

 

 

    

 

 

 

Program surplus represents obligations to operate our marketing, sales and brand programs on behalf of our hotel owners. Guarantee liability is related to obligations under our outstanding performance guarantees. Our obligations related to the self-insurance claims are expected to be satisfied, on average, over the next three years.

Derivative Instruments and Hedging Activities
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Derivative Instruments and Hedging Activities

Note 9: Derivative Instruments and Hedging Activities

During the nine months ended September 30, 2014 and 2013, derivatives were used to hedge the interest rate risk associated with variable-rate debt. Certain of our loan agreements require us to hedge interest rate risk using derivative instruments.

Cash Flow Hedges

As of September 30, 2014, we held four interest rate swaps with an aggregate notional amount of $1.45 billion, which swap three-month LIBOR on the Term Loans to a fixed rate of 1.87 percent and expire in October 2018. We elected to designate these interest rate swaps as cash flow hedges for accounting purposes.

Non-designated Hedges

As of September 30, 2014, we held one interest rate cap in the notional amount of $875 million, for the variable-rate component of the CMBS Loan, that expires in November 2015 and caps one-month LIBOR at 6.0 percent. We also held one interest rate cap in the notional amount of $525 million that expires in November 2015 and caps one-month LIBOR on a mortgage loan secured by one property at 4.0 percent. We did not elect to designate either of these interest rate caps as hedging instruments.

 

As of September 30, 2013, we held ten interest rate caps with an aggregate notional amount of $15.2 billion, which matured in November 2013. We did not elect to designate any of these ten interest rate caps as effective hedging instruments.

Fair Value of Derivative Instruments

The effects of our derivative instruments on our condensed consolidated balance sheets were as follows:

 

     September 30, 2014      December 31, 2013  
     Balance Sheet
Classification
   Fair Value      Balance Sheet
Classification
   Fair Value  
          (in millions)           (in millions)  

Cash Flow Hedges:

           

Interest rate swaps

   Other assets    $  4       Other assets    $  10   

Non-designated Hedges:

           

Interest rate caps

   Other assets            Other assets        

Earnings Effect of Derivative Instruments

The effects of our derivative instruments on our condensed consolidated statements of operations and condensed consolidated statements of comprehensive income (loss) before any effect for income taxes were as follows:

 

          Nine Months Ended
September 30,
 
     Classification of Loss Recognized    2014      2013  

Cash Flow Hedges:

        

Interest rate swaps(1)

   Other comprehensive loss    $  (6)         N/A   

Non-designated Hedges:

        

Interest rate caps

   Other gain, net      —            

 

(1)  There were no amounts recognized in earnings related to hedge ineffectiveness or amounts excluded from hedge effectiveness testing during the nine months ended September 30, 2014.
Derivative Instruments and Hedging Activities

Note 16: Derivative Instruments and Hedging Activities

During the years ended December 31, 2013, 2012 and 2011, derivatives were used to hedge the interest rate risk associated with variable-rate debt. Under the terms of the CMBS Loan and Waldorf Astoria Loan entered into in connection with the Debt Refinancing, we are required to hedge interest rate risk using derivative instruments. Additionally, under the terms of the Secured Debt, we were required to hedge interest rate risk using derivative instruments with an aggregate notional amount equal to the principal amount of the Secured Debt.

Cash Flow Hedges

Term Loans Interest Rate Swaps

In October 2013, we entered into four interest rate swap agreements with an aggregate notional amount of $1.45 billion that expire in October 2018. These agreements swap three-month LIBOR to a fixed-rate of 1.87 percent. We have elected to designate these interest rate swaps as cash flow hedges for accounting purposes.

Secured Debt Interest Rate Caps

During the year ended December 31, 2011, we held eleven interest rate caps with an aggregate notional amount of $16.2 billion, of which eight interest rate caps with an aggregate notional amount of $14.6 billion were designated as effective hedging instruments, which expired in November 2011.

Non-designated Hedges

CMBS Interest Rate Caps

In October 2013, we entered into an interest rate cap agreement for a notional amount of $875 million for the variable-rate component of the CMBS Loan that expires in November 2015. This agreement caps one-month LIBOR at 6.0 percent. We did not elect to designate this interest rate cap as a hedging instrument.

Waldorf Astoria Interest Rate Cap

In October 2013, we entered into an interest rate cap agreement for a notional amount of $525 million that expires in November 2015. This agreement caps one-month LIBOR at 4.0 percent. We did not elect to designate this interest rate cap as a hedging instrument.

 

Secured Debt Interest Rate Caps

During the year ended December 31, 2013, we held ten interest rate caps with an aggregate notional amount of $15.2 billion, which were executed in August 2012 and matured in November 2013. We did not elect to designate any of these ten interest rate caps as effective hedging instruments for accounting purposes.

During the year ended December 31, 2012, we held ten interest rate caps with an aggregate notional amount of $15.9 billion, which were executed in October 2011 and matured in November 2012. We did not elect to designate any of these ten interest rate caps as effective hedges for accounting purposes.

As of December 31, 2011, we held ten interest rate caps with an aggregate notional amount of $15.9 billion. We did not elect to designate any of these ten interest rate caps as effective hedges for accounting purposes. The caps were executed in October 2011 to replace our previous portfolio maturing in November 2011, which included eight interest rate caps designated as effective hedging instruments and three interest rate caps with an aggregate notional amount of $1.6 billion, which we did not elect to designate as effective hedges.

Fair Value of Derivative Instruments

The effects of our derivative instruments on our consolidated balance sheets were as follows:

 

     December 31, 2013      December 31, 2012  
     Balance Sheet
Classification
     Fair Value      Balance Sheet
Classification
     Fair Value  
            (in millions)             (in millions)  

Cash Flow Hedges

           

Interest rate swaps

     Other assets       $  10         N/A       $  —   

Non-designated Hedges

           

Interest rate caps(1)

     Other assets                 Other assets           

 

(1) The fair values of our interest rate caps were immaterial as of December 31, 2013 and 2012.

Earnings Effect of Derivative Instruments

The effects of our derivative instruments on our consolidated statements of operations and consolidated statements of comprehensive income (loss) before any effect for income taxes were as follows:

 

    Classification of Gain (Loss)
Recognized
  Amount of Gain (Loss) Recognized in Income  
            2013                  2012                  2011        
        (in millions)  

Cash Flow Hedges

         

Interest rate swaps(1)

  Other comprehensive income (loss)   $  10       $ —        $ —    

Interest rate caps(2)

  Other gain, net             —          (2)   

Non-designated Hedges

         

Interest rate caps(3)

  Other gain, net             (1)         (1)   

 

(1) There were no amounts recognized in earnings related to hedge ineffectiveness or amounts excluded from hedge effectiveness testing during the year ended December 31, 2013.
(2)  Relates to hedge ineffectiveness on the eight designated Secured Debt interest rate caps that were outstanding during the year ended December 31, 2011. No amounts were excluded from hedge effectiveness testing.
(3)  An immaterial loss was recorded during the year ended December 31, 2013.
Fair Value Measurements
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Fair Value Measurements

Note 10: Fair Value Measurements

The carrying amounts and estimated fair values of our financial assets and liabilities, including related current portions, were as follows:

 

     September 30, 2014  
            Hierarchy Level  
     Carrying
Amount
     Level 1      Level 2      Level 3  
     (in millions)  

Assets:

           

Cash equivalents

   $     290       $       $     290       $   

Restricted cash equivalents

     97                 97           

Timeshare financing receivables

     1,002                         1,004   

Interest rate swaps

     4                 4           

Liabilities:

           

Long-term debt(1)(2)

      11,051         1,606                  9,592   

Non-recourse debt(3)

     661                         657   

 

     December 31, 2013  
            Hierarchy Level  
     Carrying
Amount
     Level 1      Level 2      Level 3  
     (in millions)  

Assets:

           

Cash equivalents

   $ 309       $       $ 309       $   

Restricted cash equivalents

     107                 107           

Timeshare financing receivables

     994                         996   

Interest rate swaps

     10                 10           

Liabilities:

           

Long-term debt(1)

      11,682         57          1,560          10,358   

Non-recourse debt(3)

     672                         670   

 

(1)  Excludes capital lease obligations with a carrying value of $76 million and $73 million as of September 30, 2014 and December 31, 2013, respectively.
(2)  As of September 30, 2014, the classification of certain long-term debt with a carrying value of $1,500 million changed from Level 2 to Level 1 upon the availability of active market pricing data.
(3)  Excludes capital lease obligations of consolidated VIEs with a carrying value of $239 million and $255 million as of September 30, 2014 and December 31, 2013, respectively, and non-recourse debt of consolidated VIEs with a carrying value of $37 million and $41 million as of September 30, 2014 and December 31, 2013, respectively.

We believe the carrying amounts of our current financial assets and liabilities and other financing receivables approximated fair value as of September 30, 2014 and December 31, 2013. Our estimates of the fair values were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop the estimated fair values. Proper classification of fair value measurements within the valuation hierarchy is considered each reporting period. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts.

Cash equivalents and restricted cash equivalents primarily consisted of short-term interest-bearing money market funds with maturities of less than 90 days, time deposits and commercial paper. The estimated fair values were based on available market pricing information of similar financial instruments.

The estimated fair values of our timeshare financing receivables were based on the expected future cash flows discounted at risk-adjusted rates. The primary sensitivity in these calculations is based on the selection of appropriate discount rates. Fluctuations in these assumptions will result in different estimates of fair value. An increase in the discount rates would result in a decrease in the fair values.

We measure our interest rate swaps at fair value, which were estimated using an income approach. The primary inputs into our fair value estimate include interest rates and yield curves based on observable market inputs of similar instruments.

The estimated fair values of our Level 1 long-term debt were based on prices in active debt markets. The estimated fair values of our Level 2 long-term debt were based on bid prices in a non-active debt market. The estimated fair values of our Level 3 fixed-rate long-term debt were estimated based on the expected future cash flows discounted at risk-adjusted rates. The primary sensitivity in these estimates is based on the selection of appropriate discount rates. Fluctuations in these assumptions will result in different estimates of fair value. An increase in the discount rates would result in a decrease in the fair values. The carrying amounts of our Level 3 variable-rate long-term debt and non-recourse debt approximated fair value as the interest rates under the loan agreements approximated current market rates. The estimated fair values of our Level 3 fixed-rate non-recourse debt were primarily based on indicative quotes received for similar issuances.

 

As a result of our acquisition of the remaining ownership interest in certain equity method investments, which occurred during the nine months ended September 30, 2014, we measured financial and nonfinancial assets and liabilities at fair value on a nonrecurring basis (see Note 3: “Acquisitions”), as follows:

 

     Fair Value(1)  
     (in millions)  

Property and equipment

   $ 144   

Long-term debt

     64   

 

(1)  Fair value measurements using significant unobservable inputs (Level 3).

We estimated the fair value of the property and equipment using discounted cash flow analyses, with an estimated stabilized growth rate of 2 percent to 3 percent, discounted cash flow terms ranging from 11 years to 13 years, a terminal capitalization rate of 10 percent to 11 percent and a discount rate of 9 percent to 11 percent. The discount and terminal capitalization rates used for the fair value of the assets reflect the risk profile of the individual markets where the assets are located, and are not necessarily indicative of our hotel portfolio as a whole.

The fair value of the long-term debt assumed approximated the carrying amount as the interest rate under the loan agreement approximated current market rates.

Fair Value Measurements

Note 17: Fair Value Measurements

The carrying amounts and estimated fair values of our financial assets and liabilities, which included related current portions, were as follows:

 

     December 31, 2013  
            Hierarchy Level  
     Carrying
Amount
     Level 1      Level 2      Level 3  
     (in millions)  

Assets:

           

Cash equivalents

   $ 309       $  —       $ 309       $   

Restricted cash equivalents

     107                 107           

Timeshare financing receivables

     994                         996   

Interest rate swaps

     10                 10           

Liabilities:

           

Long-term debt(1)(3)

      11,682          57          1,560          10,358   

Non-recourse debt(2)(3)

     672                         670   

 

     December 31, 2012  
            Hierarchy Level  
     Carrying
Amount
     Level 1      Level 2      Level 3  
     (in millions)  

Assets:

           

Cash equivalents

   $ 561       $  —       $  561       $   

Restricted cash equivalents

     322                 322           

Timeshare financing receivables

     984                         987   

Liabilities:

           

Long-term debt(1)(3)

      15,492         152                  15,716   

 

(1) Excludes capital lease obligations with a carrying value of $73 million and $83 million as of December 31, 2013 and 2012, respectively.
(2) Represents the Securitized Timeshare Debt and the Timeshare Facility.
(3) Includes current maturities.

We believe the carrying amounts of our current financial assets and liabilities and other financing receivables approximated fair value as of December 31, 2013 and 2012. Our estimates of the fair values were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop the estimated fair value. Proper classification of fair value measurements within the valuation hierarchy is considered each reporting period. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts.

Cash equivalents and restricted cash equivalents primarily comprise short-term interest-bearing money market funds with maturities of less than 90 days, time deposits and commercial paper. The estimated fair values were based on available market pricing information of similar financial instruments.

The estimated fair value of our timeshare financing receivables were based on the expected future cash flows discounted at risk-adjusted rates. The primary sensitivity in these estimates is based on the selection of appropriate discount rates. Fluctuations in these assumptions will result in different estimates of fair value. An increase in the discount rate would result in a decrease in the fair value.

We measure our interest rate swaps at fair value which were estimated using an income approach. The primary inputs into our fair value estimate include interest rates and yield curves based on observable market inputs of similar instruments.

 

The estimated fair value of our Level 1 long-term debt was based on prices in active debt markets. The estimated fair value of our Level 2 long-term debt was based on bid prices in a non-active debt market. The estimated fair values of our Level 3 fixed-rate long-term debt were estimated based on the expected future cash flows discounted at risk-adjusted rates. The primary sensitivity in these estimates is based on the selection of appropriate discount rates. Fluctuations in these assumptions will result in different estimates of fair value. An increase in the discount rate would result in a decrease in the fair value. The estimated fair values of our Level 3 fixed-rate non-recourse debt were primarily based on indicative quotes received for similar issuances.

As of December 31, 2013, the carrying amounts of certain of our Level 3 variable-rate long-term debt and non-recourse debt approximated fair value as the interest rates under the loan agreements approximated current market rates. As of December 31, 2012, the estimated fair value of our Level 3 variable-rate long-term debt was based on estimates of market spreads when quoted market values did not exist, on the current rates offered to us for debt of the same maturities or quoted market prices for the same or similar issues. In determining the current market rate for the fixed rate debt, a market spread was added to the quoted yields on federal government treasury securities with similar maturity dates. The primary sensitivity in these estimates is based on the selection of appropriate market spreads. Fluctuations in these assumptions will result in different estimates of fair value. An increase in the market spread would result in a decrease in the fair value.

No financial or nonfinancial assets were measured at fair value on a nonrecurring basis as of December 31, 2013. The estimated fair values of our financial and nonfinancial assets that were measured at fair value on a nonrecurring basis as a result of impairment losses were as follows:

 

     Year Ended December 31,  
     2012      2011  
     Fair Value(1)      Impairment
Losses
     Fair Value(1)      Impairment
Losses
 
     (in millions)  

Property and equipment, net

   $    24       $    53       $ 5       $ 20   

Investments in affiliates

     29         20          205          141   

 

(1)  Fair value measurements using significant unobservable inputs (Level 3).

During the years ended December 31, 2012 and 2011, property and equipment, net with a carrying value of $77 million and $25 million before impairment, respectively, was reduced to its estimated fair value, resulting in impairment losses of $53 million and $20 million, respectively. Using estimates of undiscounted net cash flows, we concluded that the carrying values of the assets were not fully recoverable. We estimated the fair value of the assets using discounted cash flow analyses, with estimated stabilized growth rates ranging from 2 percent to 3 percent, a discounted cash flow term of 10 years, terminal capitalization rates ranging from 8 percent to 9 percent and discount rates ranging from 9 percent to 12 percent. The discount and terminal capitalization rates used for the fair value of the assets reflect the risk profile of the individual markets where the assets are located, and are not necessarily indicative of our hotel portfolio as a whole.

During the years ended December 31, 2012 and 2011, investments in affiliates with a carrying value of $49 million and $346 million before impairment, respectively, were reduced to their estimated fair value, resulting in impairment losses of $20 million and $141 million, respectively, related to our investments in entities that own or lease hotels. We estimated the fair value of the investments using discounted cash flow analyses, with estimated stabilized growth rates ranging from 3 percent to 7 percent, a discounted cash flow term of 10 years, terminal capitalization rates ranging from 8 percent to 12 percent and discount rates ranging from 10 percent to 22 percent. The discount and terminal capitalization rates used for the fair value of our investments reflect the risk profile of the individual markets where the assets subject to our investment are located, and are not necessarily indicative of our investment portfolio as a whole.

Leases
Leases

Note 18 : Leases

We lease hotel properties, land, equipment and corporate office space under operating and capital leases. As of December 31, 2013 and 2012, we leased 70 hotels and 71 hotels, respectively, under operating leases and five hotels and seven hotels, respectively, under capital leases. As of December 31, 2013 and 2012, two of these capital leases were liabilities of VIEs that we consolidated and were non-recourse to us. Our leases expire at various dates from 2014 through 2196, with varying renewal options, and the majority expire before 2026.

Our operating leases may require minimum rent payments, contingent rent payments based on a percentage of revenue or income or rent payments equal to the greater of a minimum rent or contingent rent. In addition, we may be required to pay some, or all, of the capital costs for property and equipment in the hotel during the term of the lease.

The future minimum rent payments, under non-cancelable leases, due in each of the next five years and thereafter as of December 31, 2013, were as follows:

 

     Operating
Leases
     Capital
Leases
     Non-Recourse
Capital Leases
 
Year    (in millions)  

2014

   $ 264       $       $ 26    

2015

     251         16          26    

2016

     243                 26    

2017

     230                 26    

2018

     223                 26    

Thereafter

     2,075         106          272    
  

 

 

    

 

 

    

 

 

 

Total minimum rent payments

   $  3,286         148          402    
  

 

 

       

Less: amount representing interest

        (75)         (147)   
     

 

 

    

 

 

 

Present value of net minimum rent payments

      $       73        $     255    
     

 

 

    

 

 

 

Amortization of assets recorded under capital leases is recorded in depreciation and amortization in our consolidated statements of operations and is recognized over the lease term.

Rent expense for all operating leases was as follows:

 

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

Minimum rentals

   $    271       $     286       $     264   

Contingent rentals

     148         161         175   
  

 

 

    

 

 

    

 

 

 
   $ 419       $ 447       $ 439   
  

 

 

    

 

 

    

 

 

 

During the year ended December 31, 2013, we purchased the land and building associated with the Hilton Bradford, which we previously leased under a capital lease. As a result of the acquisition, we released our capital lease obligation of $17 million as of the acquisition date. For further discussion, see Note 3: “Acquisitions.”

During the year ended December 31, 2012, we acquired the remaining ownership interest in one of our consolidated VIEs located in Japan, as well as restructured the lease agreement for the Hilton Odawara. In conjunction with the lease restructuring, we executed a binding purchase agreement with the owner to purchase the building and surrounding land at the end of the extended lease term. The Hilton Odawara lease, which was previously accounted for as an operating lease, was recorded as a capital lease asset and obligation of $15 million as of December 31, 2012. See Note 3: “Acquisitions” for discussion regarding the acquisition of the VIE.

Income Taxes
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Income Taxes

Note 11: Income Taxes

At the end of each quarter we estimate the effective tax rate expected to be applied for the full year. The effective income tax rate is determined by the level and composition of pre-tax income or loss, which is subject to federal, foreign, state and local income taxes and reflects income tax expense or benefit resulting from our significant operations outside of the U.S. The lower effective tax rate, as compared to our statutory tax rate, for the nine months ended September 30, 2013, was largely affected by net decreases in unrecognized tax benefits.

Our total unrecognized tax benefits as of September 30, 2014 and December 31, 2013 were $378 million and $435 million, respectively. We had accrued balances of approximately $18 million and $45 million for the payment of interest and penalties as of September 30, 2014 and December 31, 2013, respectively. We recognize interest and penalties accrued related to unrecognized tax benefits in income tax expense. The net decrease to unrecognized tax benefits of $57 million and accrued interest and penalties of $27 million relates to a reduction to uncertain tax positions for calendar years 2006 and 2007 that were effectively settled during the nine months ended September 30, 2014 in connection with the receipt of a Revenue Agent Report from the Internal Revenue Service (“IRS”).

As a result of the expected resolution of examination issues with federal, state and foreign tax authorities, we believe it is reasonably possible that during the next 12 months the amount of unrecognized tax benefits will decrease up to $1 million. Included in the balance of unrecognized tax benefits as of September 30, 2014 and December 31, 2013 were $342 million and $340 million, respectively, associated with positions that, if favorably resolved, would provide a benefit to our effective tax rate.

We file income tax returns, including returns for our subsidiaries, with federal, state and foreign jurisdictions. We are under regular and recurring audit by the IRS and other taxing authorities on open tax positions. The timing of the resolution of tax audits is highly uncertain, as are the amounts, if any, that may ultimately be paid upon such resolution. Changes may result from the conclusion of ongoing audits, appeals or litigation in state, local, federal and foreign tax jurisdictions or from the resolution of various proceedings between the U.S. and foreign tax authorities. We are no longer subject to U.S. federal income tax examination for years through 2004. As of September 30, 2014, we remain subject to federal examinations from 2005-2013, state examinations from 1999-2013 and foreign examinations of our income tax returns for the years 1996 through 2013. With respect to 2005 through October 2007 tax years, the IRS has completed its examination and the disputed assessments proposed by the IRS exam team have now been submitted to the IRS Appeals Office for review, during which we will have the opportunity to defend our position. State income tax returns are generally subject to examination for a period of three to five years after filing the respective return; however, the state effect of any federal tax return changes remains subject to examination by various states for a period generally of up to one year after formal notification to the states. The statute of limitations for the foreign jurisdictions generally ranges from three to ten years after filing the respective tax return.

Income Taxes

Note 19: Income Taxes

Our tax provision (benefit) includes federal, state and foreign income taxes payable. The domestic and foreign components of income before income taxes were as follows:

 

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

U.S. income before tax

   $ 502       $ 435       $ 48   

Foreign income before tax

     196         138         148   
  

 

 

    

 

 

    

 

 

 

Income before income taxes

   $    698       $     573       $     196   
  

 

 

    

 

 

    

 

 

 

The components of our provision (benefit) for income taxes were as follows:

 

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

Current:

  

Federal

   $ 94        $ 71       $ 50    

State

     15          13           

Foreign

     64          57         70    
  

 

 

    

 

 

    

 

 

 

Total current

     173          141         128    
  

 

 

    

 

 

    

 

 

 

Deferred:

  

Federal

     160          63             (190)   

State

             2         (8)   

Foreign

     (99)         8         11    
  

 

 

    

 

 

    

 

 

 

Total deferred

     65          73         (187)   
  

 

 

    

 

 

    

 

 

 

Total provision (benefit) for income taxes

   $      238        $      214       $ (59)   
  

 

 

    

 

 

    

 

 

 

During 2013, based on our consideration of all available positive and negative evidence, we determined that it was more likely than not we would be able to realize the benefit of various foreign deferred tax assets and state net operating losses. Accordingly, as of December 31, 2013, we released valuation allowances of $109 million and $12 million, respectively, against our deferred tax assets related to our foreign deferred tax assets and state net operating losses.

During 2011, based on our consideration of all then-available positive and negative evidence, we believed that it was more likely than not we would be able to realize the benefit of our U.S. federal foreign tax credits. Accordingly, as of December 31, 2011, we released valuation allowances of $182 million against our deferred tax assets related to our U.S. foreign tax credits.

 

Reconciliations of our tax provision at the U.S. statutory rate to the provision (benefit) for income taxes were as follows:

 

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

Statutory U.S. federal income tax provision

   $ 244        $ 201        $ 69    

State income taxes, net of U.S. federal tax benefit

     31          10            

Foreign income tax expense

     74          18          50    

Foreign losses not subject to U.S. tax

     (24)         (24)         (26)   

Tax credits

     (67)         (67)         (58)   

Change in deferred tax asset valuation allowance

     (121)         56               (160)   

Change in basis difference in foreign subsidiaries

     24          18          20    

Provision for uncertain tax positions

     (19)         (2)         35    

Non-deductible equity based compensation

     94          —          —    

Other, net

                       
  

 

 

    

 

 

    

 

 

 

Provision (benefit) for income taxes

   $      238        $      214        $ (59)   
  

 

 

    

 

 

    

 

 

 

Deferred income taxes represent the tax effect of the differences between the book and tax bases of assets and liabilities plus carryforward items. The composition of net deferred tax balances were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

Deferred income tax assets—current

   $ 23        $ 76    

Deferred income tax assets—non-current

     193          104    

Deferred income tax liabilities—current(1)

     —          (1)   

Deferred income tax liabilities—non-current

     (5,053)         (4,948)   
  

 

 

    

 

 

 

Net deferred taxes

   $  (4,837)       $  (4,769)   
  

 

 

    

 

 

 

 

(1) Included in the accounts payable, accrued expenses and other in our consolidated balance sheet.

 

The tax effects of the temporary differences and carryforwards that give rise to our net deferred tax asset (liability) were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

Deferred tax assets:

     

Foreign tax credits

   $ 20        $ 227    

Net operating loss carryforwards

     573          570    

Compensation

     187          245    

Deferred transaction costs

     15          25    

Investments

     56          —    

Other reserves

     90          198    

Capital lease obligations

     133          188    

Self-insurance reserves

     51          44    

System funds

     42          23    

Other tax credits

             48    

Other

     105          72    
  

 

 

    

 

 

 

Total gross deferred tax assets

     1,275          1,640    

Less: valuation allowance

     (503)         (769)   
  

 

 

    

 

 

 

Deferred tax assets

   $ 772        $ 871    
  

 

 

    

 

 

 

Deferred tax liabilities:

     

Property and equipment

   $  (2,075)       $  (2,025)   

Brands

     (1,910)         (1,916)   

Amortizable intangible

     (616)         (659)   

Unrealized foreign currency gains

     (279)         (301)   

Investments

     —          (70)   

Investment in foreign subsidiaries

     (81)         (93)   

Deferred income

     (648)         (576)   
  

 

 

    

 

 

 

Deferred tax liabilities

     (5,609)         (5,640)   
  

 

 

    

 

 

 

Net deferred taxes

   $   (4,837)       $   (4,769)   
  

 

 

    

 

 

 

As of December 31, 2013, we had state and foreign net operating loss carryforwards of $806 million and $2.0 billion, respectively, which resulted in deferred tax assets of $40 million for state jurisdictions and $533 million for foreign jurisdictions. Approximately $59 million of our deferred tax assets as of December 31, 2013 related to net operating loss carryforwards that will expire between 2014 and 2033 with $1 million of that amount expiring in 2014. Approximately $514 million of our deferred tax assets as of December 31, 2013 resulted from net operating loss carryforwards that are not subject to expiration. We believe that it is more likely than not that the benefit from certain state and foreign net operating loss carryforwards will not be realized. In recognition of this assessment, we provided a valuation allowance of $3 million and $440 million as of December 31, 2013 on the deferred tax assets relating to these state and foreign net operating loss carryforwards, respectively. Our valuation allowance decreased $266 million during the year ended December 31, 2013.

 

We classify reserves for tax uncertainties within current income taxes payable and other long-term liabilities in our consolidated balance sheets. Reconciliations of the beginning and ending amount of unrecognized tax benefits were as follows:

 

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

Balance at beginning of year

   $ 469        $ 436        $ 405    

Additions for tax positions related to the prior year

             71          60    

Additions for tax positions related to the current year

                       

Reductions for tax positions for prior years

     (2)         (23)         (6)   

Settlements

     (35)         (14)         (27)   

Lapse of statute of limitations

     (2)         (6)         (2)   

Currency translation adjustment

     (1)         —            
  

 

 

    

 

 

    

 

 

 

Balance at end of year

   $  435        $  469        $  436    
  

 

 

    

 

 

    

 

 

 

The changes to our unrecognized tax benefits during the years ended December 31, 2013 and 2012 were primarily the result of items identified, resolved, and settled as part of our ongoing U.S. federal audit. We recognize interest and penalties accrued related to uncertain tax positions in income tax expense. We accrued approximately $4 million, $8 million, and $6 million during the years ended December 31, 2013, 2012 and 2011, respectively. As of December 31, 2013 and 2012, we had accrued approximately $45 million and $42 million, respectively, for the payment of interest and penalties. Included in the balance of uncertain tax positions as of December 31, 2013 and 2012 were $340 million and $374 million, respectively, associated with positions that if favorably resolved would provide a benefit to our effective tax rate. As a result of the expected resolution of examination issues with federal, state, and foreign tax authorities, we believe it is reasonably possible that during the next 12 months the amount of unrecognized tax benefits will decrease up to $15 million.

We file income tax returns, including returns for our subsidiaries, with federal, state and foreign jurisdictions. We are under regular and recurring audit by the Internal Revenue Service (“IRS”) on open tax positions. The timing of the resolution of tax audits is highly uncertain, as are the amounts, if any, that may ultimately be paid upon such resolution. Changes may result from the conclusion of ongoing audits, appeals or litigation in state, local, federal and foreign tax jurisdictions or from the resolution of various proceedings between the U.S. and foreign tax authorities. We are no longer subject to U.S. federal income tax examination for years through 2004. As of December 31, 2013, we remain subject to federal examinations from 2005-2012, state examinations from 1999-2012 and foreign examinations of our income tax returns for the years 1996 through 2012. During 2009, the IRS commenced its audit of our predecessor’s consolidated U.S. income tax returns for the 2006 through October 2007 tax years. In 2013, we received Notices of Proposed Adjustment from the IRS for such years primarily relating to assertions by the IRS that: (1) certain foreign currency-denominated, intercompany loans from our foreign subsidiaries to certain U.S. subsidiaries should be recharacterized as equity for U.S. federal income tax purposes and constitute deemed dividends from such foreign subsidiaries to our U.S. subsidiaries; (2) in calculating the amount of U.S. taxable income resulting from our Hilton HHonors guest loyalty program, we should not reduce gross income by the estimated costs of future redemptions, but rather such costs would be deductible at the time the points are redeemed; and (3) certain foreign-currency denominated loans issued by one of our Luxembourg subsidiaries whose functional currency is the U.S. dollar, should instead be treated as issued by one of our Belgian subsidiaries whose functional currency is the Euro, and thus foreign currency gains and losses with respect to such loans should have been measured in Euros, instead of U.S. dollars. In total, the proposed adjustments sought by the IRS would result in additional U.S. federal tax owed of approximately $696 million, excluding interest and penalties and potential state income taxes. The portion of this amount related to our Hilton HHonors guest loyalty program would result in a decrease to our future tax liability when the points are redeemed. We disagree with the IRS’s position on each of these assertions and intend to vigorously contest them. We plan to pursue all available administrative remedies, and if we are not able to resolve these matters administratively, we plan to pursue judicial remedies. Accordingly, as of December 31, 2013, no accrual has been made for these amounts.

 

State income tax returns are generally subject to examination for a period of three to five years after filing of the respective return; however, the state impact of any federal tax return changes remains subject to examination by various states for a period generally of up to one year after formal notification to the states. The statute of limitations for the foreign jurisdictions generally ranges from three to ten years after filing the respective tax return.

On September 13, 2013, Treasury and the IRS issued final regulations regarding the deduction and capitalization of expenditures related to tangible property. The final regulations under Internal Revenue Code Sections 162, 167 and 263(a) apply to amounts paid to acquire, produce or improve tangible property, as well as dispositions of such property, and are generally effective for tax years beginning on or after January 1, 2014. We have evaluated these regulations and determined they will not have a material effect on our consolidated results of operations, cash flows or financial position.

Employee Benefit Plans
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Employee Benefit Plans

Note 12: Employee Benefit Plans

We sponsor multiple domestic and international employee benefit plans. Benefits are based upon years of service and compensation.

We have a noncontributory retirement plan in the U.S. (the “Domestic Plan”), which covers certain employees not earning union benefits. This plan was frozen for participant benefit accruals in 1996. We also have multiple employee benefit plans that cover many of our international employees. These include a plan that covers workers in the United Kingdom (the “U.K. Plan”), which was frozen to further accruals in November 2013, and a number of smaller plans that cover workers in various other countries around the world (the “International Plans”).

The components of net periodic pension cost (credit) for the Domestic Plan, U.K. Plan and International Plans were as follows:

 

     Nine Months Ended September 30,  
     2014      2013  
     Domestic
Plan
     U.K.
Plan
     International
Plans
     Domestic
Plan
     U.K.
Plan
     International
Plans
 
     (in millions)  

Service cost

   $       $       $       $       $       $   

Interest cost

     13          13                  13          12            

Expected return on plan assets

     (14)         (19)         (3)         (14)         (17)         (3)   

Amortization of prior service cost (credit)

             —           —                   (2)         —     

Amortization of net loss

                     —                             

Settlement losses

             —           —           —           —             
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net periodic pension cost (credit)

   $ 10        $ (4)       $       $       $ —         $   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

We have an outstanding bond of $76 million under a class action lawsuit against Hilton and the Domestic Plan to support potential future plan contributions from us. We funded an account, which is classified as restricted cash and cash equivalents in our condensed consolidated balance sheets, to support this requirement. If the U.S. District Court for the District of Columbia approves of our compliance with the requirements of the ruling from the class action lawsuit, then the bond may be released in 2014.

Employee Benefit Plans

Note 20: Employee Benefit Plans

We sponsor multiple domestic and international employee benefit plans. Benefits are based upon years of service and compensation.

We have a noncontributory retirement plan in the U.S. (the “Domestic Plan”), which covers certain employees not earning union benefits. This plan was frozen for participant benefit accruals in 1996; therefore, the projected benefit obligation is equal to the accumulated benefit obligation. Plan assets will be used to pay benefits due to employees for service through December 31, 1996. As employees have not accrued additional benefits since that time, we do not utilize salary or pension inflation assumptions in calculating our benefit obligation for the Domestic Plan. The annual measurement date for the Domestic Plan is December 31.

We also have multiple employee benefit plans that cover many of our international employees. These include a plan that covers workers in the United Kingdom (the “U.K. Plan”) which was frozen to further accruals on November 30, 2013, and a number of smaller plans that cover workers in various countries around the world (the “International Plans”). The annual measurement date for all of these plans is December 31.

We are required to recognize the funded status (the difference between the fair value of plan assets and the projected benefit obligations) of our pension plans in our consolidated balance sheets with a corresponding adjustment to accumulated other comprehensive loss, net of tax.

The following table presents the projected benefit obligation, fair value of plan assets, the funded status and the accumulated benefit obligation for the Domestic Plan, the U.K. Plan and the International Plans:

 

     Domestic Plan      U.K. Plan      International Plans  
         2013              2012              2013              2012              2013              2012      
                   (in millions)         

Change in Projected Benefit Obligation:

                 

Benefit obligation at beginning of year

   $ 491        $ 449        $ 365        $ 312        $ 125        $ 119    

Service cost

     —          —                                    

Interest cost

     18          21          16          16                    

Employee contributions

     —          —                          —          —    

Actuarial loss (gain)

     (51)         43          (3)         28          (6)           

Settlements and curtailments

     —          —          —          —          (2)         —    

Effect of foreign exchange rates

     —          —                  14          (4)         (2)   

Benefits paid

     (45)         (22)         (13)         (12)         (8)         (10)   

Other(1)

     11          —          —          —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Benefit obligation at end of year

   $ 424        $ 491        $ 380        $ 365        $ 112        $ 125    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Change in Plan Assets:

                 

Fair value of plan assets at beginning of year

   $ 273        $ 249        $ 363        $ 318        $ 85        $ 83    

Actual return on plan assets, net of expenses

     32          31          20          34                    

Employer contribution

     40          15                                  10    

Employee contributions

     —          —                          —          —    

Effect of foreign exchange rates

     —          —                  14          (4)         (2)   

Benefits paid

     (45)         (22)         (13)         (12)         (7)         (10)   

Settlements

     —          —          —          —          (2)         —    

Other(1)

     20          —          —          —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Fair value of plan assets at end of year

     320          273          385          363          87          85    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Funded status at end of year (overfunded/(underfunded))

     (104)         (218)                 (2)         (25)         (40)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Accumulated benefit obligation

   $    424        $   491        $  380        $  365        $  112        $  125    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Includes projected benefit obligations of $11 million and plan assets of $20 million related to certain employees of former Hilton affiliates that were assumed during the year ended December 31, 2013.

Amounts recognized in the consolidated balance sheets consisted of:

 

     Domestic Plan      U.K. Plan      International Plans  
         2013              2012              2013              2012              2013              2012      
     (in millions)  

Non-current asset

   $       $ —        $       $ —        $       $   

Current liability

     —          —            —            —          (1)         (1)   

Non-current liability

     (106)         (218)         (3)         (2)         (29)         (42)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net amount recognized

   $  (104)       $  (218)       $       $ (2)       $  (25)       $  (40)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Amounts recognized in accumulated other comprehensive loss consisted of:

 

     Domestic Plan      U.K. Plan      International Plans  
       2013          2012          2011          2013          2012          2011          2013          2012          2011    
     (in millions)  

Net actuarial loss (gain)

   $  (67)       $  29        $       $  —        $  17        $  21        $  (12)       $   9        $   2    

Prior service cost (credit)

     (12)         (4)         (4)                 16                  —          —          (4)   

Amortization of net loss (gain)

     (3)                 (4)         (4)         (3)         (1)         (2)         (1)         (2)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net amount recognized

   $ (82)       $ 26        $  —        $ (1)       $ 30        $ 23        $ (14)       $       $ (4)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

The estimated unrecognized net losses and prior service cost (credit) that will be amortized into net periodic pension cost over the next fiscal year were as follows:

 

    Domestic Plan     U.K. Plan     International Plans  
    2013     2012     2011     2013     2012     2011     2013     2012     2011  
    (in millions)  

Unrecognized net losses

  $      $      $      $      $      $      $      $      $   

Unrecognized prior service cost (credit)

                         —            (3)        (16)        —         —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Amount unrecognized

  $      5       $      8       $   10       $    1       $    1       $    (13)      $     1       $     1       $     1    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

The net periodic pension cost was as follows:

 

     Domestic Plan      U.K. Plan      International Plans  
     2013      2012      2011      2013      2012      2011      2013      2012      2011  
     (in millions)  

Service cost

   $       $ —        $ —        $       $       $       $       $       $   

Interest cost

     17          21          23          17          16          17                            

Expected return on plan assets

      (18)          (17)          (17)          (23)          (21)          (21)          (4)          (4)          (4)   

Amortization of prior service cost (credit)

                             (3)         (16)         (3)         —          —          —    

Amortization of net loss (gain)

             (1)                                                           
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net periodic pension cost (credit)

     10                  14          —          (13)         (2)                           

Settlement losses

     —          —          —          —          —          —          —          —            
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net pension cost (credit)

   $    10        $       $    14        $    —        $    (13)       $    (2)       $    5        $    6        $    7    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

The weighted-average assumptions used to determine benefit obligations were as follows:

 

     Domestic Plan      U.K. Plan     International Plans  
         2013              2012              2013             2012             2013             2012      

Discount rate

     4.7%         3.9%         4.7     4.7     4.3     3.8

Salary inflation

       N/A              N/A            1.9     1.9     2.3     2.2

Pension inflation

     N/A            N/A            3.0     2.8     1.9     2.0

The weighted-average assumptions used to determine net periodic pension cost (credit) were as follows:

 

    Domestic Plan     U.K. Plan     International Plans  
       2013          2012         2011         2013          2012           2011          2013         2012         2011    

Discount rate

    3.9%        4.9%        5.4%        4.7%        5.0%           5.7%           3.8%           4.6%          5.0%   

Expected return on plan assets

    7.5%        6.8%        6.8%        6.5%        6.5%        6.5%        6.3%        6.2%        6.2%   

Salary inflation

      N/A             N/A             N/A           1.9%        1.7%        2.6%        2.2%        2.8%        3.3%   

Pension inflation

    N/A           N/A           N/A           2.8%        2.9%        3.0%        2.0%        1.8%        1.8%   

The investment objectives for the various plans are preservation of capital, current income and long-term growth of capital. All plan assets are managed by outside investment managers and do not include investments in Company stock. Asset allocations are reviewed periodically.

Expected long-term returns on plan assets are determined using historical performance for debt and equity securities held by our plans, actual performance of plan assets and current and expected market conditions. Expected returns are formulated based on the target asset allocation. The target asset allocation for the Domestic Plan as a percentage of total plan assets as of December 31, 2013 and 2012 was 60 percent and 50 percent, respectively, in funds that invest in equity securities, and 40 percent and 50 percent, respectively, in funds that invest in debt securities. The U.K. Plan and International Plans target asset allocation as a percentage of total plan assets as of December 31, 2013 was 65 percent in funds that invest in equity and debt securities and 35 percent in bond funds. As of December 31, 2012, the U.K. Plan and International Plans target asset allocations as a percentage of total plan assets was 36 percent in funds that invest in equity securities, 50 percent in funds that invest in debt securities, and 14 percent in property funds.

 

The following table presents the fair value hierarchy of total plan assets measured at fair value by asset category. The fair value of Level 2 assets were based on available market pricing information of similar financial instruments.

 

     December 31, 2013  
     Domestic Plan      U.K. Plan      International Plans  
     Level 1      Level 2      Level 3      Level 1      Level 2      Level 3      Level 1      Level 2      Level 3  
     (in millions)  

Cash and cash equivalents

   $    —       $       $       $       $       $       $ 10       $       $   

Equity funds

     70                                                 5         9           

Debt securities

     10         97                                                           

Bond funds

                                                             16           

Real estate funds

                                                             1           

Common collective trusts

             143                         385                         45           

Other

                                                             1           
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 80       $  240       $    —       $    —       $  385       $    —       $    15       $    72       $    —   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     December 31, 2012  
     Domestic Plan      U.K. Plan      International Plans  
     Level 1      Level 2      Level 3      Level 1      Level 2      Level 3      Level 1      Level 2      Level 3  
     (in millions)  

Cash and cash equivalents

   $    —       $       $       $       $       $       $ 12       $       $   

Equity funds

     54                                                 4         9           

Debt securities

     16         103                                                           

Bond funds

                                                             15           

Common collective trusts

             100                         363                         44           

Other

                                                             1           
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 70       $  203       $    —       $    —       $  363       $    —       $    16       $    69       $    —   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

We expect to contribute approximately $9 million, $1 million and $6 million to the Domestic Plan, the U.K. Plan and the International Plans, respectively, in 2014.

As of December 31, 2013, the benefits expected to be paid in the next five years and in the aggregate for the five years thereafter were as follows:

 

     Domestic Plan      U.K. Plan      International
Plans
 
     (in millions)  

Year

        

2014

   $ 87       $ 14       $ 11   

2015

     26         14         9   

2016

     25         14         9   

2017

     25         14         8   

2018

     25         15         8   

2019 - 2023

     125         76         43   
  

 

 

    

 

 

    

 

 

 
   $  313       $  147       $    88   
  

 

 

    

 

 

    

 

 

 

Domestic Plan

As of January 1, 2007, the frozen Domestic Plan and plans maintained for certain domestic hotels currently or formerly managed by us were merged into a multiple employer plan. As of December 31, 2013, the multiple employer plan had combined assets of $342 million and a projected benefit obligation of $446 million.

 

A class action lawsuit was filed in 1998 against Hilton and the Domestic Plan claiming that the Domestic Plan did not calculate benefit obligations in accordance with the terms of the plan nor were vesting rules followed in accordance with the plan. In May 2009, the U.S. District Court for the District of Columbia (the “District Court”) found in favor of the plaintiff in a summary judgment and required that we and the plaintiff enter into mediation to reach agreement on the amounts necessary for recognition of service and benefits for plan participants and in August 2011, the District Court issued a final order with respect to this lawsuit. We recorded an increase to our minimum additional pension obligation of $109 million as of December 31, 2012 to reflect the expected increase in benefit obligation relating to this case. The additional obligation will be recognized as additional pension expense, which will be amortized over the average remaining life expectancy of the plan participants as determined by our actuaries, with the unamortized portion of the obligation having been recognized in accumulated other comprehensive loss as an adjustment of the pension liability. As of December 31, 2013, the remaining unpaid projected benefit obligation related to this case was $86 million.

In November 2013, the District Court issued final administrative orders in regard to the lawsuit, which allowed Hilton to adopt an amendment to the Domestic Plan required by the Court. The adoption of the amendment required us to make a contribution of $31 million in November 2013, prior to the amendment to comply with minimum legal funding obligations of the Domestic Plan. We expect to commence benefit payments under the new plan document in early 2014, in accordance with the requirements of the court order. In February 2012, the District Court ordered us to post bond of $76 million under the litigation to support potential future plan contributions. We funded an account, which is classified as restricted cash and cash equivalents, with this amount to support this requirement, and expect that the bond will be released upon the commencement of benefit payments being made under the amended plan document in 2014.

U.K. Plan

In March 2012, we, along with the trustees of the U.K. Plan, adopted an agreement to freeze the defined benefit plan for enrollment to new employees effective immediately, and to freeze the accrual of benefits to existing employees, which was implemented on November 30, 2013. A defined contribution plan has been put in place for the affected employees. We recognized an acceleration of prior service credit of $13 million related to the adoption of this agreement during the year ended December 31, 2012.

In May 2011, we, along with the trustees for the U.K. Plan, reached a tentative agreement on the funded status and security for the U.K. Plan. This agreement extended our GBP 15 million guarantee (equivalent to $25 million as of December 31, 2013) to March 2014 and included a one-time voluntary cash contribution of GBP 5 million (equivalent to approximately $8 million) by us to the plan, which was funded during the year ended December 31, 2011.

Other Benefit Plans

We also have plans covering qualifying employees and non-officer directors (the “Supplemental Plans”). Benefits for the Supplemental Plans are based upon years of service and compensation. Since December 31, 1996, employees and non-officer directors have not accrued additional benefits under the Supplemental Plans. These plans are self-funded by us and, therefore, have no plan assets isolated to pay benefits due to employees. As of December 31, 2013 and 2012, these plans had benefit obligations of $14 million and $13 million, respectively, which were fully accrued in our consolidated balance sheets. Expense incurred under the Supplemental Plans for the years ended December 31, 2013, 2012 and 2011 was not significant.

We have various employee defined contribution investment plans whereby we contribute matching percentages of employee contributions. The aggregate expense under these plans totaled $20 million for the year ended December 31, 2013 and $18 million for each of the years ended December 31, 2012 and 2011.

 

Multi-Employer Pension Plans

Certain employees are covered by union sponsored multi-employer pension plans pursuant to agreements between us and various unions. Our participation in these plans is outlined in the table below:

 

     EIN/ Pension
Plan Number
     Pension Protection
Act Zone Status
     Contributions  
          

Pension Fund

      2013      2012      2013      2012      2011  
                          (in millions)  

New York Hotel Trades Council & Hotel Association of New York City, Inc. Pension Fund

     13-1764242         Pending         Yellow       $ 14       $ 13       $ 13   

Other plans

              12         11         9   
           

 

 

    

 

 

    

 

 

 

Total contributions

            $  26       $  24       $  22   
           

 

 

    

 

 

    

 

 

 

Eligible employees at our owned hotels in New York City participate in the New York Hotel Trades Council and Hotel Association of New York City, Inc. Pension Fund (“New York Pension Fund”). Our contributions are based on a percentage of all union employee wages as dictated by the collective bargaining agreement that expires on June 30, 2019. Our contributions exceeded 5 percent of the total contributions to the New York Pension Fund in 2012, as indicated in the New York Pension Fund’s Annual Return/Report of Employee Benefit Plan on IRS Form 5500 for the year ended December 31, 2012. The New York Pension Fund has implemented a funding improvement plan, and we have not paid a surcharge.

Share-Based Compensation
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Share-Based Compensation

Note 13: Share-Based Compensation

2013 Omnibus Incentive Plan

In February 2014, we issued time-vesting restricted stock units (“RSUs”), nonqualified stock options (“options”) and performance-vesting restricted stock units (“performance shares”) under the 2013 Omnibus Incentive Plan.

We recorded share-based compensation expense for awards granted under the 2013 Omnibus Incentive Plan of $60 million during the nine months ended September 30, 2014, which includes amounts reimbursed by hotel owners. As of September 30, 2014, unrecognized compensation costs for unvested awards was approximately $122 million, which is expected to be recognized over a weighted-average period of 2.0 years on a straight-line basis.

 

As of September 30, 2014, there were 72,595,341 shares of common stock available for future issuance under the 2013 Omnibus Incentive Plan.

Restricted Stock Units

During the nine months ended September 30, 2014, we issued 7,066,153 RSUs with a grant-date fair value of $21.53. The RSUs vest in annual installments over two or three years from the date of grant, subject to the individual’s continued employment through the applicable vesting date. Vested RSUs generally will be settled for our common stock, with the exception of certain awards that will be settled in cash.

Stock Options

During the nine months ended September 30, 2014, we issued 1,003,591 options with an exercise price of $21.53. As of September 30, 2014, no options were exercisable. The options vest over three years in equal annual installments from the date of grant, subject to the individual’s continued employment through the applicable vesting date, and will terminate 10 years from the date of grant or earlier if the individual’s service terminates. The exercise price is equal to the closing price of the Company’s common stock on the date of grant. The grant date fair value of each of these option grants was $7.58, which was determined using the Black-Scholes-Merton option-pricing model.

Performance Shares

During the nine months ended September 30, 2014, we issued 1,078,908 performance shares. The performance shares are settled at the end of the three-year performance period with 50 percent of the shares subject to achievement based on a measure of (1) the Company’s total shareholder return relative to the total shareholder returns of members of a peer company group (“relative shareholder return”) and the other 50 percent of the shares subject to achievement based on (2) the Company’s earnings before interest expense, taxes and depreciation and amortization (“EBITDA”) compound annual growth rate (“EBITDA CAGR”). The total number of performance shares that vest based on each performance measure (relative shareholder return and EBITDA CAGR) is based on an achievement factor that in each case, ranges from a zero to 200 percent payout.

The grant date fair value of each of the performance shares based on relative shareholder return was $23.56, which was determined using a Monte Carlo simulation valuation model. The grant-date fair value of each of the performance shares based on our EBITDA CAGR was $21.53. For these shares, we determined that the performance condition is probable of achievement and during the nine months ended September 30, 2014, we recognized compensation expense over the vesting period at the target amount of 100 percent. As of September 30, 2014, 1,060,464 performance shares were outstanding with a remaining life of 2.3 years.

Promote Plan

Prior to December 2013, certain members of our senior management team participated in an executive compensation plan (the “Promote plan”). Equity awards under the Promote plan were exchanged for restricted shares of common stock in connection with our initial public offering and vest as follows: (1) 40 percent vested immediately; (2) 40 percent of each award will vest on December 11, 2014, contingent upon employment through that date; and (3) 20 percent of each award will vest on the date that The Blackstone Group L.P. and its affiliates (“Blackstone” or “our Sponsor”) cease to own 50 percent or more of the shares of the Company, contingent on employment through that date.

In March 2014, the vesting conditions of these restricted shares of common stock for certain participants were modified such that the remaining 60 percent of each participant’s award vested in June 2014. As a result of this modification, we recorded incremental compensation expense of $7 million during the nine months ended September 30, 2014. During the nine months ended September 30, 2014, total compensation expense under the Promote plan was $25 million, and unrecognized compensation expense as of September 30, 2014 was $72 million, including $4 million that is expected to be recognized through December 2014 and $68 million that is subject to the achievement of a performance condition. No expense was recognized for the portion of the awards that are subject to the achievement of a performance condition in the form of a liquidity event, since such an event was not probable as of September 30, 2014.

We recorded compensation expense related to the Promote plan of $5 million during the nine months ended September 30, 2013.

Cash-based Long-term Incentive Plan

In February 2014, we terminated a cash-based, long-term incentive plan and reversed the associated accruals resulting in a reduction of compensation expense of approximately $25 million for the nine months ended September 30, 2014.

Share-Based Compensation

Note 21: Share-Based Compensation

Promote Plan

Prior to December 11, 2013, certain members of our senior management team participated in an executive compensation plan (“the Promote plan”). The Promote plan provided for the grant of a Tier I liability award, or an alternative cash payment in lieu thereof, and a Tier II equity award. The Tier I liability award provided the participants the right to share in 2.75 percent of the equity value of Hilton up to $8.352 billion (or $230 million) based on the achievement of certain service and performance conditions. The majority of these payments were to be made in three installments for most plan participants. The Tier II equity awards allowed participants to share in Hilton’s equity growth above $8.352 billion and were also subject to service and performance conditions. As the vesting of a portion of the Tier I liability awards and all of the Tier II equity awards were previously subject to the achievement of a performance condition in the form of a liquidity event that was not probable, no expense was recognized related to these awards prior to their modification on December 11, 2013.

On December 11, 2013, in connection with our IPO, the Tier I liability awards of $52 million that remained outstanding became fully vested and were paid within 30 days. Additionally, the Tier II equity awards that remained outstanding were exchanged for restricted shares of common stock of equivalent economic value that vest as follows:

 

    40 percent of each award vested on December 11, 2013, the pricing date of our IPO;

 

    40 percent of each award will vest on December 11, 2014, the first anniversary of the pricing date of our IPO, contingent upon continued employment through that date; and

 

    20 percent of each award will vest on the date that our Sponsor and its affiliates cease to own 50 percent or more of the shares of the Company, contingent upon continued employment through that date.

 

The following is a summary of the Tier II equity award activity during the year ended December 31, 2013:

 

     Tier II Units  

Balance as of December 31, 2012

     229,047,118    

Granted

     8,628,050    

Forfeited

     (13,810,744)   

Exchanged for restricted shares of common stock

     (223,864,424)   
  

 

 

 

Balance as of December 31, 2013

     —    
  

 

 

 

The following table sets forth the number of Tier II equity units surrendered for shares of common stock on December 11, 2013:

 

     Tier II Units      Shares of
Common
Stock
 

Tier II awards exchanged for vested shares of common stock

     89,545,770          7,463,839    

Tier II awards exchanged for unvested shares of common stock

     134,318,654          11,195,791    
  

 

 

    

 

 

 

Total Tier II awards exchanged for vested shares and unvested restricted shares of common stock

     223,864,424          18,659,630    
  

 

 

    

 

 

 

The grant date fair value was determined to be $20.00 per share based on the price of the common stock sold in our IPO. The fair value of the vested shares was immediately recognized in December 2013. The fair value of the unvested shares subject only to service conditions is recognized on a straight-line basis over the requisite service period for the entire award.

As a result of the modification, we recorded incremental share-based compensation expense of $306 million during the year ended December 31, 2013.

Cash Retention Award Offer

In November 2012, we offered certain members of our senior management team the opportunity to participate in a new cash retention award in exchange for cancellation of their participation in the Promote plan. There were 13 participants who accepted the cash retention award offer. The cash retention award was paid in two installments in December 2012 and December 2013, respectively.

Payments on Share-Based Compensation Plans

Total payments under the Promote plan, including cash retention awards, during the years ended December 31, 2013 and 2012 were $65 million and $95 million, respectively. No payments were made during the year ended December 31, 2011.

A number of participants in the Promote plan terminated their employment with us during the year ended December 31, 2012. We made separation payments related to the participants’ vested portion of the Promote plan totaling $6 million during the year ended December 31, 2012. One participant terminated their employment with us during the year ended December 31, 2013, but none of the separation payments were considered to be attributable to the participants’ vested portion of the Promote plan.

Summary of Share-Based Compensation Expense and Related Activity

Total compensation expense related to the Promote plan, including cash retention awards, and restricted shares of our common stock awarded in exchange for the Tier II equity awards was $313 million, $50 million and $19 million for the years ended December 31, 2013, 2012 and 2011, respectively. As of December 31, 2013, there was $95 million of unrecognized compensation expense related to the unvested restricted shares of common stock resulting from the Promote plan conversion, $23 million of which is expected to be recognized through December 2014 and $72 million of which is subject to the achievement of a performance condition, which is currently not considered to be probable of being met.

As of December 31, 2013, there was $4 million of liability awards outstanding. The liability awards were recorded at an estimated fair value of $18 million as of December 31, 2012, $13 million of which was included in accounts payable, accrued expenses and other in our consolidated balance sheet.

2013 Omnibus Incentive Plan

We reserved 80,000,000 shares of common stock for issuance under our new 2013 Omnibus Incentive Plan. The 2013 Omnibus Incentive Plan is administered by the compensation committee of the Board of Directors and enables us to grant equity incentive awards to eligible employees, officers, directors, consultants or advisors in the form of stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based and performance compensation awards. If an award under the 2013 Omnibus Incentive Plan terminates, lapses or is settled without the payment of the full number of shares subject to the award, the undelivered shares may be granted again under the 2013 Omnibus Incentive Plan.

On December 11, 2013, we granted 19,500 restricted stock units (“RSUs”) to three independent directors under the 2013 Omnibus Incentive Plan (the “2013 Director Grant”) as part of our regular annual compensation of our independent directors. The 2013 Director Grant vests in three equal installments on the first, second and third anniversaries of the grant date. The grant date fair value was $20.00 per RSU based on the price of common shares sold in our IPO on the grant date. The fair value of the RSUs will be recognized on a straight-line basis over the requisite service period for the entire award. Less than $1 million of compensation expense was recognized during the year ended December 31, 2013 related to the 2013 Director Grant. As of December 31, 2013, unrecognized compensation expense for the 2013 Director Grant was less than $1 million.

As of December 31, 2013, there were 79,980,500 shares of common stock available for future issuance under the 2013 Omnibus Incentive Plan.

Earnings Per Share
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Earnings Per Share

Note 14: Earnings Per Share

The following table presents the calculation of basic and diluted earnings per share (“EPS”):

 

     Nine Months Ended September 30,  
           2014                  2013        
     (in millions, except per share
amounts)
 

Basic EPS:

     

Numerator:

     

Net income attributable to Hilton stockholders

   $     515        $     389    

Denominator:

     

Weighted average shares outstanding

     985          921    
  

 

 

    

 

 

 

Basic EPS

   $ 0.52        $ 0.42    
  

 

 

    

 

 

 

Diluted EPS:

     

Numerator:

     

Net income attributable to Hilton stockholders

   $ 515        $ 389    

Denominator:

     

Weighted average shares outstanding

     986          921    
  

 

 

    

 

 

 

Diluted EPS

   $ 0.52        $ 0.42    
  

 

 

    

 

 

 

Approximately 1 million share-based awards were excluded from the computation of diluted EPS for the nine months ended September 30, 2014 because their effect would have been anti-dilutive under the treasury stock method.

Earnings Per Share

Note 22 : Earnings Per Share

For periods prior to the IPO, we used the number of shares from our 9,205,128-for-1 stock split to compute earnings per share (“EPS”). The following table presents the calculation of basic and diluted EPS for the periods presented:

 

     December 31,  
     2013      2012      2011  
     (in millions, except per share amounts)  

Basic EPS:

        

Numerator:

        

Net income attributable to Hilton stockholders

   $ 415       $ 352       $ 253   

Denominator:

        

Weighted average shares outstanding

     923         921         921   
  

 

 

    

 

 

    

 

 

 

Basic EPS

   $   0.45       $   0.38       $   0.27   
  

 

 

    

 

 

    

 

 

 

Diluted EPS:

        

Numerator:

        

Net income attributable to Hilton stockholders

   $ 415       $ 352       $ 253   

Denominator:

        

Weighted average shares outstanding(1)

     923         921         921   
  

 

 

    

 

 

    

 

 

 

Diluted EPS

   $ 0.45       $ 0.38       $ 0.27   
  

 

 

    

 

 

    

 

 

 

 

(1)  Includes the 19,500 RSUs granted on December 11, 2013 under the 2013 Director Grant.
Accumulated Other Comprehensive Loss
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Accumulated Other Comprehensive Loss

Note 15: Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of taxes, were as follows:

 

     Currency
Translation
Adjustment(1)
     Pension
Liability
Adjustment
     Cash Flow
Hedge
Adjustment
     Total  
     (in millions)  

Balance as of December 31, 2013

   $ (136)       $ (134)       $       $ (264)   

Other comprehensive loss before reclassifications

     (129)         —          (4)         (133)   

Amounts reclassified from accumulated other comprehensive loss

     (4)                 —          (1)   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net current period other comprehensive income (loss)

     (133)                 (4)         (134)   

Equity contribution to consolidated variable interest entities

     (6)         —          —          (6)   
  

 

 

    

 

 

    

 

 

    

 

 

 

Balance as of September 30, 2014

   $   (275)       $   (131)       $   2        $   (404)   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     Currency
Translation
Adjustment(1)
     Pension
Liability
Adjustment
     Total  
     (in millions)  

Balance as of December 31, 2012

   $ (212)       $ (194)       $ (406)   

Other comprehensive income (loss) before reclassifications

     (21)                 (15)   

Amounts reclassified from accumulated other comprehensive loss

     —                    
  

 

 

    

 

 

    

 

 

 

Net current period other comprehensive income (loss)

     (21)         10          (11)   
  

 

 

    

 

 

    

 

 

 

Balance as of September 30, 2013

   $   (233)       $  (184)       $  (417)   
  

 

 

    

 

 

    

 

 

 

 

(1)  Includes net investment hedges.

The following table presents additional information about reclassifications out of accumulated other comprehensive loss:

 

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

Currency translation adjustment:

     

Sale and liquidation of foreign assets(1)

   $  3        $ (1)   

Gains on net investment hedges(2)

               

Tax benefit(3)(4)

     —          —    
  

 

 

    

 

 

 

Total currency translation adjustment reclassifications for the period, net of taxes

             —    
  

 

 

    

 

 

 

Pension liability adjustment:

     

Amortization of prior service cost(5)

     (3)         (1)   

Amortization of net loss(5)

     (2)         (6)   

Tax benefit(3)

               
     

Total pension liability adjustment reclassifications for the period, net of taxes

     (3)         (4)   
  

 

 

    

 

 

 

Total reclassifications for the period, net of tax

   $           1        $           (4)   
  

 

 

    

 

 

 

 

(1)  Reclassified out of accumulated other comprehensive loss to other gain, net in our condensed consolidated statements of operations. Amounts in parentheses indicate a loss in our condensed consolidated statements of operations.
(2)  Reclassified out of accumulated other comprehensive loss to gain (loss) on foreign currency transactions in our condensed consolidated statements of operations.
(3)  Reclassified out of accumulated other comprehensive loss to income tax expense in our condensed consolidated statements of operations.
(4)  The respective tax benefit was less than $1 million for the nine months ended September 30, 2014 and 2013.
(5)  Reclassified out of accumulated other comprehensive loss to general, administrative and other in the condensed consolidated statements of operations. These amounts were included in the computation of net periodic pension cost (credit). See Note 12: “Employee Benefit Plans” for additional information. Amounts in parentheses indicate a loss in our condensed consolidated statements of operations.
Accumulated Other Comprehensive Loss

Note 23: Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of taxes, were as follows:

 

     Currency
Translation
Adjustment(1)
     Pension
Liability
Adjustment
     Cash Flow
Hedge
Adjustment
     Total  
     (in millions)  

Balance as of December 31, 2010

     $  (257)         $  (140)         $  (1)         $  (398)   

Other comprehensive loss before reclassifications

     (79)         (21)         —          (100)   

Amounts reclassified from accumulated other comprehensive loss

     —                            
  

 

 

    

 

 

    

 

 

    

 

 

 

Net current period other comprehensive income (loss)

     (79)         (13)                 (91)   
  

 

 

    

 

 

    

 

 

    

 

 

 

Balance as of December 31, 2011

     (336)         (153)         —          (489)   

Other comprehensive income (loss) before reclassifications

     124          (35)         —          89    

Amounts reclassified from accumulated other comprehensive loss

     —          (6)         —          (6)   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net current period other comprehensive income (loss)

     124          (41)         —          83    
  

 

 

    

 

 

    

 

 

    

 

 

 

Balance as of December 31, 2012

     (212)         (194)         —          (406)   

Other comprehensive income before reclassifications

     67          54                  127    

Amounts reclassified from accumulated other comprehensive loss

                     —          15    
  

 

 

    

 

 

    

 

 

    

 

 

 

Net current period other comprehensive income

     76          60                  142    
  

 

 

    

 

 

    

 

 

    

 

 

 

Balance as of December 31, 2013

     $  (136)         $  (134)         $  6          $  (264)   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)  Includes net investment hedges.

The following table presents additional information about reclassifications out of accumulated other comprehensive loss for the year ended December 31, 2013:

 

     (in millions)  

Currency translation adjustment:

  

Sale and liquidation of foreign assets(1)

   $ (15)   

Gains on net investment hedges(2)

       

Tax benefit(3)

       
  

 

 

 

Total currency translation adjustment reclassifications for the period, net of taxes

     (9)   
  

 

 

 

Pension liability adjustment:

  

Amortization of prior service cost(4)

     (1)   

Amortization of net loss(4)

     (8)   

Tax benefit(3)

       
  

 

 

 

Total pension liability adjustment reclassifications for the period, net of taxes

     (6)   
  

 

 

 

Total reclassifications for the period, net of tax

   $ (15)   
  

 

 

 

 

(1)  Reclassified out of accumulated other comprehensive loss to other gain, net in the consolidated statement of operations. Amounts in parentheses indicate a loss in our consolidated statement of operations.
(2)  Reclassified out of accumulated other comprehensive loss to gain (loss) on foreign currency transactions in our consolidated statement of operations.
(3) Reclassified out of accumulated other comprehensive loss to income tax benefit (expense) in our consolidated statement of operations.
(4)  Reclassified out of accumulated other comprehensive loss to general, administrative and other in the consolidated statement of operations. These amounts were included in the computation of net periodic pension cost. See Note 20: “Employee Benefit Plans” for additional information. Amounts in parentheses indicate a loss in our consolidated statement of operations.
Business Segments
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Business Segments

Note 16: Business Segments

We are a diversified hospitality company with operations organized in three distinct operating segments: ownership, management and franchise and timeshare. Each segment is managed separately because of its distinct economic characteristics.

The ownership segment includes all hotels that we wholly own or lease, as well as consolidated non-wholly owned entities and consolidated VIEs. As of September 30, 2014, this segment included 122 wholly owned and leased hotels and resorts, three non-wholly owned hotel properties and three hotels of consolidated VIEs. While we do not include equity in earnings (losses) from unconsolidated affiliates in our measures of segment revenues, we manage these investments in our ownership segment. Our unconsolidated affiliates are primarily investments in entities that owned or leased 16 hotels and one condominium management company as of September 30, 2014.

The management and franchise segment includes all of the hotels we manage for third-party owners, as well as all franchised hotels operated or managed by someone other than us under one of our proprietary brand names of our brand portfolio. As of September 30, 2014, this segment included 524 managed hotels and 3,552 franchised hotels. This segment also earns fees for managing properties in our ownership and timeshare segments.

The timeshare segment includes the development of vacation ownership clubs and resorts, marketing and selling of timeshare intervals, providing timeshare customer financing and resort operations. This segment also provides assistance to third-party developers in selling their timeshare inventory. As of September 30, 2014, this segment included 44 timeshare properties.

Corporate and other represents revenues and related operating expenses generated by the incidental support of hotel operations for owned, leased, managed and franchised hotels and other rental income, as well as corporate assets and related expenditures.

The performance of our operating segments is evaluated primarily based on Adjusted EBITDA. We define Adjusted EBITDA as EBITDA, further adjusted to exclude certain items, including, but not limited to, gains, losses and expenses in connection with: (i) asset dispositions for both consolidated and unconsolidated investments; (ii) foreign currency transactions; (iii) debt restructurings/retirements; (iv) non-cash impairment losses; (v) furniture, fixtures and equipment (“FF&E”) replacement reserves required under certain lease agreements; (vi) reorganization costs; (vii) share-based and certain other compensation expenses prior to and in connection with our initial public offering; (viii) severance, relocation and other expenses; and (ix) other items.

 

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 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            

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 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 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   
  

 

 

    

 

 

 
Business Segments

Note 24: Business Segments

We are a diversified hospitality company with operations organized in three distinct operating segments: ownership, management and franchise and timeshare. Each segment is managed separately because of its distinct economic characteristics.

The ownership segment includes all hotels that we wholly own or lease, as well as consolidated non-wholly owned entities and consolidated VIEs. As of December 31, 2013, this segment included 118 wholly owned and leased hotels and resorts, three non-wholly owned hotel properties and three hotels of consolidated VIEs. While we do not include equity in earnings (losses) from unconsolidated affiliates in our measures of segment revenues, we manage these investments in our ownership segment.

Our unconsolidated affiliates are primarily investments in entities that owned or leased 30 hotels and one condominium management company as of December 31, 2013.

The management and franchise segment includes all of the hotels we manage for third-party owners, as well as all franchised hotels operated or managed by someone other than us under one of our proprietary brand names of our brand portfolio. As of December 31, 2013, this segment included 498 managed hotels and 3,420 franchised hotels. This segment also earns fees for managing properties in our ownership segment.

The timeshare segment includes the development of vacation ownership clubs and resorts, marketing and selling of timeshare intervals, providing timeshare customer financing and resort operations. This segment also provides assistance to third-party developers in selling their timeshare inventory. As of December 31, 2013, this segment included 42 timeshare properties.

Corporate and other represents revenues and related operating expenses generated by the incidental support of hotel operations for owned, leased, managed and franchised hotels and other rental income, as well as corporate assets and related expenditures.

The performance of our operating segments is evaluated primarily on Adjusted earnings before interest expense, taxes, depreciation and amortization (“EBITDA”), which should not be considered an alternative to net income (loss) or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. EBITDA, presented herein, is a non-GAAP financial measure that reflects net income attributable to Hilton stockholders, excluding interest expense, a provision for income taxes and depreciation and amortization. We define Adjusted EBITDA as EBITDA, further adjusted to exclude certain items, including, but not limited to gains, losses and expenses in connection with: (i) asset dispositions for both consolidated and unconsolidated investments; (ii) foreign currency transactions; (iii) debt restructurings/retirements; (iv) non-cash impairment losses; (v) furniture fixtures, and equipment (“FF&E”) replacement reserves required under certain lease agreements; (vi) reorganization costs; (vii) share-based and certain other compensation expenses prior to and in connection with our IPO; (viii) severance, relocation and other expenses; and (ix) other items.

 

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.

 

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

             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.

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   
  

 

 

    

 

 

 

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   
  

 

 

    

 

 

    

 

 

 

 

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   
  

 

 

    

 

 

    

 

 

 

Other than the U.S., there were no countries that individually represented more than 10 percent of total revenues for the years ended December 31, 2013, 2012 and 2011.

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   
  

 

 

    

 

 

 

Other than the U.S. there were no countries that individually represented over 10 percent of total property and equipment, net as of December 31, 2013 and 2012.

Commitments and Contingencies
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Commitments and Contingencies

Note 17: Commitments and Contingencies

As of September 30, 2014, we had outstanding guarantees of $27 million, with remaining terms ranging from four months to nine years, for debt and other obligations of third parties. We have two letters of credit for a total of $27 million that have been pledged as collateral for two of these guarantees. Although we believe it is unlikely that material payments will be required under these guarantees or letters of credit, there can be no assurance that this will be the case.

We have also provided performance guarantees to certain owners of hotels that we operate under management contracts. Most of these guarantees allow us to terminate the contract, rather than fund shortfalls, if specified performance levels are not achieved. However, in limited cases, we are obligated to fund performance shortfalls. As of September 30, 2014, we had six contracts containing performance guarantees, with expirations ranging from 2018 to 2030, and possible cash outlays totaling approximately $140 million. Our obligations under these guarantees in future periods are dependent on the operating performance levels of these hotels over the remaining terms of the performance guarantees. We do not have any letters of credit pledged as collateral against these guarantees. As of September 30, 2014 and December 31, 2013, we recorded current liabilities of approximately $8 million and $9 million, respectively, and non-current liabilities of approximately $41 million and $51 million, respectively, in our condensed consolidated balance sheets for obligations under our outstanding performance guarantees that are related to certain VIEs for which we are not the primary beneficiary.

As of September 30, 2014, we had outstanding commitments under third-party contracts of approximately $120 million for capital expenditures at certain owned and leased properties, including our consolidated VIEs. Our contracts contain clauses that allow us to cancel all or some portion of the work. If cancellation of a contract occurred, our commitment would be any costs incurred up to the cancellation date, in addition to any costs associated with the discharge of the contract.

We have entered into an agreement with a developer in Las Vegas, Nevada, whereby we have agreed to purchase residential units from the developer that we will convert to timeshare units to be marketed and sold under our Hilton Grand Vacations brand. Subject to certain conditions, we are required to purchase approximately $92 million of inventory ratably over a maximum period of four years, which is equivalent to purchases of approximately $6 million per quarter. We began purchasing inventory during the quarter ended March 31, 2013, and as of September 30, 2014, we had purchased $58 million of inventory under this agreement. As of September 30, 2014, our contractual obligations pursuant to this agreement for the remainder of 2014 and the years ended December 31, 2015 and 2016 were $6 million, $24 million and $4 million, respectively.

During 2010, an affiliate of our Sponsor settled a $75 million liability on our behalf in conjunction with a lawsuit settlement by entering into service contracts with the plaintiff. We recorded the portion settled by this affiliate as a capital contribution. Additionally, as part of the settlement, we entered into a guarantee with the plaintiff to pay any shortfall that this affiliate does not fund related to those service contracts up to the value of the settlement amount made by the affiliate. The remaining potential exposure under this guarantee as of September 30, 2014 was approximately $35 million. We have not accrued a liability for this guarantee as we believe the likelihood of any material funding to be remote.

We are involved in other litigation arising from the normal course of business, some of which includes claims for substantial sums. Accruals are recorded when the outcome is probable and can be reasonably estimated in accordance with applicable accounting requirements regarding accounting for contingencies. While the ultimate results of claims and litigation cannot be predicted with certainty, we expect that the ultimate resolution of all pending or threatened claims and litigation as of September 30, 2014 will not have a material effect on our condensed consolidated results of operations, financial position or cash flows.

Commitments and Contingencies

Note 25: Commitments and Contingencies

As of December 31, 2013, we had outstanding guarantees of $27 million, with remaining terms ranging from ten months to nine years, for debt and other obligations of third parties. We have two letters of credit, one supported by restricted cash and cash equivalents and the other under the Revolving Credit Facility, for a total of $27 million that have been pledged as collateral for two of these guarantees. Although we believe it is unlikely that material payments will be required under these guarantees or letters of credit, there can be no assurance that this will be the case.

We have also provided performance guarantees to certain owners of hotels that we operate under management contracts. Most of these guarantees allow us to terminate the contract, rather than fund shortfalls, if specified performance levels are not achieved. However, in limited cases, we are obligated to fund performance shortfalls. As of December 31, 2013, we had six contracts containing performance guarantees, with expirations ranging from 2018 to 2030, and possible cash outlays totaling approximately $150 million. Our obligations under these guarantees in future periods is dependent on the operating performance levels of these hotels over the remaining terms of the performance guarantees. We do not have any letters of credit pledged as collateral against these guarantees. As of December 31, 2013 and 2012, we recorded current liabilities of approximately $9 million and $30 million, respectively, and non-current liabilities of approximately $51 million and $57 million, respectively, in our consolidated balance sheets for obligations under our outstanding performance guarantees that are related to certain VIEs for which we are not the primary beneficiary.

As of December 31, 2013, we had outstanding commitments under third-party contracts of approximately $121 million for capital expenditures at certain owned and leased properties, including our consolidated VIEs. Our contracts contain clauses that allow us to cancel all or some portion of the work. If cancellation of a contract occurred, our commitment would be any costs incurred up to the cancellation date, in addition to any costs associated with the discharge of the contract.

 

We have entered into an agreement with a developer in Las Vegas, Nevada, whereby we have agreed to purchase residential units from the developer that we will convert to timeshare units to be marketed and sold under our Hilton Grand Vacations brand. Subject to certain conditions, we are required to purchase approximately $92 million of inventory ratably over a maximum period of four years, which is equivalent to purchases of approximately $6 million per quarter. We began purchasing inventory during the quarter ended March 31, 2013, and during the year ended December 31, 2013, we purchased $35 million of inventory under this agreement. As of December 31, 2013, our contractual obligations for the years ending December 31, 2014, 2015 and 2016, respectively, were $24 million, $24 million and $9 million.

During 2010, an affiliate of our Sponsor settled a $75 million liability on our behalf in conjunction with a lawsuit settlement by entering into service contracts with the plaintiff. We recorded the portion settled by this affiliate as a capital contribution. Additionally, as part of the settlement, we entered into a guarantee with the plaintiff to pay any shortfall that this affiliate does not fund related to those service contracts up to the value of the settlement amount made by the affiliate. The remaining potential exposure under this guarantee as of December 31, 2013 was approximately $48 million. We have not accrued a liability for this guarantee as we believe the likelihood of any material funding to be remote.

We are involved in other litigation arising from the normal course of business, some of which includes claims for substantial sums. Accruals are recorded when the outcome is probable and can be reasonably estimated in accordance with applicable accounting requirements regarding accounting for contingencies. While the ultimate results of claims and litigation cannot be predicted with certainty, we expect that the ultimate resolution of all pending or threatened claims and litigation as of December 31, 2013 will not have a material effect on our consolidated results of operations, financial position or cash flows.

Related Party Transactions
Related Party Transactions

Note 26 : Related Party Transactions

Investment in Affiliates

We hold investments in affiliates that own or lease properties that we manage or franchise. We recognized management and franchise fee revenue of $31 million, $29 million and $32 million for the years ended December 31, 2013, 2012 and 2011, respectively, related to our agreements for these properties. We recognized reimbursements and reimbursable costs for these hotels, primarily related to payroll and marketing expenses, of $174 million, $172 million and $148 million in other revenues and expenses from managed and franchised properties in our consolidated statements of operations for the years ended December 31, 2013, 2012 and 2011, respectively. As of December 31, 2013 and 2012, we had accounts receivable due from these properties related to these management and franchise fees and reimbursements of $21 million. Additionally, in certain cases we incur costs to acquire management contracts with our unconsolidated affiliates or provide loans or guarantees on behalf of these entities. We incurred immaterial contract acquisition costs for the year ended December 31, 2013, no contract acquisition costs for the year ended December 31, 2012 and $18 million for the year ended December 31, 2011 related to such contracts. As of December 31, 2013 and 2012, we had unamortized acquisition costs of $18 million recorded in management and franchise contracts, net in our consolidated balance sheets. As of December 31, 2013 and 2012, we had other financing receivables, net related to these properties of $15 million and $17 million, respectively. We recorded interest income on these other financing receivables of $3 million for the years ended December 31, 2013, 2012 and 2011. We generally own between 10 percent and 50 percent of these equity method investments. See Note 2: “Basis of Presentation and Summary of Significant Accounting Policies,” for further discussion.

The Blackstone Group

Blackstone directly and indirectly owns hotels that we manage or franchise and for which we receive fees in connection with the management and franchise agreements. We recognized management and franchise fee revenue of $42 million, $29 million and $23 million for the years ended December 31, 2013, 2012 and 2011, respectively, related to our agreements for these hotels. We recognized reimbursements and reimbursable costs for these hotels, primarily related to payroll and marketing expenses, of $174 million, $135 million and $101 million in other revenues and expenses from managed and franchised properties in our consolidated statements of operations for the years ended December 31, 2013, 2012 and 2011, respectively. As of December 31, 2013 and 2012, we had accounts receivable due from these hotels related to these management and franchise fees and reimbursements of $26 million and $28 million, respectively. Additionally, in certain cases, we incur costs to acquire management and franchise contracts with hotels owned by Blackstone. We incurred contract acquisition costs of $15 million and $5 million for the years ended December 31, 2013 and 2011 related to these contracts. Contract acquisition costs for the year ended December 31, 2012 related to these contracts were less than $1 million. As of December 31, 2013 and 2012, we had unamortized acquisition costs of $20 million and $6 million, respectively, recorded in management and franchise contracts, net in our consolidated balance sheets. As of December 31, 2013 and 2012, we had $14 million and $5 million, respectively, accrued in accounts payable, accrued expenses and other in our consolidated balance sheet related to contract acquisition costs for these hotels. Our maximum exposure to loss related to these hotels is limited to the amounts discussed above; therefore, our involvement with these hotels does not expose us to additional variability or risk of loss.

On January 14, 2014, we executed a Purchase and Sale Agreement with an affiliate of Blackstone for the sale of certain land and easement rights at the Hilton Hawaiian Village in connection with a timeshare project, for a total purchase price of approximately $25 million. See Note 30: “Subsequent Events” for additional details.

We also purchase products and services from entities affiliated with or owned by Blackstone. The fees paid for these products and services were $24 million, $26 million and $23 million during the years ended December 31, 2013, 2012 and 2011, respectively.

Cash Flow, Supplemental Disclosures
Cash Flow, Supplemental Disclosures

Note 27 : Supplemental Disclosures of Cash Flow Information

Interest paid during the years ended December 31, 2013, 2012 and 2011, was $535 million, $486 million and $470 million, respectively.

Income taxes, net of refunds, paid during the years ended December 31, 2013, 2012 and 2011 were $233 million, $103 million and $114 million, respectively.

In connection with our IPO in 2013, we incurred net underwriting discounts and commissions of $27 million and other offering expenses of $12 million, which are included in net proceeds from issuance of common stock in our consolidated statement of cash flows.

The following non-cash investing and financing activities were excluded from the consolidated statements of cash flows:

 

    In 2013, one of our consolidated VIEs restructured the terms of its capital lease resulting in a reduction in our capital lease asset and obligation of $44 million and $48 million, respectively. See Note 9: “Consolidated Variable Interest Entities” for further discussion.

 

    In 2013, we incurred $189 million of debt issuance costs related to the Debt Refinancing, of which $9 million had not been paid as of December 31, 2013 and were included in accounts payable, accrued expenses and other in our consolidated balance sheet. See Note 13: “Debt” for further discussion.

 

    In 2012, we executed a capital lease in conjunction with the acquisition of OHC, for which we recorded a capital lease asset and obligation of $15 million as of December 31, 2012. See Note 3: “Acquisitions” for further discussion.

 

    In 2011, two of our consolidated VIEs restructured their debt resulting in a reduction of our capital lease assets and obligations of $76 million and $73 million, respectively, as of December 31, 2011. See Note 9: “Consolidated Variable Interest Entities” for further discussion.
Quarterly Financial Information
Quarterly Financial Information

Note 28 : Selected Quarterly Financial Information (unaudited)

The following table sets forth the historical unaudited quarterly financial data for the periods indicated. The information for each of these periods has been prepared on the same basis as the audited consolidated financial statements and, in our opinion, reflects all adjustments necessary to present fairly our financial results. Operating results for previous periods do not necessarily indicate results that may be achieved in any future period.

 

     2013  
     First
Quarter
     Second
Quarter
     Third
Quarter
     Fourth
Quarter
     Year  
     (in millions, except per share data)  

Revenues

   $ 2,263       $ 2,380       $ 2,449       $ 2,643       $ 9,735   

Operating income

     252         404         357         89         1,102   

Net income

     38         157         203         62         460   

Net income attributable to Hilton stockholders

     34         155         200         26         415   

Basic and diluted earnings per share

   $ 0.03       $ 0.17       $ 0.22       $ 0.03       $ 0.45   
     2012  
     First
Quarter
     Second
Quarter
     Third
Quarter
     Fourth
Quarter
     Year  
     (in millions, except per share data)  

Revenues

   $ 2,131       $ 2,390       $ 2,417       $ 2,338       $ 9,276   

Operating income

     194         298         345         263         1,100   

Net income

     47         69         179         64         359   

Net income attributable to Hilton stockholders

     48         66         177         61         352   

Basic and diluted earnings per share

   $ 0.05       $ 0.07       $ 0.19       $ 0.07       $ 0.38   
Condensed Consolidating Guarantor Financial Information
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Condensed Consolidating Guarantor Financial Information

Note 18: Condensed Consolidating Guarantor Financial Information

In October 2013, Hilton Worldwide Finance LLC and Hilton Worldwide Finance Corp. (the “Subsidiary Issuers”), entities formed in August 2013 which are 100% owned by Hilton Worldwide Holdings Inc. (the “Parent”), issued $1.5 billion of 5.625% senior notes due in 2021 (the “Senior Notes”). The obligations of the Subsidiary Issuers are guaranteed jointly and severally on a senior unsecured basis by the Parent, and certain of the Parent’s 100% owned domestic restricted subsidiaries (the “Guarantors”). The indenture that governs the Senior Notes provides that any subsidiary of the Company that provides a guarantee of the Senior Secured Credit Facility will guarantee the Senior Notes. None of our foreign subsidiaries or U.S. subsidiaries owned by foreign subsidiaries or conducting foreign operations, our non-wholly owned subsidiaries, our subsidiaries that secure the CMBS Loan and $589 million in mortgage loans, or certain of our special purpose subsidiaries formed in connection with our Timeshare Facility and Securitized Timeshare Debt guarantee the Senior Notes (collectively, the “Non-Guarantors”).

The guarantees are full and unconditional, subject to certain customary release provisions. The indenture that governs the Senior Notes provides that any Guarantor may be released from its guarantee so long as: (a) the subsidiary is sold or sells all of its assets; (b) the subsidiary is released from its guaranty under the Senior Secured Credit Facility; (c) the subsidiary is declared “unrestricted” for covenant purposes; or (d) the requirements for legal defeasance or covenant defeasance or to discharge the indenture have been satisfied.

 

The following schedules present the condensed consolidated financial information as of September 30, 2014 and December 31, 2013 and for the nine months ended September 30, 2014 and 2013, for the Parent, Subsidiary Issuers, Guarantors and Non-Guarantors.

 

     September 30, 2014  
   Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantors
     Eliminations      Total  
     (in millions)  

ASSETS

                 

Current Assets:

                 

Cash and cash equivalents

   $       $       $ 235       $ 308        $ —        $ 543    

Restricted cash and cash equivalents

                     196         92          —          288    

Accounts receivable, net

                     478         384          —          862    

Inventories

                     326         24          —          350    

Deferred income tax assets

                     6         17          —          23    

Current portion of financing receivables, net

                     37         19          —          56    

Current portion of securitized financing receivables, net

                             64          —          64    

Prepaid expenses

                     34         138          —          172    

Other

                     29         27          —          56    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total current assets

                     1,341         1,073          —          2,414    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Property, Investments and Other Assets:

                 

Property and equipment, net

                     323         8,801          —          9,124    

Financing receivables, net

                     235         146          —          381    

Securitized financing receivables, net

                             433          —          433    

Investments in affiliates

                     123         51          —          174    

Investments in subsidiaries

     4,961         11,708         5,269         —          (21,938)         —    

Goodwill

                     3,847         2,338          —          6,185    

Brands

                     4,405         582                  4,987    

Management and franchise contracts, net

                     1,039         307          —          1,346    

Other intangible assets, net

                     475         220          —          695    

Deferred income tax assets

     22                         195          (22)         195    

Other

             95         124         171          —          390    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total property, investments and other assets

     4,983         11,803         15,840         13,244          (21,960)         23,910    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL ASSETS

   $  4,983       $  11,803       $  17,181       $  14,317        $  (21,960)       $  26,324    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

LIABILITIES AND EQUITY

                 

Current Liabilities:

                 

Accounts payable, accrued expenses and other

   $       $ 64       $ 1,246       $ 693        $ —        $ 2,003    

Current maturities of long-term debt

                                     —            

Current maturities of non-recourse debt

                             124          —          124    

Income taxes payable

                             10          —          10    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total current liabilities

             64         1,246         830          —          2,140    

Long-term debt

             6,776         54         4,294          —          11,124    

Non-recourse debt

                             813          —          813    

Deferred revenues

                     540                 —          544    

Deferred income tax liabilities

             2         2,241         2,916          (22)         5,137    

Liability for guest loyalty program

                     637         —          —          637    

Other

     193                 755         231          —          1,179    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

     193         6,842         5,473         9,088          (22)         21,574    

Equity:

                 

Total Hilton stockholders’ equity

     4,790         4,961         11,708         5,269          (21,938)         4,790    

Noncontrolling interests

                             (40)         —          (40)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total equity

     4,790         4,961         11,708         5,229          (21,938)         4,750    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 4,983       $ 11,803       $ 17,181       $ 14,317        $ (21,960)       $ 26,324    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     December 31, 2013  
   Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantors
     Eliminations      Total  
     (in millions)  

ASSETS

                 

Current Assets:

                 

Cash and cash equivalents

   $ —        $ —        $ 329        $ 265        $ —        $ 594    

Restricted cash and cash equivalents

     —          —          194          72          —          266    

Accounts receivable, net

     —          —          426          305          —          731    

Inventories

     —          —          370          26          —          396    

Deferred income tax assets

     —          —                  17          —          23    

Current portion of financing receivables, net

     —          —          38          56          —          94    

Current portion of securitized financing receivables, net

     —          —          —          27          —          27    

Prepaid expenses

     —          —          15          133          —          148    

Other

     —          —          101          26          (23)         104    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total current assets

     —          —          1,479          927          (23)         2,383    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Property, Investments and Other Assets:

                 

Property and equipment, net

     —          —          341          8,717          —          9,058    

Financing receivables, net

     —          —          199          436          —          635    

Securitized financing receivables, net

     —          —          —          194          —          194    

Investments in affiliates

     —          —          210          50          —          260    

Investments in subsidiaries

     4,528          11,942          5,253          —          (21,723)         —    

Goodwill

     —          —          3,847          2,373          —          6,220    

Brands

     —          —          4,405          608          —          5,013    

Management and franchise contracts, net

     —          —          1,143          309          —          1,452    

Other intangible assets, net

     —          —          511          240          —          751    

Deferred income tax assets

     21          —          —          193          (21)         193    

Other

     —          121          133          149          —          403    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total property, investments and other assets

     4,549          12,063          16,042          13,269          (21,744)         24,179    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL ASSETS

   $  4,549        $  12,063        $  17,521        $  14,196        $  (21,767)       $  26,562    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

LIABILITIES AND EQUITY

                 

Current Liabilities:

                 

Accounts payable, accrued expenses and other

   $ —        $ 60        $ 1,335        $ 684        $ —        $ 2,079    

Current maturities of long-term debt

     —          —          —                  —            

Current maturities of non-recourse debt

     —          —          —          48          —          48    

Income taxes payable

     —          —                  31          (23)         11    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total current liabilities

     —          60          1,338          767          (23)         2,142    

Long-term debt

     —          7,470          54          4,227          —          11,751    

Non-recourse debt

     —          —          —          920          —          920    

Deferred revenues

     —          —          674          —          —          674    

Deferred income tax liabilities

     —                  2,298          2,771          (21)         5,053    

Liability for guest loyalty program

     —          —          597          —          —          597    

Other

     186          —          618          345          —          1,149    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

     186          7,535          5,579          9,030          (44)         22,286    

Equity:

                 

Total Hilton stockholders’ equity

     4,363          4,528          11,942          5,253          (21,723)         4,363    

Noncontrolling interests

     —          —          —          (87)         —          (87)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total equity

     4,363          4,528          11,942          5,166          (21,723)         4,276    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 4,549        $ 12,063        $ 17,521        $ 14,196        $ (21,767)       $ 26,562    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     Nine Months Ended September 30, 2014  
     Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantors
     Eliminations      Total  
     (in millions)  

Revenues

                 

Owned and leased hotels

   $ —        $ —        $ 163        $  2,999        $ (21)       $ 3,141    

Management and franchise fees and other

     —          —          575          546          (91)         1,030    

Timeshare

     —          —          777          73          —          850    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,515          3,618          (112)         5,021    

Other revenues from managed and franchised properties

     —          —          2,991          300          (638)         2,653    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     —          —          4,506          3,918          (750)         7,674    

Expenses

                 

Owned and leased hotels

     —          —          116          2,359          (55)         2,420    

Timeshare

     —          —          590          14          (40)         564    

Depreciation and amortization

     —          —          227          243          —          470    

General, administrative and other

     —          —          275          91          (17)         349    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,208          2,707          (112)         3,803    

Other expenses from managed and franchised properties

     —          —           2,991          300          (638)         2,653    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses

     —          —          4,199          3,007          (750)          6,456    

Operating income

     —          —          307          911          —          1,218    

Interest income

     —          —                          —            

Interest expense

     —          (255)         (42)         (170)         —          (467)   

Equity in earnings from unconsolidated affiliates

     —          —          13                  —          16    

Gain (loss) on foreign currency transactions

     —          —          248          (207)         —          41    

Other gain, net

     —          —                  32          —          38    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before income taxes and equity in earnings from subsidiaries

     —          (255)         538          571          —          854    

Income tax benefit (expense)

     (5)         98          (213)         (211)         —          (331)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before equity in earnings from subsidiaries

     (5)          (157)         325          360          —          523    

Equity in earnings from subsidiaries

     520          677          352          —          (1,549)         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income

     515          520          677          360          (1,549)         523    

Net income attributable to noncontrolling interests

     —          —          —          (8)         —          (8)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income attributable to Hilton stockholders

   $ 515        $ 520        $ 677        $ 352        $  (1,549)       $ 515    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income

   $ 381        $ 516        $ 697        $ 212        $ (1,415)       $ 391    

Comprehensive income attributable to noncontrolling interests

     —          —          —          (10)         —          (10)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income attributable to Hilton stockholders

   $  381        $ 516        $ 697        $ 202        $ (1,415)       $ 381    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     Nine Months Ended September 30, 2013  
     Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantors
     Eliminations      Total  
     (in millions)  

Revenues

        

Owned and leased hotels

   $ —        $ —        $ 146        $ 2,855        $ (19)       $ 2,982    

Management and franchise fees and other

     —          —          425          546          (103)         868    

Timeshare

     —          —          779          30          —          809    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,350          3,431          (122)         4,659    

Other revenues from managed and franchised properties

     —          —          2,792          247          (606)         2,433    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     —          —          4,142          3,678          (728)         7,092    

Expenses

                 

Owned and leased hotels

     —          —          110          2,258          (41)         2,327    

Timeshare

     —          —          594                  (57)         545    

Depreciation and amortization

     —          —          208          247          —          455    

General, administrative and other

     —          —          229          114          (24)         319    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,141          2,627          (122)         3,646    

Other expenses from managed and franchised properties

     —          —          2,792          247          (606)         2,433    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses

     —          —          3,933          2,874          (728)         6,079    

Operating income

                         209          804          —          1,013    

Interest income

     217          —                          (217)           

Interest expense

     —          —          (575)         (43)         217          (401)   

Equity in earnings from unconsolidated affiliates

     —          —                          —          11    

Gain (loss) on foreign currency transactions

     —          —                  (47)         —          (43)   

Other gain, net

     —          —          —                  —            
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before income taxes and equity in earnings from subsidiaries

     217          —          (350)         723          —          590    

Income tax benefit (expense)

     (84)         —          141          (249)         —          (192)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before equity in earnings from subsidiaries

     133          —          (209)         474          —          398    

Equity in earnings from subsidiaries

     256          —          465          —          (721)         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income

     389          —          256          474          (721)         398    

Net income attributable to noncontrolling interests

     —          —          —          (9)         —          (9)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income attributable to Hilton stockholders

   $ 389        $ —        $ 256        $ 465        $ (721)       $ 389    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income

   $ 378        $ —        $ 261        $ 472        $ (710)       $ 401    

Comprehensive income attributable to noncontrolling interests

     —          —          —          (23)         —          (23)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income attributable to Hilton stockholders

   $ 378        $ —        $ 261        $ 449        $ (710)       $ 378    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     Nine Months Ended September 30, 2014  
     Parent      Subsidiary
Issuers
     Guarantors      Non-Guarantors      Eliminations      Total  
     (in millions)  

Operating Activities:

              

Net cash provided by operating activities

   $         —        $ —        $ 605        $ 501        $ (207)       $ 899    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Investing Activities:

                 

Capital expenditures for property and equipment

     —          —          (13)         (171)         —          (184)   

Payments received on other financing receivables

     —          —          16                  —          18    

Issuance of other financing receivables

     —          —          —          (1)         —          (1)   

Investments in affiliates

     —          —          (6)         —          —          (6)   

Distributions from unconsolidated affiliates

     —          —          30                  —          32    

Proceeds from asset dispositions

     —          —                  34          —          40    

Contract acquisition costs

     —          —          (13)         (41)         —          (54)   

Software capitalization costs

     —          —          (45)         —          —          (45)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net cash used in investing activities

     —          —          (25)         (175)         —          (200)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Financing Activities:

                 

Borrowings

     —          —          —          350          —          350    

Repayment of debt

     —          (700)         —          (375)         —          (1,075)   

Debt issuance costs

     —          (6)         —          (3)         —          (9)   

Change in restricted cash and cash equivalents

     —          —          —          (19)         —          (19)   

Intercompany transfers

     —          706          (674)         (32)         —          —    

Dividends paid to Guarantors

     —          —          —          (207)         207          —    

Capital contribution

     —          —          —          13          —          13    

Distributions to noncontrolling interests

     —          —          —          (3)         —          (3)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net cash used in financing activities

     —          —          (674)         (276)         207          (743)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     —          —          —          (7)         —          (7)   

Net increase (decrease) in cash and cash equivalents

     —          —          (94)         43          —          (51)   

Cash and cash equivalents, beginning of period

     —          —          329          265          —          594    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cash and cash equivalents, end of period

   $ —        $ —        $ 235        $ 308        $ —        $ 543    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

    Nine Months Ended September 30, 2013  
    Parent     Subsidiary
Issuers
    Guarantors     Non-Guarantors     Eliminations     Total  
    (in millions)  

Operating Activities:

     

Net cash provided by operating activities

  $         —       $         —       $ 592       $ 432       $         —       $ 1,024    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investing Activities:

         

Capital expenditures for property and equipment

    —         —         (15)        (152)        —         (167)   

Acquisitions

    —         —         —         (30)        —         (30)   

Payments received on other financing receivables

    —         —                —         —           

Issuance of other financing receivables

    —         —         (6)        (2)        —         (8)   

Investments in affiliates

    —         —         (4)        —         —         (4)   

Distributions from unconsolidated affiliates

    —         —         16         —         —         16    

Contract acquisition costs

    —         —         (2)        (10)        —         (12)   

Software capitalization costs

    —         —         (50)        —         —         (50)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

    —         —         (58)        (194)        —         (252)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Financing Activities:

           

Borrowings

    —         —         —         702         —         702    

Repayment of debt

    —         —         (1,279)        (323)        —         (1,602)   

Change in restricted cash and cash equivalents

    —         —         140         (26)        —         114    

Intercompany transfers

    —         —         566         (566)        —         —    

Distributions to noncontrolling interests

    —         —         —         (3)        —         (3)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

    —         —         (573)        (216)        —         (789)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

    —         —         —         (14)        —         (14)   

Net increase (decrease) in cash and cash equivalents

    —         —         (39)               —         (31)   

Cash and cash equivalents, beginning of period

    —         —         542         213         —         755    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents, end of period

  $ —       $ —       $ 503       $ 221       $ —       $ 724    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Condensed Consolidating Guarantor Financial Information

Note 29: Condensed Consolidating Guarantor Financial Information

In October 2013, Hilton Worldwide Finance LLC and Hilton Worldwide Finance Corp. (the “Subsidiary Issuers”), entities formed in August 2013 which are 100% owned by Hilton Worldwide Holdings Inc. (the “Parent”), issued the Senior Notes. The obligations of the Subsidiary Issuers are guaranteed jointly and severally on a senior unsecured basis by the Parent, and certain of the Parent’s 100% owned domestic restricted subsidiaries (the “Guarantors”). The indenture that governs the Senior Notes provides that any subsidiary of the Company that provides a guarantee of the Senior Secured Credit Facility will guarantee the Senior Notes. None of our foreign subsidiaries or U.S. subsidiaries owned by foreign subsidiaries or conducting foreign operations, our non-wholly owned subsidiaries, our subsidiaries that secure the CMBS Loan and Waldorf Astoria Loan or certain of our special purpose subsidiaries formed in connection with our Timeshare Facility and Securitized Timeshare Debt guarantee the Senior Notes (collectively, the “Non-Guarantors”).

The guarantees are full and unconditional, subject to certain customary release provisions. The indenture that governs the Senior Notes provides that any Guarantor may be released from its guarantee so long as: (a) the subsidiary is sold or sells all of its assets; (b) the subsidiary is released from its guaranty under the Senior Secured Credit Facility; (c) the subsidiary is declared “unrestricted” for covenant purposes; or (d) the requirements for legal defeasance or covenant defeasance or to discharge the indenture have been satisfied.

The following schedules present the condensed consolidated financial information as of December 31, 2013 and 2012, and the years ended December 31, 2013, 2012 and 2011, for the Parent, Subsidiary Issuers, Guarantors and Non-Guarantors.

 

    December 31, 2013  
    Parent     Subsidiary
Issuers
    Guarantors     Non-
Guarantors
    Eliminations     Total  
    (in millions)  

ASSETS

           

Current Assets:

           

Cash and cash equivalents

  $      $      $ 329      $ 265       $ —       $ 594    

Restricted cash and cash equivalents

                  194        72         —         266    

Accounts receivable, net

                  426        305         —         731    

Inventories

                  370        26         —         396    

Deferred income tax assets

                  6        17         —         23    

Current portion of financing receivables, net

                  38        56         —         94    

Current portion of securitized financing receivables, net

                         27         —         27    

Prepaid expenses

                  15        133         —         148    

Other

                  101        26         (23)        104    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

                  1,479        927         (23)        2,383    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Property, Investments and Other Assets:

           

Property and equipment, net

                  341        8,717         —         9,058    

Financing receivables, net

                  199        436         —         635    

Securitized financing receivables, net

                         194         —         194    

Investments in affiliates

                  210        50         —         260    

Investments in subsidiaries

    4,528        11,942        5,253        —         (21,723)        —    

Goodwill

                  3,847        2,373         —         6,220    

Brands

                  4,405        608         —         5,013    

Management and franchise contracts, net

                  1,143        309         —         1,452    

Other intangible assets, net

                  511        240         —         751    

Deferred income tax assets

    21                      193         (21)        193    

Other

           121        133        149         —         403    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total property, investments and other assets

     4,549         12,063         16,042         13,269          (21,744)         24,179    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL ASSETS

  $ 4,549      $ 12,063      $ 17,521      $ 14,196       $ (21,767)      $ 26,562    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES AND EQUITY

           

Current Liabilities:

           

Accounts payable, accrued expenses and other

  $      $ 60      $ 1,335      $ 684       $ —       $ 2,079    

Current maturities of long-term debt

                                —           

Current maturities of non-recourse debt

                         48         —         48    

Income taxes payable

                  3        31         (23)        11    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

           60        1,338        767         (23)        2,142    

Long-term debt

           7,470        54        4,227         —         11,751    

Non-recourse debt

                         920         —         920    

Deferred revenues

                  674        —         —         674    

Deferred income tax liabilities

           5        2,298        2,771         (21)        5,053    

Liability for guest loyalty program

                  597        —         —         597    

Other

    186               618        345         —         1,149    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

    186        7,535        5,579        9,030         (44)        22,286    

Equity:

           

Total Hilton stockholders’ equity

    4,363        4,528        11,942        5,253         (21,723)        4,363    

Noncontrolling interests

                         (87)        —         (87)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total equity

     4,363         4,528         11,942         5,166          (21,723)         4,276    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

  $ 4,549      $ 12,063      $ 17,521      $ 14,196       $ (21,767)      $ 26,562    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

    December 31, 2012  
    Parent     Subsidiary
Issuers
    Guarantors     Non-
Guarantors
    Eliminations     Total  
    (in millions)  

ASSETS

           

Current Assets:

           

Cash and cash equivalents

  $      $      $ 542       $ 213       $ —       $ 755    

Restricted cash and cash equivalents

                  496         54         —         550    

Accounts receivable, net

                  414         305         —         719    

Intercompany interest receivable(1)

    98               —         —         (98     —    

Inventories

                  395         20         —         415    

Deferred income tax assets

                  64         12         —         76    

Current portion of financing receivables, net

                  119         —         —         119    

Prepaid expenses

                  22         131         —         153    

Other

                  51         12         (23     40    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

    98               2,103         747         (121     2,827    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Property, Investments and Other Assets:

           

Property and equipment, net

                  359         8,838         —         9,197    

Financing receivables, net

                  806                —         815    

Intercompany notes receivable(1)

    3,787               —         —         (3,787     —    

Investments in affiliates

                  244         47         —         291    

Investments in subsidiaries

                  9,364         —         (9,364     —    

Goodwill

                  3,847         2,350         —         6,197    

Brands

                  4,405         624         —         5,029    

Management and franchise contracts, net

                  1,285         315         —         1,600    

Other intangible assets, net

                  512         232         —         744    

Deferred income tax assets

                  —         104         —         104    

Other

                  159         103         —         262    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total property, investments and other assets

    3,787                20,981          12,622          (13,151)         24,239    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL ASSETS

  $ 3,885      $      $ 23,084       $ 13,369       $  (13,272)      $ 27,066    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES AND EQUITY

           

Current Liabilities:

           

Accounts payable, accrued expenses and other

  $      $      $ 1,253       $ 669       $ —       $ 1,922    

Intercompany interest payable(1)

                  98         —         (98     —    

Current maturities of long-term debt

                  357         35         —         392    

Current maturities of non-recourse debt

                  —         15         —         15    

Income taxes payable

                  —         43         (23     20    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

                  1,708         762         (121     2,349    

Long-term debt

                  15,001         182         —         15,183    

Non-recourse debt

                  —         405         —         405    

Intercompany notes payable(1)

                  3,787         —          (3,787     —    

Investments in subsidiaries

    1,389               —         —         (1,389     —    

Deferred revenues

                  82         —         —         82    

Deferred income tax liabilities

    8               2,495         2,445         —         4,948    

Liability for guest loyalty program

                  503         —         —         503    

Other

    187               897         357         —         1,441    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

    1,584               24,473         4,151         (5,297      24,911    

Equity:

           

Total Hilton stockholders’ equity

    2,301               (1,389)        9,364         (7,975     2,301    

Noncontrolling interests

                  —         (146)        —         (146)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total equity

    2,301                (1,389)         9,218         (7,975     2,155    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

  $  3,885      $       —      $ 23,084       $ 13,369       $ (13,272   $ 27,066    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)  Prior to June 30, 2013, a Guarantor had intercompany notes payable to the Parent (the “Notes Payable to Parent”). Interest under the Notes Payable to Parent was accrued and added to the principal balance through the date of maturity. On June 30, 2013, the Parent made a non-cash contribution of the Notes Payable to Parent, including the accrued interest, to the Guarantor, resulting in an increase to the Guarantor’s equity.

 

     Year Ended December 31, 2013  
     Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantor
     Eliminations      Total  
     (in millions)  

Revenues

                 

Owned and leased hotels

   $ —        $ —        $ 190        $ 3,882        $ (26)       $ 4,046    

Management and franchise fees and other

     —          —          587          733          (145)         1,175    

Timeshare

     —          —          1,052          57          —          1,109    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,829          4,672          (171)         6,330    

Other revenues from managed and franchised properties

     —          —          3,869          351          (815)         3,405    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     —          —          5,698          5,023          (986)         9,735    

Expenses

                 

Owned and leased hotels

     —          —          148          3,058          (59)         3,147    

Timeshare

     —          —          797          12          (79)         730    

Depreciation and amortization

     —          —          277          326          —          603    

General, administrative and other

     —          —          620          161          (33)         748    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,842          3,557          (171)         5,228    

Other expenses from managed and franchised properties

     —          —          3,869          351          (815)         3,405    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses

     —          —          5,711          3,908          (986)         8,633    

Operating income (loss)

     —          —          (13)         1,115          —          1,102    

Interest income

     217          —                          (217)           

Interest expense

     —          (105)         (642)         (90)         217          (620)   

Equity in earnings from unconsolidated affiliates

     —          —          13                  —          16    

Gain (loss) on foreign currency transactions

     —          —          35          (80)         —          (45)   

Gain on debt extinguishment

     —          —          229          —          —          229    

Other gain, net

     —          —                          —            
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before income taxes and equity in earnings from subsidiaries

     217          (105)         (369)         955          —          698    

Income tax benefit (expense)

     (84)         40          48          (242)         —          (238)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before equity in earnings from subsidiaries

     133          (65)         (321)         713          —          460    

Equity in earnings from subsidiaries

     282          347          668          —          (1,297)         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income

     415          282          347          713          (1,297)         460    

Net income attributable to noncontrolling interests

     —          —          —          (45)         —          (45)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income attributable to Hilton stockholders

   $ 415        $ 282        $ 347        $ 668        $ (1,297)       $ 415    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income

   $ 557        $ 288        $ 417        $ 797        $ (1,439)       $ 620    

Comprehensive income attributable to noncontrolling interests

     —          —          —          (63)         —          (63)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income attributable to Hilton stockholders

   $  557        $ 288        $ 417        $ 734        $ (1,439)       $ 557    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     Year Ended December 31, 2012  
     Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantor
     Eliminations      Total  
     (in millions)  

Revenues

                 

Owned and leased hotels

   $ —        $ —        $ 181        $ 3,821        $ (23)       $ 3,979    

Management and franchise fees and other

     —          —          459          762          (133)         1,088    

Timeshare

     —          —          1,081                  —          1,085    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,721          4,587          (156)         6,152    

Other revenues from managed and franchised properties

     —          —          3,643          295          (814)         3,124    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     —          —          5,364          4,882          (970)         9,276    

Expenses

                 

Owned and leased hotels

     —          —          142          3,141          (53)         3,230    

Timeshare

     —          —          827                  (73)         758    

Depreciation and amortization

     —          —          251          299          —          550    

Impairment losses

     —          —          13          41          —          54    

General, administrative and other

     —          —          342          148          (30)         460    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,575          3,633          (156)         5,052    

Other expenses from managed and franchised properties

     —          —          3,643          295          (814)         3,124    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses

     —          —          5,218          3,928          (970)         8,176    

Operating income

     —          —          146          954          —          1,100    

Interest income

     403          —                          (403)         15    

Interest expense

     —          —          (916)         (56)         403          (569)   

Equity in earnings (losses) from unconsolidated affiliates

     —          —          (12)                 —          (11)   

Gain on foreign currency transactions

     —          —          12          11          —          23    

Other gain, net

     —          —                          —          15    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before income taxes and equity in earnings from subsidiaries

     403          —          (757)         927          —          573    

Income tax benefit (expense)

     (155)         —          312          (371)         —          (214)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before equity in earnings from subsidiaries

     248          —          (445)         556          —          359    

Equity in earnings from subsidiaries

     104          —          549          —          (653)         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income

     352          —          104          556          (653)         359    

Net income attributable to noncontrolling interests

     —          —          —          (7)         —          (7)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income attributable to Hilton stockholders

   $ 352        $ —        $ 104        $ 549        $ (653)       $ 352    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income

   $ 435        $ —        $ 126        $ 631        $ (736)       $ 456    

Comprehensive income attributable to noncontrolling interests

     —          —          —          (21)         —          (21)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income attributable to Hilton stockholders

   $ 435        $ —        $ 126        $ 610        $ (736)       $ 435    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     Year Ended December 31, 2011  
     Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantor
     Eliminations      Total  
     (in millions)  

Revenues

                 

Owned and leased hotels

   $ —        $ —        $ 171        $ 3,751        $ (24)       $ 3,898    

Management and franchise fees and other

     —          —          383          756          (125)         1,014    

Timeshare

     —          —          940                  —          944    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,494          4,511          (149)         5,856    

Other revenues from managed and franchised properties

     —          —          3,521          196          (790)         2,927    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     —          —          5,015          4,707          (939)         8,783    

Expenses

                 

Owned and leased hotels

     —          —          140          3,124          (51)         3,213    

Timeshare

     —          —          731                  (67)         668    

Depreciation and amortization

     —          —          246          318          —          564    

Impairment losses

     —          —                  12          —          20    

General, administrative and other

     —          —          301          146          (31)         416    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,426          3,604          (149)         4,881    

Other expenses from managed and franchised properties

     —          —          3,521          196          (790)         2,927    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses

     —          —          4,947          3,800          (939)         7,808    

Operating income

     —          —          68          907          —          975    

Interest income

     359          —                          (359)         11    

Interest expense

     —          —          (948)         (54)         359          (643)   

Equity in losses from unconsolidated affiliates

     —          —          (133)         (12)         —          (145)   

Gain (loss) on foreign currency transactions

     —          —          (26)                 —          (21)   

Other gain, net

     —          —          14                  —          19    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before income taxes and equity in earnings from subsidiaries

     359          —          (1,018)         855          —          196    

Income tax benefit (expense)

     (137)         —          397          (201)         —          59    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before equity in earnings from subsidiaries

     222          —          (621)         654          —          255    

Equity in earnings from subsidiaries

     31          —          652          —          (683)         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income

     253          —          31          654          (683)         255    

Net income attributable to noncontrolling interests

     —          —          —          (2)         —          (2)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income attributable to Hilton stockholders

   $ 253        $ —        $ 31        $ 652        $ (683)       $ 253    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income

   $ 162        $ —        $ 30        $ 561        $ (592)       $ 161    

Comprehensive loss attributable to noncontrolling interests

     —          —          —                  —            
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income attributable to Hilton stockholders

   $ 162        $ —        $ 30        $ 562        $ (592)       $ 162    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     Year Ended December 31, 2013  
     Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantors
     Eliminations      Total  
     (in millions)  

Operating Activities:

                 

Net cash provided by operating activities

   $ —        $ —        $ 1,574        $ 630        $ (103)       $ 2,101    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Investing Activities:

                 

Capital expenditures for property and equipment

     —          —          (23)         (231)         —          (254)   

Acquisitions

     —          —          —          (30)         —          (30)   

Payments received on other financing receivables

     —          —                          —            

Issuance of other financing receivables

     —          —          (6)         (4)         —          (10)   

Investments in affiliates

     —          —          (4)         —          —          (4)   

Distributions from unconsolidated affiliates

     —          —          33          —          —          33    

Contract acquisition costs

     —          —          (14)         (30)         —          (44)   

Software capitalization costs

     —          —          (78)         —          —          (78)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net cash used in investing activities

     —          —          (88)         (294)         —          (382)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Financing Activities:

                 

Net proceeds from issuance of common stock

     1,243          —          —          —          —          1,243    

Borrowings

     —          9,062          —          5,026          —          14,088    

Repayment of debt

     —          (1,600)         (15,245)         (358)         —          (17,203)   

Debt issuance costs

     —          (123)         —          (57)         —          (180)   

Change in restricted cash and cash equivalents

     —          —          222          (29)         —          193    

Intercompany transfers

     (1,243)         (7,339)         13,324          (4,742)         —          —    

Dividends paid to Guarantors

     —          —          —          (103)         103          —    

Distributions to noncontrolling interests

     —          —          —          (4)         —          (4)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net cash used in financing activities

     —          —          (1,699)         (267)         103          (1,863)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     —          —          —          (17)         —          (17)   

Net increase (decrease) in cash and cash equivalents

     —          —          (213)         52          —          (161)   

Cash and cash equivalents, beginning of period

     —          —          542          213          —          755    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cash and cash equivalents, end of period

   $ —        $ —        $ 329        $ 265        $ —        $ 594    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     Year Ended December 31, 2012  
     Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantors
     Eliminations      Total  
     (in millions)  

Operating Activities:

                 

Net cash provided by operating activities

   $         —        $         —        $ 271        $ 853        $ (14)       $ 1,110    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Investing Activities:

                 

Capital expenditures for property and equipment

     —          —          (57)         (376)         —          (433)   

Payments received on other financing receivables

     —          —                          —            

Issuance of other financing receivables

     —          —          (1)         (3)         —          (4)   

Investments in affiliates

     —          —          (3)         —          —          (3)   

Distributions from unconsolidated affiliates

     —          —                  —          —            

Contract acquisition costs

     —          —          (28)         (3)         —          (31)   

Software capitalization costs

     —          —          (103)         —          —          (103)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net cash used in investing activities

     —          —          (179)         (379)         —          (558)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Financing Activities:

                 

Borrowings

     —          —          —          96          —          96    

Repayment of debt

     —          —          (735)         (119)         —          (854)   

Change in restricted cash and cash equivalents

     —          —          193          (6)         —          187    

Intercompany transfers

     —          —          449          (463)         14          —    

Distributions to noncontrolling interests

     —          —          —          (4)         —          (4)   

Acquisition of noncontrolling interests

     —          —          —          (1)         —          (1)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net cash used in financing activities

     —          —          (93)         (497)         14          (576)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     —          —          —          (2)         —          (2)   

Net decrease in cash and cash equivalents

     —          —          (1)         (25)         —          (26)   

Cash and cash equivalents, beginning of period

     —          —          543          238          —          781    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cash and cash equivalents, end of period

   $ —        $ —        $    542        $    213        $      —        $ 755    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

    Year Ended December 31, 2011  
    Parent     Subsidiary
Issuers
    Guarantors     Non-
Guarantors
    Eliminations     Total  
    (in millions)  

Operating Activities:

           

Net cash provided by operating activities

  $    —       $    —       $ 359       $ 812       $ (4)      $  1,167    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investing Activities:

           

Capital expenditures for property and equipment

    —         —         (43)        (346)        —         (389)   

Acquisitions

    —         —         —         (12)        —         (12)   

Payments received on other financing receivables

    —         —                       —           

Investments in affiliates

    —         —         (11)        —         —         (11)   

Distributions from unconsolidated affiliates

    —         —         —         23         —         23    

Proceeds from asset dispositions

    —         —         65                —         65    

Contract acquisition costs

    —         —         (23)        (30)        —         (53)   

Software capitalization costs

    —         —         (93)        —         —         (93)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

    —         —         (99)        (364)        —         (463)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Financing Activities:

           

Borrowings

    —         —         24         16         —         40    

Repayment of debt

    —         —         (697)        (29)        —         (726)   

Change in restricted cash and cash equivalents

    —         —         (19)        (6)        —         (25)   

Intercompany transfers

    —         —         422         (426)               —    

Distributions to noncontrolling interests

    —         —         —         (3)        —         (3)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

    —         —         (270)        (448)               (714)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

    —         —         —         (5)        —         (5)   

Net decrease in cash and cash equivalents

    —         —         (10)        (5)        —         (15)   

Cash and cash equivalents, beginning of period

    —         —         553         243         —         796    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents, end of period

  $ —       $ —       $ 543       $ 238       $    —       $ 781    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Subsequent Events
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Subsequent Events

Note 19: Subsequent Events

Sale of the Waldorf Astoria New York

In October 2014, we entered into a purchase and sale agreement to sell the Waldorf Astoria New York hotel for $1.95 billion, which is payable in cash at closing and is subject to customary pro rations and adjustments. At closing, we will enter into a management agreement with a 100-year term with the buyer, pursuant to which we will continue to operate the hotel under our “Waldorf Astoria Hotels & Resorts” brand. The buyer has provided a $100 million cash deposit, which is being held in escrow as earnest money and the completion of the transaction is subject to customary closing conditions. Subject to specified terms and conditions, the closing is scheduled for December 31, 2014, but the parties have the right to adjourn closing to March 31, 2015, subject to certain additional limited adjournments. At closing, we expect that our existing approximately $525 million mortgage loan secured by the Waldorf Astoria New York will be repaid in full from other sources of liquidity.

Debt Repayment

In October 2014, we made a voluntary prepayment of $100 million on our Term Loans.

Subsequent Events

Note 30: Subsequent Events

HGV Grand Islander

In January 2014, we executed a Purchase and Sale Agreement (“PSA”) with an affiliate of Blackstone for the sale of certain land and easement rights at the Hilton Hawaiian Village in connection with a timeshare project, for a total purchase price of approximately $25 million. Additionally, the PSA provides for Blackstone to purchase from us the name, plans, contracts and other documents related to the timeshare project through reimbursement of certain costs already incurred by us and those incurred through the closing date. Blackstone will then develop and construct the timeshare property for which we expect to provide services through a sales and marketing agreement. The closing date is expected to occur in March 2014, subject to the satisfaction of the conditions of the agreement.

 

Share-based Compensation

In February 2014, our board of directors approved a share-based payment award consisting of restricted stock units under our 2013 Omnibus Incentive Plan that will vest over one to two years based on service conditions to certain non-executive employees that had participated in an existing cash-based, long-term incentive plan. As this replacement award is in lieu of a cash payment that would have been made under the cash-based plan, the amount accrued as of December 31, 2013 will be reversed and is expected to result in a reduction of compensation expense of approximately $25 million during the first quarter of 2014. We expect the compensation expense incurred during 2014 resulting from the new share-based compensation awards to offset the reduction of compensation expense from the reversal of the replaced long- term incentive plan accrual, and the awards will not result in a material change to compensation expense in future years.

Basis of Presentation and Summary of Significant Accounting Policies (Policies)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Accounting Policies [Abstract]
 
 
Consolidation
 
Use of Estimates
 
Reclassifications
 
Revenue Recognition
 
Cash and Cash Equivalents
 
Restricted Cash and Cash Equivalents
 
Allowance for Doubtful Accounts
 
Inventories
 
Property and Equipment
 
Financing Receivables
 
Investments in Affiliates
 
Goodwill
 
Brands
 
Intangible Assets with Finite Useful Lives
 
Hilton HHonors
 
Fair Value Measurements-Valuation Hierarchy
 
Derivative Instruments
 
Currency Translation
 
Self Insurance Reserve
 
Share-based Compensation
 
Income Taxes
 
ASU 2013-11 Income Taxes
ASU 2013-05 Foreign Currency Matters
ASU 2013-02 Comprehensive Income
 
ASU 2012-02 Intangibles - Goodwill and Other
 
ASU 2014-15 Going Concern
 
ASU 2014-09 Revenue Recognition Policy
 
ASU 2014-08 Discontinued Operations Policy
 

Principles of Consolidation

The consolidated financial statements include the accounts of Hilton, our wholly owned subsidiaries and entities in which we have a controlling financial interest, including variable interest entities (“VIEs”) where we are the primary beneficiary. Entities in which we have a controlling financial interest generally comprise majority owned real estate ownership and management enterprises.

The determination of a controlling financial interest is based upon the terms of the governing agreements of the respective entities, including the evaluation of rights held by other ownership interests. If the entity is considered to be a VIE, we determine whether we are the primary beneficiary, and then consolidate those VIEs for which we have determined we are the primary beneficiary. If the entity in which we hold an interest does not meet the definition of a VIE, we evaluate whether we have a controlling financial interest through our voting interests in the entity. We consolidate entities when we own more than 50 percent of the voting shares of a company or have a controlling general partner interest of a partnership, assuming the absence of other factors determining control, including the ability of noncontrolling owners to participate in or block certain decisions. As of December 31, 2013, we consolidated six non-wholly owned entities in which we own more than 50 percent of the voting shares of the entities or we have determined we are the primary beneficiary of VIEs.

All material intercompany transactions and balances have been eliminated in consolidation. References in these financial statements to net income attributable to Hilton stockholders and Hilton stockholders’ equity do not include noncontrolling interests, which represent the outside ownership interests of our six consolidated, non-wholly owned entities and are reported separately.

Use of Estimates

The preparation of financial statements in conformity with United States of America (“U.S.”) generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported and, accordingly, ultimate results could differ from those estimates.

Reclassifications

Certain prior year amounts have been reclassified to conform to current presentation.

Revenue Recognition

Revenues are primarily derived from the following sources and are generally recognized as services are rendered and when collectibility is reasonably assured. Amounts received in advance of revenue recognition are deferred as liabilities.

 

    Owned and leased hotel revenues primarily consist of room rentals and food and beverage sales from owned, leased and consolidated non-wholly owned hotel properties. Revenues are recorded when rooms are occupied or goods and services have been delivered or rendered.

 

    Management fees represent fees earned from hotels and timeshare properties that we manage, usually under long-term contracts with the property owner. Management fees from hotels usually include a base fee, which is generally a percentage of hotel revenues, and an incentive fee, which is typically based on a fixed or variable percentage of hotel profits and in some cases may be subject to a stated return threshold to the owner, normally over a one-calendar year period. Additionally, we receive one-time upfront fees upon execution of certain management contracts. We recognize base fees as revenue when earned in accordance with the terms of the management agreement. For incentive fees, we recognize those amounts that would be due if the contract was terminated at the financial statement date. One-time, upfront fees are recognized when all conditions have been substantially performed or satisfied by us. Management fees from timeshare properties are generally a fixed percent as stated in the management agreement and are recognized as the services are performed.

 

    Franchise fees represent fees earned in connection with the licensing of one of our hotel brands, usually under long-term contracts with the hotel owner. We charge a monthly franchise royalty fee, generally based on a percentage of room revenue, as well as application and initiation fees for new hotels entering the system. Royalty fees for our full-service brands may also include a percentage of gross food and beverage revenues and other revenues, where applicable. We recognize franchise fee revenue as the fees are earned, which is when all material services or conditions have been performed or satisfied.

 

    Other revenues include revenues generated by the incidental support of hotel operations for owned, leased, managed and franchised hotels and other rental income. This includes any revenues received for vendor rebate arrangements we participate in as a manager of hotel and timeshare properties.

 

   

Timeshare revenues consist of revenues generated from our Hilton Grand Vacations timeshare business. Timeshare revenues are principally generated from the sale and financing of timeshare intervals. Revenue from a deeded timeshare sale is recognized when the customer has executed a binding sales contract, a minimum ten percent down payment has been received, certain minimum sales thresholds for a timeshare project have been attained, the purchaser’s period to cancel for a refund has expired and the related receivable is deemed to be collectible. We defer revenue recognition for sales that do not meet these criteria. During periods of construction, revenue from timeshare sales is recognized under the percentage-of-completion method. One of our timeshare products is accounted for as a long-term lease with a reversionary interest, rather than the sale of a deeded interest in real estate. In this case, sales revenue is recognized on a straight-line basis over the term of the lease. Revenue from the financing of timeshare sales is recognized on the accrual method as earned based on the outstanding principal, interest rate and terms stated in each individual financing agreement. See “Financing Receivables” section below for further discussion of the policies applicable to our timeshare financing receivables. Additionally, we receive sales commissions from certain third-party developers that we assist in selling their timeshare inventory. We recognize revenue from commissions on these sales as intervals are sold and we fulfill the service requirements under the respective sales agreements with the developers. We also generate revenues from enrollment and other fees, rentals of timeshare units, food and beverage sales and other ancillary services at our timeshare properties that are recognized when units are rented or goods and services are delivered or rendered.

 

    Other revenues from managed and franchised properties represent payroll and related costs, certain other operating costs of the managed and franchised properties’ operations, marketing expenses and other expenses associated with our brands and shared services that are contractually reimbursed to us by the property owners or paid from fees collected in advance from these properties. The corresponding expenses are presented as other expenses from managed and franchised properties in our consolidated statements of operations, resulting in no effect on operating income (loss) or net income (loss).

We are required to collect certain taxes and fees from customers on behalf of government agencies and remit these back to the applicable governmental agencies on a periodic basis. We have a legal obligation to act as a collection agent. We do not retain these taxes and fees and, therefore, they are not included in revenues. We record a liability when the amounts are collected and relieve the liability when payments are made to the applicable taxing authority or other appropriate governmental agency.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with original maturities, when purchased, of three months or less.

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents include cash balances established as security for certain guarantees, lender reserves, ground rent and property tax escrows, reserves statutorily required to be held by our captive insurance subsidiary and advance deposits received on timeshare sales that are held in escrow until the contract is closed. For purposes of our consolidated statements of cash flows, changes in restricted cash and cash equivalents caused by changes in lender reserves due to restrictions under our loan agreements are shown as financing activities. The remaining changes in restricted cash and cash equivalents are the result of our normal operations, and, as such, are reflected in operating activities.

Allowance for Doubtful Accounts

An allowance for doubtful accounts is provided on accounts receivable when losses are probable based on historical collection activity and current business conditions.

Inventories

Inventories comprise unsold timeshare intervals at our timeshare properties, as well as hotel inventories consisting of operating supplies that have a period of consumption of one year or less, guest room items and food and beverage items.

Timeshare inventory is carried at the lower of cost or market, based on the relative sales value or net realizable value. Capital expenditures associated with our non-lease timeshare products are reflected as inventory until the timeshare intervals are sold. Consistent with industry practice, timeshare inventory is classified as a current asset despite an operating cycle that exceeds 12 months. The majority of sales and marketing costs incurred to sell timeshare intervals are expensed when incurred. Certain direct and incremental selling and marketing costs are deferred on a contract until revenue from the interval sale has been recognized.

In accordance with the accounting standards for costs and the initial rental operations of real estate projects, we use the relative sales value method of costing our timeshare sales and relieving inventory. In addition, we continually assess our timeshare inventory and, if necessary, impose pricing adjustments to accelerate sales pace. It is possible that any future changes in our development and sales strategies could have a material effect on the carrying value of certain projects and inventory. We monitor our projects and inventory on an ongoing basis and complete an evaluation each reporting period to ensure that the inventory is stated at the lower of cost or market.

Hotel inventories are generally valued at the lower of cost (using “first-in, first-out”, or FIFO) or market.

Property and Equipment

Property and equipment are recorded at cost and interest applicable to major construction or development projects is capitalized. Costs of improvements that extend the economic life or improve service potential are also capitalized. Capitalized costs are depreciated over their estimated useful lives. Costs for normal repairs and maintenance are expensed as incurred.

Depreciation is recorded using the straight-line method over the assets’ estimated useful lives, which are generally as follows: buildings and improvements (8 to 40 years), furniture and equipment (3 to 8 years) and computer equipment and acquired software (3 years). Leasehold improvements are depreciated over the shorter of the estimated useful life, based on the lives estimates above, or the lease term.

We evaluate the carrying value of our property and equipment if there are indicators of potential impairment. We perform an analysis to determine the recoverability of the asset’s carrying value by comparing the expected undiscounted future cash flows to the net book value of the asset. If it is determined that the expected undiscounted future cash flows are less than the net book value of the asset, the excess of the net book value over the estimated fair value is recorded in our consolidated statements of operations within impairment losses. Fair value is generally estimated using valuation techniques that consider the discounted cash flows of the asset using discount and capitalization rates deemed reasonable for the type of asset, as well as prevailing market conditions, appraisals, recent similar transactions in the market and, if appropriate and available, current estimated net sales proceeds from pending offers.

If sufficient information exists to reasonably estimate the fair value of a conditional asset retirement obligation, including environmental remediation liabilities, we recognize the fair value of the obligation when the obligation is incurred, which is generally upon acquisition, construction or development and/or through the normal operation of the asset.

Financing Receivables

We define financing receivables as financing arrangements that represent a contractual right to receive money either on demand or on fixed or determinable dates, which are recognized as an asset in our consolidated balance sheets. We record all financing receivables at amortized cost in current and long-term financing receivables. We recognize interest income as earned and provide an allowance for cancellations and defaults. We have divided our financing receivables into two portfolio segments based on the level of aggregation at which we develop and document a systematic methodology to determine the allowance for credit losses. Based on their initial measurement, risk characteristics and our method for monitoring and assessing credit risk, we have determined the classes of financing receivables to correspond to our identified portfolio segments as follows:

 

   

Timeshare financing receivables comprise loans related to our financing of timeshare interval sales and secured by the underlying timeshare properties. We determine our timeshare financing receivables to be past due based on the contractual terms of the individual mortgage loans. We recognize interest income on our timeshare financing receivables as earned. The interest rate charged on the notes correlates to the risk profile of the borrower at the time of purchase and the percentage of the purchase that is financed, among other factors. We record an estimate of uncollectibility as a reduction of sales revenue at the time revenue is recognized on a timeshare interval sale. We evaluate this portfolio collectively, since we hold a large group of homogeneous timeshare financing receivables, which are individually immaterial. We monitor the credit quality of our receivables on an ongoing basis. There are no significant concentrations of credit risk with any individual counterparty or groups of counterparties. With the exception of the financing provided to customers of our timeshare business, we do not normally require collateral or other security to support credit sales. We use a technique referred to as static pool analysis as the basis for determining our general reserve requirements on our timeshare financing receivables. The adequacy of the related allowance is determined by management through analysis of several factors, such as current economic conditions and industry trends, as well as the specific risk characteristics of the portfolio including assumed default rates, aging and historical write-offs of these receivables. The allowance is maintained at a level deemed adequate by management based on a periodic analysis of the mortgage portfolio. Once a note is 90 days past due or is determined to be uncollectible prior to 90 days past due, we cease accruing interest and reverse the accrued interest recognized up to that point. We apply payments we receive for loans, including those in non-accrual status, to amounts due in the following order: servicing fees, late charges, interest and principal. We resume interest accrual for loans for which we had previously ceased accruing interest once the loan is less than 90 days past due. We fully reserve for a timeshare financing receivable in the month following the date that the loan is 120 days past due and, subsequently, we write off the uncollectible note against the reserve once the foreclosure process is complete and we receive the deed for the foreclosed unit.

 

    Other financing receivables primarily comprise individual loans and other types of unsecured financing arrangements provided to hotel owners. We individually assess all financing receivables in this portfolio for collectibility and impairment. We measure loan impairment based on the present value of expected future cash flows discounted at the loan’s effective interest rate. For impaired loans, we establish a specific impairment reserve for the difference between the recorded investment in the loan and the present value of the expected future cash flows. We do not recognize interest income on unsecured financing to hotel owners for notes that are greater than 90 days past due and only resume interest recognition if the financing receivable becomes current. We fully reserve unsecured financing to hotel owners when we determine that the receivables are uncollectible and when all commercially reasonable means of recovering the receivable balances have been exhausted.

Investments in Affiliates

We hold investments in affiliates that primarily own or lease hotels under one of our nine distinct hotel brands. If the entity does not meet the definition of a VIE, we evaluate our voting interest or general partnership interest to determine if we have a controlling financial interest in the entity. Investments in affiliates over which we exercise significant influence, but lack a controlling financial interest, are accounted for using the equity method. We account for investments using the equity method when we own more than a minimal investment, but have no more than a 50 percent voting interest or do not otherwise control the investment. Investments in affiliates over which we are not able to exercise significant influence are accounted for under the cost method.

Our proportionate share of earnings (losses) from our equity method investments is presented as equity in earnings (losses) from unconsolidated affiliates in our consolidated statements of operations. Distributions from investments in unconsolidated entities are presented as an operating activity in our consolidated statements of cash flows when such distributions are a return on investment. Distributions from unconsolidated affiliates are recorded as an investing activity in our consolidated statements of cash flows when such distributions are a return of investment.

 

We assess the recoverability of our equity method and cost method investments if there are indicators of potential impairment. If an identified event or change in circumstances requires an evaluation to determine if an investment may have an other-than-temporary impairment, we assess the fair value of the investment based on accepted valuation methodologies, which include discounted cash flows, estimates of sales proceeds and external appraisals. If an investment’s fair value is below its carrying value and the decline is considered to be other-than-temporary, we will recognize an impairment loss in equity in earnings (losses) from unconsolidated affiliates for equity method investments or impairment losses for cost method investments in our consolidated statements of operations.

Goodwill

Goodwill represents the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. We do not amortize goodwill, but rather evaluate goodwill for potential impairment on an annual basis or at other times during the year if events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is below the carrying amount.

We review the carrying value of our goodwill by comparing the carrying value of our reporting units to their fair value. Our reporting units are the same as our operating segments as described in Note 24: “Business Segments”. We perform this evaluation annually or at an interim date if indicators of impairment exist. In any year we may elect to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is in excess of its carrying value. If we cannot determine qualitatively that the fair value is in excess of the carrying value, or we decide to bypass the qualitative assessment, we proceed to the two-step quantitative process. In the first step, we determine the fair value of each of our reporting units. The valuation is based on internal projections of expected future cash flows and operating plans, as well as market conditions relative to the operations of our reporting units. If the estimated fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired and the second step of the impairment test is not necessary. However, if the carrying amount of a reporting unit exceeds its estimated fair value, then the second step must be performed. In the second step, we estimate the implied fair value of goodwill, which is determined by taking the fair value of the reporting unit and allocating it to all of its assets and liabilities (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

Brands

We own, operate and franchise hotels under our portfolio of brands. There are no legal, regulatory, contractual, competitive, economic or other factors that limit the useful lives of these brands and, accordingly, the useful lives of these brands are considered to be indefinite. Our hotel brand portfolio includes Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Hilton Hotels & Resorts, DoubleTree by Hilton (including DoubleTree Suites by Hilton), Embassy Suites Hotels, Hilton Garden Inn, Hampton Inn (including Hampton Inn & Suites and, outside of the U.S., Hampton by Hilton), Homewood Suites by Hilton and Home2 Suites by Hilton. In addition, we also develop and operate timeshare properties under our Hilton Grand Vacations brand.

At the time of the Merger, our brands were assigned a fair value based on a common valuation technique known as the relief from royalty approach. Home2 Suites by Hilton was launched post-Merger and, as such, it was not assigned a fair value. We evaluate our brands for impairment on an annual basis or at other times during the year if events or circumstances indicate that it is more likely than not that the fair value of the brand is below the carrying value. If a brand’s estimated current fair value is less than its respective carrying value, the excess of the carrying value over the estimated fair value is recorded in our consolidated statements of operations within impairment losses.

Intangible Assets with Finite Useful Lives

We have certain finite lived intangible assets that were initially recorded at their fair value at the time of the Merger. These intangible assets consist of management agreements, franchise contracts, leases, certain proprietary technologies and our guest loyalty program, Hilton HHonors. Additionally, we capitalize management and franchise contract acquisition costs as finite-lived intangible assets. Intangible assets with finite useful lives are amortized using the straight-line method over their respective estimated useful lives.

We capitalize costs incurred to develop internal-use computer software. Internal and external costs incurred in connection with development of upgrades or enhancements that result in additional functionality are also capitalized. These capitalized costs are amortized on a straight-line basis over the estimated useful life of the software. These capitalized costs are recorded in other intangible assets in our consolidated balance sheets.

We review all finite lived intangible assets for impairment when circumstances indicate that their carrying amounts may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess of carrying value over the fair value in our consolidated statements of operations.

Hilton HHonors

Hilton HHonors is a guest loyalty program provided to hotels. Most of our owned, leased, managed and franchised hotels and timeshare properties participate in the Hilton HHonors program. Hilton HHonors members earn points based on their spending at our participating hotel and timeshare properties and through participation in affiliated partner programs. When points are earned by Hilton HHonors members, the property or affiliated partner pays Hilton HHonors based on an estimated cost per point for the costs of operating the program, which include marketing, promotion, communication, administration and the estimated cost of award redemptions. Hilton HHonors member points are accumulated and may be redeemed for certificates that entitle the holder to the right to stay at participating properties, as well as other opportunities with third parties, including, but not limited to, airlines, car rentals, cruises, vacation packages, shopping and dining. We provide Hilton HHonors as a marketing program to participating hotels, with the objective of operating the program on a break-even basis to us.

Hilton HHonors defers revenue received from participating hotels and program partners in an amount equal to the estimated cost per point of the future redemption obligation. We engage outside actuaries to assist in determining the fair value of the future award redemption obligation using statistical formulas that project future point redemptions based on factors that include historical experience, an estimate of “breakage” (points that will never be redeemed), an estimate of the points that will eventually be redeemed and the cost of reimbursing hotels and other third parties in respect to other redemption opportunities available to members. Revenue is recognized by participating hotels and resorts only when points that have been redeemed for hotel stay certificates are used by members or their designees at the respective properties. Additionally, when members of the Hilton HHonors loyalty program redeem award certificates at our owned and leased hotels, we recognize room rental revenue.

Fair Value Measurements—Valuation Hierarchy

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (an exit price). We use the three-level valuation hierarchy for classification of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized below:

 

    Level 1 - Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

    Level 2 - Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument.

 

    Level 3 - Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

The classification of assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement in its entirety.

Derivative Instruments

We use derivative instruments as part of our overall strategy to manage our exposure to market risks associated with fluctuations in interest rates and foreign currency exchange rates. We regularly monitor the financial stability and credit standing of the counterparties to our derivative instruments. Under the terms of our loan agreements, we are required to maintain derivative financial instruments to manage interest rates. We do not enter into derivative financial instruments for trading or speculative purposes.

We record all derivatives at fair value. On the date the derivative contract is entered, we designate the derivative as one of the following: a hedge of a forecasted transaction or the variability of cash flows to be paid (cash flow hedge), a hedge of the fair value of a recognized asset or liability (fair value hedge), a hedge of our foreign currency exposure (net investment hedge) or an undesignated hedge instrument. Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge or net investment hedge are recorded in other comprehensive income (loss) in the consolidated statements of comprehensive income (loss) until they are reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Changes in the fair value of a derivative that is qualified, designated and highly effective as a fair value hedge, along with the gain or loss on the hedged asset or liability that is attributable to the hedged risk, are recorded in current period earnings. Changes in the fair value of undesignated derivative instruments and the ineffective portion of designated derivative instruments are reported in current period earnings. Cash flows from designated derivative financial instruments are classified within the same category as the item being hedged in the consolidated statements of cash flows. Cash flows from undesignated derivative financial instruments are included as an investing activity in the consolidated statements of cash flows.

If we determine that we qualify for and will designate a derivative as a hedging instrument, at the designation date we formally document all relationships between hedging activities, including the risk management objective and strategy for undertaking various hedge transactions. This process includes matching all derivatives that are designated as cash flow hedges to specific forecasted transactions, linking all derivatives designated as fair value hedges to specific assets and liabilities in our consolidated balance sheets, and determining the foreign currency exposure of net investment of the foreign operation for a net investment hedge.

On a quarterly basis, we assess the effectiveness of our designated hedges in offsetting the variability in the cash flows or fair values of the hedged assets or obligations via use of the Hypothetical Derivative Method. This method compares the cumulative change in fair value of each hedging instrument to the cumulative change in fair value of a hypothetical hedging instrument, which has terms that identically match the critical terms of the respective hedged transactions. Thus, the hypothetical hedging instrument is presumed to perfectly offset the hedged cash flows. Ineffectiveness results when the cumulative change in the fair value of the hedging instrument exceeds the cumulative change in the fair value of the hypothetical hedging instrument. We discontinue hedge accounting prospectively, when the derivative is not highly effective as a hedge, the underlying hedged transaction is no longer probable, or the hedging instrument expires, is sold, terminated or exercised.

Currency Translation

The United States Dollar (“USD”) is our reporting currency and is the functional currency of our consolidated and unconsolidated entities operating in the U.S. The functional currency for our consolidated and unconsolidated entities operating outside of the U.S. is the currency of the primary economic environment in which the respective entity operates. Assets and liabilities measured in foreign currencies are translated into USD at the prevailing exchange rates in effect as of the financial statement date and the related gains and losses, net of applicable deferred income taxes, are reflected in equity. Income and expense accounts are translated at the average exchange rate for the period. Gains and losses from foreign exchange rate changes related to intercompany receivables and payables denominated in a currency other than an entity’s functional currency that are not of a long-term investment nature are reported as a component of gain (loss) on foreign currency transactions in our consolidated statements of operations.

Self-Insurance

We are self-insured for various levels of general liability, auto liability, workers’ compensation and employee health insurance coverage at our owned properties. Additionally, the majority of employees at managed hotels, of which we are the employer, participate in our workers’ compensation and employee health insurance coverage. Also, a number of our managed hotels participate in our general liability, auto liability, excess liability and property insurance programs. We purchase insurance coverage for claim amounts that exceed our self-insured retentions. Our insurance reserves are accrued based on estimates of the ultimate cost of claims that occurred during the covered period, which includes claims incurred but not reported. These estimates are prepared with the assistance of outside actuaries and consultants. The ultimate cost of claims for a covered period may differ from our original estimates. Our provision for insured events for the years ended December 31, 2013, 2012 and 2011 was $38 million, $27 million and $33 million, respectively. Our insured claims and adjustments paid for the years ended December 31, 2013, 2012 and 2011 were $36 million, $37 million and $33 million, respectively.

Share-based Compensation

We recognize the cost of services received in a share-based payment transaction with an employee as services are received and recognize either a corresponding increase in equity or a liability, depending on whether the instruments granted satisfy the equity or liability classification criteria.

The measurement objective for these equity awards is the estimated fair value at the grant date of the equity instruments that we are obligated to issue when employees have rendered the requisite service and satisfied any other conditions necessary to earn the right to benefit from the instruments. The compensation cost for an award classified as an equity instrument is recognized ratably over the requisite service period, including an estimate of forfeitures. The requisite service period is the period during which an employee is required to provide service in exchange for an award.

Liability awards under a share-based payment arrangement are measured based on the award’s fair value, and the fair value is remeasured at each reporting date until the date of settlement. Compensation cost for each period until settlement is based on the change (or a portion of the change, depending on the percentage of the requisite service that has been rendered at the reporting date) in the fair value of the instrument for each reporting period, including an estimate of forfeitures.

Compensation cost for awards with performance conditions is recognized over the requisite service period if it is probable that the performance condition will be satisfied. If such performance conditions are not considered probable until they occur, no compensation expense for these awards is recognized

Income Taxes

We account for income taxes using the asset and liability method. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year, to recognize the deferred tax assets and liabilities that relate to tax consequences in future years, which result from differences between the respective tax basis of assets and liabilities and their financial reporting amounts, and tax loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the respective temporary differences or operating loss or tax credit carry forwards are expected to be recovered or settled. The realization of deferred tax assets and tax loss and tax credit carry forwards is contingent upon the generation of future taxable income and other restrictions that may exist under the tax laws of the jurisdiction in which a deferred tax asset exists. Valuation allowances are provided to reduce such deferred tax assets to amounts more likely than not to be ultimately realized.

We use a prescribed recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. For all income tax positions, we first determine whether it is “more-likely-than-not” that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. If it is determined that a position meets the more-likely-than-not recognition threshold, the benefit recognized in the financial statements is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement.

In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11 (“ASU 2013-11”), Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This ASU provides guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists in the applicable jurisdiction to settle any additional income taxes that would result from disallowance of the tax position. The provisions of ASU 2013-11 were effective, prospectively, for reporting periods beginning after December 15, 2013. The adoption of this ASU resulted in the reclassification of $108 million of unrecognized tax benefits against deferred income tax assets.

In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11 (“ASU 2013-11”), Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This ASU provides guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists in the applicable jurisdiction to settle any additional income taxes that would result from disallowance of the tax position. The provisions of ASU 2013-11 are effective, prospectively, for reporting periods beginning after December 15, 2013. The adoption of ASU 2013-11 is not expected to materially affect our consolidated financial statements.

In March 2013, the FASB issued ASU No. 2013-05 (“ASU 2013-05”),Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. This ASU clarifies when a cumulative translation adjustment should be released to net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate) within a foreign entity. The provisions of ASU 2013-05 were effective, prospectively, for reporting periods beginning after December 15, 2013. The adoption did not have a material effect on our condensed consolidated financial statements.

In March 2013, the FASB issued ASU No. 2013-05 (“ASU 2013-05”), Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. The ASU clarifies when a cumulative translation adjustment should be released to net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate) within a foreign entity. The provisions of ASU 2013-05 are effective for reporting periods beginning after December 15, 2013. The adoption of ASU 2013-05 is not expected to materially affect our consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02 (“ASU 2013-02”), Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This ASU amends existing guidance by requiring companies to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required to be reclassified in its entirety to net income in the same reporting period. For amounts which are not required to be reclassified in their entirety to net income in the same reporting period, companies are required to cross reference other disclosures that provide information about those amounts. The provisions of ASU 2013-02 were effective, prospectively, for reporting periods beginning after December 15, 2012. The adoption of this ASU resulted in additional disclosures within Note 23: “Accumulated Other Comprehensive Loss.”

In July 2012, the FASB issued ASU No. 2012-02 (“ASU 2012-02”), Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This ASU permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative impairment test. This ASU was effective for annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 14, 2012. The adoption of ASU 2012-02 did not have a material effect on our consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15 (“ASU 2014-15”), Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU requires management to assess and evaluate whether conditions or events exist, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements issue date. The provisions of ASU 2014-15 are effective for annual periods beginning after December 15, 2016 and for annual and interim periods thereafter; early adoption is permitted. The adoption of ASU 2014-15 is not expected to have a material effect on our consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers (Topic 606). This ASU supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605),” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The provisions of ASU 2014-09 are effective for annual periods beginning after December 15, 2016, including interim periods within that reporting period and are to be applied retrospectively; early application is not permitted. We are currently evaluating the effect that this ASU will have on our consolidated financial statements.

In April 2014, the FASB issued ASU No. 2014-08 (“ASU 2014-08”), Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU amends guidance on reporting discontinued operations only if the disposal of a component of an entity or group of components of an entity represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The provisions of ASU 2014-08 should be applied prospectively for all disposals of components of an entity and for all businesses that, on acquisition, are classified as held for sale that occurred within annual periods beginning on or after December 15, 2014, and interim periods within. We have elected, as permitted by the standard, to early adopt ASU 2014-08 effective for components disposed of or held for sale on or after October 1, 2014. The adoption is not expected to have a material effect on our consolidated financial statements.

Acquisitions (Tables)

The following is a listing of all 11 hotels involved in this exchange, including pre-exchange and post-exchange ownership percentages:

 

Property

   Pre-Exchange
Ownership %
    Post-Exchange
Ownership %
 

Embassy Suites Atlanta—Perimeter Center

     50     100

Embassy Suites Kansas City—Overland Park

     50     100

Embassy Suites Kansas City—Plaza

     50     100

Embassy Suites Parsippany

     50     100

Embassy Suites San Rafael—Marin County

     50     100

Embassy Suites Austin—Central

     50    

Embassy Suites Chicago—Lombard/Oak Brook

     50    

Embassy Suites Raleigh—Crabtree

     50    

Embassy Suites San Antonio—International Airport

     50    

Embassy Suites San Antonio—NW I-10

     50    

DoubleTree Guest Suites Austin

     10    

The fair value of the assets and liabilities acquired as a result of the exchange were as follows:

 

     (in millions)  

Cash and cash equivalents

   $   

Property and equipment

      144    

Other intangible assets

       

Long-term debt

     (64)   
  

 

 

 

Net assets acquired

   $ 83    
  

 

 

 
Inventories (Tables)
Schedule of Inventory, Current

Inventories were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

Timeshare

   $        371       $        389   

Hotel

     25         26   
  

 

 

    

 

 

 
   $ 396       $ 415   
  

 

 

    

 

 

 
Property and Equipment (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Property, Plant and Equipment [Abstract]
 
 
Property and Equipment
Impairment Losses Recognized on Assets Included in Property and Equipment, by Property Type
 

Property and equipment were as follows:

 

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

Land

   $ 4,115        $ 4,098    

Buildings and leasehold improvements

     5,706          5,511    

Furniture and equipment

     1,203          1,172    

Construction-in-progress

     97          67    
  

 

 

    

 

 

 
      11,121           10,848    

Accumulated depreciation and amortization

     (1,997)         (1,790)   
  

 

 

    

 

 

 
   $ 9,124        $ 9,058    
  

 

 

    

 

 

 

Property and equipment were as follows:

     December 31,  
     2013      2012  
     (in millions)  

Land

   $ 4,098        $ 4,090    

Buildings and leasehold improvements

     5,511          5,450    

Furniture and equipment

     1,172          1,111    

Construction-in-progress

     67          88    
  

 

 

    

 

 

 
      10,848           10,739    

Accumulated depreciation and amortization

     (1,790)         (1,542)   
  

 

 

    

 

 

 
   $ 9,058        $ 9,197    
  

 

 

    

 

 

 

The following table details the impairment losses recognized on our assets included in property and equipment, by property type, for the years ended December 31, 2012 and 2011:

 

     Year Ended December 31,  
       2012          2011    
     (in millions)  

Owned and leased hotels

   $  42       $  17   

Timeshare properties

             3   

Corporate office facilities

     11           
  

 

 

    

 

 

 
   $ 53       $ 20   
  

 

 

    

 

 

 
Financing Receivables (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013

Financing receivables were as follows:

 

     September 30, 2014  
     Securitized
Timeshare
     Unsecuritized
Timeshare
         Other              Total      
     (in millions)  

Financing receivables

   $  459        $  412        $  24        $  895    

Less: allowance

     (26)         (54)         (1)         (81)   
  

 

 

    

 

 

    

 

 

    

 

 

 
     433          358          23          814    
  

 

 

    

 

 

    

 

 

    

 

 

 

Current portion of financing receivables

     68          63                  133    

Less: allowance

     (4)         (9)         —          (13)   
  

 

 

    

 

 

    

 

 

    

 

 

 
     64          54                  120    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total financing receivables

   $ 497        $ 412        $ 25        $ 934    
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     December 31, 2013  
     Securitized
Timeshare
     Unsecuritized
Timeshare
         Other              Total      
     (in millions)  

Financing receivables

   $  205        $  654        $  49        $  908    

Less: allowance

     (11)         (67)         (1)         (79)   
  

 

 

    

 

 

    

 

 

    

 

 

 
     194          587          48          829    
  

 

 

    

 

 

    

 

 

    

 

 

 

Current portion of financing receivables

     29          106          —          135    

Less: allowance

     (2)         (12)         —          (14)   
  

 

 

    

 

 

    

 

 

    

 

 

 
     27          94          —          121    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total financing receivables

   $ 221        $ 681        $ 48        $ 950    
  

 

 

    

 

 

    

 

 

    

 

 

 

Financing receivables were as follows:

 

     December 31, 2013  
     Securitized
Timeshare
     Unsecuritized
Timeshare
         Other              Total      
     (in millions)  

Financing receivables

   $  205        $  654        $  49        $  908    

Less: allowance

     (11)         (67)         (1)         (79)   
  

 

 

    

 

 

    

 

 

    

 

 

 
     194          587          48          829    
  

 

 

    

 

 

    

 

 

    

 

 

 

Current portion of financing receivables

     29          106          —          135    

Less: allowance

     (2)         (12)         —          (14)   
  

 

 

    

 

 

    

 

 

    

 

 

 
     27          94          —          121    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total financing receivables

   $ 221        $ 681        $ 48        $ 950    
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     December 31, 2012  
     Unsecuritized
Timeshare
         Other              Total      
     (in millions)  

Financing receivables

   $  853        $  44        $  897    

Less: allowance

     (81)         (1)         (82)   
  

 

 

    

 

 

    

 

 

 
     772          43          815    
  

 

 

    

 

 

    

 

 

 

Current portion of financing receivables

     131          —          131    

Less: allowance

     (12)         —          (12)   
  

 

 

    

 

 

    

 

 

 
     119          —          119    
  

 

 

    

 

 

    

 

 

 

Total financing receivables

   $ 891        $ 43        $ 934    
  

 

 

    

 

 

    

 

 

 

The changes in our allowance for uncollectible timeshare financing receivables were as follows:

 

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

Beginning balance

   $ 92        $ 93    

Write-offs

        (24)            (19)   

Provision for uncollectibles on sales

     25          20    
  

 

 

    

 

 

 

Ending balance

   $ 93        $ 94    
  

 

 

    

 

 

 

 

The changes in our allowance for uncollectible timeshare financing receivables were as follows:

 

     (in millions)  

Balance as of December 31, 2010

   $  101    

Write-offs

     (36)   

Provision for uncollectibles on sales

     32    
  

 

 

 

Balance as of December 31, 2011

     97    

Write-offs

     (33)   

Provision for uncollectibles on sales

     29    
  

 

 

 

Balance as of December 31, 2012

     93    

Write-offs

     (25)   

Provision for uncollectibles on sales

     24    
  

 

 

 

Balance as of December 31, 2013

   $ 92    
  

 

 

 

Our timeshare financing receivables as of September 30, 2014 mature as follows:

 

     Securitized
Timeshare
     Unsecuritized
Timeshare
 
Year    (in millions)  

2014 (remaining)

   $ 17        $ 27    

2015

     68          48    

2016

     71          51    

2017

     73          52    

2018

     72          52    

Thereafter

     226          245    
  

 

 

    

 

 

 
     527          475    

Less: allowance

     (30)         (63)   
  

 

 

    

 

 

 
   $  497        $  412    
  

 

 

    

 

 

 

Our timeshare financing receivables as of December 31, 2013 mature as follows:

 

     Securitized
Timeshare
     Unsecuritized
Timeshare
 
Year    (in millions)  

2014

   $ 29        $ 106    

2015

     29          87    

2016

     30          90    

2017

     30          92    

2018

     30          89    

Thereafter

     86          296    
  

 

 

    

 

 

 
     234          760    

Less: allowance

     (13)         (79)   
  

 

 

    

 

 

 
   $  221        $  681    
  

 

 

    

 

 

 

The following table details an aged analysis of our gross timeshare financing receivables balance:

 

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

Current

   $ 958        $ 948    

30 - 89 days past due

     13          14    

90 - 119 days past due

               

120 days and greater past due

     28          28    
  

 

 

    

 

 

 
   $  1,002        $  994    
  

 

 

    

 

 

 

The following table details an aged analysis of our gross timeshare financing receivables balance:

 

     December 31,  
         2013              2012      
     (in millions)  

Current

   $  948       $  940   

30 - 89 days past due

     14         14   

90 - 119 days past due

     4         4   

120 days and greater past due

     28         26   
  

 

 

    

 

 

 
   $ 994       $ 984   
  

 

 

    

 

 

 
Investments in Affiliates (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Schedule of Investments in Affiliates

Investments in affiliates were as follows:

 

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

Equity investments

   $ 157        $ 245    

Other investments

     17          15    
  

 

 

    

 

 

 
   $  174        $  260    
  

 

 

    

 

 

 
Schedule of Investments in Affiliates

Investments in affiliates were as follows:

 

     December 31,  
         2013              2012      
     (in millions)  

Equity investments

   $  245       $  276   

Other investments

     15         15   
  

 

 

    

 

 

 
   $ 260       $ 291   
  

 

 

    

 

 

 
Goodwill Disclosure (Tables)
Schedule of Goodwill

Our goodwill balances, by reporting unit, were as follows:

 

     Ownership      Management
and Franchise
     Total  
     (in millions)  

Goodwill

   $ 4,555        $ 5,147       $ 9,702    

Accumulated impairment losses

      (3,527)                  (3,527)   
  

 

 

    

 

 

    

 

 

 

Balance as of December 31, 2011

     1,028          5,147         6,175    

Foreign currency translation

             18         22    

Goodwill

     4,559          5,165         9,724    

Accumulated impairment losses

     (3,527)                 (3,527)   
  

 

 

    

 

 

    

 

 

 

Balance as of December 31, 2012

     1,032          5,165         6,197    

Foreign currency translation

             19         23    

Goodwill

     4,563          5,184         9,747    

Accumulated impairment losses

     (3,527)                 (3,527)   
  

 

 

    

 

 

    

 

 

 

Balance as of December 31, 2013

   $ 1,036        $  5,184       $ 6,220    
  

 

 

    

 

 

    

 

 

 
Other Intangible Assets (Tables)

Other intangible assets were as follows:

 

     December 31, 2013  
     Gross Carrying
Amount
     Accumulated
Amortization
     Net Carrying
Amount
 
     (in millions)  

Amortizing Intangible Assets:

        

Management and franchise agreements

   $ 2,573       $ (1,121)       $ 1,452   

Leases

     436         (132)         304   

Other(1)

     727         (280)         447   
  

 

 

    

 

 

    

 

 

 
   $  3,736       $  (1,533)       $  2,203   
  

 

 

    

 

 

    

 

 

 

Non-amortizing Intangible Assets:

        

Brands

   $ 5,013       $ —        $ 5,013   

 

     December 31, 2012  
     Gross Carrying
Amount
     Accumulated
Amortization
     Net Carrying
Amount
 
     (in millions)  

Amortizing Intangible Assets:

        

Management and franchise agreements

   $  2,542       $ (942)       $  1,600   

Leases

     408         (107)         301   

Other(1)

     646         (203)         443   
  

 

 

    

 

 

    

 

 

 
   $  3,596       $  (1,252)       $  2,344   
  

 

 

    

 

 

    

 

 

 

Non-amortizing Intangible Assets:

        

Brands

   $ 5,029       $ —        $ 5,029   

 

(1) 

Includes capitalized software with a net balance of $218 million and $191 million as of December 31, 2013 and 2012, respectively, and the Hilton HHonors intangible with a net balance of $215 million and $236 million as of December 31, 2013 and 2012, respectively. We recorded amortization expense on capitalized software of $52 million, $30 million and $15 million for the years ended December 31, 2013, 2012 and 2011, respectively, and amortization expense on the Hilton HHonors intangible of $22 million for the years ended December 31, 2013, 2012 and 2011.

We estimate our future amortization expense for our amortizing intangible assets to be as follows:

 

Year    (in millions)  

2014

   $ 315   

2015

     307   

2016

     285   

2017

     239   

2018

     229   

Thereafter

     828   
  

 

 

 
   $  2,203   
  

 

 

 
Accounts Payable, Accrued Expenses and Other (Tables)
Accounts Payable, Accrued Expenses and Other

Accounts payable, accrued expenses and other were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

Accrued employee compensation and benefits

   $ 547       $ 530   

Accounts payable

     319         286   

Liability for guest loyalty program, current

     366         321   

Deposit liabilities

     195         169   

Deferred revenues, current

     48         61   

Self-insurance reserves, current

     52         47   

Other accrued expenses

     552         508   
  

 

 

    

 

 

 
   $  2,079       $  1,922   
  

 

 

    

 

 

 
Debt (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Debt Disclosure [Abstract]
 
 
Long-term Debt
Gain on Extinguishment of Debt
 
Non-recourse Debt
Debt Maturities

Long-term debt balances, including obligations for capital leases, and associated interest rates were as follows:

 

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

Senior secured term loan facility with a rate of 3.50%, due 2020

   $ 5,300        $ 6,000    

Senior notes with a rate of 5.625%, due 2021

     1,500          1,500    

Commercial mortgage-backed securities loan with an average rate of 4.05%, due 2018(1)

     3,500          3,500    

Mortgage loan with a rate of 2.30%, due 2018

     525          525    

Mortgage notes with an average rate of 5.17%, due 2016 to 2017

     196          133    

Other unsecured notes with a rate of 7.50%, due 2017

     54          53    

Capital lease obligations with an average rate of 6.06%, due 2015 to 2097

     76          73    
  

 

 

    

 

 

 
     11,151          11,784    

Less: current maturities of long-term debt

     (3)         (4)   

Less: unamortized discount on senior secured term loan facility

     (24)         (29)   
  

 

 

    

 

 

 
   $  11,124        $  11,751    
  

 

 

    

 

 

 

 

(1)  The initial maturity date of the variable-rate component of this borrowing is November 1, 2015. We assumed all extensions, which are solely at our option, were exercised.

Long-term debt balances, including obligations for capital leases, and associated interest rates were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

Senior secured term loan facility with a rate of 3.75%, due 2020

   $ 6,000        $ —    

Senior notes with a rate of 5.625%, due 2021

     1,500          —    

Commercial mortgage-backed securities loan with an average rate of 4.05%, due 2018(1)

     3,500          —    

Mortgage loan with a rate of 2.32%, due 2018

     525          —    

Senior mortgage loans with a rate of 2.51%, due 2015(2)

     —          7,271    

Secured mezzanine loans with an average rate of 4.12%, due 2015(2)

     —          7,697    

Secured mezzanine loans with a rate of 4.71%, due 2015(2)

     —          240    

Mortgage notes with an average rate of 6.13%, due 2014 to 2016

     133          134    

Other unsecured notes with a rate of 7.50%, due 2017(3)

     53          149    

Capital lease obligations with an average rate of 5.88%, due 2015 to 2093

     73          83    

Contingently convertible notes with a rate of 3.38%, due 2023(4)

     —            
  

 

 

    

 

 

 
     11,784          15,575    

Less: current maturities of long-term debt

     (4)         (392)   

Less: unamortized discount on senior secured term loan facility

     (29)         —    
  

 

 

    

 

 

 
   $  11,751        $  15,183    
  

 

 

    

 

 

 

 

(1)  The initial maturity date of the $875 million variable-rate component of this borrowing is November 1, 2015. We have assumed all extensions, which are solely at our option, were exercised.
(2) The rates are as of December 31, 2012, since the senior mortgage and secured mezzanine loans were paid in full on October 25, 2013.
(3) The balance as of December 31, 2012, included $96 million of our 8 percent unsecured notes due 2031 that were paid in full on November 25, 2013.
(4) The balance was less than $1 million as of December 31, 2013.

Upon completion of the Debt Refinancing, we recognized a $229 million gain on extinguishment of debt in our consolidated statement of operations as follows:

 

     (in millions)  

Release of interest accrued under the interest method

   $  201    

Release of unamortized yield adjustments related to prior debt modifications

     43    

Release of unamortized debt issuance costs

     (15)   
  

 

 

 
   $ 229    
  

 

 

 

Non-recourse debt, including obligations for capital leases, and associated interest rates were as follows:

 

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

Capital lease obligations of consolidated VIEs with a rate of 6.34%, due 2018 to 2026

  $       239       $       255    

Non-recourse debt of consolidated VIEs with an average rate of 3.46%, due 2015 to 2018(1)

    37         41    

Timeshare Facility with a rate of 1.40%, due 2016

    150         450    

Securitized Timeshare Debt with an average rate of 1.98%, due 2026

    511         222    
 

 

 

   

 

 

 
    937         968    

Less: current maturities of non-recourse debt

     (124)        (48)   
 

 

 

   

 

 

 
  $ 813       $  920    
 

 

 

   

 

 

 

 

(1)  Excludes the non-recourse debt of our VIEs that issued the Securitized Timeshare Debt, as this is presented separately.

Non-recourse debt, including obligations for capital leases, and associated interest rates were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

Capital lease obligations of consolidated VIEs with a rate of 6.34%, due 2018 to 2026

   $       255        $       373    

Non-recourse debt of consolidated VIEs with an average rate of 3.30%, due 2015 to 2018(1)

     41          47    

Timeshare Facility with a rate of 1.42%, due 2016

     450          —    

Securitized Timeshare Debt with a rate of 2.28%, due 2026

     222          —    
  

 

 

    

 

 

 
     968          420    

Less: current maturities of non-recourse debt

     (48)         (15)   
  

 

 

    

 

 

 
   $ 920        $ 405    
  

 

 

    

 

 

 

 

(1) Excludes the non-recourse debt of our VIE that issued the Securitized Timeshare Debt, as this is presented separately.

The contractual maturities of our long-term debt and non-recourse debt as of September 30, 2014 were as follows:

 

Year    (in millions)  

2014 (remaining)

   $ 34   

2015

     136   

2016

     433   

2017

     164   

2018(1)

     4,097   

Thereafter

     7,224   
  

 

 

 
   $  12,088   
  

 

 

 

 

(1)  The CMBS Loan has three one-year extensions, solely at our option, that effectively extend maturity to November 1, 2018. We assumed all extensions for purposes of calculating maturity dates.

The contractual maturities of our long-term debt and non-recourse debt as of December 31, 2013 were as follows:

 

Year    (in millions)  

2014

   $ 52   

2015

     69   

2016

     622   

2017

     96   

2018(1)

     4,068   

Thereafter

     7,845   
  

 

 

 
   $  12,752   
  

 

 

 

 

(1) The CMBS Loan has three one-year extensions solely at our option that effectively extend maturity to November 1, 2018. We have assumed all extensions for purposes of calculating maturity dates.
Deferred Revenues (Tables)
Schedule of Deferred Revenues

Deferred revenues were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

Hilton HHonors points sales

   $ 597       $   

Other

     77         82   
  

 

 

    

 

 

 
   $  674       $ 82   
  

 

 

    

 

 

 
Other Liabilities Disclosure (Tables)
Other Noncurrent Liabilities

Other long-term liabilities were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

Program surplus

   $ 314       $ 263   

Pension obligations

     138         262   

Other long-term tax liabilities

     344         340   

Deferred employee compensation and benefits

     147         129   

Self-insurance reserves

     81         80   

Guarantee liability

     51         57   

Other

     74         310   
  

 

 

    

 

 

 
   $  1,149       $  1,441   
  

 

 

    

 

 

 
Derivative Instruments and Hedging Activities (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013

The effects of our derivative instruments on our condensed consolidated balance sheets were as follows:

 

     September 30, 2014      December 31, 2013  
     Balance Sheet
Classification
   Fair Value      Balance Sheet
Classification
   Fair Value  
          (in millions)           (in millions)  

Cash Flow Hedges:

           

Interest rate swaps

   Other assets    $  4       Other assets    $  10   

Non-designated Hedges:

           

Interest rate caps

   Other assets            Other assets        

The effects of our derivative instruments on our consolidated balance sheets were as follows:

 

     December 31, 2013      December 31, 2012  
     Balance Sheet
Classification
     Fair Value      Balance Sheet
Classification
     Fair Value  
            (in millions)             (in millions)  

Cash Flow Hedges

           

Interest rate swaps

     Other assets       $  10         N/A       $  —   

Non-designated Hedges

           

Interest rate caps(1)

     Other assets                 Other assets           

 

(1) The fair values of our interest rate caps were immaterial as of December 31, 2013 and 2012.

Earnings Effect of Derivative Instruments

The effects of our derivative instruments on our condensed consolidated statements of operations and condensed consolidated statements of comprehensive income (loss) before any effect for income taxes were as follows:

 

          Nine Months Ended
September 30,
 
     Classification of Loss Recognized    2014      2013  

Cash Flow Hedges:

        

Interest rate swaps(1)

   Other comprehensive loss    $  (6)         N/A   

Non-designated Hedges:

        

Interest rate caps

   Other gain, net      —            

 

(1)  There were no amounts recognized in earnings related to hedge ineffectiveness or amounts excluded from hedge effectiveness testing during the nine months ended September 30, 2014.

The effects of our derivative instruments on our consolidated statements of operations and consolidated statements of comprehensive income (loss) before any effect for income taxes were as follows:

 

    Classification of Gain (Loss)
Recognized
  Amount of Gain (Loss) Recognized in Income  
            2013                  2012                  2011        
        (in millions)  

Cash Flow Hedges

         

Interest rate swaps(1)

  Other comprehensive income (loss)   $  10       $ —        $ —    

Interest rate caps(2)

  Other gain, net             —          (2)   

Non-designated Hedges

         

Interest rate caps(3)

  Other gain, net             (1)         (1)   

 

(1) There were no amounts recognized in earnings related to hedge ineffectiveness or amounts excluded from hedge effectiveness testing during the year ended December 31, 2013.
(2)  Relates to hedge ineffectiveness on the eight designated Secured Debt interest rate caps that were outstanding during the year ended December 31, 2011. No amounts were excluded from hedge effectiveness testing.
(3)  An immaterial loss was recorded during the year ended December 31, 2013.
Fair Value Measurements (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013

The carrying amounts and estimated fair values of our financial assets and liabilities, including related current portions, were as follows:

 

     September 30, 2014  
            Hierarchy Level  
     Carrying
Amount
     Level 1      Level 2      Level 3  
     (in millions)  

Assets:

           

Cash equivalents

   $     290       $       $     290       $   

Restricted cash equivalents

     97                 97           

Timeshare financing receivables

     1,002                         1,004   

Interest rate swaps

     4                 4           

Liabilities:

           

Long-term debt(1)(2)

      11,051         1,606                  9,592   

Non-recourse debt(3)

     661                         657   

 

     December 31, 2013  
            Hierarchy Level  
     Carrying
Amount
     Level 1      Level 2      Level 3  
     (in millions)  

Assets:

           

Cash equivalents

   $ 309       $       $ 309       $   

Restricted cash equivalents

     107                 107           

Timeshare financing receivables

     994                         996   

Interest rate swaps

     10                 10           

Liabilities:

           

Long-term debt(1)

      11,682         57          1,560          10,358   

Non-recourse debt(3)

     672                         670   

 

(1)  Excludes capital lease obligations with a carrying value of $76 million and $73 million as of September 30, 2014 and December 31, 2013, respectively.
(2)  As of September 30, 2014, the classification of certain long-term debt with a carrying value of $1,500 million changed from Level 2 to Level 1 upon the availability of active market pricing data.
(3)  Excludes capital lease obligations of consolidated VIEs with a carrying value of $239 million and $255 million as of September 30, 2014 and December 31, 2013, respectively, and non-recourse debt of consolidated VIEs with a carrying value of $37 million and $41 million as of September 30, 2014 and December 31, 2013, respectively.

The carrying amounts and estimated fair values of our financial assets and liabilities, which included related current portions, were as follows:

 

     December 31, 2013  
            Hierarchy Level  
     Carrying
Amount
     Level 1      Level 2      Level 3  
     (in millions)  

Assets:

           

Cash equivalents

   $ 309       $  —       $ 309       $   

Restricted cash equivalents

     107                 107           

Timeshare financing receivables

     994                         996   

Interest rate swaps

     10                 10           

Liabilities:

           

Long-term debt(1)(3)

      11,682          57          1,560          10,358   

Non-recourse debt(2)(3)

     672                         670   

 

     December 31, 2012  
            Hierarchy Level  
     Carrying
Amount
     Level 1      Level 2      Level 3  
     (in millions)  

Assets:

           

Cash equivalents

   $ 561       $  —       $  561       $   

Restricted cash equivalents

     322                 322           

Timeshare financing receivables

     984                         987   

Liabilities:

           

Long-term debt(1)(3)

      15,492         152                  15,716   

 

(1) Excludes capital lease obligations with a carrying value of $73 million and $83 million as of December 31, 2013 and 2012, respectively.
(2) Represents the Securitized Timeshare Debt and the Timeshare Facility.
(3) Includes current maturities.

As a result of our acquisition of the remaining ownership interest in certain equity method investments, which occurred during the nine months ended September 30, 2014, we measured financial and nonfinancial assets and liabilities at fair value on a nonrecurring basis (see Note 3: “Acquisitions”), as follows:

 

     Fair Value(1)  
     (in millions)  

Property and equipment

   $ 144   

Long-term debt

     64   

 

(1)  Fair value measurements using significant unobservable inputs (Level 3).

The estimated fair values of our financial and nonfinancial assets that were measured at fair value on a nonrecurring basis as a result of impairment losses were as follows:

 

     Year Ended December 31,  
     2012      2011  
     Fair Value(1)      Impairment
Losses
     Fair Value(1)      Impairment
Losses
 
     (in millions)  

Property and equipment, net

   $    24       $    53       $ 5       $ 20   

Investments in affiliates

     29         20          205          141   

 

(1)  Fair value measurements using significant unobservable inputs (Level 3).
Leases (Tables)

The future minimum rent payments, under non-cancelable leases, due in each of the next five years and thereafter as of December 31, 2013, were as follows:

 

     Operating
Leases
     Capital
Leases
     Non-Recourse
Capital Leases
 
Year    (in millions)  

2014

   $ 264       $       $ 26    

2015

     251         16          26    

2016

     243                 26    

2017

     230                 26    

2018

     223                 26    

Thereafter

     2,075         106          272    
  

 

 

    

 

 

    

 

 

 

Total minimum rent payments

   $  3,286         148          402    
  

 

 

       

Less: amount representing interest

        (75)         (147)   
     

 

 

    

 

 

 

Present value of net minimum rent payments

      $       73        $     255    
     

 

 

    

 

 

 

Rent expense for all operating leases was as follows:

 

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

Minimum rentals

   $    271       $     286       $     264   

Contingent rentals

     148         161         175   
  

 

 

    

 

 

    

 

 

 
   $ 419       $ 447       $ 439   
  

 

 

    

 

 

    

 

 

 
Income Taxes (Tables)

The domestic and foreign components of income before income taxes were as follows:

 

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

U.S. income before tax

   $ 502       $ 435       $ 48   

Foreign income before tax

     196         138         148   
  

 

 

    

 

 

    

 

 

 

Income before income taxes

   $    698       $     573       $     196   
  

 

 

    

 

 

    

 

 

 

The components of our provision (benefit) for income taxes were as follows:

 

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

Current:

  

Federal

   $ 94        $ 71       $ 50    

State

     15          13           

Foreign

     64          57         70    
  

 

 

    

 

 

    

 

 

 

Total current

     173          141         128    
  

 

 

    

 

 

    

 

 

 

Deferred:

  

Federal

     160          63             (190)   

State

             2         (8)   

Foreign

     (99)         8         11    
  

 

 

    

 

 

    

 

 

 

Total deferred

     65          73         (187)   
  

 

 

    

 

 

    

 

 

 

Total provision (benefit) for income taxes

   $      238        $      214       $ (59)   
  

 

 

    

 

 

    

 

 

 

Reconciliations of our tax provision at the U.S. statutory rate to the provision (benefit) for income taxes were as follows:

 

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

Statutory U.S. federal income tax provision

   $ 244        $ 201        $ 69    

State income taxes, net of U.S. federal tax benefit

     31          10            

Foreign income tax expense

     74          18          50    

Foreign losses not subject to U.S. tax

     (24)         (24)         (26)   

Tax credits

     (67)         (67)         (58)   

Change in deferred tax asset valuation allowance

     (121)         56               (160)   

Change in basis difference in foreign subsidiaries

     24          18          20    

Provision for uncertain tax positions

     (19)         (2)         35    

Non-deductible equity based compensation

     94          —          —    

Other, net

                       
  

 

 

    

 

 

    

 

 

 

Provision (benefit) for income taxes

   $      238        $      214        $ (59)   
  

 

 

    

 

 

    

 

 

 

The composition of net deferred tax balances were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

Deferred income tax assets—current

   $ 23        $ 76    

Deferred income tax assets—non-current

     193          104    

Deferred income tax liabilities—current(1)

     —          (1)   

Deferred income tax liabilities—non-current

     (5,053)         (4,948)   
  

 

 

    

 

 

 

Net deferred taxes

   $  (4,837)       $  (4,769)   
  

 

 

    

 

 

 

 

(1) Included in the accounts payable, accrued expenses and other in our consolidated balance sheet.

 

The tax effects of the temporary differences and carryforwards that give rise to our net deferred tax asset (liability) were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

Deferred tax assets:

     

Foreign tax credits

   $ 20        $ 227    

Net operating loss carryforwards

     573          570    

Compensation

     187          245    

Deferred transaction costs

     15          25    

Investments

     56          —    

Other reserves

     90          198    

Capital lease obligations

     133          188    

Self-insurance reserves

     51          44    

System funds

     42          23    

Other tax credits

             48    

Other

     105          72    
  

 

 

    

 

 

 

Total gross deferred tax assets

     1,275          1,640    

Less: valuation allowance

     (503)         (769)   
  

 

 

    

 

 

 

Deferred tax assets

   $ 772        $ 871    
  

 

 

    

 

 

 

Deferred tax liabilities:

     

Property and equipment

   $  (2,075)       $  (2,025)   

Brands

     (1,910)         (1,916)   

Amortizable intangible

     (616)         (659)   

Unrealized foreign currency gains

     (279)         (301)   

Investments

     —          (70)   

Investment in foreign subsidiaries

     (81)         (93)   

Deferred income

     (648)         (576)   
  

 

 

    

 

 

 

Deferred tax liabilities

     (5,609)         (5,640)   
  

 

 

    

 

 

 

Net deferred taxes

   $   (4,837)       $   (4,769)   
  

 

 

    

 

 

 

Reconciliations of the beginning and ending amount of unrecognized tax benefits were as follows:

 

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

Balance at beginning of year

   $ 469        $ 436        $ 405    

Additions for tax positions related to the prior year

             71          60    

Additions for tax positions related to the current year

                       

Reductions for tax positions for prior years

     (2)         (23)         (6)   

Settlements

     (35)         (14)         (27)   

Lapse of statute of limitations

     (2)         (6)         (2)   

Currency translation adjustment

     (1)         —            
  

 

 

    

 

 

    

 

 

 

Balance at end of year

   $  435        $  469        $  436    
  

 

 

    

 

 

    

 

 

 
Employee Benefit Plans (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Compensation and Retirement Disclosure [Abstract]
 
 
Schedule of Changes in Projected Benefit Obligations
 
Schedule of Amounts Recognized in Balance Sheet
 
Schedule of Amounts Recognized in Other Comprehensive Income (Loss)
 
Schedule of Amounts in Accumulated Other Comprehensive Income (Loss) to be Recognized over Next Fiscal Year
 
Schedule of Net Periodic Pension Cost (Credit)
Schedule of Assumptions Used
 
Schedule of Fair Value Of Pension Assets
 
Schedule of Expected Benefit Payments
 
Schedule of Multiemployer Plans
 

The following table presents the projected benefit obligation, fair value of plan assets, the funded status and the accumulated benefit obligation for the Domestic Plan, the U.K. Plan and the International Plans:

 

     Domestic Plan      U.K. Plan      International Plans  
         2013              2012              2013              2012              2013              2012      
                   (in millions)         

Change in Projected Benefit Obligation:

                 

Benefit obligation at beginning of year

   $ 491        $ 449        $ 365        $ 312        $ 125        $ 119    

Service cost

     —          —                                    

Interest cost

     18          21          16          16                    

Employee contributions

     —          —                          —          —    

Actuarial loss (gain)

     (51)         43          (3)         28          (6)           

Settlements and curtailments

     —          —          —          —          (2)         —    

Effect of foreign exchange rates

     —          —                  14          (4)         (2)   

Benefits paid

     (45)         (22)         (13)         (12)         (8)         (10)   

Other(1)

     11          —          —          —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Benefit obligation at end of year

   $ 424        $ 491        $ 380        $ 365        $ 112        $ 125    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Change in Plan Assets:

                 

Fair value of plan assets at beginning of year

   $ 273        $ 249        $ 363        $ 318        $ 85        $ 83    

Actual return on plan assets, net of expenses

     32          31          20          34                    

Employer contribution

     40          15                                  10    

Employee contributions

     —          —                          —          —    

Effect of foreign exchange rates

     —          —                  14          (4)         (2)   

Benefits paid

     (45)         (22)         (13)         (12)         (7)         (10)   

Settlements

     —          —          —          —          (2)         —    

Other(1)

     20          —          —          —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Fair value of plan assets at end of year

     320          273          385          363          87          85    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Funded status at end of year (overfunded/(underfunded))

     (104)         (218)                 (2)         (25)         (40)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Accumulated benefit obligation

   $    424        $   491        $  380        $  365        $  112        $  125    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Includes projected benefit obligations of $11 million and plan assets of $20 million related to certain employees of former Hilton affiliates that were assumed during the year ended December 31, 2013.

Amounts recognized in the consolidated balance sheets consisted of:

 

     Domestic Plan      U.K. Plan      International Plans  
         2013              2012              2013              2012              2013              2012      
     (in millions)  

Non-current asset

   $       $ —        $       $ —        $       $   

Current liability

     —          —            —            —          (1)         (1)   

Non-current liability

     (106)         (218)         (3)         (2)         (29)         (42)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net amount recognized

   $  (104)       $  (218)       $       $ (2)       $  (25)       $  (40)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Amounts recognized in accumulated other comprehensive loss consisted of:

 

     Domestic Plan      U.K. Plan      International Plans  
       2013          2012          2011          2013          2012          2011          2013          2012          2011    
     (in millions)  

Net actuarial loss (gain)

   $  (67)       $  29        $       $  —        $  17        $  21        $  (12)       $   9        $   2    

Prior service cost (credit)

     (12)         (4)         (4)                 16                  —          —          (4)   

Amortization of net loss (gain)

     (3)                 (4)         (4)         (3)         (1)         (2)         (1)         (2)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net amount recognized

   $ (82)       $ 26        $  —        $ (1)       $ 30        $ 23        $ (14)       $       $ (4)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

The estimated unrecognized net losses and prior service cost (credit) that will be amortized into net periodic pension cost over the next fiscal year were as follows:

 

    Domestic Plan     U.K. Plan     International Plans  
    2013     2012     2011     2013     2012     2011     2013     2012     2011  
    (in millions)  

Unrecognized net losses

  $      $      $      $      $      $      $      $      $   

Unrecognized prior service cost (credit)

                         —            (3)        (16)        —         —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Amount unrecognized

  $      5       $      8       $   10       $    1       $    1       $    (13)      $     1       $     1       $     1    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The components of net periodic pension cost (credit) for the Domestic Plan, U.K. Plan and International Plans were as follows:

 

     Nine Months Ended September 30,  
     2014      2013  
     Domestic
Plan
     U.K.
Plan
     International
Plans
     Domestic
Plan
     U.K.
Plan
     International
Plans
 
     (in millions)  

Service cost

   $       $       $       $       $       $   

Interest cost

     13          13                  13          12            

Expected return on plan assets

     (14)         (19)         (3)         (14)         (17)         (3)   

Amortization of prior service cost (credit)

             —           —                   (2)         —     

Amortization of net loss

                     —                             

Settlement losses

             —           —           —           —             
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net periodic pension cost (credit)

   $ 10        $ (4)       $       $       $ —         $   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

The net periodic pension cost was as follows:

 

     Domestic Plan      U.K. Plan      International Plans  
     2013      2012      2011      2013      2012      2011      2013      2012      2011  
     (in millions)  

Service cost

   $       $ —        $ —        $       $       $       $       $       $   

Interest cost

     17          21          23          17          16          17                            

Expected return on plan assets

      (18)          (17)          (17)          (23)          (21)          (21)          (4)          (4)          (4)   

Amortization of prior service cost (credit)

                             (3)         (16)         (3)         —          —          —    

Amortization of net loss (gain)

             (1)                                                           
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net periodic pension cost (credit)

     10                  14          —          (13)         (2)                           

Settlement losses

     —          —          —          —          —          —          —          —            
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net pension cost (credit)

   $    10        $       $    14        $    —        $    (13)       $    (2)       $    5        $    6        $    7    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

The weighted-average assumptions used to determine benefit obligations were as follows:

 

     Domestic Plan      U.K. Plan     International Plans  
         2013              2012              2013             2012             2013             2012      

Discount rate

     4.7%         3.9%         4.7     4.7     4.3     3.8

Salary inflation

       N/A              N/A            1.9     1.9     2.3     2.2

Pension inflation

     N/A            N/A            3.0     2.8     1.9     2.0

The weighted-average assumptions used to determine net periodic pension cost (credit) were as follows:

 

    Domestic Plan     U.K. Plan     International Plans  
       2013          2012         2011         2013          2012           2011          2013         2012         2011    

Discount rate

    3.9%        4.9%        5.4%        4.7%        5.0%           5.7%           3.8%           4.6%          5.0%   

Expected return on plan assets

    7.5%        6.8%        6.8%        6.5%        6.5%        6.5%        6.3%        6.2%        6.2%   

Salary inflation

      N/A             N/A             N/A           1.9%        1.7%        2.6%        2.2%        2.8%        3.3%   

Pension inflation

    N/A           N/A           N/A           2.8%        2.9%        3.0%        2.0%        1.8%        1.8%   

The following table presents the fair value hierarchy of total plan assets measured at fair value by asset category. The fair value of Level 2 assets were based on available market pricing information of similar financial instruments.

 

     December 31, 2013  
     Domestic Plan      U.K. Plan      International Plans  
     Level 1      Level 2      Level 3      Level 1      Level 2      Level 3      Level 1      Level 2      Level 3  
     (in millions)  

Cash and cash equivalents

   $    —       $       $       $       $       $       $ 10       $       $   

Equity funds

     70                                                 5         9           

Debt securities

     10         97                                                           

Bond funds

                                                             16           

Real estate funds

                                                             1           

Common collective trusts

             143                         385                         45           

Other

                                                             1           
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 80       $  240       $    —       $    —       $  385       $    —       $    15       $    72       $    —   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     December 31, 2012  
     Domestic Plan      U.K. Plan      International Plans  
     Level 1      Level 2      Level 3      Level 1      Level 2      Level 3      Level 1      Level 2      Level 3  
     (in millions)  

Cash and cash equivalents

   $    —       $       $       $       $       $       $ 12       $       $   

Equity funds

     54                                                 4         9           

Debt securities

     16         103                                                           

Bond funds

                                                             15           

Common collective trusts

             100                         363                         44           

Other

                                                             1           
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 70       $  203       $    —       $    —       $  363       $    —       $    16       $    69       $    —   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

As of December 31, 2013, the benefits expected to be paid in the next five years and in the aggregate for the five years thereafter were as follows:

 

     Domestic Plan      U.K. Plan      International
Plans
 
     (in millions)  

Year

        

2014

   $ 87       $ 14       $ 11   

2015

     26         14         9   

2016

     25         14         9   

2017

     25         14         8   

2018

     25         15         8   

2019 - 2023

     125         76         43   
  

 

 

    

 

 

    

 

 

 
   $  313       $  147       $    88   
  

 

 

    

 

 

    

 

 

 

Certain employees are covered by union sponsored multi-employer pension plans pursuant to agreements between us and various unions. Our participation in these plans is outlined in the table below:

 

     EIN/ Pension
Plan Number
     Pension Protection
Act Zone Status
     Contributions  
          

Pension Fund

      2013      2012      2013      2012      2011  
                          (in millions)  

New York Hotel Trades Council & Hotel Association of New York City, Inc. Pension Fund

     13-1764242         Pending         Yellow       $ 14       $ 13       $ 13   

Other plans

              12         11         9   
           

 

 

    

 

 

    

 

 

 

Total contributions

            $  26       $  24       $  22   
           

 

 

    

 

 

    

 

 

 
Share-Based Compensation (Tables) (Promote Plan [member])

The following is a summary of the Tier II equity award activity during the year ended December 31, 2013:

 

     Tier II Units  

Balance as of December 31, 2012

     229,047,118    

Granted

     8,628,050    

Forfeited

     (13,810,744)   

Exchanged for restricted shares of common stock

     (223,864,424)   
  

 

 

 

Balance as of December 31, 2013

     —    
  

 

 

 

The following table sets forth the number of Tier II equity units surrendered for shares of common stock on December 11, 2013:

 

     Tier II Units      Shares of
Common
Stock
 

Tier II awards exchanged for vested shares of common stock

     89,545,770          7,463,839    

Tier II awards exchanged for unvested shares of common stock

     134,318,654          11,195,791    
  

 

 

    

 

 

 

Total Tier II awards exchanged for vested shares and unvested restricted shares of common stock

     223,864,424          18,659,630    
  

 

 

    

 

 

 
Earnings Per Share (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Basic and Diluted Earnings Per Share

The following table presents the calculation of basic and diluted earnings per share (“EPS”):

 

     Nine Months Ended September 30,  
           2014                  2013        
     (in millions, except per share
amounts)
 

Basic EPS:

     

Numerator:

     

Net income attributable to Hilton stockholders

   $     515        $     389    

Denominator:

     

Weighted average shares outstanding

     985          921    
  

 

 

    

 

 

 

Basic EPS

   $ 0.52        $ 0.42    
  

 

 

    

 

 

 

Diluted EPS:

     

Numerator:

     

Net income attributable to Hilton stockholders

   $ 515        $ 389    

Denominator:

     

Weighted average shares outstanding

     986          921    
  

 

 

    

 

 

 

Diluted EPS

   $ 0.52        $ 0.42    
  

 

 

    

 

 

 
Basic and Diluted Earnings Per Share

 The following table presents the calculation of basic and diluted EPS for the periods presented:

 

     December 31,  
     2013      2012      2011  
     (in millions, except per share amounts)  

Basic EPS:

        

Numerator:

        

Net income attributable to Hilton stockholders

   $ 415       $ 352       $ 253   

Denominator:

        

Weighted average shares outstanding

     923         921         921   
  

 

 

    

 

 

    

 

 

 

Basic EPS

   $   0.45       $   0.38       $   0.27   
  

 

 

    

 

 

    

 

 

 

Diluted EPS:

        

Numerator:

        

Net income attributable to Hilton stockholders

   $ 415       $ 352       $ 253   

Denominator:

        

Weighted average shares outstanding(1)

     923         921         921   
  

 

 

    

 

 

    

 

 

 

Diluted EPS

   $ 0.45       $ 0.38       $ 0.27   
  

 

 

    

 

 

    

 

 

 

 

(1)  Includes the 19,500 RSUs granted on December 11, 2013 under the 2013 Director Grant.
Accumulated Other Comprehensive Loss (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013

The components of accumulated other comprehensive loss, net of taxes, were as follows:

 

     Currency
Translation
Adjustment(1)
     Pension
Liability
Adjustment
     Cash Flow
Hedge
Adjustment
     Total  
     (in millions)  

Balance as of December 31, 2013

   $ (136)       $ (134)       $       $ (264)   

Other comprehensive loss before reclassifications

     (129)         —          (4)         (133)   

Amounts reclassified from accumulated other comprehensive loss

     (4)                 —          (1)   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net current period other comprehensive income (loss)

     (133)                 (4)         (134)   

Equity contribution to consolidated variable interest entities

     (6)         —          —          (6)   
  

 

 

    

 

 

    

 

 

    

 

 

 

Balance as of September 30, 2014

   $   (275)       $   (131)       $   2        $   (404)   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     Currency
Translation
Adjustment(1)
     Pension
Liability
Adjustment
     Total  
     (in millions)  

Balance as of December 31, 2012

   $ (212)       $ (194)       $ (406)   

Other comprehensive income (loss) before reclassifications

     (21)                 (15)   

Amounts reclassified from accumulated other comprehensive loss

     —                    
  

 

 

    

 

 

    

 

 

 

Net current period other comprehensive income (loss)

     (21)         10          (11)   
  

 

 

    

 

 

    

 

 

 

Balance as of September 30, 2013

   $   (233)       $  (184)       $  (417)   
  

 

 

    

 

 

    

 

 

 

 

(1)  Includes net investment hedges.

The components of accumulated other comprehensive loss, net of taxes, were as follows:

 

     Currency
Translation
Adjustment(1)
     Pension
Liability
Adjustment
     Cash Flow
Hedge
Adjustment
     Total  
     (in millions)  

Balance as of December 31, 2010

     $  (257)         $  (140)         $  (1)         $  (398)   

Other comprehensive loss before reclassifications

     (79)         (21)         —          (100)   

Amounts reclassified from accumulated other comprehensive loss

     —                            
  

 

 

    

 

 

    

 

 

    

 

 

 

Net current period other comprehensive income (loss)

     (79)         (13)                 (91)   
  

 

 

    

 

 

    

 

 

    

 

 

 

Balance as of December 31, 2011

     (336)         (153)         —          (489)   

Other comprehensive income (loss) before reclassifications

     124          (35)         —          89    

Amounts reclassified from accumulated other comprehensive loss

     —          (6)         —          (6)   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net current period other comprehensive income (loss)

     124          (41)         —          83    
  

 

 

    

 

 

    

 

 

    

 

 

 

Balance as of December 31, 2012

     (212)         (194)         —          (406)   

Other comprehensive income before reclassifications

     67          54                  127    

Amounts reclassified from accumulated other comprehensive loss

                     —          15    
  

 

 

    

 

 

    

 

 

    

 

 

 

Net current period other comprehensive income

     76          60                  142    
  

 

 

    

 

 

    

 

 

    

 

 

 

Balance as of December 31, 2013

     $  (136)         $  (134)         $  6          $  (264)   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)  Includes net investment hedges.

The following table presents additional information about reclassifications out of accumulated other comprehensive loss:

 

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

Currency translation adjustment:

     

Sale and liquidation of foreign assets(1)

   $  3        $ (1)   

Gains on net investment hedges(2)

               

Tax benefit(3)(4)

     —          —    
  

 

 

    

 

 

 

Total currency translation adjustment reclassifications for the period, net of taxes

             —    
  

 

 

    

 

 

 

Pension liability adjustment:

     

Amortization of prior service cost(5)

     (3)         (1)   

Amortization of net loss(5)

     (2)         (6)   

Tax benefit(3)

               
     

Total pension liability adjustment reclassifications for the period, net of taxes

     (3)         (4)   
  

 

 

    

 

 

 

Total reclassifications for the period, net of tax

   $           1        $           (4)   
  

 

 

    

 

 

 

 

(1)  Reclassified out of accumulated other comprehensive loss to other gain, net in our condensed consolidated statements of operations. Amounts in parentheses indicate a loss in our condensed consolidated statements of operations.
(2)  Reclassified out of accumulated other comprehensive loss to gain (loss) on foreign currency transactions in our condensed consolidated statements of operations.
(3)  Reclassified out of accumulated other comprehensive loss to income tax expense in our condensed consolidated statements of operations.
(4)  The respective tax benefit was less than $1 million for the nine months ended September 30, 2014 and 2013.
(5)  Reclassified out of accumulated other comprehensive loss to general, administrative and other in the condensed consolidated statements of operations. These amounts were included in the computation of net periodic pension cost (credit). See Note 12: “Employee Benefit Plans” for additional information. Amounts in parentheses indicate a loss in our condensed consolidated statements of operations.

The following table presents additional information about reclassifications out of accumulated other comprehensive loss for the year ended December 31, 2013:

 

     (in millions)  

Currency translation adjustment:

  

Sale and liquidation of foreign assets(1)

   $ (15)   

Gains on net investment hedges(2)

       

Tax benefit(3)

       
  

 

 

 

Total currency translation adjustment reclassifications for the period, net of taxes

     (9)   
  

 

 

 

Pension liability adjustment:

  

Amortization of prior service cost(4)

     (1)   

Amortization of net loss(4)

     (8)   

Tax benefit(3)

       
  

 

 

 

Total pension liability adjustment reclassifications for the period, net of taxes

     (6)   
  

 

 

 

Total reclassifications for the period, net of tax

   $ (15)   
  

 

 

 

 

(1)  Reclassified out of accumulated other comprehensive loss to other gain, net in the consolidated statement of operations. Amounts in parentheses indicate a loss in our consolidated statement of operations.
(2)  Reclassified out of accumulated other comprehensive loss to gain (loss) on foreign currency transactions in our consolidated statement of operations.
(3) Reclassified out of accumulated other comprehensive loss to income tax benefit (expense) in our consolidated statement of operations.
(4)  Reclassified out of accumulated other comprehensive loss to general, administrative and other in the consolidated statement of operations. These amounts were included in the computation of net periodic pension cost. See Note 20: “Employee Benefit Plans” for additional information. Amounts in parentheses indicate a loss in our consolidated statement of operations.
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
Reconciliation of Adjusted EBITDA to Net Income (Loss) Attributable to Hilton Stockholders
Schedule of Assets by Segment
Schedule of Capital Expenditures by Segment
Revenue from External Customers by Geographic Areas
 
Property and Equipment, Net by Country
 

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.

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            

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

             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.

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   
  

 

 

    

 

 

 

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   
  

 

 

    

 

 

    

 

 

 

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 were as follows:

 

     December 31,  
     2013      2012  
     (in millions)  

U.S.

   $ 8,204       $ 8,252   

All other

     854         945   
  

 

 

    

 

 

 
   $  9,058       $  9,197   
  

 

 

    

 

 

 
Quarterly Financial Information (Tables)
Schedule of Quarterly Financial Information

The following table sets forth the historical unaudited quarterly financial data for the periods indicated. The information for each of these periods has been prepared on the same basis as the audited consolidated financial statements and, in our opinion, reflects all adjustments necessary to present fairly our financial results. Operating results for previous periods do not necessarily indicate results that may be achieved in any future period.

 

     2013  
     First
Quarter
     Second
Quarter
     Third
Quarter
     Fourth
Quarter
     Year  
     (in millions, except per share data)  

Revenues

   $ 2,263       $ 2,380       $ 2,449       $ 2,643       $ 9,735   

Operating income

     252         404         357         89         1,102   

Net income

     38         157         203         62         460   

Net income attributable to Hilton stockholders

     34         155         200         26         415   

Basic and diluted earnings per share

   $ 0.03       $ 0.17       $ 0.22       $ 0.03       $ 0.45   
     2012  
     First
Quarter
     Second
Quarter
     Third
Quarter
     Fourth
Quarter
     Year  
     (in millions, except per share data)  

Revenues

   $ 2,131       $ 2,390       $ 2,417       $ 2,338       $ 9,276   

Operating income

     194         298         345         263         1,100   

Net income

     47         69         179         64         359   

Net income attributable to Hilton stockholders

     48         66         177         61         352   

Basic and diluted earnings per share

   $ 0.05       $ 0.07       $ 0.19       $ 0.07       $ 0.38   
Condensed Consolidating Guarantor Financial Information (Tables)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013

The following schedules present the condensed consolidated financial information as of September 30, 2014 and December 31, 2013 and for the nine months ended September 30, 2014 and 2013, for the Parent, Subsidiary Issuers, Guarantors and Non-Guarantors.

 

     September 30, 2014  
   Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantors
     Eliminations      Total  
     (in millions)  

ASSETS

                 

Current Assets:

                 

Cash and cash equivalents

   $       $       $ 235       $ 308        $ —        $ 543    

Restricted cash and cash equivalents

                     196         92          —          288    

Accounts receivable, net

                     478         384          —          862    

Inventories

                     326         24          —          350    

Deferred income tax assets

                     6         17          —          23    

Current portion of financing receivables, net

                     37         19          —          56    

Current portion of securitized financing receivables, net

                             64          —          64    

Prepaid expenses

                     34         138          —          172    

Other

                     29         27          —          56    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total current assets

                     1,341         1,073          —          2,414    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Property, Investments and Other Assets:

                 

Property and equipment, net

                     323         8,801          —          9,124    

Financing receivables, net

                     235         146          —          381    

Securitized financing receivables, net

                             433          —          433    

Investments in affiliates

                     123         51          —          174    

Investments in subsidiaries

     4,961         11,708         5,269         —          (21,938)         —    

Goodwill

                     3,847         2,338          —          6,185    

Brands

                     4,405         582                  4,987    

Management and franchise contracts, net

                     1,039         307          —          1,346    

Other intangible assets, net

                     475         220          —          695    

Deferred income tax assets

     22                         195          (22)         195    

Other

             95         124         171          —          390    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total property, investments and other assets

     4,983         11,803         15,840         13,244          (21,960)         23,910    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL ASSETS

   $  4,983       $  11,803       $  17,181       $  14,317        $  (21,960)       $  26,324    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

LIABILITIES AND EQUITY

                 

Current Liabilities:

                 

Accounts payable, accrued expenses and other

   $       $ 64       $ 1,246       $ 693        $ —        $ 2,003    

Current maturities of long-term debt

                                     —            

Current maturities of non-recourse debt

                             124          —          124    

Income taxes payable

                             10          —          10    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total current liabilities

             64         1,246         830          —          2,140    

Long-term debt

             6,776         54         4,294          —          11,124    

Non-recourse debt

                             813          —          813    

Deferred revenues

                     540                 —          544    

Deferred income tax liabilities

             2         2,241         2,916          (22)         5,137    

Liability for guest loyalty program

                     637         —          —          637    

Other

     193                 755         231          —          1,179    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

     193         6,842         5,473         9,088          (22)         21,574    

Equity:

                 

Total Hilton stockholders’ equity

     4,790         4,961         11,708         5,269          (21,938)         4,790    

Noncontrolling interests

                             (40)         —          (40)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total equity

     4,790         4,961         11,708         5,229          (21,938)         4,750    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 4,983       $ 11,803       $ 17,181       $ 14,317        $ (21,960)       $ 26,324    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     December 31, 2013  
   Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantors
     Eliminations      Total  
     (in millions)  

ASSETS

                 

Current Assets:

                 

Cash and cash equivalents

   $ —        $ —        $ 329        $ 265        $ —        $ 594    

Restricted cash and cash equivalents

     —          —          194          72          —          266    

Accounts receivable, net

     —          —          426          305          —          731    

Inventories

     —          —          370          26          —          396    

Deferred income tax assets

     —          —                  17          —          23    

Current portion of financing receivables, net

     —          —          38          56          —          94    

Current portion of securitized financing receivables, net

     —          —          —          27          —          27    

Prepaid expenses

     —          —          15          133          —          148    

Other

     —          —          101          26          (23)         104    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total current assets

     —          —          1,479          927          (23)         2,383    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Property, Investments and Other Assets:

                 

Property and equipment, net

     —          —          341          8,717          —          9,058    

Financing receivables, net

     —          —          199          436          —          635    

Securitized financing receivables, net

     —          —          —          194          —          194    

Investments in affiliates

     —          —          210          50          —          260    

Investments in subsidiaries

     4,528          11,942          5,253          —          (21,723)         —    

Goodwill

     —          —          3,847          2,373          —          6,220    

Brands

     —          —          4,405          608          —          5,013    

Management and franchise contracts, net

     —          —          1,143          309          —          1,452    

Other intangible assets, net

     —          —          511          240          —          751    

Deferred income tax assets

     21          —          —          193          (21)         193    

Other

     —          121          133          149          —          403    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total property, investments and other assets

     4,549          12,063          16,042          13,269          (21,744)         24,179    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL ASSETS

   $  4,549        $  12,063        $  17,521        $  14,196        $  (21,767)       $  26,562    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

LIABILITIES AND EQUITY

                 

Current Liabilities:

                 

Accounts payable, accrued expenses and other

   $ —        $ 60        $ 1,335        $ 684        $ —        $ 2,079    

Current maturities of long-term debt

     —          —          —                  —            

Current maturities of non-recourse debt

     —          —          —          48          —          48    

Income taxes payable

     —          —                  31          (23)         11    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total current liabilities

     —          60          1,338          767          (23)         2,142    

Long-term debt

     —          7,470          54          4,227          —          11,751    

Non-recourse debt

     —          —          —          920          —          920    

Deferred revenues

     —          —          674          —          —          674    

Deferred income tax liabilities

     —                  2,298          2,771          (21)         5,053    

Liability for guest loyalty program

     —          —          597          —          —          597    

Other

     186          —          618          345          —          1,149    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

     186          7,535          5,579          9,030          (44)         22,286    

Equity:

                 

Total Hilton stockholders’ equity

     4,363          4,528          11,942          5,253          (21,723)         4,363    

Noncontrolling interests

     —          —          —          (87)         —          (87)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total equity

     4,363          4,528          11,942          5,166          (21,723)         4,276    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 4,549        $ 12,063        $ 17,521        $ 14,196        $ (21,767)       $ 26,562    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

The following schedules present the condensed consolidated financial information as of December 31, 2013 and 2012, and the years ended December 31, 2013, 2012 and 2011, for the Parent, Subsidiary Issuers, Guarantors and Non-Guarantors.

 

    December 31, 2013  
    Parent     Subsidiary
Issuers
    Guarantors     Non-
Guarantors
    Eliminations     Total  
    (in millions)  

ASSETS

           

Current Assets:

           

Cash and cash equivalents

  $      $      $ 329      $ 265       $ —       $ 594    

Restricted cash and cash equivalents

                  194        72         —         266    

Accounts receivable, net

                  426        305         —         731    

Inventories

                  370        26         —         396    

Deferred income tax assets

                  6        17         —         23    

Current portion of financing receivables, net

                  38        56         —         94    

Current portion of securitized financing receivables, net

                         27         —         27    

Prepaid expenses

                  15        133         —         148    

Other

                  101        26         (23)        104    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

                  1,479        927         (23)        2,383    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Property, Investments and Other Assets:

           

Property and equipment, net

                  341        8,717         —         9,058    

Financing receivables, net

                  199        436         —         635    

Securitized financing receivables, net

                         194         —         194    

Investments in affiliates

                  210        50         —         260    

Investments in subsidiaries

    4,528        11,942        5,253        —         (21,723)        —    

Goodwill

                  3,847        2,373         —         6,220    

Brands

                  4,405        608         —         5,013    

Management and franchise contracts, net

                  1,143        309         —         1,452    

Other intangible assets, net

                  511        240         —         751    

Deferred income tax assets

    21                      193         (21)        193    

Other

           121        133        149         —         403    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total property, investments and other assets

     4,549         12,063         16,042         13,269          (21,744)         24,179    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL ASSETS

  $ 4,549      $ 12,063      $ 17,521      $ 14,196       $ (21,767)      $ 26,562    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES AND EQUITY

           

Current Liabilities:

           

Accounts payable, accrued expenses and other

  $      $ 60      $ 1,335      $ 684       $ —       $ 2,079    

Current maturities of long-term debt

                                —           

Current maturities of non-recourse debt

                         48         —         48    

Income taxes payable

                  3        31         (23)        11    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

           60        1,338        767         (23)        2,142    

Long-term debt

           7,470        54        4,227         —         11,751    

Non-recourse debt

                         920         —         920    

Deferred revenues

                  674        —         —         674    

Deferred income tax liabilities

           5        2,298        2,771         (21)        5,053    

Liability for guest loyalty program

                  597        —         —         597    

Other

    186               618        345         —         1,149    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

    186        7,535        5,579        9,030         (44)        22,286    

Equity:

           

Total Hilton stockholders’ equity

    4,363        4,528        11,942        5,253         (21,723)        4,363    

Noncontrolling interests

                         (87)        —         (87)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total equity

     4,363         4,528         11,942         5,166          (21,723)         4,276    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

  $ 4,549      $ 12,063      $ 17,521      $ 14,196       $ (21,767)      $ 26,562    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

    December 31, 2012  
    Parent     Subsidiary
Issuers
    Guarantors     Non-
Guarantors
    Eliminations     Total  
    (in millions)  

ASSETS

           

Current Assets:

           

Cash and cash equivalents

  $      $      $ 542       $ 213       $ —       $ 755    

Restricted cash and cash equivalents

                  496         54         —         550    

Accounts receivable, net

                  414         305         —         719    

Intercompany interest receivable(1)

    98               —         —         (98     —    

Inventories

                  395         20         —         415    

Deferred income tax assets

                  64         12         —         76    

Current portion of financing receivables, net

                  119         —         —         119    

Prepaid expenses

                  22         131         —         153    

Other

                  51         12         (23     40    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

    98               2,103         747         (121     2,827    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Property, Investments and Other Assets:

           

Property and equipment, net

                  359         8,838         —         9,197    

Financing receivables, net

                  806                —         815    

Intercompany notes receivable(1)

    3,787               —         —         (3,787     —    

Investments in affiliates

                  244         47         —         291    

Investments in subsidiaries

                  9,364         —         (9,364     —    

Goodwill

                  3,847         2,350         —         6,197    

Brands

                  4,405         624         —         5,029    

Management and franchise contracts, net

                  1,285         315         —         1,600    

Other intangible assets, net

                  512         232         —         744    

Deferred income tax assets

                  —         104         —         104    

Other

                  159         103         —         262    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total property, investments and other assets

    3,787                20,981          12,622          (13,151)         24,239    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL ASSETS

  $ 3,885      $      $ 23,084       $ 13,369       $  (13,272)      $ 27,066    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES AND EQUITY

           

Current Liabilities:

           

Accounts payable, accrued expenses and other

  $      $      $ 1,253       $ 669       $ —       $ 1,922    

Intercompany interest payable(1)

                  98         —         (98     —    

Current maturities of long-term debt

                  357         35         —         392    

Current maturities of non-recourse debt

                  —         15         —         15    

Income taxes payable

                  —         43         (23     20    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

                  1,708         762         (121     2,349    

Long-term debt

                  15,001         182         —         15,183    

Non-recourse debt

                  —         405         —         405    

Intercompany notes payable(1)

                  3,787         —          (3,787     —    

Investments in subsidiaries

    1,389               —         —         (1,389     —    

Deferred revenues

                  82         —         —         82    

Deferred income tax liabilities

    8               2,495         2,445         —         4,948    

Liability for guest loyalty program

                  503         —         —         503    

Other

    187               897         357         —         1,441    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

    1,584               24,473         4,151         (5,297      24,911    

Equity:

           

Total Hilton stockholders’ equity

    2,301               (1,389)        9,364         (7,975     2,301    

Noncontrolling interests

                  —         (146)        —         (146)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total equity

    2,301                (1,389)         9,218         (7,975     2,155    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

  $  3,885      $       —      $ 23,084       $ 13,369       $ (13,272   $ 27,066    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)  Prior to June 30, 2013, a Guarantor had intercompany notes payable to the Parent (the “Notes Payable to Parent”). Interest under the Notes Payable to Parent was accrued and added to the principal balance through the date of maturity. On June 30, 2013, the Parent made a non-cash contribution of the Notes Payable to Parent, including the accrued interest, to the Guarantor, resulting in an increase to the Guarantor’s equity.
     Nine Months Ended September 30, 2014  
     Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantors
     Eliminations      Total  
     (in millions)  

Revenues

                 

Owned and leased hotels

   $ —        $ —        $ 163        $  2,999        $ (21)       $ 3,141    

Management and franchise fees and other

     —          —          575          546          (91)         1,030    

Timeshare

     —          —          777          73          —          850    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,515          3,618          (112)         5,021    

Other revenues from managed and franchised properties

     —          —          2,991          300          (638)         2,653    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     —          —          4,506          3,918          (750)         7,674    

Expenses

                 

Owned and leased hotels

     —          —          116          2,359          (55)         2,420    

Timeshare

     —          —          590          14          (40)         564    

Depreciation and amortization

     —          —          227          243          —          470    

General, administrative and other

     —          —          275          91          (17)         349    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,208          2,707          (112)         3,803    

Other expenses from managed and franchised properties

     —          —           2,991          300          (638)         2,653    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses

     —          —          4,199          3,007          (750)          6,456    

Operating income

     —          —          307          911          —          1,218    

Interest income

     —          —                          —            

Interest expense

     —          (255)         (42)         (170)         —          (467)   

Equity in earnings from unconsolidated affiliates

     —          —          13                  —          16    

Gain (loss) on foreign currency transactions

     —          —          248          (207)         —          41    

Other gain, net

     —          —                  32          —          38    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before income taxes and equity in earnings from subsidiaries

     —          (255)         538          571          —          854    

Income tax benefit (expense)

     (5)         98          (213)         (211)         —          (331)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before equity in earnings from subsidiaries

     (5)          (157)         325          360          —          523    

Equity in earnings from subsidiaries

     520          677          352          —          (1,549)         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income

     515          520          677          360          (1,549)         523    

Net income attributable to noncontrolling interests

     —          —          —          (8)         —          (8)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income attributable to Hilton stockholders

   $ 515        $ 520        $ 677        $ 352        $  (1,549)       $ 515    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income

   $ 381        $ 516        $ 697        $ 212        $ (1,415)       $ 391    

Comprehensive income attributable to noncontrolling interests

     —          —          —          (10)         —          (10)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income attributable to Hilton stockholders

   $  381        $ 516        $ 697        $ 202        $ (1,415)       $ 381    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     Nine Months Ended September 30, 2013  
     Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantors
     Eliminations      Total  
     (in millions)  

Revenues

        

Owned and leased hotels

   $ —        $ —        $ 146        $ 2,855        $ (19)       $ 2,982    

Management and franchise fees and other

     —          —          425          546          (103)         868    

Timeshare

     —          —          779          30          —          809    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,350          3,431          (122)         4,659    

Other revenues from managed and franchised properties

     —          —          2,792          247          (606)         2,433    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     —          —          4,142          3,678          (728)         7,092    

Expenses

                 

Owned and leased hotels

     —          —          110          2,258          (41)         2,327    

Timeshare

     —          —          594                  (57)         545    

Depreciation and amortization

     —          —          208          247          —          455    

General, administrative and other

     —          —          229          114          (24)         319    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,141          2,627          (122)         3,646    

Other expenses from managed and franchised properties

     —          —          2,792          247          (606)         2,433    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses

     —          —          3,933          2,874          (728)         6,079    

Operating income

                         209          804          —          1,013    

Interest income

     217          —                          (217)           

Interest expense

     —          —          (575)         (43)         217          (401)   

Equity in earnings from unconsolidated affiliates

     —          —                          —          11    

Gain (loss) on foreign currency transactions

     —          —                  (47)         —          (43)   

Other gain, net

     —          —          —                  —            
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before income taxes and equity in earnings from subsidiaries

     217          —          (350)         723          —          590    

Income tax benefit (expense)

     (84)         —          141          (249)         —          (192)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before equity in earnings from subsidiaries

     133          —          (209)         474          —          398    

Equity in earnings from subsidiaries

     256          —          465          —          (721)         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income

     389          —          256          474          (721)         398    

Net income attributable to noncontrolling interests

     —          —          —          (9)         —          (9)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income attributable to Hilton stockholders

   $ 389        $ —        $ 256        $ 465        $ (721)       $ 389    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income

   $ 378        $ —        $ 261        $ 472        $ (710)       $ 401    

Comprehensive income attributable to noncontrolling interests

     —          —          —          (23)         —          (23)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income attributable to Hilton stockholders

   $ 378        $ —        $ 261        $ 449        $ (710)       $ 378    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     Year Ended December 31, 2013  
     Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantor
     Eliminations      Total  
     (in millions)  

Revenues

                 

Owned and leased hotels

   $ —        $ —        $ 190        $ 3,882        $ (26)       $ 4,046    

Management and franchise fees and other

     —          —          587          733          (145)         1,175    

Timeshare

     —          —          1,052          57          —          1,109    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,829          4,672          (171)         6,330    

Other revenues from managed and franchised properties

     —          —          3,869          351          (815)         3,405    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     —          —          5,698          5,023          (986)         9,735    

Expenses

                 

Owned and leased hotels

     —          —          148          3,058          (59)         3,147    

Timeshare

     —          —          797          12          (79)         730    

Depreciation and amortization

     —          —          277          326          —          603    

General, administrative and other

     —          —          620          161          (33)         748    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,842          3,557          (171)         5,228    

Other expenses from managed and franchised properties

     —          —          3,869          351          (815)         3,405    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses

     —          —          5,711          3,908          (986)         8,633    

Operating income (loss)

     —          —          (13)         1,115          —          1,102    

Interest income

     217          —                          (217)           

Interest expense

     —          (105)         (642)         (90)         217          (620)   

Equity in earnings from unconsolidated affiliates

     —          —          13                  —          16    

Gain (loss) on foreign currency transactions

     —          —          35          (80)         —          (45)   

Gain on debt extinguishment

     —          —          229          —          —          229    

Other gain, net

     —          —                          —            
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before income taxes and equity in earnings from subsidiaries

     217          (105)         (369)         955          —          698    

Income tax benefit (expense)

     (84)         40          48          (242)         —          (238)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before equity in earnings from subsidiaries

     133          (65)         (321)         713          —          460    

Equity in earnings from subsidiaries

     282          347          668          —          (1,297)         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income

     415          282          347          713          (1,297)         460    

Net income attributable to noncontrolling interests

     —          —          —          (45)         —          (45)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income attributable to Hilton stockholders

   $ 415        $ 282        $ 347        $ 668        $ (1,297)       $ 415    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income

   $ 557        $ 288        $ 417        $ 797        $ (1,439)       $ 620    

Comprehensive income attributable to noncontrolling interests

     —          —          —          (63)         —          (63)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income attributable to Hilton stockholders

   $  557        $ 288        $ 417        $ 734        $ (1,439)       $ 557    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     Year Ended December 31, 2012  
     Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantor
     Eliminations      Total  
     (in millions)  

Revenues

                 

Owned and leased hotels

   $ —        $ —        $ 181        $ 3,821        $ (23)       $ 3,979    

Management and franchise fees and other

     —          —          459          762          (133)         1,088    

Timeshare

     —          —          1,081                  —          1,085    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,721          4,587          (156)         6,152    

Other revenues from managed and franchised properties

     —          —          3,643          295          (814)         3,124    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     —          —          5,364          4,882          (970)         9,276    

Expenses

                 

Owned and leased hotels

     —          —          142          3,141          (53)         3,230    

Timeshare

     —          —          827                  (73)         758    

Depreciation and amortization

     —          —          251          299          —          550    

Impairment losses

     —          —          13          41          —          54    

General, administrative and other

     —          —          342          148          (30)         460    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,575          3,633          (156)         5,052    

Other expenses from managed and franchised properties

     —          —          3,643          295          (814)         3,124    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses

     —          —          5,218          3,928          (970)         8,176    

Operating income

     —          —          146          954          —          1,100    

Interest income

     403          —                          (403)         15    

Interest expense

     —          —          (916)         (56)         403          (569)   

Equity in earnings (losses) from unconsolidated affiliates

     —          —          (12)                 —          (11)   

Gain on foreign currency transactions

     —          —          12          11          —          23    

Other gain, net

     —          —                          —          15    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before income taxes and equity in earnings from subsidiaries

     403          —          (757)         927          —          573    

Income tax benefit (expense)

     (155)         —          312          (371)         —          (214)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before equity in earnings from subsidiaries

     248          —          (445)         556          —          359    

Equity in earnings from subsidiaries

     104          —          549          —          (653)         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income

     352          —          104          556          (653)         359    

Net income attributable to noncontrolling interests

     —          —          —          (7)         —          (7)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income attributable to Hilton stockholders

   $ 352        $ —        $ 104        $ 549        $ (653)       $ 352    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income

   $ 435        $ —        $ 126        $ 631        $ (736)       $ 456    

Comprehensive income attributable to noncontrolling interests

     —          —          —          (21)         —          (21)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income attributable to Hilton stockholders

   $ 435        $ —        $ 126        $ 610        $ (736)       $ 435    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     Year Ended December 31, 2011  
     Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantor
     Eliminations      Total  
     (in millions)  

Revenues

                 

Owned and leased hotels

   $ —        $ —        $ 171        $ 3,751        $ (24)       $ 3,898    

Management and franchise fees and other

     —          —          383          756          (125)         1,014    

Timeshare

     —          —          940                  —          944    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,494          4,511          (149)         5,856    

Other revenues from managed and franchised properties

     —          —          3,521          196          (790)         2,927    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     —          —          5,015          4,707          (939)         8,783    

Expenses

                 

Owned and leased hotels

     —          —          140          3,124          (51)         3,213    

Timeshare

     —          —          731                  (67)         668    

Depreciation and amortization

     —          —          246          318          —          564    

Impairment losses

     —          —                  12          —          20    

General, administrative and other

     —          —          301          146          (31)         416    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          1,426          3,604          (149)         4,881    

Other expenses from managed and franchised properties

     —          —          3,521          196          (790)         2,927    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses

     —          —          4,947          3,800          (939)         7,808    

Operating income

     —          —          68          907          —          975    

Interest income

     359          —                          (359)         11    

Interest expense

     —          —          (948)         (54)         359          (643)   

Equity in losses from unconsolidated affiliates

     —          —          (133)         (12)         —          (145)   

Gain (loss) on foreign currency transactions

     —          —          (26)                 —          (21)   

Other gain, net

     —          —          14                  —          19    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before income taxes and equity in earnings from subsidiaries

     359          —          (1,018)         855          —          196    

Income tax benefit (expense)

     (137)         —          397          (201)         —          59    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before equity in earnings from subsidiaries

     222          —          (621)         654          —          255    

Equity in earnings from subsidiaries

     31          —          652          —          (683)         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income

     253          —          31          654          (683)         255    

Net income attributable to noncontrolling interests

     —          —          —          (2)         —          (2)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income attributable to Hilton stockholders

   $ 253        $ —        $ 31        $ 652        $ (683)       $ 253    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income

   $ 162        $ —        $ 30        $ 561        $ (592)       $ 161    

Comprehensive loss attributable to noncontrolling interests

     —          —          —                  —            
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income attributable to Hilton stockholders

   $ 162        $ —        $ 30        $ 562        $ (592)       $ 162    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     Nine Months Ended September 30, 2014  
     Parent      Subsidiary
Issuers
     Guarantors      Non-Guarantors      Eliminations      Total  
     (in millions)  

Operating Activities:

              

Net cash provided by operating activities

   $         —        $ —        $ 605        $ 501        $ (207)       $ 899    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Investing Activities:

                 

Capital expenditures for property and equipment

     —          —          (13)         (171)         —          (184)   

Payments received on other financing receivables

     —          —          16                  —          18    

Issuance of other financing receivables

     —          —          —          (1)         —          (1)   

Investments in affiliates

     —          —          (6)         —          —          (6)   

Distributions from unconsolidated affiliates

     —          —          30                  —          32    

Proceeds from asset dispositions

     —          —                  34          —          40    

Contract acquisition costs

     —          —          (13)         (41)         —          (54)   

Software capitalization costs

     —          —          (45)         —          —          (45)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net cash used in investing activities

     —          —          (25)         (175)         —          (200)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Financing Activities:

                 

Borrowings

     —          —          —          350          —          350    

Repayment of debt

     —          (700)         —          (375)         —          (1,075)   

Debt issuance costs

     —          (6)         —          (3)         —          (9)   

Change in restricted cash and cash equivalents

     —          —          —          (19)         —          (19)   

Intercompany transfers

     —          706          (674)         (32)         —          —    

Dividends paid to Guarantors

     —          —          —          (207)         207          —    

Capital contribution

     —          —          —          13          —          13    

Distributions to noncontrolling interests

     —          —          —          (3)         —          (3)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net cash used in financing activities

     —          —          (674)         (276)         207          (743)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     —          —          —          (7)         —          (7)   

Net increase (decrease) in cash and cash equivalents

     —          —          (94)         43          —          (51)   

Cash and cash equivalents, beginning of period

     —          —          329          265          —          594    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cash and cash equivalents, end of period

   $ —        $ —        $ 235        $ 308        $ —        $ 543    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

    Nine Months Ended September 30, 2013  
    Parent     Subsidiary
Issuers
    Guarantors     Non-Guarantors     Eliminations     Total  
    (in millions)  

Operating Activities:

     

Net cash provided by operating activities

  $         —       $         —       $ 592       $ 432       $         —       $ 1,024    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investing Activities:

         

Capital expenditures for property and equipment

    —         —         (15)        (152)        —         (167)   

Acquisitions

    —         —         —         (30)        —         (30)   

Payments received on other financing receivables

    —         —                —         —           

Issuance of other financing receivables

    —         —         (6)        (2)        —         (8)   

Investments in affiliates

    —         —         (4)        —         —         (4)   

Distributions from unconsolidated affiliates

    —         —         16         —         —         16    

Contract acquisition costs

    —         —         (2)        (10)        —         (12)   

Software capitalization costs

    —         —         (50)        —         —         (50)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

    —         —         (58)        (194)        —         (252)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Financing Activities:

           

Borrowings

    —         —         —         702         —         702    

Repayment of debt

    —         —         (1,279)        (323)        —         (1,602)   

Change in restricted cash and cash equivalents

    —         —         140         (26)        —         114    

Intercompany transfers

    —         —         566         (566)        —         —    

Distributions to noncontrolling interests

    —         —         —         (3)        —         (3)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

    —         —         (573)        (216)        —         (789)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

    —         —         —         (14)        —         (14)   

Net increase (decrease) in cash and cash equivalents

    —         —         (39)               —         (31)   

Cash and cash equivalents, beginning of period

    —         —         542         213         —         755    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents, end of period

  $ —       $ —       $ 503       $ 221       $ —       $ 724    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Year Ended December 31, 2013  
     Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantors
     Eliminations      Total  
     (in millions)  

Operating Activities:

                 

Net cash provided by operating activities

   $ —        $ —        $ 1,574        $ 630        $ (103)       $ 2,101    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Investing Activities:

                 

Capital expenditures for property and equipment

     —          —          (23)         (231)         —          (254)   

Acquisitions

     —          —          —          (30)         —          (30)   

Payments received on other financing receivables

     —          —                          —            

Issuance of other financing receivables

     —          —          (6)         (4)         —          (10)   

Investments in affiliates

     —          —          (4)         —          —          (4)   

Distributions from unconsolidated affiliates

     —          —          33          —          —          33    

Contract acquisition costs

     —          —          (14)         (30)         —          (44)   

Software capitalization costs

     —          —          (78)         —          —          (78)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net cash used in investing activities

     —          —          (88)         (294)         —          (382)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Financing Activities:

                 

Net proceeds from issuance of common stock

     1,243          —          —          —          —          1,243    

Borrowings

     —          9,062          —          5,026          —          14,088    

Repayment of debt

     —          (1,600)         (15,245)         (358)         —          (17,203)   

Debt issuance costs

     —          (123)         —          (57)         —          (180)   

Change in restricted cash and cash equivalents

     —          —          222          (29)         —          193    

Intercompany transfers

     (1,243)         (7,339)         13,324          (4,742)         —          —    

Dividends paid to Guarantors

     —          —          —          (103)         103          —    

Distributions to noncontrolling interests

     —          —          —          (4)         —          (4)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net cash used in financing activities

     —          —          (1,699)         (267)         103          (1,863)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     —          —          —          (17)         —          (17)   

Net increase (decrease) in cash and cash equivalents

     —          —          (213)         52          —          (161)   

Cash and cash equivalents, beginning of period

     —          —          542          213          —          755    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cash and cash equivalents, end of period

   $ —        $ —        $ 329        $ 265        $ —        $ 594    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     Year Ended December 31, 2012  
     Parent      Subsidiary
Issuers
     Guarantors      Non-
Guarantors
     Eliminations      Total  
     (in millions)  

Operating Activities:

                 

Net cash provided by operating activities

   $         —        $         —        $ 271        $ 853        $ (14)       $ 1,110    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Investing Activities:

                 

Capital expenditures for property and equipment

     —          —          (57)         (376)         —          (433)   

Payments received on other financing receivables

     —          —                          —            

Issuance of other financing receivables

     —          —          (1)         (3)         —          (4)   

Investments in affiliates

     —          —          (3)         —          —          (3)   

Distributions from unconsolidated affiliates

     —          —                  —          —            

Contract acquisition costs

     —          —          (28)         (3)         —          (31)   

Software capitalization costs

     —          —          (103)         —          —          (103)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net cash used in investing activities

     —          —          (179)         (379)         —          (558)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Financing Activities:

                 

Borrowings

     —          —          —          96          —          96    

Repayment of debt

     —          —          (735)         (119)         —          (854)   

Change in restricted cash and cash equivalents

     —          —          193          (6)         —          187    

Intercompany transfers

     —          —          449          (463)         14          —    

Distributions to noncontrolling interests

     —          —          —          (4)         —          (4)   

Acquisition of noncontrolling interests

     —          —          —          (1)         —          (1)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net cash used in financing activities

     —          —          (93)         (497)         14          (576)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     —          —          —          (2)         —          (2)   

Net decrease in cash and cash equivalents

     —          —          (1)         (25)         —          (26)   

Cash and cash equivalents, beginning of period

     —          —          543          238          —          781    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cash and cash equivalents, end of period

   $ —        $ —        $    542        $    213        $      —        $ 755    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

    Year Ended December 31, 2011  
    Parent     Subsidiary
Issuers
    Guarantors     Non-
Guarantors
    Eliminations     Total  
    (in millions)  

Operating Activities:

           

Net cash provided by operating activities

  $    —       $    —       $ 359       $ 812       $ (4)      $  1,167    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investing Activities:

           

Capital expenditures for property and equipment

    —         —         (43)        (346)        —         (389)   

Acquisitions

    —         —         —         (12)        —         (12)   

Payments received on other financing receivables

    —         —                       —           

Investments in affiliates

    —         —         (11)        —         —         (11)   

Distributions from unconsolidated affiliates

    —         —         —         23         —         23    

Proceeds from asset dispositions

    —         —         65                —         65    

Contract acquisition costs

    —         —         (23)        (30)        —         (53)   

Software capitalization costs

    —         —         (93)        —         —         (93)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

    —         —         (99)        (364)        —         (463)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Financing Activities:

           

Borrowings

    —         —         24         16         —         40    

Repayment of debt

    —         —         (697)        (29)        —         (726)   

Change in restricted cash and cash equivalents

    —         —         (19)        (6)        —         (25)   

Intercompany transfers

    —         —         422         (426)               —    

Distributions to noncontrolling interests

    —         —         —         (3)        —         (3)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

    —         —         (270)        (448)               (714)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

    —         —         —         (5)        —         (5)   

Net decrease in cash and cash equivalents

    —         —         (10)        (5)        —         (15)   

Cash and cash equivalents, beginning of period

    —         —         553         243         —         796    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents, end of period

  $ —       $ —       $ 543       $ 238       $    —       $ 781    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Organization and Basis of Presentation - Additional Information (Detail) (USD $)
12 Months Ended
Dec. 31, 2013
Intervals
Hotel
Brand
Room
Timeshare
Country
Sep. 30, 2014
Room
Intervals
Country
Brand
Hotel
Timeshare
Dec. 17, 2013
Dec. 31, 2007
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
 
 
 
Number of brands
10 
12 
 
 
Number of hotel properties
4,073 
4,221 
 
 
Number of hotel rooms
672,083 
698,402 
 
 
Number of countries
91 
93 
 
 
Number of timeshare properties
42 
44 
 
 
Number of timeshare units
6,547 
6,794 
 
 
Stock split
9,205,128-for-1 
 
 
 
Number of newly issued shares
64,102,564 
 
 
 
Number of shares sold by selling stockholder
71,184,153 
 
 
 
IPO share price
 
 
$ 20.00 
 
Sponsor's percentage of ownership
76.40% 
 
 
100.00% 
Basis of Presentation and Summary of Significant Accounting Policies (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Segment
Entity
Dec. 31, 2012
Dec. 31, 2011
Jan. 2, 2014
Accounting Policies [Line Items]
 
 
 
 
Number of Non-wholly Owned Entities Consolidated
 
 
 
Financing Receivables Portfolio Segments
 
 
 
Increase (Decrease) in Self Insurance Reserve
$ 38 
$ 27 
$ 33 
 
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid
36 
37 
33 
 
Reclassified unrecognized tax benefits
 
 
 
$ 108 
Building and Building Improvements [member] |
Minimum [member]
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
Property, Plant and Equipment, Useful Life
8 years 
 
 
 
Building and Building Improvements [member] |
Maximum [member]
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
Property, Plant and Equipment, Useful Life
40 years 
 
 
 
Furniture and Equipment [member] |
Minimum [member]
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
Property, Plant and Equipment, Useful Life
3 years 
 
 
 
Furniture and Equipment [member] |
Maximum [member]
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
Property, Plant and Equipment, Useful Life
8 years 
 
 
 
Computer Equipment and Acquired Software [member] |
Minimum [member]
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
Property, Plant and Equipment, Useful Life
3 years 
 
 
 
Computer Equipment and Acquired Software [member] |
Maximum [member]
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
Property, Plant and Equipment, Useful Life
3 years 
 
 
 
Acquisitions - Schedule of Equity Investments Exchanged (Detail)
Jul. 25, 2014
Embassy Suites Atlanta - Perimeter Center [member]
 
Business Acquisition [Line Items]
 
Pre-exchange ownership %
50.00% 
Post-exchange ownership %
100.00% 
Embassy Suites Kansas City - Overland Park [member]
 
Business Acquisition [Line Items]
 
Pre-exchange ownership %
50.00% 
Post-exchange ownership %
100.00% 
Embassy Suites Kansas City - Plaza [member]
 
Business Acquisition [Line Items]
 
Pre-exchange ownership %
50.00% 
Post-exchange ownership %
100.00% 
Embassy Suites Parsippany [Member]
 
Business Acquisition [Line Items]
 
Pre-exchange ownership %
50.00% 
Post-exchange ownership %
100.00% 
Embassy Suites San Rafael - Marin County [member]
 
Business Acquisition [Line Items]
 
Pre-exchange ownership %
50.00% 
Post-exchange ownership %
100.00% 
Embassy Suites Austin - Central [member]
 
Business Acquisition [Line Items]
 
Pre-exchange ownership %
50.00% 
Post-exchange ownership %
0.00% 
Embassy Suites Chicago - Lombard/Oak Brook [member]
 
Business Acquisition [Line Items]
 
Pre-exchange ownership %
50.00% 
Post-exchange ownership %
0.00% 
Embassy Suites Raleigh - Crabtree [member]
 
Business Acquisition [Line Items]
 
Pre-exchange ownership %
50.00% 
Post-exchange ownership %
0.00% 
Embassy Suites San Antonio - International Airport [member]
 
Business Acquisition [Line Items]
 
Pre-exchange ownership %
50.00% 
Post-exchange ownership %
0.00% 
Embassy Suites San Antonio - NW I-10 [member]
 
Business Acquisition [Line Items]
 
Pre-exchange ownership %
50.00% 
Post-exchange ownership %
0.00% 
DoubleTree Guest Suites Austin [member]
 
Business Acquisition [Line Items]
 
Pre-exchange ownership %
10.00% 
Post-exchange ownership %
0.00% 
Acquisitions - Schedule of Net Assets Acquired (Detail) (USD $)
In Millions, unless otherwise specified
Jul. 25, 2014
Acquisitions Disclosure [Abstract]
 
Cash and cash equivalents
$ 2 
Property and equipment
144 
Other intangible assets
Long-term debt
(64)
Net assets acquired
$ 83 
Acquisitions (Detail)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended 1 Months Ended 1 Months Ended 11 Months Ended 1 Months Ended 9 Months Ended 9 Months Ended
Sep. 30, 2014
USD ($)
Sep. 30, 2013
USD ($)
Dec. 31, 2013
USD ($)
Dec. 31, 2012
USD ($)
Dec. 31, 2011
USD ($)
Dec. 31, 2012
Hilton Odawara [member]
USD ($)
Oct. 31, 2013
Hilton Bradford [Member]
USD ($)
Oct. 31, 2013
Hilton Bradford [Member]
GBP (£)
Sep. 30, 2013
Hilton Bradford [Member]
USD ($)
Apr. 30, 2013
Land Parcel [member]
USD ($)
Dec. 31, 2012
Hilton Odawara [member]
USD ($)
Dec. 31, 2012
Hilton Odawara [member]
JPY (¥)
Nov. 30, 2012
Hilton Odawara [member]
Aug. 31, 2011
Oakbrook Suites and Garden Inn [member]
USD ($)
Jul. 31, 2011
Oakbrook Suites and Garden Inn [member]
Sep. 30, 2014
Equity Investments Exchange [Member]
USD ($)
Hotel
Jul. 25, 2014
Equity Investments Exchange [Member]
USD ($)
Sep. 30, 2013
Land Parcel [member]
USD ($)
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisitions
 
$ 30 
$ 30 
 
$ 12 
 
$ 15 
£ 9 
 
$ 28 
$ 1 
¥ 155 
 
$ 12 
 
 
 
$ 28 
Gain (loss) on capital lease transactions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital lease obligations
 
 
 
 
 
15 
 
 
17 
 
 
 
 
 
 
 
 
 
Percentage interest acquired
 
 
 
 
 
 
 
 
 
 
53.50% 
53.50% 
 
50.00% 
 
 
 
 
VIE, ownership percentage
 
 
 
 
 
 
 
 
 
 
 
 
46.50% 
 
 
 
 
 
Acquisition of noncontrolling interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity method investment, ownership percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50.00% 
 
 
 
Property and equipment recognized from acquisition
 
 
 
 
 
 
 
 
 
 
 
 
 
24 
 
 
 
 
Number of hotels in JV portfolio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
11 
 
 
Number of hotels to be removed from JV portfolio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of hotels to be retained and wholly owned
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Post-exchange ownership %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
100.00% 
 
Equity investments
157 
 
245 
276 
 
 
 
 
 
 
 
 
 
 
 
 
59 
 
Fair value of equity investments before exchange
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
83 
 
 
Remeasurement gain of equity investments before exchange
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
24 
 
 
Transaction-related costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1 
 
 
Disposals - Additional Information (Detail)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended 1 Months Ended
Sep. 30, 2014
USD ($)
Dec. 31, 2011
USD ($)
Dec. 31, 2013
Conrad Istanbul [member]
USD ($)
Dec. 31, 2011
India Joint Venture [member]
USD ($)
Dec. 31, 2011
India Joint Venture [member]
GBP (£)
Jan. 31, 2011
Beverly Hills Office Building [member]
USD ($)
Significant Acquisitions and Disposals [Line Items]
 
 
 
 
 
 
Equity method investment, ownership percentage
 
 
25.00% 
26.00% 
26.00% 
 
Proceeds from sale of equity method investments
 
 
$ 17 
$ 23 
£ 15 
 
Reclassification from accumulated other comprehensive income, before tax
 
 
14 
 
 
Gain (loss) on sale of equity investments
 
 
(1)
(10)
 
 
Proceeds from asset dispositions
40 
65 
 
 
 
65 
Gain (loss) on asset dispositions
$ 13 
 
 
 
 
$ 16 
Inventory (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Inventory [Line Items]
 
 
 
Inventories
$ 350 
$ 396 
$ 415 
Timeshare [member]
 
 
 
Inventory [Line Items]
 
 
 
Inventories
 
371 
389 
Hotel [Member]
 
 
 
Inventory [Line Items]
 
 
 
Inventories
 
$ 25 
$ 26 
Property and Equipment - Schedule of Property and Equipment (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Property, Plant and Equipment [Abstract]
 
 
 
Land
$ 4,115 
$ 4,098 
$ 4,090 
Buildings And Leasehold Improvements
5,706 
5,511 
5,450 
Furniture and equipment
1,203 
1,172 
1,111 
Construction in Progress, Gross
97 
67 
88 
Property and equipment, gross
11,121 
10,848 
10,739 
Accumulated depreciation and amortization
(1,997)
(1,790)
(1,542)
Property and equipment, net
$ 9,124 
$ 9,058 
$ 9,197 
Property and Equipment - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Depreciation
$ 235 
$ 243 
$ 318 
$ 290 
$ 323 
Net capital lease assets included in property and equipment
150 
 
130 
157 
 
Accumulated depreciation and amortization of capital lease assets included in property and equipment
64 
 
59 
71 
 
Proceeds from asset dispositions
40 
 
 
 
65 
Gain (loss) on asset dispositions
13 
 
 
 
 
Capital contribution
13 
 
 
 
 
Hotel [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Sale and liquidation of foreign assets
 
 
 
 
Number of Hotels Sold
 
 
 
 
Proceeds from asset dispositions
 
 
 
 
Vacant Land [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Proceeds from asset dispositions
 
 
 
 
HGV Grand Islander [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Proceeds from asset dispositions and easement rights
37 
 
 
 
 
Capital contribution
$ 13 
 
 
 
 
Property and Equipment - Impairment Losses Of Property And Equipment (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Impairment of Property and Equipment [Line Items]
 
 
 
Impairment losses
$ 0 
$ 54 
$ 20 
Owned and leased hotels [member]
 
 
 
Impairment of Property and Equipment [Line Items]
 
 
 
Impairment losses
42 
17 
Timeshare properties [member]
 
 
 
Impairment of Property and Equipment [Line Items]
 
 
 
Impairment losses
Corporate Office Facilities [Member]
 
 
 
Impairment of Property and Equipment [Line Items]
 
 
 
Impairment losses
11 
Property and equipment [member]
 
 
 
Impairment of Property and Equipment [Line Items]
 
 
 
Impairment losses
$ 0 
$ 53 
$ 20 
Financing Receivables - Schedule of Financing Receivables (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Financing receivables, gross, non-current
$ 895 
$ 908 
$ 897 
Allowance for financing receivables, non-current
(81)
(79)
(82)
Financing receivables, net, non-current
381 
635 
815 
Financing receivables, gross, current
133 
135 
131 
Allowance for financing receivables, current
(13)
(14)
(12)
Current portion of financing receivables, net
56 
94 
119 
Financing receivables, net
934 
950 
934 
Securitized Timeshare Financing Receivables [member]
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Financing receivables, gross, non-current
459 
205 
 
Allowance for financing receivables, non-current
(26)
(11)
 
Financing receivables, net, non-current
433 
194 
 
Financing receivables, gross, current
68 
29 
 
Allowance for financing receivables, current
(4)
(2)
 
Current portion of financing receivables, net
64 
27 
 
Financing receivables, net
497 
221 
 
Unsecuritized timeshare financing receivables [member]
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Financing receivables, gross, non-current
412 
654 
853 
Allowance for financing receivables, non-current
(54)
(67)
(81)
Financing receivables, net, non-current
358 
587 
772 
Financing receivables, gross, current
63 
106 
131 
Allowance for financing receivables, current
(9)
(12)
(12)
Current portion of financing receivables, net
54 
94 
119 
Financing receivables, net
412 
681 
891 
Other financing receivables [member]
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Financing receivables, gross, non-current
24 
49 
44 
Allowance for financing receivables, non-current
(1)
(1)
(1)
Financing receivables, net, non-current
23 
48 
43 
Financing receivables, gross, current
Allowance for financing receivables, current
Current portion of financing receivables, net
Financing receivables, net
25 
48 
43 
Financing Receivable [Member]
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Financing receivables, net, non-current
814 
829 
815 
Current portion of financing receivables, net
$ 120 
$ 121 
$ 119 
Financing Receivables - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Y
Note
Dec. 31, 2013
Y
Note
Dec. 31, 2012
Sep. 30, 2014
Securitized Timeshare Financing Receivables [member]
Jun. 10, 2014
Securitized Timeshare Financing Receivables [member]
Dec. 31, 2013
Securitized Timeshare Financing Receivables [member]
Aug. 31, 2013
Securitized Timeshare Financing Receivables [member]
Jun. 10, 2014
Securitized Timeshare Debt 1.77 Notes [Member]
Jun. 10, 2014
Securitized Timeshare Debt 2.07 Notes [Member]
Schedule of Maturities of Timeshare Financing Receivables [Line Items]
 
 
 
 
 
 
 
 
 
Gross timeshare financing receivables secured under securitized timeshare debt
 
 
 
$ 527 
$ 357 
$ 234 
$ 255 
 
 
Securitized timeshare debt, face amount
 
 
 
 
 
 
250 
304 
46 
Securitized timeshare debt stated interest rate
 
 
 
 
 
 
2.28% 
1.77% 
2.07% 
Timeshare financing receivables secured under timeshare facility
164 
492 
 
 
 
 
 
 
 
Number of timeshare financing receivables outstanding
51,923 
53,123 
 
 
 
 
 
 
 
Timeshare financing receivables range of stated interest rates, minimum
0.00% 
0.00% 
 
 
 
 
 
 
 
Timeshare financing receivables range of stated interest rates, maximum
20.50% 
20.50% 
 
 
 
 
 
 
 
Timeshare financing receivables weighted average stated interest rate
12.16% 
11.97% 
 
 
 
 
 
 
 
Timeshare financing receivables weighted average remaining term
7.4 
7.5 
 
 
 
 
 
 
 
Nonaccrual timeshare financing receivables
$ 31 
$ 32 
$ 30 
 
 
 
 
 
 
Financing Receivables - Schedule of Allowance Uncollectible Timeshare Financing Receivables (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Timeshare Allowance for Uncollectible Accounts [Roll Forward]
 
 
 
 
 
Beginning balance
$ 92 
$ 93 
$ 93 
$ 97 
$ 101 
Write-offs
(24)
(19)
(25)
(33)
(36)
Provision for uncollectibles on sales
25 
20 
24 
29 
32 
Ending balance
$ 93 
$ 94 
$ 92 
$ 93 
$ 97 
Financing Receivables - Schedule of Maturities of Timeshare Financing Receivables (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Sep. 30, 2013
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Sep. 30, 2014
Securitized Timeshare Financing Receivables [member]
Jun. 10, 2014
Securitized Timeshare Financing Receivables [member]
Dec. 31, 2013
Securitized Timeshare Financing Receivables [member]
Aug. 31, 2013
Securitized Timeshare Financing Receivables [member]
Sep. 30, 2014
Unsecuritized timeshare financing receivables [member]
Dec. 31, 2013
Unsecuritized timeshare financing receivables [member]
Schedule of Maturities of Timeshare Financing Receivables [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
$ 17 
 
$ 29 
 
$ 27 
$ 106 
2015
 
 
 
 
 
 
68 
 
29 
 
48 
87 
2016
 
 
 
 
 
 
71 
 
30 
 
51 
90 
2017
 
 
 
 
 
 
73 
 
30 
 
52 
92 
2018
 
 
 
 
 
 
72 
 
30 
 
52 
89 
Thereafter
 
 
 
 
 
 
226 
 
86 
 
245 
296 
Timeshare financing receivables, gross
 
 
 
 
 
 
527 
357 
234 
255 
475 
760 
Allowance for uncollectible timeshare financing receivables
(93)
(92)
(94)
(93)
(97)
(101)
(30)
 
(13)
 
(63)
(79)
Timeshare financing receivables, net
 
 
 
 
 
 
$ 497 
 
$ 221 
 
$ 412 
$ 681 
Financing Receivables - Aged Analysis of Gross Timeshare Financing Receivables (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]
 
 
 
Current
$ 958 
$ 948 
$ 940 
30 - 89 days past due
13 
14 
14 
90 - 119 days past due
120 days and greater past due
28 
28 
26 
Financing Receivable, Gross
$ 1,002 
$ 994 
$ 984 
Investments in Affiliates - Schedule of Investments (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract]
 
 
 
Equity investments
$ 157 
$ 245 
$ 276 
Other investments
17 
15 
15 
Investments in affiliates
$ 174 
$ 260 
$ 291 
Investments in Affiliates - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended 9 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2013
Hotel
Dec. 31, 2012
Hotel
Dec. 31, 2011
Sep. 30, 2014
Hotel
Sep. 30, 2014
Equity Investments Exchange [Member]
Hotel
Jul. 25, 2014
Equity Investments Exchange [Member]
Dec. 31, 2013
Felcor Hotels, LLC [Member]
Hotel
Dec. 31, 2012
Felcor Hotels, LLC [Member]
Dec. 31, 2013
Ashford HHC Partners III, LP [Member]
Hotel
Dec. 31, 2012
Ashford HHC Partners III, LP [Member]
Dec. 31, 2013
Domhotel GmbH, Berlin [Member]
Hotel
Dec. 31, 2012
Domhotel GmbH, Berlin [Member]
Dec. 31, 2013
Other Equity Method Investments [Member]
Hotel
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of hotels owned or leased by unconsolidated joint ventures
30 
32 
 
16 
 
 
13 
 
 
 
14 
Equity investments
$ 245 
$ 276 
 
$ 157 
 
$ 59 
$ 99 
$ 104 
$ 20 
$ 37 
$ 38 
$ 35 
 
Equity Method Investments As Percent Of Total Assets
1.00% 
1.00% 
 
 
 
 
 
 
 
 
 
 
 
Equity method investment ownership percentage range
 
 
 
 
 
 
10 percent to 50 percent 
 
 
 
 
 
10 percent to 50 percent 
Equity method investment, ownership percentage
 
 
 
 
 
 
50.00% 
 
25.00% 
 
40.00% 
 
 
Equity Method Investments Disposed
 
 
 
 
 
 
 
 
 
 
 
 
Debt of unconsolidated joint ventures
1,100 
1,100 
 
900 
 
 
 
 
 
 
 
 
 
Unconsolidated affiliates creditor debt
17 
20 
 
 
 
 
 
 
 
 
 
 
Equity Method Investment, Other than Temporary Impairment
 
19 
141 
 
 
 
 
 
 
 
 
 
 
Cost-method Investments, Other than Temporary Impairment
 
 
 
 
 
 
 
 
 
 
 
 
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity
119 
120 
 
 
 
 
 
 
 
 
 
 
 
Amortization of Basis Difference Equity Method Investments
$ 3 
 
 
 
 
 
 
 
 
 
 
 
 
Number of hotels in JV portfolio
 
 
 
 
11 
 
 
 
 
 
 
 
 
Number of hotels to be removed from JV portfolio
 
 
 
 
 
 
 
 
 
 
 
 
Number of hotels to be retained and wholly owned
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Variable Interest Entities (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 3 Months Ended 36 Months Ended 3 Months Ended 36 Months Ended 3 Months Ended 36 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2014
Entity
Sep. 30, 2013
Dec. 31, 2013
Entity
Dec. 31, 2012
Entity
Dec. 31, 2011
Entity
Dec. 31, 2010
Sep. 30, 2014
Additional Paid-in Capital [member]
Dec. 31, 2012
Additional Paid-in Capital [member]
Sep. 30, 2014
Noncontrolling Interest [member]
Dec. 31, 2012
Noncontrolling Interest [member]
Sep. 30, 2014
Accumulated Other Comprehensive Income (Loss) [member]
Sep. 30, 2014
Japan VIEs [member]
Entity
Sep. 30, 2013
Japan VIEs [member]
Dec. 31, 2013
Japan VIEs [member]
Entity
Dec. 31, 2012
Japan VIEs [member]
Dec. 31, 2011
Japan VIEs [member]
Sep. 30, 2014
Japan VIEs [member]
Additional Paid-in Capital [member]
Dec. 31, 2013
Japan VIEs [member]
Additional Paid-in Capital [member]
Error Correction [Member]
Sep. 30, 2014
Japan VIEs [member]
Noncontrolling Interest [member]
Dec. 31, 2013
Japan VIEs [member]
Noncontrolling Interest [member]
Error Correction [Member]
Sep. 30, 2014
Japan VIEs [member]
Accumulated Other Comprehensive Income (Loss) [member]
Dec. 31, 2013
Japan VIEs [member]
Accumulated Other Comprehensive Income (Loss) [member]
Error Correction [Member]
Sep. 30, 2014
Securitized Timeshare Debt VIE [member]
Sep. 30, 2013
Securitized Timeshare Debt VIE [member]
Dec. 31, 2013
Securitized Timeshare Debt VIE [member]
Variable Interest Entity [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of consolidated variable interest entities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$ 543 
$ 724 
$ 594 
$ 755 
$ 781 
$ 796 
 
 
 
 
 
$ 32 
 
$ 42 
$ 29 
 
 
 
 
 
 
 
 
 
 
Property and equipment, net
9,124 
 
9,058 
9,197 
 
 
 
 
 
 
 
45 
 
26 
66 
 
 
 
 
 
 
 
 
 
 
Non-recourse debt, including current maturities
 
 
 
 
 
 
 
 
 
 
 
264 
 
284 
408 
 
 
 
 
 
 
 
511 
 
222 
Interest expense
467 
401 
620 
569 
643 
 
 
 
 
 
 
13 
20 
28 
33 
33 
 
 
 
 
 
 
Non-cash capital lease asset reduction
 
(44)
(44)
 
(76)
 
 
 
 
 
 
 
(44)
(44)
 
 
 
 
 
 
 
 
 
 
 
Non-Cash Capital Lease Obligation Reduction
 
(48)
(48)
 
(73)
 
 
 
 
 
 
 
(48)
(48)
 
 
 
 
 
 
 
 
 
 
 
Non-cash capital lease gain
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13 
 
 
 
 
 
 
 
 
 
Non-cash capital lease gain attributable to noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted cash and cash equivalents
288 
 
266 
550 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20 
 
Financing Receivable, Net
934 
 
950 
934 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
497 
 
221 
Interest income
15 
11 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
36 
17 
Equity contributions to consolidated variable interest entities
$ 0 
 
 
$ 1 
 
 
$ 34 
$ 4 
$ (40)
$ (3)
$ 6 
 
 
 
 
 
$ (6)
$ (28)
$ 5 
$ 35 
$ 1 
$ (7)
 
 
 
Goodwill - Additional Information (Detail) (USD $)
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2008
Dec. 31, 2007
Goodwill [Line Items]
 
 
 
 
 
Goodwill acquired during period
 
 
 
 
$ 10,500,000,000 
Goodwill impairment loss
4,300,000,000 
 
Timeshare [member]
 
 
 
 
 
Goodwill [Line Items]
 
 
 
 
 
Goodwill impairment loss
 
 
 
$ 795,000,000 
 
Goodwill - Schedule of Goodwill (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Sep. 30, 2014
Dec. 31, 2011
Goodwill [Line Items]
 
 
 
 
Foreign currency translation
$ 23 
$ 22 
 
 
Goodwill, gross
9,747 
9,724 
 
9,702 
Accumulated impairment losses
(3,527)
(3,527)
 
(3,527)
Goodwill
6,220 
6,197 
6,185 
6,175 
Ownership [member]
 
 
 
 
Goodwill [Line Items]
 
 
 
 
Foreign currency translation
 
 
Goodwill, gross
4,563 
4,559 
 
4,555 
Accumulated impairment losses
(3,527)
(3,527)
 
(3,527)
Goodwill
1,036 
1,032 
 
1,028 
Management and franchise [member]
 
 
 
 
Goodwill [Line Items]
 
 
 
 
Foreign currency translation
19 
18 
 
 
Goodwill, gross
5,184 
5,165 
 
5,147 
Accumulated impairment losses
 
Goodwill
$ 5,184 
$ 5,165 
 
$ 5,147 
Other Intangible Assets - Schedule of Other Intangible Assets (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Sep. 30, 2014
Schedule Of Other Intangible Assets, Excluding Goodwill [Line Items]
 
 
 
 
Management and franchise contracts, gross
$ 2,573 
$ 2,542 
 
 
Management and franchise contracts, accumulated amortization
(1,121)
(942)
 
 
Management and franchise contracts, net
1,452 
1,600 
 
1,346 
Other intangible assets, net
751 
744 
 
695 
Intangible assets, gross
3,736 
3,596 
 
 
Intangible assets, accumulated amortization
(1,533)
(1,252)
 
 
Intangible assets, net
2,203 
2,344 
 
 
Brands
5,013 
5,029 
 
4,987 
Amortization expense of intangible asset
285 
260 
241 
 
Other [member]
 
 
 
 
Schedule Of Other Intangible Assets, Excluding Goodwill [Line Items]
 
 
 
 
Other intangibles, gross
727 
646 
 
 
Other intangibles, accumulated amortization
(280)
(203)
 
 
Other intangible assets, net
447 1 2
443 1
 
 
Capitalized software, net
218 
191 
 
 
Other [member] |
Hilton HHonors
 
 
 
 
Schedule Of Other Intangible Assets, Excluding Goodwill [Line Items]
 
 
 
 
Other intangible assets, net
215 
236 
 
 
Amortization expense of intangible asset
22 
22 
22 
 
Other [member] |
Capitalized Software [Member]
 
 
 
 
Schedule Of Other Intangible Assets, Excluding Goodwill [Line Items]
 
 
 
 
Amortization expense of intangible asset
52 
30 
15 
 
Leases [member] |
Capitalized Software [Member]
 
 
 
 
Schedule Of Other Intangible Assets, Excluding Goodwill [Line Items]
 
 
 
 
Other intangibles, gross
436 
408 
 
 
Other intangibles, accumulated amortization
(132)
(107)
 
 
Other intangible assets, net
$ 304 
$ 301 
 
 
Other Intangible Assets - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Other Intangible Assets Disclosure [Abstract]
 
 
 
Amortization expense of intangible assets
$ 285 
$ 260 
$ 241 
Impairment relating to other intangible assets
$ 0 
$ 0 
$ 0 
Other Intangible Assets - Estimated Future Amortization Expense for Amortizing intangible Assets (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2013
Dec. 31, 2012
Other Intangible Assets Disclosure [Abstract]
 
 
2014
$ 315 
 
2015
307 
 
2016
285 
 
2017
239 
 
2018
229 
 
Thereafter
828 
 
Intangible assets, net
$ 2,203 
$ 2,344 
Accounts Payable, Accrued Expenses and Other (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Payables and Accruals [Abstract]
 
 
 
Accrued employee compensation and benefits
 
$ 547 
$ 530 
Accounts payable
 
319 
286 
Liability for guest loyalty program, current
 
366 
321 
Deposit liabilities
 
195 
169 
Deferred revenues, current
 
48 
61 
Self-insurance reserves, current
 
52 
47 
Other accrued expenses
 
552 
508 
Accounts payable, accrued expenses and other
$ 2,003 
$ 2,079 
$ 1,922 
Debt - Long-term Debt (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Oct. 31, 2013
Dec. 31, 2012
Debt Instrument [Line Items]
 
 
 
 
Long-term debt and capital lease obligations, gross, including current maturities
$ 11,151 
$ 11,784 
 
$ 15,575 
Current maturities of long-term debt
(3)
(4)
 
(392)
Unamortized discount on senior secured term loan facility
(24)
(29)
 
Long-term debt
11,124 
11,751 
 
15,183 
Senior secured term loan facility [member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Debt instrument, interest rate, stated percentage
3.50% 
3.75% 
 
 
Long-term debt, gross
5,300 
6,000 
7,600 
Senior Notes [member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Debt instrument, interest rate, stated percentage
5.625% 
5.625% 
5.625% 
 
Long-term debt, gross
1,500 
1,500 
1,500 
Commercial mortgage-backed securities loan [member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Debt instrument, weighted average interest rate
4.05% 
4.05% 
 
 
Long-term debt, gross
3,500 1
3,500 1 2
3,500 
Mortgage loan [member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Debt instrument, interest rate, stated percentage
2.30% 
2.32% 
 
 
Long-term debt, gross
525 
525 
525 
Senior Mortgage Loans [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Debt instrument, interest rate, stated percentage
 
 
 
2.51% 
Long-term debt, gross
 
 
7,271 3
Secured mezzanine loans with an average rate [member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Debt instrument, weighted average interest rate
 
 
 
4.12% 
Long-term debt, gross
 
 
7,697 3
Secured Mezzanine Loans [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Debt instrument, interest rate, stated percentage
 
 
 
4.71% 
Long-term debt, gross
 
 
240 3
Mortgage notes [member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Debt instrument, weighted average interest rate
5.17% 
6.13% 
 
 
Long-term debt, gross
196 
133 
 
134 
Other unsecured notes [member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Debt instrument, interest rate, stated percentage
7.50% 
7.50% 
 
 
Long-term debt, gross
54 
53 
 
149 4
Capital lease obligations [member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Debt instrument, weighted average interest rate
6.06% 
5.88% 
 
 
Long-term debt, gross
76 
73 
 
83 
Contingently Convertible Notes [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Debt instrument, interest rate, stated percentage
 
 
 
3.38% 
Long-term debt, gross
 
5
 
Unsecured Notes 8due 2031 [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Debt instrument, interest rate, stated percentage
 
 
 
8.00% 
Long-term debt, gross
 
96 
 
96 
Variable rate [member] |
Commercial mortgage-backed securities loan [member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Long-term debt, gross
 
$ 875 
 
 
Debt - Additional Information (Detail) (USD $)
9 Months Ended 12 Months Ended 1 Months Ended 9 Months Ended 12 Months Ended 1 Months Ended 1 Months Ended 1 Months Ended 1 Months Ended 1 Months Ended 1 Months Ended 1 Months Ended
Sep. 30, 2014
Extension
Hotel
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2013
Senior secured term loan facility [member]
Sep. 30, 2014
Senior secured term loan facility [member]
Dec. 31, 2013
Senior secured term loan facility [member]
Oct. 31, 2013
Senior secured term loan facility [member]
Dec. 31, 2012
Senior secured term loan facility [member]
Sep. 30, 2014
Senior Notes [member]
Dec. 31, 2013
Senior Notes [member]
Oct. 31, 2013
Senior Notes [member]
Dec. 31, 2012
Senior Notes [member]
Sep. 30, 2014
Commercial mortgage-backed securities loan [member]
Dec. 31, 2013
Commercial mortgage-backed securities loan [member]
Hotel
Oct. 31, 2013
Commercial mortgage-backed securities loan [member]
Dec. 31, 2012
Commercial mortgage-backed securities loan [member]
Oct. 31, 2013
Mortgage loan [member]
Sep. 30, 2014
Mortgage loan [member]
Dec. 31, 2013
Mortgage loan [member]
Dec. 31, 2012
Mortgage loan [member]
Oct. 31, 2013
Secured Debt [member]
Dec. 31, 2012
Secured Debt [member]
Oct. 31, 2013
Unsecured Notes 8due 2031 [Member]
Dec. 31, 2013
Unsecured Notes 8due 2031 [Member]
Dec. 31, 2012
Unsecured Notes 8due 2031 [Member]
Aug. 31, 2013
Timeshare Facility [member]
Sep. 30, 2014
Timeshare Facility [member]
Dec. 31, 2013
Timeshare Facility [member]
Oct. 31, 2013
Timeshare Facility [member]
May 31, 2013
Timeshare Facility [member]
Aug. 31, 2013
Securitized Timeshare Financing Receivables [member]
Sep. 30, 2014
Securitized Timeshare Debt [member]
Dec. 31, 2013
Securitized Timeshare Debt [member]
Aug. 31, 2013
Securitized Timeshare Debt [member]
Jun. 10, 2014
Securitized Timeshare Debt 1.77 Notes [Member]
Jun. 10, 2014
Securitized Timeshare Debt 2.07 Notes [Member]
Sep. 30, 2014
Timeshare debt agreements [member]
Dec. 31, 2013
Timeshare debt agreements [member]
Oct. 31, 2013
Fixed Rate Debt [Member]
Commercial mortgage-backed securities loan [member]
Oct. 31, 2013
Variable Rate Debt [Member]
Commercial mortgage-backed securities loan [member]
Extension
Dec. 31, 2013
Variable Rate Debt [Member]
Commercial mortgage-backed securities loan [member]
Oct. 31, 2013
Variable Rate Debt [Member]
Commercial mortgage-backed securities loan [member]
After Extension [Member]
Oct. 31, 2013
Variable rate [member]
Commercial mortgage-backed securities loan [member]
Dec. 31, 2013
Variable rate [member]
Commercial mortgage-backed securities loan [member]
Oct. 31, 2013
Fixed Rate [Member]
Commercial mortgage-backed securities loan [member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit facility, maximum borrowing capacity
$ 1,000,000,000 
 
 
 
 
 
$ 1,000,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 300,000,000 
 
$ 450,000,000 
$ 400,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt, gross
 
 
 
6,000,000,000 
5,300,000,000 
6,000,000,000 
7,600,000,000 
1,500,000,000 
1,500,000,000 
1,500,000,000 
3,500,000,000 1
3,500,000,000 1 2
3,500,000,000 
525,000,000 
525,000,000 
525,000,000 
 
15,200,000,000 
 
96,000,000 
96,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,625,000,000 
 
875,000,000 
 
 
875,000,000 
 
Debt instrument, interest rate, stated percentage
 
 
 
3.75% 
3.50% 
3.75% 
 
 
5.625% 
5.625% 
5.625% 
 
 
 
 
 
 
2.30% 
2.32% 
 
 
 
 
 
8.00% 
 
1.40% 
1.42% 
 
 
 
 
2.28% 
2.28% 
1.77% 
2.07% 
 
 
4.47% 
 
 
 
 
 
 
Number of hotels securing CMBS loan
23 
 
 
 
 
 
 
 
 
 
 
 
 
23 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Extinguishment of debt, amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13,400,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Redemption price of debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt issuance cost
 
189,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred financing costs, net
 
168,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Letters of credit, maximum allowable
 
 
 
 
 
 
150,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Letters of credit outstanding under revolving credit facility
47,000,000 
 
 
43,000,000 
 
43,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit facility, remaining borrowing capacity
953,000,000 
 
 
957,000,000 
 
957,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit facility, unused capacity, commitment fee percentage
 
 
 
 
 
0.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt discount, percentage
 
 
 
 
 
 
0.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarterly principal payments
 
 
 
 
 
 
0.25% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from issuance of common stock
 
1,243,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Voluntary repayments of long-term debt
 
 
 
1,250,000,000 
700,000,000 
350,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
250,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of debt discount
 
23,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, number of extensions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, additional interest on variable-rate component LIBOR plus basis points
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.25% 
 
 
 
Restricted cash and cash equivalents
288,000,000 
266,000,000 
550,000,000 
 
 
 
 
 
 
 
 
 
47,000,000 
29,000,000 
 
 
 
 
 
 
 
147,000,000 
 
 
 
 
 
12,000,000 
 
 
 
 
8,000,000 
 
 
 
24,000,000 
20,000,000 
 
 
 
 
 
29,000,000 
 
Basis spread on variable-rate debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.15% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.65% 
 
 
Description of long-term debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
the rate would increase by 25 basis points during the final extension period 
 
 
Term of debt instrument
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 years 
 
5 years 
Non-recourse debt, including current maturities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
400,000,000 
150,000,000 
450,000,000 
 
 
 
511,000,000 
222,000,000 
250,000,000 
304,000,000 
46,000,000 
 
 
 
 
 
 
 
 
 
Gross timeshare financing receivables secured under securitized timeshare debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 255,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt - Gain on Extinguishment of Debt (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Extinguishment of Debt [Line Items]
 
 
 
Gain on debt extinguishment
$ 229 
$ 0 
$ 0 
Release of interest accrued [member]
 
 
 
Extinguishment of Debt [Line Items]
 
 
 
Gain on debt extinguishment
201 
 
 
Release of unamortized yield adjustments [member]
 
 
 
Extinguishment of Debt [Line Items]
 
 
 
Gain on debt extinguishment
43 
 
 
Release of unamortized debt issuance costs [member]
 
 
 
Extinguishment of Debt [Line Items]
 
 
 
Gain on debt extinguishment
$ (15)
 
 
Debt - Non-recourse Debt (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Sep. 30, 2014
Capital lease obligations of consolidated VIEs [member]
Dec. 31, 2013
Capital lease obligations of consolidated VIEs [member]
Dec. 31, 2012
Capital lease obligations of consolidated VIEs [member]
Sep. 30, 2014
Non-recourse debt of consolidated VIEs [member]
Dec. 31, 2013
Non-recourse debt of consolidated VIEs [member]
Dec. 31, 2012
Non-recourse debt of consolidated VIEs [member]
Sep. 30, 2014
Timeshare Facility [member]
Dec. 31, 2013
Timeshare Facility [member]
Aug. 31, 2013
Timeshare Facility [member]
Sep. 30, 2014
Securitized Timeshare Debt [member]
Dec. 31, 2013
Securitized Timeshare Debt [member]
Aug. 31, 2013
Securitized Timeshare Debt [member]
Non-recourse Debt [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-recourse debt, including current maturities
 
 
 
$ 239 
$ 255 
$ 373 
$ 37 1
$ 41 1
$ 47 
$ 150 
$ 450 
$ 400 
$ 511 
$ 222 
$ 250 
Debt instrument, interest rate, stated percentage
 
 
 
6.34% 
6.34% 
 
 
 
 
1.40% 
1.42% 
 
 
2.28% 
2.28% 
Debt instrument, weighted average interest rate
 
 
 
 
 
 
3.46% 
3.30% 2
 
 
 
 
1.98% 
 
 
Non-recourse debt and capital lease obligations, including current maturities
937 
968 
420 
 
 
 
 
 
 
 
 
 
 
 
 
Current maturities of non-recourse debt
(124)
(48)
(15)
 
 
 
 
 
 
 
 
 
 
 
 
Non-recourse debt
$ 813 
$ 920 
$ 405 
 
 
 
 
 
 
 
 
 
 
 
 
Debt - Debt Maturities (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Extension
Dec. 31, 2013
Dec. 31, 2013
Commercial mortgage-backed securities loan [member]
Variable Rate Debt [Member]
Extension
Debt Disclosure [Abstract]
 
 
 
2014
$ 34 
$ 52 
 
2015
136 
69 
 
2016
433 
622 
 
2017
164 
96 
 
2018
4,097 1
4,068 2
 
Thereafter
7,224 
7,845 
 
Long-term debt and capital lease obligations, gross
$ 12,088 
$ 12,752 
 
Debt Instrument Extension Period
1 year 
 
1 year 
Debt Instrument Number Of Extension Options
 
Debt instrument, maturity date
 
 
2018-11-01 
Deferred Revenues (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2013
Hilton HHonors points sales [member]
Oct. 31, 2013
Hilton HHonors points sales [member]
Dec. 31, 2012
Hilton HHonors points sales [member]
Dec. 31, 2013
Other deferred revenues [member]
Dec. 31, 2012
Other deferred revenues [member]
Deferred Revenue Arrangement [Line Items]
 
 
 
 
 
 
 
 
Deferred revenues
$ 544 
$ 674 
$ 82 
$ 597 
$ 650 
$ 0 
$ 77 
$ 82 
Deferred Revenues - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Oct. 31, 2013
Amex [member]
Oct. 31, 2013
Citi [member]
Dec. 31, 2013
Hilton HHonors points sales [member]
Oct. 31, 2013
Hilton HHonors points sales [member]
Dec. 31, 2012
Hilton HHonors points sales [member]
Deferred Revenue Arrangement [Line Items]
 
 
 
 
 
 
 
 
Deferred revenues
$ 544 
$ 674 
$ 82 
$ 400 
$ 250 
$ 597 
$ 650 
$ 0 
Other Liabilities (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Other Liabilities Disclosure [Abstract]
 
 
 
Program surplus
 
$ 314 
$ 263 
Pension obligations
 
138 
262 
Other long-term tax liabilities
 
344 
340 
Deferred employee compensation and benefits
 
147 
129 
Self-insurance reserves
 
81 
80 
Guarantee liability
 
51 
57 
Other
 
74 
310 
Other Liabilities, Noncurrent
$ 1,179 
$ 1,149 
$ 1,441 
Derivative Instruments and Hedging Activities - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
Nov. 30, 2011
Secured debt interest rate caps [member]
Derivative
Nov. 30, 2011
Designated as hedging instrument [member]
Derivative
Sep. 30, 2014
Designated as hedging instrument [member]
Term loan interest rate swaps [member]
Derivative
Dec. 31, 2013
Designated as hedging instrument [member]
Term loan interest rate swaps [member]
Derivative
Nov. 30, 2011
Designated as hedging instrument [member]
Secured debt interest rate caps [member]
Derivative
Nov. 30, 2013
Not designated as hedging instrument [member]
Secured debt interest rate caps [member]
Derivative
Sep. 30, 2013
Not designated as hedging instrument [member]
Secured debt interest rate caps [member]
Derivative
Nov. 30, 2012
Not designated as hedging instrument [member]
Secured debt interest rate caps [member]
Derivative
Dec. 31, 2011
Not designated as hedging instrument [member]
Secured debt interest rate caps [member]
Derivative
Nov. 30, 2011
Not designated as hedging instrument [member]
Secured debt interest rate caps [member]
Derivative
Sep. 30, 2014
Not designated as hedging instrument [member]
CMBS loan interest rate cap [member]
Derivative
Dec. 31, 2013
Not designated as hedging instrument [member]
CMBS loan interest rate cap [member]
Sep. 30, 2014
Not designated as hedging instrument [member]
Mortgage loan interest rate cap [member]
Derivative
Dec. 31, 2013
Not designated as hedging instrument [member]
Mortgage loan interest rate cap [member]
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative, notional amount
$ 16,200 
 
$ 1,450 
$ 1,450 
$ 14,600 
$ 15,200 
$ 15,200 
$ 15,900 
$ 15,900 
$ 1,600 
$ 875 
$ 875 
$ 525 
$ 525 
Derivative, swaption interest rate
 
 
1.87% 
1.87% 
 
 
 
 
 
 
 
 
 
 
Number of interest rate derivatives held
11 
10 
10 
10 
10 
 
 
Derivative, cap interest rate
 
 
 
 
 
 
 
 
 
 
6.00% 
6.00% 
4.00% 
4.00% 
Derivative Instruments and Hedging Activities - Fair Value of Derivative Instruments (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Designated as hedging instrument [member] |
Term loan interest rate swaps [member]
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Derivative fair value
$ 4 
$ 10 
$ 0 
Not designated as hedging instrument [member] |
Interest rate caps [member]
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Derivative fair value
$ 0 
$ 0 
$ 0 
Derivative Instruments and Hedging Activities - Earnings Effect of Derivative Instruments (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2014
Designated as hedging instrument [member]
Dec. 31, 2013
Designated as hedging instrument [member]
Dec. 31, 2012
Designated as hedging instrument [member]
Dec. 31, 2011
Designated as hedging instrument [member]
Nov. 30, 2011
Designated as hedging instrument [member]
Derivative
Sep. 30, 2014
Not designated as hedging instrument [member]
Sep. 30, 2013
Not designated as hedging instrument [member]
Dec. 31, 2013
Not designated as hedging instrument [member]
Dec. 31, 2012
Not designated as hedging instrument [member]
Dec. 31, 2011
Not designated as hedging instrument [member]
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
 
 
 
 
 
 
Derivative instruments, gain (loss) recognized in other comprehensive income (loss), effective portion, net
$ (6)
$ 10 1
$ 0 1
$ 0 1
 
 
 
 
 
 
Derivative instruments, gain (loss) recognized in income, ineffective portion and amount excluded from effectiveness testing, net
 
2
2
(2)2
 
 
 
 
 
Gain (loss) on interest rate derivative instruments not designated as hedging instruments
 
 
 
 
 
$ 0 
$ 0 
$ 0 3
$ (1)3
$ (1)3
Number of interest rate derivatives held
 
 
 
 
 
 
 
 
 
Fair Value Measurements - Schedule by Balance Sheet Grouping (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Oct. 31, 2013
Dec. 31, 2012
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
 
Timeshare financing receivables
$ 1,002 
$ 994 
 
$ 984 
Long-term debt
64 1
 
 
 
Carrying amount
 
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
 
Cash equivalents
290 
309 
 
561 
Restricted cash equivalents
97 
107 
 
322 
Timeshare financing receivables
1,002 
994 
 
984 
Interest rate swaps, asset
10 
 
 
Long-term debt
11,051 2 3
11,682 2 4 5
 
15,492 4 5
Non-recourse debt, including current maturities
661 6
672 5 6 7
 
 
Level 1 [member]
 
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
 
Cash equivalents
 
Restricted cash equivalents
 
Timeshare financing receivables
 
Interest rate swaps, asset
 
 
Long-term debt
1,606 2 3
57 2 4 5
 
152 4 5
Non-recourse debt
6
5 6 7
 
 
Level 2 [member]
 
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
 
Cash equivalents
290 
309 
 
561 
Restricted cash equivalents
97 
107 
 
322 
Timeshare financing receivables
 
Interest rate swaps, asset
10 
 
 
Long-term debt
2 3
1,560 2 4 5
 
4 5
Non-recourse debt
6
5 6 7
 
 
Level 3 [member]
 
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
 
Cash equivalents
 
Restricted cash equivalents
 
Timeshare financing receivables
1,004 
996 
 
987 
Interest rate swaps, asset
 
 
Long-term debt
9,592 2 3
10,358 2 4 5
 
15,716 4 5
Non-recourse debt
657 6
670 5 6 7
 
 
Capital lease obligations [member]
 
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
 
Long-term debt, gross
76 
73 
 
83 
Senior Notes [member]
 
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
 
Long-term debt, gross
1,500 
1,500 
1,500 
Capital lease obligations of consolidated VIEs [member]
 
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
 
Non-recourse debt, including current maturities
239 
255 
 
373 
Non-recourse debt of consolidated VIEs [member]
 
 
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
 
Non-recourse debt, including current maturities
$ 37 8
$ 41 8
 
$ 47 
Fair Value Measurements - Schedule of Fair Value Measured on a Nonrecurring Basis (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Sep. 30, 2014
Fair Value Disclosures [Abstract]
 
 
 
 
Property and equipment
 
$ 24 
$ 5 
$ 144 1
Investments in affiliates, fair value
 
29 
205 
 
Long-term debt
 
 
 
64 1
Impairment losses
54 
20 
 
Property and equipment [member]
 
 
 
 
Fair Value Disclosures [Abstract]
 
 
 
 
Impairment losses
 
53 
20 
 
Investments in affiliates [member]
 
 
 
 
Fair Value Disclosures [Abstract]
 
 
 
 
Impairment losses
 
$ 20 
$ 141 
 
Fair Value Measurements - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended 9 Months Ended 12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2012
Property and equipment [member]
Dec. 31, 2011
Property and equipment [member]
Sep. 30, 2014
Property and equipment [member]
Growth rate [member]
Sep. 30, 2014
Property and equipment [member]
Cash flow term [member]
Sep. 30, 2014
Property and equipment [member]
Capitalization rates [member]
Sep. 30, 2014
Property and equipment [member]
Discount Rates [Member]
Dec. 31, 2012
Investments in affiliates [member]
Dec. 31, 2011
Investments in affiliates [member]
Dec. 31, 2012
Growth rate [member]
Property and equipment [member]
Dec. 31, 2012
Growth rate [member]
Investments in affiliates [member]
Dec. 31, 2012
Cash flow term [member]
Property and equipment [member]
Dec. 31, 2012
Cash flow term [member]
Investments in affiliates [member]
Dec. 31, 2012
Capitalization rates [member]
Property and equipment [member]
Dec. 31, 2012
Capitalization rates [member]
Investments in affiliates [member]
Dec. 31, 2012
Discount rates [member]
Property and equipment [member]
Dec. 31, 2012
Discount rates [member]
Investments in affiliates [member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carrying value of impaired asset
 
 
 
$ 77 
$ 25 
 
 
 
 
$ 49 
$ 346 
 
 
 
 
 
 
 
 
Impairment losses
$ 0 
$ 54 
$ 20 
$ 53 
$ 20 
 
 
 
 
$ 20 
$ 141 
 
 
 
 
 
 
 
 
Fair value measurements, valuation techniques
 
 
 
 
 
2 percent to 3 percent 
11 years to 13 years 
10 percent to 11 percent 
9 percent to 11 percent 
 
 
2 percent to 3 percent 
3 percent to 7 percent 
10 years 
10 years 
8 percent to 9 percent 
8 percent to 12 percent 
9 percent to 12 percent 
10 percent to 22 percent 
Leases - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Entity
Hotel
Dec. 31, 2012
Hotel
Entity
Sep. 30, 2013
Hilton Bradford [Member]
Dec. 31, 2012
Hilton Odawara [member]
Capital Leased Assets [Line Items]
 
 
 
 
Number of hotel properties under operating leases
70 
71 
 
 
Number of Hotel properties under capital leases
 
 
Number of consolidated variable interest entities capital leases
 
 
Leases starting expiration date
2014 
 
 
 
Leases ending expiration date
2196 
 
 
 
Date majority of leases expire
2026 
 
 
 
Capital lease obligations
 
 
$ 17 
$ 15 
Leases - Schedule of Future Minimum Rental Payments (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2013
Schedule of Future Lease Payments [Line Items]
 
2014
$ 264 
2015
251 
2016
243 
2017
230 
2018
223 
Thereafter
2,075 
Total minimum rent payments
3,286 
Recourse capital leases [member]
 
Schedule of Future Lease Payments [Line Items]
 
2014
2015
16 
2016
2017
2018
Thereafter
106 
Total minimum rent payments
148 
Less: amount representing interest
(75)
Present value of net minimum rent payments
73 
Non-recourse capital leases [member]
 
Schedule of Future Lease Payments [Line Items]
 
2014
26 
2015
26 
2016
26 
2017
26 
2018
26 
Thereafter
272 
Total minimum rent payments
402 
Less: amount representing interest
(147)
Present value of net minimum rent payments
$ 255 
Leases - Schedule of Rent Expense (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Schedule of Rent Expense [Abstract]
 
 
 
Minimum rentals
$ 271 
$ 286 
$ 264 
Contingent rentals
148 
161 
175 
Rent expense
$ 419 
$ 447 
$ 439 
Income Taxes - Income Before Income Taxes (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Income Tax Disclosure [Abstract]
 
 
 
 
 
U.S. income before tax
 
 
$ 502 
$ 435 
$ 48 
Foreign income before tax
 
 
196 
138 
148 
Income before income taxes
$ 854 
$ 590 
$ 698 
$ 573 
$ 196 
Income Taxes - Components of Income Tax Expense (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Income Tax Disclosure [Abstract]
 
 
 
 
 
Federal
 
 
$ 94 
$ 71 
$ 50 
State
 
 
15 
13 
Foreign
 
 
64 
57 
70 
Total current
 
 
173 
141 
128 
Federal
 
 
160 
63 
(190)
State
 
 
(8)
Foreign
 
 
(99)
11 
Total deferred
(62)
66 
65 
73 
(187)
Total provision (benefit) for income taxes
$ 331 
$ 192 
$ 238 
$ 214 
$ (59)
Income Taxes - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Income Tax Disclosure [Abstract]
 
 
 
 
 
Valuation allowance release, deferred tax asset, foreign
 
$ 109 
 
 
 
Valuation allowance release, deferred tax asset, state net operating loss
 
12 
 
 
 
Valuation allowance release, deferred tax asset, foreign tax credit
 
 
 
182 
 
Deferred tax assets, state net operating loss carryforwards
 
40 
 
 
 
Deferred tax assets, foreign net operating loss carryforwards
 
533 
 
 
 
Deferred tax assets, net operating loss carryforwards due to expire
 
59 
 
 
 
Net operating loss carryforwards expiration range
 
2014 and 2033 
 
 
 
Net operating loss carryforwards due to expire in one year
 
 
 
 
Deferred tax assets, net operating loss carryforwards not subject to expiration
 
514 
 
 
 
Deferred tax asset valuation allowance increase (decrease)
 
(266)
 
 
 
Interest and penalties expense related to uncertain tax positions
 
 
Unrecognized tax benefits, income tax penalties and interest accrued
18 
45 
42 
 
 
Unrecognized tax benefits that would impact effective tax rate
342 
340 
374 
 
 
Significant change in unrecognized tax benefits is reasonably possible, amount of unrecorded benefit
15 
 
 
 
IRS proposed additional U.S. federal tax owed
 
696 
 
 
 
Unrecognized tax benefits
378 
435 
469 
436 
405 
Unrecognized tax benefits, period increase (decrease)
(57)
 
 
 
 
Unrecognized tax benefits, income tax penalties and interest accrued, period increase (decrease)
(27)
 
 
 
 
State and Local Jurisdiction [Member]
 
 
 
 
 
Income Tax Disclosure [Abstract]
 
 
 
 
 
Net operating loss carryforwards
 
806 
 
 
 
Net operating loss carryforwards valuation allowance
 
 
 
 
Foreign Tax Authority [Member]
 
 
 
 
 
Income Tax Disclosure [Abstract]
 
 
 
 
 
Net operating loss carryforwards
 
2,000 
 
 
 
Net operating loss carryforwards valuation allowance
 
$ 440 
 
 
 
Income Taxes - Effective Income Tax Rate Reconciliation (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Income Tax Disclosure [Abstract]
 
 
 
 
 
Statutory U.S. federal income tax provision
 
 
$ 244 
$ 201 
$ 69 
State income taxes, net of U.S. federal tax benefit
 
 
31 
10 
Foreign income tax expense
 
 
74 
18 
50 
Foreign losses not subject to U.S. tax
 
 
(24)
(24)
(26)
Tax credits
 
 
(67)
(67)
(58)
Change in deferred tax asset valuation allowance
 
 
(121)
56 
(160)
Change in basis difference in foreign subsidiaries
 
 
24 
18 
20 
Provision for uncertain tax positions
 
 
(19)
(2)
35 
Non-deductible equity based compensation
 
 
94 
Other, net
 
 
Provision (benefit) for income taxes
$ 331 
$ 192 
$ 238 
$ 214 
$ (59)
Income Taxes - Schedule of Income Tax Balance Sheet Presentation (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Income Tax Disclosure [Abstract]
 
 
 
Deferred income tax assets-current
$ 23 
$ 23 
$ 76 
Deferred income tax assets-non-current
195 
193 
104 
Deferred income tax liabilities-current
 
(1)
Deferred income tax liabilities-non-current
(5,137)
(5,053)
(4,948)
Net deferred taxes
 
$ (4,837)
$ (4,769)
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2013
Dec. 31, 2012
Income Tax Disclosure [Abstract]
 
 
Foreign tax credits
$ 20 
$ 227 
Net operating loss carryforwards
573 
570 
Compensation
187 
245 
Deferred transaction costs
15 
25 
Investments
56 
Other reserves
90 
198 
Capital lease obligations
133 
188 
Self-insurance reserves
51 
44 
System funds
42 
23 
Other tax credits
48 
Other
105 
72 
Total gross deferred tax assets
1,275 
1,640 
Less: valuation allowance
(503)
(769)
Deferred tax assets
772 
871 
Property and equipment
(2,075)
(2,025)
Brands
(1,910)
(1,916)
Amortizable intangible
(616)
(659)
Unrealized foreign currency gains
(279)
(301)
Investments
(70)
Investment in foreign subsidiaries
(81)
(93)
Deferred income
(648)
(576)
Deferred tax liabilities
(5,609)
(5,640)
Net deferred taxes
$ (4,837)
$ (4,769)
Income Taxes - Summary of Unrecognized Tax Benefits (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Sep. 30, 2014
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
 
 
Balance at beginning of year
$ 469 
$ 436 
$ 405 
$ 378 
Additions for tax positions related to the prior year
71 
60 
 
Additions for tax positions related to the current year
 
Reductions for tax positions for prior years
(2)
(23)
(6)
 
Settlements
(35)
(14)
(27)
 
Lapse of statute of limitations
(2)
(6)
(2)
 
Currency translation adjustment, decrease
(1)
 
 
 
Currency translation adjustment, increase
 
 
Balance at end of year
$ 435 
$ 469 
$ 436 
$ 378 
Employee Benefit Plans - Schedule of Changes in Projected Benefit Obligations (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Employees of former Hilton Affiliates [member]
 
 
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
 
 
Benefit obligation at end of year
$ 11 
 
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
 
 
Fair value of plan assets at end of year
20 
 
Domestic plan [member]
 
 
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
 
 
Benefit obligation at beginning of year
491 
449 
Service cost
Interest cost
18 
21 
Employee contributions
Actuarial loss (gain)
(51)
43 
Settlements and curtailments
Effect of foreign exchange rates
Benefits paid
(45)
(22)
Other
11 1
Benefit obligation at end of year
424 
491 
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
 
 
Fair value of plan assets at beginning of year
273 
249 
Actual return on plan assets, net of expenses
32 
31 
Employer contribution
40 
15 
Employee contributions
Effect of foreign exchange rates
Benefits paid
(45)
(22)
Settlements
Other
20 1
Fair value of plan assets at end of year
320 
273 
Funded status at end of year (overfunded/(underfunded))
(104)
(218)
Accumulated benefit obligation
424 
491 
U.K. plan [member]
 
 
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
 
 
Benefit obligation at beginning of year
365 
312 
Service cost
Interest cost
16 
16 
Employee contributions
Actuarial loss (gain)
(3)
28 
Settlements and curtailments
Effect of foreign exchange rates
14 
Benefits paid
(13)
(12)
Other
Benefit obligation at end of year
380 
365 
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
 
 
Fair value of plan assets at beginning of year
363 
318 
Actual return on plan assets, net of expenses
20 
34 
Employer contribution
Employee contributions
Effect of foreign exchange rates
14 
Benefits paid
(13)
(12)
Settlements
Other
Fair value of plan assets at end of year
385 
363 
Funded status at end of year (overfunded/(underfunded))
(2)
Accumulated benefit obligation
380 
365 
International plans [member]
 
 
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
 
 
Benefit obligation at beginning of year
125 
119 
Service cost
Interest cost
Employee contributions
Actuarial loss (gain)
(6)
Settlements and curtailments
(2)
Effect of foreign exchange rates
(4)
(2)
Benefits paid
(8)
(10)
Other
Benefit obligation at end of year
112 
125 
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
 
 
Fair value of plan assets at beginning of year
85 
83 
Actual return on plan assets, net of expenses
Employer contribution
10 
Employee contributions
Effect of foreign exchange rates
(4)
(2)
Benefits paid
(7)
(10)
Settlements
(2)
Other
Fair value of plan assets at end of year
87 
85 
Funded status at end of year (overfunded/(underfunded))
(25)
(40)
Accumulated benefit obligation
$ 112 
$ 125 
Employee Benefit Plans - Schedule of Amounts Recognized in Balance Sheet (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2013
Dec. 31, 2012
Domestic plan [member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Non-current asset
$ 2 
$ 0 
Current liability
Non-current liability
(106)
(218)
Net amount recognized
(104)
(218)
U.K. plan [member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Non-current asset
Current liability
Non-current liability
(3)
(2)
Net amount recognized
(2)
International plans [member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Non-current asset
Current liability
(1)
(1)
Non-current liability
(29)
(42)
Net amount recognized
$ (25)
$ (40)
Employee Benefit Plans - Schedule of Amounts Recognized in Other Comprehensive Income (Loss) (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Domestic plan [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net actuarial loss (gain)
$ (67)
$ 29 
$ 8 
Prior service cost (credit)
(12)
(4)
(4)
Amortization of net loss (gain)
(3)
(4)
Net amount recognized
(82)
26 
U.K. plan [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net actuarial loss (gain)
17 
21 
Prior service cost (credit)
16 
Amortization of net loss (gain)
(4)
(3)
(1)
Net amount recognized
(1)
30 
23 
International plans [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net actuarial loss (gain)
(12)
Prior service cost (credit)
(4)
Amortization of net loss (gain)
(2)
(1)
(2)
Net amount recognized
$ (14)
$ 8 
$ (4)
Employee Benefit Plans - Net Periodic Pension Cost (Credit) (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Domestic plan [member]
 
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
 
Service cost
$ 5 
$ 3 
$ 4 
$ 0 
$ 0 
Interest cost
13 
13 
17 
21 
23 
Expected return on plan assets
(14)
(14)
(18)
(17)
(17)
Amortization of prior service cost (credit)
Amortization of net loss (gain)
(1)
Net periodic pension cost (credit) before settlements losses
 
 
10 
14 
Settlement losses
Net periodic pension cost (credit)
10 
10 
14 
U.K. plan [member]
 
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
 
Service cost
Interest cost
13 
12 
17 
16 
17 
Expected return on plan assets
(19)
(17)
(23)
(21)
(21)
Amortization of prior service cost (credit)
(2)
(3)
(16)
(3)
Amortization of net loss (gain)
Net periodic pension cost (credit) before settlements losses
 
 
(13)
(2)
Settlement losses
Net periodic pension cost (credit)
(4)
(13)
(2)
International plans [member]
 
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
 
Service cost
Interest cost
Expected return on plan assets
(3)
(3)
(4)
(4)
(4)
Amortization of prior service cost (credit)
Amortization of net loss (gain)
Net periodic pension cost (credit) before settlements losses
 
 
Settlement losses
Net periodic pension cost (credit)
$ 2 
$ 5 
$ 5 
$ 6 
$ 7 
Employee Benefit Plans - Schedule of Assumptions Used (Detail)
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Domestic plan [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate
4.70% 
3.90% 
 
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate
3.90% 
4.90% 
5.40% 
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Return on Assets
7.50% 
6.80% 
6.80% 
U.K. plan [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate
4.70% 
4.70% 
 
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Rate of Compensation Increase
1.90% 
1.90% 
 
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Rate of Pension Increase
3.00% 
2.80% 
 
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate
4.70% 
5.00% 
5.70% 
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Return on Assets
6.50% 
6.50% 
6.50% 
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Rate of Compensation Increase
1.90% 
1.70% 
2.60% 
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Rate of Pension Increase
2.80% 
2.90% 
3.00% 
International plans [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate
4.30% 
3.80% 
 
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Rate of Compensation Increase
2.30% 
2.20% 
 
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Rate of Pension Increase
1.90% 
2.00% 
 
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate
3.80% 
4.60% 
5.00% 
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Return on Assets
6.30% 
6.20% 
6.20% 
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Rate of Compensation Increase
2.20% 
2.80% 
3.30% 
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Rate of Pension Increase
2.00% 
1.80% 
1.80% 
Employee Benefit Plans - Additional Information (Detail)
In Millions, unless otherwise specified
12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2013
Dec. 31, 2013
Domestic plan [member]
USD ($)
Sep. 30, 2014
Domestic plan [member]
USD ($)
Dec. 31, 2012
Domestic plan [member]
USD ($)
Dec. 31, 2011
Domestic plan [member]
USD ($)
Dec. 31, 2013
Domestic plan [member]
Equity Securities [Member]
Dec. 31, 2012
Domestic plan [member]
Equity Securities [Member]
Dec. 31, 2013
Domestic plan [member]
Debt Securities [Member]
Dec. 31, 2012
Domestic plan [member]
Debt Securities [Member]
Dec. 31, 2013
U.K. plan [member]
USD ($)
Dec. 31, 2013
U.K. plan [member]
GBP (£)
Dec. 31, 2012
U.K. plan [member]
USD ($)
Dec. 31, 2011
U.K. plan [member]
USD ($)
Dec. 31, 2012
U.K. plan [member]
Equity Securities [Member]
Dec. 31, 2012
U.K. plan [member]
Debt Securities [Member]
Dec. 31, 2013
U.K. plan [member]
Common Collective Trust [Member]
Dec. 31, 2013
U.K. plan [member]
Bonds [Member]
Dec. 31, 2012
U.K. plan [member]
Real Estate Funds [Member]
Dec. 31, 2013
International plans [member]
USD ($)
Dec. 31, 2012
International plans [member]
USD ($)
Dec. 31, 2011
International plans [member]
USD ($)
Dec. 31, 2012
International plans [member]
Equity Securities [Member]
Dec. 31, 2012
International plans [member]
Debt Securities [Member]
Dec. 31, 2013
International plans [member]
Common Collective Trust [Member]
Dec. 31, 2013
International plans [member]
Bonds [Member]
Dec. 31, 2012
International plans [member]
Real Estate Funds [Member]
Dec. 31, 2013
Other Benefit Plans [Member]
USD ($)
Dec. 31, 2012
Other Benefit Plans [Member]
USD ($)
Dec. 31, 2011
Other Benefit Plans [Member]
USD ($)
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Defined Benefit Plan, Target Plan Asset Allocations
 
 
 
 
 
60.00% 
50.00% 
40.00% 
50.00% 
 
 
 
 
36.00% 
50.00% 
65.00% 
35.00% 
14.00% 
 
 
 
36.00% 
50.00% 
65.00% 
35.00% 
14.00% 
 
 
 
Defined Benefit Plans, Estimated Future Employer Contributions in Next Fiscal Year
 
$ 9 
 
 
 
 
 
 
 
$ 1 
 
 
 
 
 
 
 
 
$ 6 
 
 
 
 
 
 
 
 
 
 
Multiemployer Plans, Plan Assets
 
342 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multiemployer Plans, Accumulated Benefit Obligation
 
446 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Defined Benefit Plan, Effect of Lawsuit on Accumulated Benefit Obligation
 
 
 
109 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Defined Benefit Plan, Benefit Obligation of Lawsuit
 
86 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Court ordered posted bond
 
76 
76 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pension Contributions
 
31 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Defined Benefit Plan, Effect of Plan Amendment on Net Periodic Benefit Cost
 
 
 
 
 
 
 
 
 
 
 
13 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guarantor obligations, maximum exposure, undiscounted
 
 
 
 
 
 
 
 
 
25 
15 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Defined Benefit Plan, Benefit Obligation
 
424 
 
491 
449 
 
 
 
 
380 
 
365 
312 
 
 
 
 
 
112 
125 
119 
 
 
 
 
 
14 
13 
 
Defined Contribution Plan, Cost Recognized
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 20 
$ 18 
$ 18 
Multiemployer Plans, Period Contributions, Significance of Contributions in New York Pension Fund
Exceeded 5 percent 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee Benefit Plans - Fair Value of Pension Assets (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Domestic plan [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
$ 320 
$ 273 
$ 249 
Domestic plan [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
80 
70 
 
Domestic plan [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
240 
203 
 
Domestic plan [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
U.K. plan [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
385 
363 
318 
U.K. plan [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
U.K. plan [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
385 
363 
 
U.K. plan [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
International plans [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
87 
85 
83 
International plans [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
15 
16 
 
International plans [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
72 
69 
 
International plans [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Cash and Cash Equivalents [Member] |
Domestic plan [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Cash and Cash Equivalents [Member] |
Domestic plan [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Cash and Cash Equivalents [Member] |
Domestic plan [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Cash and Cash Equivalents [Member] |
U.K. plan [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Cash and Cash Equivalents [Member] |
U.K. plan [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Cash and Cash Equivalents [Member] |
U.K. plan [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Cash and Cash Equivalents [Member] |
International plans [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
10 
12 
 
Cash and Cash Equivalents [Member] |
International plans [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Cash and Cash Equivalents [Member] |
International plans [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Equity Funds [Member] |
Domestic plan [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
70 
54 
 
Equity Funds [Member] |
Domestic plan [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Equity Funds [Member] |
Domestic plan [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Equity Funds [Member] |
U.K. plan [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Equity Funds [Member] |
U.K. plan [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Equity Funds [Member] |
U.K. plan [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Equity Funds [Member] |
International plans [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Equity Funds [Member] |
International plans [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Equity Funds [Member] |
International plans [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Debt Securities [Member] |
Domestic plan [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
10 
16 
 
Debt Securities [Member] |
Domestic plan [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
97 
103 
 
Debt Securities [Member] |
Domestic plan [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Debt Securities [Member] |
U.K. plan [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Debt Securities [Member] |
U.K. plan [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Debt Securities [Member] |
U.K. plan [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Debt Securities [Member] |
International plans [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Debt Securities [Member] |
International plans [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Debt Securities [Member] |
International plans [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Bond funds [Member] |
Domestic plan [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Bond funds [Member] |
Domestic plan [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Bond funds [Member] |
Domestic plan [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Bond funds [Member] |
U.K. plan [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Bond funds [Member] |
U.K. plan [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Bond funds [Member] |
U.K. plan [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Bond funds [Member] |
International plans [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Bond funds [Member] |
International plans [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
16 
15 
 
Bond funds [Member] |
International plans [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Real Estate Funds [Member] |
Domestic plan [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
 
Real Estate Funds [Member] |
Domestic plan [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
 
Real Estate Funds [Member] |
Domestic plan [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
 
Real Estate Funds [Member] |
U.K. plan [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
 
Real Estate Funds [Member] |
U.K. plan [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
 
Real Estate Funds [Member] |
U.K. plan [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
 
Real Estate Funds [Member] |
International plans [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
 
Real Estate Funds [Member] |
International plans [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
 
Real Estate Funds [Member] |
International plans [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
 
Common Collective Trust [Member] |
Domestic plan [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Common Collective Trust [Member] |
Domestic plan [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
143 
100 
 
Common Collective Trust [Member] |
Domestic plan [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Common Collective Trust [Member] |
U.K. plan [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Common Collective Trust [Member] |
U.K. plan [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
385 
363 
 
Common Collective Trust [Member] |
U.K. plan [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Common Collective Trust [Member] |
International plans [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Common Collective Trust [Member] |
International plans [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
45 
44 
 
Common Collective Trust [Member] |
International plans [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Other [Member] |
Domestic plan [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Other [Member] |
Domestic plan [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Other [Member] |
Domestic plan [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Other [Member] |
U.K. plan [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Other [Member] |
U.K. plan [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Other [Member] |
U.K. plan [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Other [Member] |
International plans [member] |
Level 1 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Other [Member] |
International plans [member] |
Level 2 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Other [Member] |
International plans [member] |
Level 3 [member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
$ 0 
$ 0 
 
Employee Benefit Plans - Schedule of Expected Benefit Payments (Detail) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2013
Domestic plan [member]
 
Defined Benefit Plan Disclosure [Line Items]
 
2014
$ 87 
2015
26 
2016
25 
2017
25 
2018
25 
2019-2023
125 
Defined Benefit Plan Expected Future Benefit Payments
313 
U.K. plan [member]
 
Defined Benefit Plan Disclosure [Line Items]
 
2014
14 
2015
14 
2016
14 
2017
14 
2018
15 
2019-2023
76 
Defined Benefit Plan Expected Future Benefit Payments
147 
International plans [member]
 
Defined Benefit Plan Disclosure [Line Items]
 
2014
11 
2015
2016
2017
2018
2019-2023
43 
Defined Benefit Plan Expected Future Benefit Payments
$ 88 
Employee Benefit Plans - Schedule of Multiemployer Plans (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Multiemployer Plan, Period Contributions
$ 26 
$ 24 
$ 22 
New York Hotel Trades Council & Hotel Association of New York City, Inc. Pension Fund [Member]
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Entity Tax Identification Number
131764242 
 
 
Pension Protection Act Zone Status
 
Yellow 
 
Multiemployer Plan, Period Contributions
14 
13 
13 
Other plans [Member]
 
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
 
Multiemployer Plan, Period Contributions
$ 12 
$ 11 
$ 9 
Share-Based Compensation - Additional Information (Detail) (USD $)
In Millions, except Share data, unless otherwise specified
9 Months Ended 12 Months Ended 0 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Dec. 10, 2013
Promote Plan [member]
Sep. 30, 2014
Promote Plan [member]
Sep. 30, 2013
Promote Plan [member]
Dec. 31, 2013
Promote Plan [member]
Dec. 31, 2012
Promote Plan [member]
Dec. 31, 2011
Promote Plan [member]
Sep. 30, 2014
Promote Plan [member]
Sponsor less than 50 percent ownership [member]
Dec. 31, 2013
Promote Plan [member]
Sponsor less than 50 percent ownership [member]
Sep. 30, 2014
Promote Plan [member]
Immediate [member]
Dec. 31, 2013
Promote Plan [member]
Immediate [member]
Sep. 30, 2014
Promote Plan [member]
1 year [member]
Dec. 31, 2013
Promote Plan [member]
1 year [member]
Dec. 31, 2012
Promote Plan [member]
Vested [Member]
Dec. 31, 2013
Promote Plan [member]
Tier I
Sep. 30, 2014
2013 Omnibus Incentive Plan [member]
Dec. 31, 2013
2013 Omnibus Incentive Plan [member]
Dec. 11, 2013
2013 Omnibus Incentive Plan [member]
Sep. 30, 2014
2013 Omnibus Incentive Plan [member]
Restricted stock units (RSUs) [member]
Dec. 31, 2013
2013 Omnibus Incentive Plan [member]
Restricted stock units (RSUs) [member]
Sep. 30, 2014
2013 Omnibus Incentive Plan [member]
Restricted stock units (RSUs) [member]
Minimum [member]
Sep. 30, 2014
2013 Omnibus Incentive Plan [member]
Restricted stock units (RSUs) [member]
Maximum [member]
Sep. 30, 2014
2013 Omnibus Incentive Plan [member]
Stock options [member]
Sep. 30, 2014
2013 Omnibus Incentive Plan [member]
Performance Shares [Member]
Sep. 30, 2014
2013 Omnibus Incentive Plan [member]
Relative shareholder return [member]
Sep. 30, 2014
2013 Omnibus Incentive Plan [member]
EBITDA CAGR [member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation expense
$ 25 
$ 5 
$ 313 
$ 50 
$ 19 
 
$ 25 
$ 5 
$ 313 
$ 50 
$ 19 
 
$ 0 
 
 
 
 
 
 
$ 60 
$ 1 
 
 
 
 
 
 
 
 
 
Description of right to share in equity value
 
 
 
 
 
Tier I liability award provided the participants the right to share in 2.75 percent of the equity value of Hilton up to $8.352 billion (or $230 million) based on the achievement of certain service and performance conditions. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accelerated compensation cost
 
 
 
 
 
 
 
306 
 
 
 
 
 
 
 
 
 
52 
 
 
 
 
 
 
 
 
 
 
 
Vesting rights
 
 
 
 
 
 
 
 
 
 
 
the date that The Blackstone Group L.P. and its affiliates ("Blackstone" or "our Sponsor") cease to own 50 percent or more of the shares of the Company 
20 percent of each award will vest on the date that our Sponsor and its affiliates cease to own 50 percent or more of the shares of the Company, contingent upon continued employment through that date. 
 
40 percent of each award vested on December 11, 2013, the pricing date of our IPO 
 
40 percent of each award will vest on December 11, 2014, the first anniversary of the pricing date of our IPO, contingent upon continued employment through that date 
 
 
 
 
 
 
 
 
 
 
zero to 200 percent payout 
 
 
Weighted average grant-date fair value
 
 
 
 
 
 
 
 
$ 20.00 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 21.53 
$ 20.00 
 
 
 
 
$ 23.56 
$ 21.53 
Liabilities paid
 
 
 
 
 
 
 
 
65 
95 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized compensation costs related to unvested awards
 
 
 
 
 
 
 
 
95 
 
 
 
72 
 
 
 
23 
 
 
122 
 
 
 
 
 
 
 
 
 
 
Liability, current and noncurrent
 
 
 
 
 
 
 
 
18 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liability, current
 
 
 
 
 
 
 
 
 
13 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of common stock reserved for future issuance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
72,595,341 
79,980,500 
80,000,000 
 
 
 
 
 
 
 
 
Shares granted during the period
 
 
19,500 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,066,153 
19,500 
 
 
 
1,078,908 
 
 
Unrecognized compensation costs, related to unvested awards, other than options
 
 
 
 
 
 
72 
 
 
 
 
68 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized compensation costs related to unvested awards, weighted-average period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 years 0 months 0 days 
 
 
 
 
 
 
 
 
 
 
Vesting period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 years 
3 years 
3 years 
3 years 
 
 
Options granted during the period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,003,591 
 
 
 
Options, grants in period, weighted-average exercise price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 21.53 
 
 
 
Options, exercisable, number
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expiration period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10 years 
 
 
 
Options, grants in period, weighted-average grant-date fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 7.58 
 
 
 
Vesting rights, percentage
 
 
 
 
 
 
 
 
 
 
 
20.00% 
 
40.00% 
 
40.00% 
 
 
 
 
 
 
 
 
 
 
 
 
50.00% 
50.00% 
Method of measuring cost of award
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
target amount of 100 percent 
Nonvested awards
 
 
 
 
 
 
 
 
11,195,791 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,060,464 
 
 
Weighted-average remaining contractual terms
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 years 3 months 18 days 
 
 
Accelerated vesting
 
 
 
 
 
 
remaining 60 percent of each participant's award 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash-based LTI plan termination compensation expense reduction
$ 25 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-Based Compensation - Schedule of Tier II Equity Award Activity (Detail)
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Shares granted during the period
19,500 
 
Promote Plan [member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Nonvested awards
11,195,791 
 
Promote Plan [member] |
Tier II [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Shares granted during the period
8,628,050 
 
Shares forfeited during period
(13,810,744)
 
Tier II awards exchanged for restricted shares of common stock
(223,864,424)
 
Nonvested awards
229,047,118 
Share-Based Compensation - Schedule of Tier II Equity Awards Exchanged for Restricted Shares of Common Stock (Detail) (Promote Plan [member])
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Vested awards
7,463,839 
 
Nonvested awards
11,195,791 
 
Shares outstanding
18,659,630 
 
Tier II [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Total Tier II awards exchanged for vested shares and unvested restricted shares of common stock
223,864,424 
 
Nonvested awards
229,047,118 
Tier II [Member] |
Vested [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Total Tier II awards exchanged for vested shares and unvested restricted shares of common stock
89,545,770 
 
Tier II [Member] |
Shares that have not vested.
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Total Tier II awards exchanged for vested shares and unvested restricted shares of common stock
134,318,654 
 
Earnings Per Share (Detail) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Earnings Per Share [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock split
 
 
 
 
 
 
 
 
 
 
9,205,128-for-1 
 
 
Net income (loss) attributable to Hilton stockholders
$ 26 
$ 200 
$ 155 
$ 34 
$ 61 
$ 177 
$ 66 
$ 48 
$ 515 
$ 389 
$ 415 
$ 352 
$ 253 
Basic EPS:
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
 
 
 
 
 
 
 
985,000,000 
921,000,000 
923,000,000 
921,000,000 
921,000,000 
Basic EPS
 
 
 
 
 
 
 
 
$ 0.52 
$ 0.42 
$ 0.45 
$ 0.38 
$ 0.27 
Diluted EPS:
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
 
 
 
 
 
 
 
986,000,000 
921,000,000 
923,000,000 1
921,000,000 1
921,000,000 1
Diluted EPS
 
 
 
 
 
 
 
 
$ 0.52 
$ 0.42 
$ 0.45 
$ 0.38 
$ 0.27 
Shares granted during the period
 
 
 
 
 
 
 
 
 
 
19,500 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
 
 
 
 
 
 
 
 
1,000,000 
 
 
 
 
Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Loss (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
 
Beginning balance
$ (264)
$ (406)
$ (406)
$ (489)
$ (398)
Other comprehensive income (loss) before reclassifications
(133)
(15)
127 
89 
(100)
Amounts reclassified from accumulated other comprehensive loss
(1)
15 
(6)
Net current period other comprehensive income (loss)
(134)
(11)
142 
83 
(91)
Equity contribution to consolidated variable interest entities
 
 
(1)
 
Ending balance
(404)
(417)
(264)
(406)
(489)
Currency translation adjustment [member]
 
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
 
Beginning balance
(136)1
(212)1
(212)1
(336)
(257)
Other comprehensive income (loss) before reclassifications
(129)1
(21)1
67 
124 
(79)
Amounts reclassified from accumulated other comprehensive loss
(4)1
 
 
 
Net current period other comprehensive income (loss)
(133)1
(21)1
76 
124 
(79)
Equity contribution to consolidated variable interest entities
(6)1
 
 
 
 
Ending balance
(275)1
(233)1
(136)1
(212)1
(336)
Pension liability adjustment [member]
 
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
 
Beginning balance
(134)
(194)
(194)
(153)
(140)
Other comprehensive income (loss) before reclassifications
 
54 
(35)
(21)
Amounts reclassified from accumulated other comprehensive loss
(6)
Net current period other comprehensive income (loss)
10 
60 
(41)
(13)
Ending balance
(131)
(184)
(134)
(194)
(153)
Cash flow hedge adjustment [member]
 
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
 
Beginning balance
 
 
 
(1)
Other comprehensive income (loss) before reclassifications
(4)
 
 
 
Amounts reclassified from accumulated other comprehensive loss
 
 
 
 
Net current period other comprehensive income (loss)
(4)
 
 
Ending balance
 
 
 
Accumulated Other Comprehensive Income (Loss) [member]
 
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
 
Equity contribution to consolidated variable interest entities
$ (6)
 
 
 
 
Accumulated Other Comprehensive Loss - Reclassifications Out of Accumulated Other Comprehensive Loss (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive loss
$ 1 
$ (4)
$ (15)
$ 6 
$ (9)
Currency translation adjustment [member]
 
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
 
Sale and liquidation of foreign assets
1
(1)1
(15)2
 
 
Gains on net investment hedges
3
3
4
 
 
Tax benefit
5 6
5 6
7
 
 
Total currency translation adjustment reclassifications for the period, net of taxes
(9)
 
 
Pension liability adjustment [member]
 
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
 
Amortization of prior service cost
(3)8
(1)8
(1)9
 
 
Amortization of net gain (loss)
(2)8
(6)8
(8)9
 
 
Tax benefit
5
5
7
 
 
Total pension liability adjustment reclassifications for the period, net of taxes
$ (3)
$ (4)
$ (6)
 
 
Business Segments - Hotel Properties by Segment (Detail)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Entity
Timeshare
Hotel
Dec. 31, 2013
Entity
Hotel
Timeshare
Dec. 31, 2012
Hotel
Segment Reporting [Abstract]
 
 
 
Number of operating business segments
 
Number of wholly owned and leased hotels and resorts
122 
118 
 
Number of non-wholly owned hotel properties
 
Number of hotels of consolidated VIEs
 
Number of hotels owned or leased by unconsolidated joint ventures
16 
30 
32 
Number of non-hotels owned by unconsolidated affiliates
 
Number of managed hotels
524 
498 
 
Number of franchised hotels
3,552 
3,420 
 
Number of timeshare properties
44 
42 
 
Business Segments - Reconciliation of Revenue and Adjusted EBITDA from Segment Amounts to Consolidated Amounts (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Reconciliation of Revenues and Adjusted EBITDA from Segment Amounts to Consolidated Amounts [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
$ 2,643 
$ 2,449 
$ 2,380 
$ 2,263 
$ 2,338 
$ 2,417 
$ 2,390 
$ 2,131 
$ 7,674 
$ 7,092 
$ 9,735 
$ 9,276 
$ 8,783 
Adjusted EBITDA
 
 
 
 
 
 
 
 
1,840 
1,607 
2,210 
1,956 
1,753 
Charges to timeshare operations for rental and other fees
 
 
 
 
 
 
 
 
21 
19 
26 
24 
27 
Charges to consolidated owned and leased properties for management, royalty and IP fees
 
 
 
 
 
 
 
 
86 
71 
100 
96 
88 
Charges to timeshare operations for licensing fees
 
 
 
 
 
 
 
 
33 
40 
56 
52 
43 
Charges to consolidated owned and leased properties for laundry services
 
 
 
 
 
 
 
 
10 
Other charges from consolidated owned and leased properties
 
 
 
 
 
 
 
 
 
Ownership [member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of Revenues and Adjusted EBITDA from Segment Amounts to Consolidated Amounts [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
3,165 1 2
3,003 1 2
4,075 3 4
4,006 3 4
3,926 3 4
Adjusted EBITDA
 
 
 
 
 
 
 
 
730 1 2 5 6 7
672 1 2 5 6 7
926 3 4 7 8 9
793 3 4 7 8 9
725 3 4 7 8 9
Management and franchise [member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of Revenues and Adjusted EBITDA from Segment Amounts to Consolidated Amounts [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
1,085 5
938 5
1,271 10
1,180 10
1,095 10
Adjusted EBITDA
 
 
 
 
 
 
 
 
1,085 5
938 5
1,271 9
1,180 9
1,095 9
Timeshare [member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of Revenues and Adjusted EBITDA from Segment Amounts to Consolidated Amounts [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
850 
809 
1,109 
1,085 
944 
Adjusted EBITDA
 
 
 
 
 
 
 
 
232 1 5
205 1 5
297 3 9
252 3 9
207 3 9
Operating segments [member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of Revenues and Adjusted EBITDA from Segment Amounts to Consolidated Amounts [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
5,100 
4,750 
6,455 
6,271 
5,965 
Other revenues from managed and franchised properties for segment reporting [member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of Revenues and Adjusted EBITDA from Segment Amounts to Consolidated Amounts [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
2,653 
2,433 
3,405 
3,124 
2,927 
Other revenues for segment reporting [member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of Revenues and Adjusted EBITDA from Segment Amounts to Consolidated Amounts [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
70 6
48 6
69 8
66 8
58 8
Intersegment eliminations [member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of Revenues and Adjusted EBITDA from Segment Amounts to Consolidated Amounts [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
(149)1 2 5 6 7
(139)1 2 5 6 7
(194)3 4 8 9
(185)3 4 8 9
(167)3 4 8 9
Corporate and other [member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of Revenues and Adjusted EBITDA from Segment Amounts to Consolidated Amounts [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA
 
 
 
 
 
 
 
 
$ (207)2 6
$ (208)2 6
$ (284)4 8
$ (269)4 8
$ (274)4 8
[5] 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.
[9] 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.
Business Segments - Reconciliation of Adjusted EBITDA to Net Income (Loss) Attributable to Hilton Stockholders (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Segment Reporting [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA
 
 
 
 
 
 
 
 
$ 1,840 
$ 1,607 
$ 2,210 
$ 1,956 
$ 1,753 
Net income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
(8)
(9)
(45)
(7)
(2)
Gain (loss) on foreign currency transactions
 
 
 
 
 
 
 
 
41 
(43)
(45)
23 
(21)
FF&E replacement reserve
 
 
 
 
 
 
 
 
(32)
(29)
(46)
(68)
(57)
Share-based compensation expense
 
 
 
 
 
 
 
 
(25)
(5)
(313)
(50)
(19)
Impairment losses
 
 
 
 
 
 
 
 
 
 
(54)
(20)
Equity Method Investment, Other than Temporary Impairment
 
 
 
 
 
 
 
 
 
 
 
(19)
(141)
Gain on debt extinguishment
 
 
 
 
 
 
 
 
 
 
229 
Other gain (loss), net
 
 
 
 
 
 
 
 
38 
15 
19 
Other adjustment items
 
 
 
 
 
 
 
 
(41)
(56)
(76)1
(64)1
(51)1
EBITDA
 
 
 
 
 
 
 
 
1,813 
1,470 
1,921 
1,732 
1,461 
Interest expense
 
 
 
 
 
 
 
 
(467)
(401)
(620)
(569)
(643)
Interest expense included in equity in earnings (losses) from unconsolidated affiliates
 
 
 
 
 
 
 
 
(8)
(10)
(13)
(13)
(12)
Income tax benefit (expense)
 
 
 
 
 
 
 
 
(331)
(192)
(238)
(214)
59 
Depreciation and amortization
 
 
 
 
 
 
 
 
(470)
(455)
(603)
(550)
(564)
Depreciation and amortization included in equity in earnings (losses) from unconsolidated affiliates
 
 
 
 
 
 
 
 
(22)
(23)
(32)
(34)
(48)
Net income (loss) attributable to Hilton Stockholders
$ 26 
$ 200 
$ 155 
$ 34 
$ 61 
$ 177 
$ 66 
$ 48 
$ 515 
$ 389 
$ 415 
$ 352 
$ 253 
Business Segments - Schedule of Assets by Segment (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
 
Total assets
$ 26,324 
$ 26,562 
$ 27,066 
Ownership [member]
 
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
 
Total assets
11,769 
11,936 
12,476 
Management and franchise [member]
 
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
 
Total assets
10,626 
11,016 
11,650 
Timeshare [member]
 
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
 
Total assets
1,757 
1,871 
1,911 
Corporate and other [member]
 
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
 
Total assets
$ 2,172 
$ 1,739 
$ 1,029 
Business Segments - Schedule of Capital Expenditures by Segment (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Segment Reporting, Capital Expenditure Reconciling Item [Line Items]
 
 
 
 
 
Capital expenditures for property and equipment
$ 184 
$ 167 
$ 254 
$ 433 
$ 389 
Ownership [member]
 
 
 
 
 
Segment Reporting, Capital Expenditure Reconciling Item [Line Items]
 
 
 
 
 
Capital expenditures for property and equipment
173 
158 
240 
396 
368 
Timeshare [member]
 
 
 
 
 
Segment Reporting, Capital Expenditure Reconciling Item [Line Items]
 
 
 
 
 
Capital expenditures for property and equipment
28 
12 
Corporate and other [member]
 
 
 
 
 
Segment Reporting, Capital Expenditure Reconciling Item [Line Items]
 
 
 
 
 
Capital expenditures for property and equipment
$ 6 
$ 5 
$ 6 
$ 9 
$ 9 
Business Segments - Schedule of Revenue from External Customers by Geographic Area (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
$ 2,643 
$ 2,449 
$ 2,380 
$ 2,263 
$ 2,338 
$ 2,417 
$ 2,390 
$ 2,131 
$ 7,674 
$ 7,092 
$ 9,735 
$ 9,276 
$ 8,783 
United States [Member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
 
 
7,262 
6,743 
6,293 
Total of All Other Countries [Member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
 
 
$ 2,473 
$ 2,533 
$ 2,490 
Business Segments - Schedule of Property and Equipment, Net by Country (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Schedule of Property and Equipment, Net by Country [Line Items]
 
 
 
Property, Plant and Equipment, Net
$ 9,124 
$ 9,058 
$ 9,197 
United States [Member]
 
 
 
Schedule of Property and Equipment, Net by Country [Line Items]
 
 
 
Property, Plant and Equipment, Net
 
8,204 
8,252 
Total of All Other Countries [Member]
 
 
 
Schedule of Property and Equipment, Net by Country [Line Items]
 
 
 
Property, Plant and Equipment, Net
 
$ 854 
$ 945 
Commitments and Contingencies (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Sep. 30, 2014
Guarantees for debt and other obligations of third parties [member]
Agreement
CreditFacility
Dec. 31, 2013
Guarantees for debt and other obligations of third parties [member]
CreditFacility
Agreement
Sep. 30, 2014
Management contract performance guarantees [member]
Contract
Dec. 31, 2013
Management contract performance guarantees [member]
Contract
Dec. 31, 2012
Management contract performance guarantees [member]
Sep. 30, 2014
Commitments for capital expenditures [member]
Dec. 31, 2013
Commitments for capital expenditures [member]
Dec. 31, 2013
Timeshare inventory purchase commitment [member]
Sep. 30, 2014
Timeshare inventory purchase commitment [member]
Dec. 31, 2010
Settlement guarantee [member]
Sep. 30, 2014
Settlement guarantee [member]
Dec. 31, 2013
Settlement guarantee [member]
Commitments and Contingencies [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guarantor obligations, maximum exposure, undiscounted
 
 
 
$ 27 
$ 27 
$ 140 
$ 150 
 
 
 
 
 
 
$ 35 
$ 48 
Guarantor Obligations, Term
 
 
 
four months to nine years 
ten months to nine years 
2018 to 2030 
2018 to 2030 
 
 
 
 
 
 
 
 
Number of letters of credit pledged as collateral
 
 
 
 
 
 
 
 
 
 
 
 
 
Letters of credit outstanding, amount
 
 
 
27 
27 
 
 
 
 
 
 
 
 
 
 
Number of guarantees with pledged collateral
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of contracts with performance guarantees
 
 
 
 
 
 
 
 
 
 
 
 
 
Current liabilities
2,140 
2,142 
2,349 
 
 
30 
 
 
 
 
 
 
 
Non-current liabilities
 
 
 
 
 
41 
51 
57 
 
 
 
 
 
 
 
Purchase commitment, remaining minimum amount committed
 
 
 
 
 
 
 
 
120 
121 
 
 
 
 
 
Long-term purchase commitment, amount
 
 
 
 
 
 
 
 
 
 
92 
 
 
 
 
Long-term purchase commitment, time period
 
 
 
 
 
 
 
 
 
 
4 years 0 months 0 days 
 
 
 
 
Quarterly purchase commitment, amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase commitment satisfied
 
 
 
 
 
 
 
 
 
 
35 
58 
 
 
 
2014 contractual obligation
 
 
 
 
 
 
 
 
 
 
24 
 
 
 
 
2015 contractual obligation
 
 
 
 
 
 
 
 
 
 
24 
24 
 
 
 
2016 contractual obligation
 
 
 
 
 
 
 
 
 
 
 
 
 
Litigation settlement, amount
 
 
 
 
 
 
 
 
 
 
 
 
75 
 
 
2014 contractual obligation
 
 
 
 
 
 
 
 
 
 
 
$ 6 
 
 
 
Related Party Transactions (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended 1 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2013
Investments in affiliates [member]
Dec. 31, 2012
Investments in affiliates [member]
Dec. 31, 2011
Investments in affiliates [member]
Dec. 31, 2013
The Blackstone Group and its affiliates [member]
Dec. 31, 2012
The Blackstone Group and its affiliates [member]
Dec. 31, 2011
The Blackstone Group and its affiliates [member]
Jan. 31, 2014
HGV Grand Islander [Member]
Jan. 31, 2014
HGV Grand Islander [Member]
The Blackstone Group and its affiliates [member]
Related Party Transaction [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Management and franchise fees
 
 
 
 
 
$ 31 
$ 29 
$ 32 
$ 42 
$ 29 
$ 23 
 
 
Other revenues from managed and franchised properties
2,653 
2,433 
3,405 
3,124 
2,927 
174 
172 
148 
174 
135 
101 
 
 
Accounts receivable, net of allowance for doubtful accounts
862 
 
731 
719 
 
21 
21 
 
26 
28 
 
 
 
Contract acquisition costs
54 
12 
44 
31 
53 
 
18 
15 
 
 
Management and franchise contracts, net
1,346 
 
1,452 
1,600 
 
18 
18 
 
20 
 
 
 
Financing receivables, net
381 
 
635 
815 
 
15 
17 
 
 
 
 
 
 
Interest income
15 
11 
 
 
 
 
 
Equity method investment ownership percentage range
 
 
 
 
 
10 percent and 50 percent 
 
 
 
 
 
 
 
Accounts payable, accrued expenses and other
2,003 
 
2,079 
1,922 
 
 
 
 
14 
 
 
 
Proceeds from asset dispositions
40 
 
 
 
65 
 
 
 
 
 
 
25 
25 
Purchases of products and services
 
 
 
 
 
 
 
 
$ 24 
$ 26 
$ 23 
 
 
Supplemental Disclosures of Cash Flow Information (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Supplemental Disclosures of Cash Flow Information [Abstract]
 
 
 
 
 
Interest Paid
$ 353 
$ 395 
$ 535 
$ 486 
$ 470 
Income Taxes Paid, Net
284 
84 
233 
103 
114 
IPO Underwriting Expenses
 
 
27 
 
 
IPO Other Offering Expenses
 
 
12 
 
 
Non-cash capital lease asset reduction
 
(44)
(44)
 
(76)
Non-Cash Capital Lease Obligation Reduction
 
(48)
(48)
 
(73)
Debt issuance cost
 
 
189 
 
 
Accrued Debt Issuance Costs
 
 
 
 
Non-Cash Capital Lease Asset Increase
11 
 
 
15 
 
Non-Cash Capital Lease Obligation Increase
 
 
 
$ 15 
 
Selected Quarterly Financial Information (unaudited) (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Quarterly Financial Information Disclosure (unaudited) [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$ 2,643 
$ 2,449 
$ 2,380 
$ 2,263 
$ 2,338 
$ 2,417 
$ 2,390 
$ 2,131 
$ 7,674 
$ 7,092 
$ 9,735 
$ 9,276 
$ 8,783 
Operating income
89 
357 
404 
252 
263 
345 
298 
194 
1,218 
1,013 
1,102 
1,100 
975 
Net income (loss)
62 
203 
157 
38 
64 
179 
69 
47 
523 
398 
460 
359 
255 
Net income (loss) attributable to Hilton stockholders
$ 26 
$ 200 
$ 155 
$ 34 
$ 61 
$ 177 
$ 66 
$ 48 
$ 515 
$ 389 
$ 415 
$ 352 
$ 253 
Basic and diluted earnings per share
$ 0.03 
$ 0.22 
$ 0.17 
$ 0.03 
$ 0.07 
$ 0.19 
$ 0.07 
$ 0.05 
$ 0.52 
$ 0.42 
$ 0.45 
$ 0.38 
$ 0.27 
Guarantor and Non Guarantor Financial Information - Condensed Balance Sheet (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Sep. 30, 2013
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Current Assets:
 
 
 
 
 
 
Cash and cash equivalents
$ 543 
$ 594 
$ 724 
$ 755 
$ 781 
$ 796 
Restricted cash and cash equivalents
288 
266 
 
550 
 
 
Accounts receivable, net
862 
731 
 
719 
 
 
Intercompany interest receivable
 
 
 
1
 
 
Inventories
350 
396 
 
415 
 
 
Deferred income tax assets
23 
23 
 
76 
 
 
Current portion of financing receivables, net
56 
94 
 
119 
 
 
Current portion of securitized financing receivables, net
64 
27 
 
 
 
Prepaid expenses
172 
148 
 
153 
 
 
Other
56 
104 
 
40 
 
 
Total current assets
2,414 
2,383 
 
2,827 
 
 
Property, Investments and Other Assets:
 
 
 
 
 
 
Property and equipment, net
9,124 
9,058 
 
9,197 
 
 
Financing receivables, net
381 
635 
 
815 
 
 
Intercompany notes receivable
 
 
 
1
 
 
Securitized financing receivables, net
433 
194 
 
 
 
Investments in affiliates
174 
260 
 
291 
 
 
Investments in subsidiaries
 
 
 
 
Goodwill
6,185 
6,220 
 
6,197 
6,175 
 
Brands
4,987 
5,013 
 
5,029 
 
 
Management and franchise contracts, net
1,346 
1,452 
 
1,600 
 
 
Other intangible assets, net
695 
751 
 
744 
 
 
Deferred income tax assets
195 
193 
 
104 
 
 
Other
390 
403 
 
262 
 
 
Total property, investments and other assets
23,910 
24,179 
 
24,239 
 
 
Total assets
26,324 
26,562 
 
27,066 
 
 
Current Liabilities:
 
 
 
 
 
 
Accounts payable, accrued expenses and other
2,003 
2,079 
 
1,922 
 
 
Intercompany interest payable
 
 
 
1
 
 
Current maturities of long-term debt
 
392 
 
 
Current maturities of non-recourse debt
124 
48 
 
15 
 
 
Income taxes payable
10 
11 
 
20 
 
 
Total current liabilities
2,140 
2,142 
 
2,349 
 
 
Long-term debt
11,124 
11,751 
 
15,183 
 
 
Non-recourse debt
813 
920 
 
405 
 
 
Intercompany notes payable
 
 
 
1
 
 
Investments in subsidiaries
 
 
 
 
 
Deferred revenues
544 
674 
 
82 
 
 
Deferred income tax liabilities
5,137 
5,053 
 
4,948 
 
 
Liability for guest loyalty program
637 
597 
 
503 
 
 
Other
1,179 
1,149 
 
1,441 
 
 
Total liabilities
21,574 
22,286 
 
24,911 
 
 
Equity:
 
 
 
 
 
 
Total Hilton stockholders' equity
4,790 
4,363 
 
2,301 
 
 
Noncontrolling interests
(40)
(87)
 
(146)
 
 
Total equity
4,750 
4,276 
2,553 
2,155 
1,702 
1,544 
TOTAL LIABILITIES AND EQUITY
26,324 
26,562 
 
27,066 
 
 
Eliminations [member]
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
Cash and cash equivalents
Restricted cash and cash equivalents
 
 
 
Accounts receivable, net
 
 
 
Intercompany interest receivable
 
 
 
(98)1
 
 
Inventories
 
 
 
 
Deferred income tax assets
 
 
 
Current portion of financing receivables, net
 
 
 
Current portion of securitized financing receivables, net
 
 
 
 
Prepaid expenses
 
 
 
Other
(23)
 
(23)
 
 
Total current assets
(23)
 
(121)
 
 
Property, Investments and Other Assets:
 
 
 
 
 
 
Property and equipment, net
 
 
 
Financing receivables, net
 
 
 
Intercompany notes receivable
 
 
 
(3,787)1
 
 
Securitized financing receivables, net
 
 
 
 
Investments in affiliates
 
 
 
Investments in subsidiaries
(21,938)
(21,723)
 
(9,364)
 
 
Goodwill
 
 
 
Brands
 
 
 
Management and franchise contracts, net
 
 
 
Other intangible assets, net
 
 
 
Deferred income tax assets
(22)
(21)
 
 
 
Other
 
 
 
Total property, investments and other assets
(21,960)
(21,744)
 
(13,151)
 
 
Total assets
(21,960)
(21,767)
 
(13,272)
 
 
Current Liabilities:
 
 
 
 
 
 
Accounts payable, accrued expenses and other
 
 
 
Intercompany interest payable
 
 
 
(98)1
 
 
Current maturities of long-term debt
 
 
 
Current maturities of non-recourse debt
 
 
 
Income taxes payable
(23)
 
(23)
 
 
Total current liabilities
(23)
 
(121)
 
 
Long-term debt
 
 
 
Non-recourse debt
 
 
 
Intercompany notes payable
 
 
 
(3,787)1
 
 
Investments in subsidiaries
 
 
 
(1,389)
 
 
Deferred revenues
 
 
 
Deferred income tax liabilities
(22)
(21)
 
 
 
Liability for guest loyalty program
 
 
 
Other
 
 
 
Total liabilities
(22)
(44)
 
(5,297)
 
 
Equity:
 
 
 
 
 
 
Total Hilton stockholders' equity
(21,938)
(21,723)
 
(7,975)
 
 
Noncontrolling interests
 
 
 
 
Total equity
(21,938)
(21,723)
 
(7,975)
 
 
TOTAL LIABILITIES AND EQUITY
(21,960)
(21,767)
 
(13,272)
 
 
Parent [member]
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
Cash and cash equivalents
Restricted cash and cash equivalents
 
 
 
Accounts receivable, net
 
 
 
Intercompany interest receivable
 
 
 
98 1
 
 
Inventories
 
 
 
Deferred income tax assets
 
 
 
Current portion of financing receivables, net
 
 
 
Current portion of securitized financing receivables, net
 
 
 
 
Prepaid expenses
 
 
 
Other
 
 
 
Total current assets
 
98 
 
 
Property, Investments and Other Assets:
 
 
 
 
 
 
Property and equipment, net
 
 
 
Financing receivables, net
 
 
 
Intercompany notes receivable
 
 
 
3,787 1
 
 
Securitized financing receivables, net
 
 
 
 
Investments in affiliates
 
 
 
Investments in subsidiaries
4,961 
4,528 
 
 
 
Goodwill
 
 
 
Brands
 
 
 
Management and franchise contracts, net
 
 
 
Other intangible assets, net
 
 
 
Deferred income tax assets
22 
21 
 
 
 
Other
 
 
 
Total property, investments and other assets
4,983 
4,549 
 
3,787 
 
 
Total assets
4,983 
4,549 
 
3,885 
 
 
Current Liabilities:
 
 
 
 
 
 
Accounts payable, accrued expenses and other
 
 
 
Intercompany interest payable
 
 
 
1
 
 
Current maturities of long-term debt
 
 
 
Current maturities of non-recourse debt
 
 
 
Income taxes payable
 
 
 
Total current liabilities
 
 
 
Long-term debt
 
 
 
Non-recourse debt
 
 
 
Intercompany notes payable
 
 
 
1
 
 
Investments in subsidiaries
 
 
 
1,389 
 
 
Deferred revenues
 
 
 
Deferred income tax liabilities
 
 
 
Liability for guest loyalty program
 
 
 
Other
193 
186 
 
187 
 
 
Total liabilities
193 
186 
 
1,584 
 
 
Equity:
 
 
 
 
 
 
Total Hilton stockholders' equity
4,790 
4,363 
 
2,301 
 
 
Noncontrolling interests
 
 
 
Total equity
4,790 
4,363 
 
2,301 
 
 
TOTAL LIABILITIES AND EQUITY
4,983 
4,549 
 
3,885 
 
 
Subsidiary Issuer [Member]
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
Cash and cash equivalents
Restricted cash and cash equivalents
 
 
 
Accounts receivable, net
 
 
 
Intercompany interest receivable
 
 
 
1
 
 
Inventories
 
 
 
Deferred income tax assets
 
 
 
Current portion of financing receivables, net
 
 
 
Current portion of securitized financing receivables, net
 
 
 
 
Prepaid expenses
 
 
 
Other
 
 
 
Total current assets
 
 
 
Property, Investments and Other Assets:
 
 
 
 
 
 
Property and equipment, net
 
 
 
Financing receivables, net
 
 
 
Intercompany notes receivable
 
 
 
1
 
 
Securitized financing receivables, net
 
 
 
 
Investments in affiliates
 
 
 
Investments in subsidiaries
11,708 
11,942 
 
 
 
Goodwill
 
 
 
Brands
 
 
 
Management and franchise contracts, net
 
 
 
Other intangible assets, net
 
 
 
Deferred income tax assets
 
 
 
Other
95 
121 
 
 
 
Total property, investments and other assets
11,803 
12,063 
 
 
 
Total assets
11,803 
12,063 
 
 
 
Current Liabilities:
 
 
 
 
 
 
Accounts payable, accrued expenses and other
64 
60 
 
 
 
Intercompany interest payable
 
 
 
1
 
 
Current maturities of long-term debt
 
 
 
Current maturities of non-recourse debt
 
 
 
Income taxes payable
 
 
 
Total current liabilities
64 
60 
 
 
 
Long-term debt
6,776 
7,470 
 
 
 
Non-recourse debt
 
 
 
Intercompany notes payable
 
 
 
1
 
 
Investments in subsidiaries
 
 
 
 
 
Deferred revenues
 
 
 
Deferred income tax liabilities
 
 
 
Liability for guest loyalty program
 
 
 
Other
 
 
 
Total liabilities
6,842 
7,535 
 
 
 
Equity:
 
 
 
 
 
 
Total Hilton stockholders' equity
4,961 
4,528 
 
 
 
Noncontrolling interests
 
 
 
Total equity
4,961 
4,528 
 
 
 
TOTAL LIABILITIES AND EQUITY
11,803 
12,063 
 
 
 
Guarantor Subsidiaries [Member]
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
Cash and cash equivalents
235 
329 
503 
542 
543 
553 
Restricted cash and cash equivalents
196 
194 
 
496 
 
 
Accounts receivable, net
478 
426 
 
414 
 
 
Intercompany interest receivable
 
 
 
1
 
 
Inventories
326 
370 
 
395 
 
 
Deferred income tax assets
 
64 
 
 
Current portion of financing receivables, net
37 
38 
 
119 
 
 
Current portion of securitized financing receivables, net
 
 
 
 
 
Prepaid expenses
34 
15 
 
22 
 
 
Other
29 
101 
 
51 
 
 
Total current assets
1,341 
1,479 
 
2,103 
 
 
Property, Investments and Other Assets:
 
 
 
 
 
 
Property and equipment, net
323 
341 
 
359 
 
 
Financing receivables, net
235 
199 
 
806 
 
 
Intercompany notes receivable
 
 
 
1
 
 
Securitized financing receivables, net
 
 
 
 
Investments in affiliates
123 
210 
 
244 
 
 
Investments in subsidiaries
5,269 
5,253 
 
9,364 
 
 
Goodwill
3,847 
3,847 
 
3,847 
 
 
Brands
4,405 
4,405 
 
4,405 
 
 
Management and franchise contracts, net
1,039 
1,143 
 
1,285 
 
 
Other intangible assets, net
475 
511 
 
512 
 
 
Deferred income tax assets
 
 
 
Other
124 
133 
 
159 
 
 
Total property, investments and other assets
15,840 
16,042 
 
20,981 
 
 
Total assets
17,181 
17,521 
 
23,084 
 
 
Current Liabilities:
 
 
 
 
 
 
Accounts payable, accrued expenses and other
1,246 
1,335 
 
1,253 
 
 
Intercompany interest payable
 
 
 
98 1
 
 
Current maturities of long-term debt
 
357 
 
 
Current maturities of non-recourse debt
 
 
 
Income taxes payable
 
 
 
Total current liabilities
1,246 
1,338 
 
1,708 
 
 
Long-term debt
54 
54 
 
15,001 
 
 
Non-recourse debt
 
 
 
Intercompany notes payable
 
 
 
3,787 1
 
 
Investments in subsidiaries
 
 
 
 
 
Deferred revenues
540 
674 
 
82 
 
 
Deferred income tax liabilities
2,241 
2,298 
 
2,495 
 
 
Liability for guest loyalty program
637 
597 
 
503 
 
 
Other
755 
618 
 
897 
 
 
Total liabilities
5,473 
5,579 
 
24,473 
 
 
Equity:
 
 
 
 
 
 
Total Hilton stockholders' equity
11,708 
11,942 
 
(1,389)
 
 
Noncontrolling interests
 
 
 
Total equity
11,708 
11,942 
 
(1,389)
 
 
TOTAL LIABILITIES AND EQUITY
17,181 
17,521 
 
23,084 
 
 
Non-Guarantor Subsidiaries [member]
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
Cash and cash equivalents
308 
265 
221 
213 
238 
243 
Restricted cash and cash equivalents
92 
72 
 
54 
 
 
Accounts receivable, net
384 
305 
 
305 
 
 
Intercompany interest receivable
 
 
 
1
 
 
Inventories
24 
26 
 
20 
 
 
Deferred income tax assets
17 
17 
 
12 
 
 
Current portion of financing receivables, net
19 
56 
 
 
 
Current portion of securitized financing receivables, net
64 
27 
 
 
 
 
Prepaid expenses
138 
133 
 
131 
 
 
Other
27 
26 
 
12 
 
 
Total current assets
1,073 
927 
 
747 
 
 
Property, Investments and Other Assets:
 
 
 
 
 
 
Property and equipment, net
8,801 
8,717 
 
8,838 
 
 
Financing receivables, net
146 
436 
 
 
 
Intercompany notes receivable
 
 
 
1
 
 
Securitized financing receivables, net
433 
194 
 
 
 
 
Investments in affiliates
51 
50 
 
47 
 
 
Investments in subsidiaries
 
 
 
Goodwill
2,338 
2,373 
 
2,350 
 
 
Brands
582 
608 
 
624 
 
 
Management and franchise contracts, net
307 
309 
 
315 
 
 
Other intangible assets, net
220 
240 
 
232 
 
 
Deferred income tax assets
195 
193 
 
104 
 
 
Other
171 
149 
 
103 
 
 
Total property, investments and other assets
13,244 
13,269 
 
12,622 
 
 
Total assets
14,317 
14,196 
 
13,369 
 
 
Current Liabilities:
 
 
 
 
 
 
Accounts payable, accrued expenses and other
693 
684 
 
669 
 
 
Intercompany interest payable
 
 
 
1
 
 
Current maturities of long-term debt
 
35 
 
 
Current maturities of non-recourse debt
124 
48 
 
15 
 
 
Income taxes payable
10 
31 
 
43 
 
 
Total current liabilities
830 
767 
 
762 
 
 
Long-term debt
4,294 
4,227 
 
182 
 
 
Non-recourse debt
813 
920 
 
405 
 
 
Intercompany notes payable
 
 
 
1
 
 
Investments in subsidiaries
 
 
 
 
 
Deferred revenues
 
 
 
Deferred income tax liabilities
2,916 
2,771 
 
2,445 
 
 
Liability for guest loyalty program
 
 
 
Other
231 
345 
 
357 
 
 
Total liabilities
9,088 
9,030 
 
4,151 
 
 
Equity:
 
 
 
 
 
 
Total Hilton stockholders' equity
5,269 
5,253 
 
9,364 
 
 
Noncontrolling interests
(40)
(87)
 
(146)
 
 
Total equity
5,229 
5,166 
 
9,218 
 
 
TOTAL LIABILITIES AND EQUITY
$ 14,317 
$ 14,196 
 
$ 13,369 
 
 
Guarantor and Non Guarantor Financial Information - Condensed Income Statement (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
Owned and leased hotels
 
 
 
 
 
 
 
 
$ 3,141 
$ 2,982 
$ 4,046 
$ 3,979 
$ 3,898 
Management and franchise fees and other
 
 
 
 
 
 
 
 
1,030 
868 
1,175 
1,088 
1,014 
Timeshare
 
 
 
 
 
 
 
 
850 
809 
1,109 
1,085 
944 
Total revenues excluding reimbursement revenue
 
 
 
 
 
 
 
 
5,021 
4,659 
6,330 
6,152 
5,856 
Other revenues from managed and franchised properties
 
 
 
 
 
 
 
 
2,653 
2,433 
3,405 
3,124 
2,927 
Total revenues
2,643 
2,449 
2,380 
2,263 
2,338 
2,417 
2,390 
2,131 
7,674 
7,092 
9,735 
9,276 
8,783 
Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
Owned and leased hotels
 
 
 
 
 
 
 
 
2,420 
2,327 
3,147 
3,230 
3,213 
Timeshare
 
 
 
 
 
 
 
 
564 
545 
730 
758 
668 
Depreciation and amortization
 
 
 
 
 
 
 
 
470 
455 
603 
550 
564 
Impairment losses
 
 
 
 
 
 
 
 
 
 
54 
20 
General, administrative and other
 
 
 
 
 
 
 
 
349 
319 
748 
460 
416 
Total expenses excluding cost of reimbursable expense
 
 
 
 
 
 
 
 
3,803 
3,646 
5,228 
5,052 
4,881 
Other expenses from managed and franchised properties
 
 
 
 
 
 
 
 
2,653 
2,433 
3,405 
3,124 
2,927 
Total expenses
 
 
 
 
 
 
 
 
6,456 
6,079 
8,633 
8,176 
7,808 
Operating income
89 
357 
404 
252 
263 
345 
298 
194 
1,218 
1,013 
1,102 
1,100 
975 
Interest income
 
 
 
 
 
 
 
 
15 
11 
Interest expense
 
 
 
 
 
 
 
 
(467)
(401)
(620)
(569)
(643)
Equity in earnings (losses) from unconsolidated affiliates
 
 
 
 
 
 
 
 
16 
11 
16 
(11)
(145)
Gain (loss) on foreign currency transactions
 
 
 
 
 
 
 
 
41 
(43)
(45)
23 
(21)
Gain on debt extinguishment
 
 
 
 
 
 
 
 
 
 
229 
Other gain, net
 
 
 
 
 
 
 
 
38 
15 
19 
Income (loss) before income taxes and equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
854 
590 
698 
573 
196 
Income tax benefit (expense)
 
 
 
 
 
 
 
 
(331)
(192)
(238)
(214)
59 
Income (loss) before equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
523 
398 
460 
359 
255 
Equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
Net income
62 
203 
157 
38 
64 
179 
69 
47 
523 
398 
460 
359 
255 
Net income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
(8)
(9)
(45)
(7)
(2)
Net income attributable to Hilton stockholders
26 
200 
155 
34 
61 
177 
66 
48 
515 
389 
415 
352 
253 
Comprehensive income
 
 
 
 
 
 
 
 
391 
401 
620 
456 
161 
Comprehensive income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
(10)
(23)
(63)
(21)
Comprehensive income attributable to Hilton stockholders
 
 
 
 
 
 
 
 
381 
378 
557 
435 
162 
Eliminations [member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
Owned and leased hotels
 
 
 
 
 
 
 
 
(21)
(19)
(26)
(23)
(24)
Management and franchise fees and other
 
 
 
 
 
 
 
 
(91)
(103)
(145)
(133)
(125)
Timeshare
 
 
 
 
 
 
 
 
Total revenues excluding reimbursement revenue
 
 
 
 
 
 
 
 
(112)
(122)
(171)
(156)
(149)
Other revenues from managed and franchised properties
 
 
 
 
 
 
 
 
(638)
(606)
(815)
(814)
(790)
Total revenues
 
 
 
 
 
 
 
 
(750)
(728)
(986)
(970)
(939)
Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
Owned and leased hotels
 
 
 
 
 
 
 
 
(55)
(41)
(59)
(53)
(51)
Timeshare
 
 
 
 
 
 
 
 
(40)
(57)
(79)
(73)
(67)
Depreciation and amortization
 
 
 
 
 
 
 
 
Impairment losses
 
 
 
 
 
 
 
 
 
 
 
General, administrative and other
 
 
 
 
 
 
 
 
(17)
(24)
(33)
(30)
(31)
Total expenses excluding cost of reimbursable expense
 
 
 
 
 
 
 
 
(112)
(122)
(171)
(156)
(149)
Other expenses from managed and franchised properties
 
 
 
 
 
 
 
 
(638)
(606)
(815)
(814)
(790)
Total expenses
 
 
 
 
 
 
 
 
(750)
(728)
(986)
(970)
(939)
Operating income
 
 
 
 
 
 
 
 
Interest income
 
 
 
 
 
 
 
 
(217)
(217)
(403)
(359)
Interest expense
 
 
 
 
 
 
 
 
217 
217 
403 
359 
Equity in earnings (losses) from unconsolidated affiliates
 
 
 
 
 
 
 
 
Gain (loss) on foreign currency transactions
 
 
 
 
 
 
 
 
Gain on debt extinguishment
 
 
 
 
 
 
 
 
 
 
 
 
Other gain, net
 
 
 
 
 
 
 
 
Income (loss) before income taxes and equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
Income tax benefit (expense)
 
 
 
 
 
 
 
 
Income (loss) before equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
Equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
(1,549)
(721)
(1,297)
(653)
(683)
Net income
 
 
 
 
 
 
 
 
(1,549)
(721)
(1,297)
(653)
(683)
Net income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
Net income attributable to Hilton stockholders
 
 
 
 
 
 
 
 
(1,549)
(721)
(1,297)
(653)
(683)
Comprehensive income
 
 
 
 
 
 
 
 
(1,415)
(710)
(1,439)
(736)
(592)
Comprehensive income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
Comprehensive income attributable to Hilton stockholders
 
 
 
 
 
 
 
 
(1,415)
(710)
(1,439)
(736)
(592)
Parent [member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
Owned and leased hotels
 
 
 
 
 
 
 
 
Management and franchise fees and other
 
 
 
 
 
 
 
 
Timeshare
 
 
 
 
 
 
 
 
Total revenues excluding reimbursement revenue
 
 
 
 
 
 
 
 
Other revenues from managed and franchised properties
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
Owned and leased hotels
 
 
 
 
 
 
 
 
Timeshare
 
 
 
 
 
 
 
 
Depreciation and amortization
 
 
 
 
 
 
 
 
Impairment losses
 
 
 
 
 
 
 
 
 
 
 
General, administrative and other
 
 
 
 
 
 
 
 
Total expenses excluding cost of reimbursable expense
 
 
 
 
 
 
 
 
Other expenses from managed and franchised properties
 
 
 
 
 
 
 
 
Total expenses
 
 
 
 
 
 
 
 
Operating income
 
 
 
 
 
 
 
 
Interest income
 
 
 
 
 
 
 
 
217 
217 
403 
359 
Interest expense
 
 
 
 
 
 
 
 
Equity in earnings (losses) from unconsolidated affiliates
 
 
 
 
 
 
 
 
Gain (loss) on foreign currency transactions
 
 
 
 
 
 
 
 
Gain on debt extinguishment
 
 
 
 
 
 
 
 
 
 
 
 
Other gain, net
 
 
 
 
 
 
 
 
Income (loss) before income taxes and equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
217 
217 
403 
359 
Income tax benefit (expense)
 
 
 
 
 
 
 
 
(5)
(84)
(84)
(155)
(137)
Income (loss) before equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
(5)
133 
133 
248 
222 
Equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
520 
256 
282 
104 
31 
Net income
 
 
 
 
 
 
 
 
515 
389 
415 
352 
253 
Net income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
Net income attributable to Hilton stockholders
 
 
 
 
 
 
 
 
515 
389 
415 
352 
253 
Comprehensive income
 
 
 
 
 
 
 
 
381 
378 
557 
435 
162 
Comprehensive income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
Comprehensive income attributable to Hilton stockholders
 
 
 
 
 
 
 
 
381 
378 
557 
435 
162 
Subsidiary Issuer [Member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
Owned and leased hotels
 
 
 
 
 
 
 
 
 
Management and franchise fees and other
 
 
 
 
 
 
 
 
Timeshare
 
 
 
 
 
 
 
 
Total revenues excluding reimbursement revenue
 
 
 
 
 
 
 
 
Other revenues from managed and franchised properties
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
Owned and leased hotels
 
 
 
 
 
 
 
 
Timeshare
 
 
 
 
 
 
 
 
Depreciation and amortization
 
 
 
 
 
 
 
 
Impairment losses
 
 
 
 
 
 
 
 
 
 
 
General, administrative and other
 
 
 
 
 
 
 
 
Total expenses excluding cost of reimbursable expense
 
 
 
 
 
 
 
 
Other expenses from managed and franchised properties
 
 
 
 
 
 
 
 
Total expenses
 
 
 
 
 
 
 
 
Operating income
 
 
 
 
 
 
 
 
Interest income
 
 
 
 
 
 
 
 
Interest expense
 
 
 
 
 
 
 
 
(255)
(105)
Equity in earnings (losses) from unconsolidated affiliates
 
 
 
 
 
 
 
 
Gain (loss) on foreign currency transactions
 
 
 
 
 
 
 
 
Gain on debt extinguishment
 
 
 
 
 
 
 
 
 
 
 
 
Other gain, net
 
 
 
 
 
 
 
 
Income (loss) before income taxes and equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
(255)
(105)
Income tax benefit (expense)
 
 
 
 
 
 
 
 
98 
40 
Income (loss) before equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
(157)
(65)
Equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
677 
347 
Net income
 
 
 
 
 
 
 
 
520 
282 
Net income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
Net income attributable to Hilton stockholders
 
 
 
 
 
 
 
 
520 
282 
Comprehensive income
 
 
 
 
 
 
 
 
516 
288 
Comprehensive income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
Comprehensive income attributable to Hilton stockholders
 
 
 
 
 
 
 
 
516 
288 
Guarantor Subsidiaries [Member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
Owned and leased hotels
 
 
 
 
 
 
 
 
163 
146 
190 
181 
171 
Management and franchise fees and other
 
 
 
 
 
 
 
 
575 
425 
587 
459 
383 
Timeshare
 
 
 
 
 
 
 
 
777 
779 
1,052 
1,081 
940 
Total revenues excluding reimbursement revenue
 
 
 
 
 
 
 
 
1,515 
1,350 
1,829 
1,721 
1,494 
Other revenues from managed and franchised properties
 
 
 
 
 
 
 
 
2,991 
2,792 
3,869 
3,643 
3,521 
Total revenues
 
 
 
 
 
 
 
 
4,506 
4,142 
5,698 
5,364 
5,015 
Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
Owned and leased hotels
 
 
 
 
 
 
 
 
116 
110 
148 
142 
140 
Timeshare
 
 
 
 
 
 
 
 
590 
594 
797 
827 
731 
Depreciation and amortization
 
 
 
 
 
 
 
 
227 
208 
277 
251 
246 
Impairment losses
 
 
 
 
 
 
 
 
 
 
 
13 
General, administrative and other
 
 
 
 
 
 
 
 
275 
229 
620 
342 
301 
Total expenses excluding cost of reimbursable expense
 
 
 
 
 
 
 
 
1,208 
1,141 
1,842 
1,575 
1,426 
Other expenses from managed and franchised properties
 
 
 
 
 
 
 
 
2,991 
2,792 
3,869 
3,643 
3,521 
Total expenses
 
 
 
 
 
 
 
 
4,199 
3,933 
5,711 
5,218 
4,947 
Operating income
 
 
 
 
 
 
 
 
307 
209 
(13)
146 
68 
Interest income
 
 
 
 
 
 
 
 
Interest expense
 
 
 
 
 
 
 
 
(42)
(575)
(642)
(916)
(948)
Equity in earnings (losses) from unconsolidated affiliates
 
 
 
 
 
 
 
 
13 
13 
(12)
(133)
Gain (loss) on foreign currency transactions
 
 
 
 
 
 
 
 
248 
35 
12 
(26)
Gain on debt extinguishment
 
 
 
 
 
 
 
 
 
 
229 
 
 
Other gain, net
 
 
 
 
 
 
 
 
14 
Income (loss) before income taxes and equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
538 
(350)
(369)
(757)
(1,018)
Income tax benefit (expense)
 
 
 
 
 
 
 
 
(213)
141 
48 
312 
397 
Income (loss) before equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
325 
(209)
(321)
(445)
(621)
Equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
352 
465 
668 
549 
652 
Net income
 
 
 
 
 
 
 
 
677 
256 
347 
104 
31 
Net income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
Net income attributable to Hilton stockholders
 
 
 
 
 
 
 
 
677 
256 
347 
104 
31 
Comprehensive income
 
 
 
 
 
 
 
 
697 
261 
417 
126 
30 
Comprehensive income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
Comprehensive income attributable to Hilton stockholders
 
 
 
 
 
 
 
 
697 
261 
417 
126 
30 
Non-Guarantor Subsidiaries [member]
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
Owned and leased hotels
 
 
 
 
 
 
 
 
2,999 
2,855 
3,882 
3,821 
3,751 
Management and franchise fees and other
 
 
 
 
 
 
 
 
546 
546 
733 
762 
756 
Timeshare
 
 
 
 
 
 
 
 
73 
30 
57 
Total revenues excluding reimbursement revenue
 
 
 
 
 
 
 
 
3,618 
3,431 
4,672 
4,587 
4,511 
Other revenues from managed and franchised properties
 
 
 
 
 
 
 
 
300 
247 
351 
295 
196 
Total revenues
 
 
 
 
 
 
 
 
3,918 
3,678 
5,023 
4,882 
4,707 
Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
Owned and leased hotels
 
 
 
 
 
 
 
 
2,359 
2,258 
3,058 
3,141 
3,124 
Timeshare
 
 
 
 
 
 
 
 
14 
12 
Depreciation and amortization
 
 
 
 
 
 
 
 
243 
247 
326 
299 
318 
Impairment losses
 
 
 
 
 
 
 
 
 
 
 
41 
12 
General, administrative and other
 
 
 
 
 
 
 
 
91 
114 
161 
148 
146 
Total expenses excluding cost of reimbursable expense
 
 
 
 
 
 
 
 
2,707 
2,627 
3,557 
3,633 
3,604 
Other expenses from managed and franchised properties
 
 
 
 
 
 
 
 
300 
247 
351 
295 
196 
Total expenses
 
 
 
 
 
 
 
 
3,007 
2,874 
3,908 
3,928 
3,800 
Operating income
 
 
 
 
 
 
 
 
911 
804 
1,115 
954 
907 
Interest income
 
 
 
 
 
 
 
 
Interest expense
 
 
 
 
 
 
 
 
(170)
(43)
(90)
(56)
(54)
Equity in earnings (losses) from unconsolidated affiliates
 
 
 
 
 
 
 
 
(12)
Gain (loss) on foreign currency transactions
 
 
 
 
 
 
 
 
(207)
(47)
(80)
11 
Gain on debt extinguishment
 
 
 
 
 
 
 
 
 
 
 
 
Other gain, net
 
 
 
 
 
 
 
 
32 
Income (loss) before income taxes and equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
571 
723 
955 
927 
855 
Income tax benefit (expense)
 
 
 
 
 
 
 
 
(211)
(249)
(242)
(371)
(201)
Income (loss) before equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
360 
474 
713 
556 
654 
Equity in earnings from subsidiaries
 
 
 
 
 
 
 
 
Net income
 
 
 
 
 
 
 
 
360 
474 
713 
556 
654 
Net income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
(8)
(9)
(45)
(7)
(2)
Net income attributable to Hilton stockholders
 
 
 
 
 
 
 
 
352 
465 
668 
549 
652 
Comprehensive income
 
 
 
 
 
 
 
 
212 
472 
797 
631 
561 
Comprehensive income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
(10)
(23)
(63)
(21)
Comprehensive income attributable to Hilton stockholders
 
 
 
 
 
 
 
 
$ 202 
$ 449 
$ 734 
$ 610 
$ 562 
Guarantor and Non Guarantor Financial Information - Condensed Cash Flow Statement (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Operating Activities:
 
 
 
 
 
Net cash provided by operating activities
$ 899 
$ 1,024 
$ 2,101 
$ 1,110 
$ 1,167 
Investing Activities:
 
 
 
 
 
Capital expenditures for property and equipment
(184)
(167)
(254)
(433)
(389)
Acquisitions
 
(30)
(30)
 
(12)
Payments received on other financing receivables
18 
Issuance of other financing receivables
(1)
(8)
(10)
(4)
 
Investments in affiliates
(6)
(4)
(4)
(3)
(11)
Distributions from unconsolidated affiliates
32 
16 
33 
23 
Proceeds from asset dispositions
40 
 
 
 
65 
Contract acquisition costs
(54)
(12)
(44)
(31)
(53)
Software capitalization costs
(45)
(50)
(78)
(103)
(93)
Net cash used in investing activities
(200)
(252)
(382)
(558)
(463)
Financing Activities:
 
 
 
 
 
Net proceeds from issuance of common stock
 
 
1,243 
 
 
Borrowings
350 
702 
14,088 
96 
40 
Repayment of debt
(1,075)
(1,602)
(17,203)
(854)
(726)
Debt issuance costs
(9)
 
(180)
 
 
Change in restricted cash and cash equivalents
(19)
114 
193 
187 
(25)
Intercompany transfers
Dividends paid to Guarantors
 
 
 
Capital contribution
13 
 
 
 
 
Distributions to noncontrolling interests
(3)
(3)
(4)
(4)
(3)
Acquisition of noncontrolling interests
 
 
 
(1)
 
Net cash used in financing activities
(743)
(789)
(1,863)
(576)
(714)
Effect of exchange rate changes on cash and cash equivalents
(7)
(14)
(17)
(2)
(5)
Net increase (decrease) in cash and cash equivalents
(51)
(31)
(161)
(26)
(15)
Cash and cash equivalents, beginning of period
594 
755 
755 
781 
796 
Cash and cash equivalents, end of period
543 
724 
594 
755 
781 
Eliminations [member]
 
 
 
 
 
Operating Activities:
 
 
 
 
 
Net cash provided by operating activities
(207)
(103)
(14)
(4)
Investing Activities:
 
 
 
 
 
Capital expenditures for property and equipment
Acquisitions
 
 
Payments received on other financing receivables
Issuance of other financing receivables
 
Investments in affiliates
Distributions from unconsolidated affiliates
Proceeds from asset dispositions
 
 
 
Contract acquisition costs
Software capitalization costs
Net cash used in investing activities
Financing Activities:
 
 
 
 
 
Net proceeds from issuance of common stock
 
 
 
 
Borrowings
Repayment of debt
Debt issuance costs
 
 
 
Change in restricted cash and cash equivalents
Intercompany transfers
14 
Dividends paid to Guarantors
207 
 
103 
 
 
Capital contribution
 
 
 
 
Distributions to noncontrolling interests
Acquisition of noncontrolling interests
 
 
 
 
Net cash used in financing activities
207 
103 
14 
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
Parent [member]
 
 
 
 
 
Operating Activities:
 
 
 
 
 
Net cash provided by operating activities
Investing Activities:
 
 
 
 
 
Capital expenditures for property and equipment
Acquisitions
 
 
Payments received on other financing receivables
Issuance of other financing receivables
 
Investments in affiliates
Distributions from unconsolidated affiliates
Proceeds from asset dispositions
 
 
 
Contract acquisition costs
Software capitalization costs
Net cash used in investing activities
Financing Activities:
 
 
 
 
 
Net proceeds from issuance of common stock
 
 
1,243 
 
 
Borrowings
Repayment of debt
Debt issuance costs
 
 
 
Change in restricted cash and cash equivalents
Intercompany transfers
(1,243)
Dividends paid to Guarantors
 
 
 
Capital contribution
 
 
 
 
Distributions to noncontrolling interests
Acquisition of noncontrolling interests
 
 
 
 
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
Subsidiary Issuer [Member]
 
 
 
 
 
Operating Activities:
 
 
 
 
 
Net cash provided by operating activities
Investing Activities:
 
 
 
 
 
Capital expenditures for property and equipment
Acquisitions
 
 
Payments received on other financing receivables
Issuance of other financing receivables
 
Investments in affiliates
Distributions from unconsolidated affiliates
Proceeds from asset dispositions
 
 
 
Contract acquisition costs
Software capitalization costs
Net cash used in investing activities
Financing Activities:
 
 
 
 
 
Net proceeds from issuance of common stock
 
 
 
 
Borrowings
9,062 
Repayment of debt
(700)
(1,600)
Debt issuance costs
(6)
 
(123)
 
 
Change in restricted cash and cash equivalents
Intercompany transfers
706 
(7,339)
Dividends paid to Guarantors
 
 
 
Capital contribution
 
 
 
 
Distributions to noncontrolling interests
Acquisition of noncontrolling interests
 
 
 
 
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
Guarantor Subsidiaries [Member]
 
 
 
 
 
Operating Activities:
 
 
 
 
 
Net cash provided by operating activities
605 
592 
1,574 
271 
359 
Investing Activities:
 
 
 
 
 
Capital expenditures for property and equipment
(13)
(15)
(23)
(57)
(43)
Acquisitions
 
 
Payments received on other financing receivables
16 
Issuance of other financing receivables
(6)
(6)
(1)
 
Investments in affiliates
(6)
(4)
(4)
(3)
(11)
Distributions from unconsolidated affiliates
30 
16 
33 
Proceeds from asset dispositions
 
 
 
65 
Contract acquisition costs
(13)
(2)
(14)
(28)
(23)
Software capitalization costs
(45)
(50)
(78)
(103)
(93)
Net cash used in investing activities
(25)
(58)
(88)
(179)
(99)
Financing Activities:
 
 
 
 
 
Net proceeds from issuance of common stock
 
 
 
 
Borrowings
24 
Repayment of debt
(1,279)
(15,245)
(735)
(697)
Debt issuance costs
 
 
 
Change in restricted cash and cash equivalents
140 
222 
193 
(19)
Intercompany transfers
(674)
566 
13,324 
449 
422 
Dividends paid to Guarantors
 
 
 
Capital contribution
 
 
 
 
Distributions to noncontrolling interests
Acquisition of noncontrolling interests
 
 
 
 
Net cash used in financing activities
(674)
(573)
(1,699)
(93)
(270)
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
(94)
(39)
(213)
(1)
(10)
Cash and cash equivalents, beginning of period
329 
542 
542 
543 
553 
Cash and cash equivalents, end of period
235 
503 
329 
542 
543 
Non-Guarantor Subsidiaries [member]
 
 
 
 
 
Operating Activities:
 
 
 
 
 
Net cash provided by operating activities
501 
432 
630 
853 
812 
Investing Activities:
 
 
 
 
 
Capital expenditures for property and equipment
(171)
(152)
(231)
(376)
(346)
Acquisitions
 
(30)
(30)
 
(12)
Payments received on other financing receivables
Issuance of other financing receivables
(1)
(2)
(4)
(3)
 
Investments in affiliates
Distributions from unconsolidated affiliates
23 
Proceeds from asset dispositions
34 
 
 
 
Contract acquisition costs
(41)
(10)
(30)
(3)
(30)
Software capitalization costs
Net cash used in investing activities
(175)
(194)
(294)
(379)
(364)
Financing Activities:
 
 
 
 
 
Net proceeds from issuance of common stock
 
 
 
 
Borrowings
350 
702 
5,026 
96 
16 
Repayment of debt
(375)
(323)
(358)
(119)
(29)
Debt issuance costs
(3)
 
(57)
 
 
Change in restricted cash and cash equivalents
(19)
(26)
(29)
(6)
(6)
Intercompany transfers
(32)
(566)
(4,742)
(463)
(426)
Dividends paid to Guarantors
(207)
 
(103)
 
 
Capital contribution
13 
 
 
 
 
Distributions to noncontrolling interests
(3)
(3)
(4)
(4)
(3)
Acquisition of noncontrolling interests
 
 
 
(1)
 
Net cash used in financing activities
(276)
(216)
(267)
(497)
(448)
Effect of exchange rate changes on cash and cash equivalents
(7)
(14)
(17)
(2)
(5)
Net increase (decrease) in cash and cash equivalents
43 
52 
(25)
(5)
Cash and cash equivalents, beginning of period
265 
213 
213 
238 
243 
Cash and cash equivalents, end of period
$ 308 
$ 221 
$ 265 
$ 213 
$ 238 
Subsequent Events (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended 1 Months Ended
Sep. 30, 2014
Dec. 31, 2011
Dec. 31, 2013
Dec. 31, 2012
Jan. 31, 2014
HGV Grand Islander [Member]
Feb. 28, 2014
Share Based Compensation [Member]
Oct. 31, 2014
Subsequent event [member]
Sep. 30, 2014
Mortgage loan [member]
Dec. 31, 2013
Mortgage loan [member]
Oct. 31, 2013
Mortgage loan [member]
Dec. 31, 2012
Mortgage loan [member]
Dec. 31, 2014
Mortgage loan [member]
Subsequent event [member]
Sep. 30, 2014
Senior secured term loan facility [member]
Dec. 31, 2013
Senior secured term loan facility [member]
Oct. 31, 2013
Senior secured term loan facility [member]
Dec. 31, 2012
Senior secured term loan facility [member]
Oct. 31, 2014
Senior secured term loan facility [member]
Subsequent event [member]
Subsequent Event [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from asset dispositions
$ 40 
$ 65 
 
 
$ 25 
 
$ 1,950 
 
 
 
 
 
 
 
 
 
 
Cash-based LTI plan termination compensation expense reduction
25 
 
 
 
 
25 
 
 
 
 
 
 
 
 
 
 
 
Management agreement, year
 
 
 
 
 
 
100 years 
 
 
 
 
 
 
 
 
 
 
Restricted cash and cash equivalents
288 
 
266 
550 
 
 
100 
 
 
 
 
 
 
 
 
 
100 
Long-term debt, gross
 
 
 
 
 
 
 
$ 525 
$ 525 
$ 525 
$ 0 
$ 525 
$ 5,300 
$ 6,000 
$ 7,600 
$ 0 
 
Condensed Consolidating Guarantor Financial Information - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Oct. 31, 2013
Dec. 31, 2012
Senior Notes [member]
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Long-term debt, gross
$ 1,500 
$ 1,500 
$ 1,500 
$ 0 
Debt instrument, interest rate, stated percentage
5.625% 
5.625% 
5.625% 
 
Mortgage loan [member]
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Long-term debt, gross
525 
525 
525 
Debt instrument, interest rate, stated percentage
2.30% 
2.32% 
 
 
Subsidiary Issuer [Member]
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Ownership Percentage
100.00% 
100.00% 
 
 
Subsidiary Issuer [Member] |
Senior Notes [member]
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Long-term debt, gross
 
 
1,500 
 
Debt instrument, interest rate, stated percentage
 
 
5.625% 
 
Non-Guarantor Subsidiaries [member] |
Mortgage loan [member]
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Long-term debt, gross
$ 589 
 
 
 
Guarantor Subsidiaries [Member]
 
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
 
Ownership Percentage
100.00% 
100.00%