Hilton Worldwide Holdings Inc. (NYSE:HLT)

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Hilton Worldwide Holdings Inc., effective income tax rate (EITR) reconciliation

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
	Statutory U.S. federal income tax rate	21.00%	21.00%	21.00%	21.00%	21.00%
	Effective income tax rate	31.97%	27.51%	27.32%	22.08%	28.78%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The analysis of the effective income tax rate (EITR) relative to the statutory U.S. federal income tax rate reveals a consistent variance, with the EITR remaining above the baseline statutory rate of 21.00% throughout the five-year period from 2019 to 2023.

Effective Income Tax Rate Volatility: The EITR exhibited significant fluctuations over the observed period. After starting at 28.78% in 2019, the rate decreased sharply to 22.08% in 2020, marking the lowest point of the period and the closest alignment with the statutory federal rate. A subsequent recovery occurred in 2021 and 2022, with the rate stabilizing between 27.32% and 27.51%.
Analysis of the 2023 Peak: A notable upward shift is observed in 2023, where the EITR reached a period high of 31.97%. This represents a spread of 10.97 percentage points above the static 21.00% statutory rate, indicating a significant increase in the relative tax burden compared to previous years.
Statutory versus Effective Rate Comparison: While the statutory U.S. federal income tax rate remained completely stable at 21.00% across all five years, the EITR never converged with this baseline. The persistent gap suggests that factors beyond U.S. federal tax law, such as international tax differentials or non-deductible expenses, consistently influenced the actual tax obligation.

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Hilton Worldwide Holdings Inc., components of deferred tax assets and liabilities

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net tax loss carryforwards and carrybacks	604)	641)	649)	593)	386)
Compensation	124)	117)	101)	135)	138)
Reserves	81)	66)	76)	71)	33)
Operating and finance lease liabilities	290)	301)	341)	382)	404)
Deferred income	558)	271)	278)	271)	260)
Foreign tax credit carryforwards	63)	49)	48)	48)	49)
Other	114)	102)	144)	153)	51)
Gross deferred tax assets	1,834)	1,547)	1,637)	1,653)	1,321)
Valuation allowance	(698)	(649)	(669)	(654)	(501)
Deferred tax assets	1,136)	898)	968)	999)	820)
Brands	(1,143)	(1,151)	(1,152)	(1,147)	(1,133)
Operating and finance lease ROU assets	(195)	(206)	(218)	(207)	(210)
Other	(59)	(72)	(85)	(100)	(172)
Deferred tax liabilities	(1,397)	(1,429)	(1,455)	(1,454)	(1,515)
Net deferred taxes	(261)	(531)	(487)	(455)	(695)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The net deferred tax position demonstrates a significant trend toward the reduction of net liabilities over the five-year period analyzed. The net deferred tax liability decreased from 695 million US dollars in 2019 to 261 million US dollars by the end of 2023. This improvement is characterized by a substantial increase in deferred tax assets coupled with a steady decline in total deferred tax liabilities.

Gross Deferred Tax Assets and Valuation Allowance: Gross deferred tax assets grew from 1,321 million US dollars in 2019 to 1,834 million US dollars in 2023. This growth was primarily driven by a sharp increase in deferred income, which rose from 271 million US dollars in 2020 to 558 million US dollars in 2023. Furthermore, net tax loss carryforwards and carrybacks experienced a notable surge, peaking at 649 million US dollars in 2021 before moderating to 604 million US dollars in 2023. Concurrently, the valuation allowance increased from 501 million US dollars to 698 million US dollars, suggesting a more conservative estimation of the realizable value of these assets over time.
Deferred Tax Liabilities Composition: Total deferred tax liabilities declined from 1,515 million US dollars in 2019 to 1,397 million US dollars in 2023. The largest component, liabilities related to brands, remained remarkably stable, fluctuating slightly between 1,133 million and 1,152 million US dollars. The reduction in overall liabilities is largely attributable to the "Other" category, which decreased from 172 million US dollars in 2019 to 59 million US dollars in 2023, and a modest decrease in operating and finance lease right-of-use assets.
Net Asset and Liability Trends: The net deferred tax assets, after applying the valuation allowance, rose from 820 million US dollars in 2019 to 1,136 million US dollars in 2023. When netted against the liabilities, the resulting deficit narrowed considerably. This suggests a shifting tax profile where the accumulation of future tax benefits—specifically from deferred income and loss carryforwards—is increasingly offsetting the long-term tax obligations associated with brand assets.

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Hilton Worldwide Holdings Inc., deferred tax assets and liabilities, classification

US$ in millions

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
	Deferred income tax assets	140)	204)	213)	194)	100)
	Deferred income tax liabilities	401)	735)	700)	649)	795)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

An analysis of the deferred tax accounts reveals a significant shift in the company's net tax position between 2019 and 2023, characterized by a substantial reduction in overall deferred tax liabilities by the end of the period.

Deferred Income Tax Assets: Deferred tax assets experienced a period of growth from 2019 to 2021, increasing from 100 million US$ to a peak of 213 million US$. This upward trend reversed after 2021, with values declining to 204 million US$ in 2022 and further decreasing to 140 million US$ by December 31, 2023.
Deferred Income Tax Liabilities: Deferred tax liabilities remained relatively elevated between 2019 and 2022, fluctuating between a low of 649 million US$ in 2020 and a high of 795 million US$ in 2019. However, a sharp contraction occurred in 2023, where liabilities fell to 401 million US$, representing a significant reduction compared to the previous four years.
Net Deferred Tax Position: The company maintained a net deferred tax liability throughout the analyzed timeframe. The net liability gap was widest in 2019 at 695 million US$ and reached its narrowest point in 2023 at 261 million US$. This indicates a general trend toward the resolution or reduction of deferred tax obligations over the five-year period.

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Hilton Worldwide Holdings Inc., Financial Data: Reported vs. Adjusted

Hilton Worldwide Holdings Inc., adjustments to financial statements

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported)	15,401)	15,512)	15,441)	16,755)	14,957)
Less: Noncurrent deferred tax assets, net	140)	204)	213)	194)	100)
Total assets (adjusted)	15,261)	15,308)	15,228)	16,561)	14,857)
Adjustment to Total Liabilities
Total liabilities (as reported)	17,748)	16,610)	16,260)	18,241)	15,429)
Less: Noncurrent deferred tax liabilities, net	401)	735)	700)	649)	795)
Total liabilities (adjusted)	17,347)	15,875)	15,560)	17,592)	14,634)
Adjustment to Total Hilton Stockholders’ Deficit
Total Hilton stockholders’ deficit (as reported)	(2,360)	(1,102)	(821)	(1,490)	(482)
Less: Net deferred tax assets (liabilities)	(261)	(531)	(487)	(455)	(695)
Total Hilton stockholders’ deficit (adjusted)	(2,099)	(571)	(334)	(1,035)	213)
Adjustment to Net Income (loss) Attributable To Hilton Stockholders
Net income (loss) attributable to Hilton stockholders (as reported)	1,141)	1,255)	410)	(715)	881)
Add: Deferred income tax expense (benefit)	(264)	34)	(4)	(235)	(20)
Net income (loss) attributable to Hilton stockholders (adjusted)	877)	1,289)	406)	(950)	861)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The removal of deferred taxes results in a consistent downward adjustment to both total assets and total liabilities across the analyzed period. This modification reveals a balance sheet that is less leveraged in nominal terms but maintains a similar trajectory of asset fluctuation, peaking in 2020 before stabilizing. The divergence between reported and adjusted figures indicates that deferred tax positions hold a significant presence in the reported financial structure.

Impact on Balance Sheet Composition: A consistent reduction in total assets is observed when deferred taxes are removed, with the most pronounced gap appearing between 2020 and 2023. Similarly, adjusted total liabilities are lower than reported liabilities throughout the five-year period. The narrowing of the asset and liability bases suggests that the reported financial position is moderately inflated by deferred tax accounting, although the overall trend of increasing liabilities relative to assets remains evident in both reported and adjusted figures.
Stockholders' Equity Analysis: The adjustment for deferred taxes provides a more favorable view of the stockholders' position. In 2019, the removal of deferred taxes transforms a reported deficit of 482 million US$ into a positive adjusted equity position of 213 million US$. While a deficit persists from 2020 through 2023 in both scenarios, the adjusted deficit is consistently smaller than the reported deficit. However, a significant deterioration in equity is noted by 2023, where the adjusted deficit reaches 2,099 million US$, following a reported deficit of 2,360 million US$.
Net Income Volatility: The removal of deferred taxes introduces variability in the net income attributable to stockholders. In 2020, the adjusted loss was more severe than the reported loss, increasing from 715 million US$ to 950 million US$. Conversely, in 2022, the adjusted net income showed a slight improvement over the reported figure. By 2023, the trend reversed, with adjusted net income dropping to 877 million US$ compared to the reported ,1141 million US$. This indicates that deferred tax adjustments can either amplify or mitigate reported profitability depending on the fiscal year.

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Hilton Worldwide Holdings Inc., Financial Ratios: Reported vs. Adjusted

Hilton Worldwide Holdings Inc., adjusted financial ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net Profit Margin
Reported net profit margin	11.15%	14.31%	7.08%	-16.60%	9.32%
Adjusted net profit margin	8.57%	14.69%	7.01%	-22.06%	9.11%
Total Asset Turnover
Reported total asset turnover	0.66	0.57	0.37	0.26	0.63
Adjusted total asset turnover	0.67	0.57	0.38	0.26	0.64
Financial Leverage
Reported financial leverage	—	—	—	—	—
Adjusted financial leverage	—	—	—	—	69.75
Return on Equity (ROE)
Reported ROE	—	—	—	—	—
Adjusted ROE	—	—	—	—	404.23%
Return on Assets (ROA)
Reported ROA	7.41%	8.09%	2.66%	-4.27%	5.89%
Adjusted ROA	5.75%	8.42%	2.67%	-5.74%	5.80%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The removal of deferred taxes highlights a greater degree of volatility in profitability and return metrics than is evident in reported figures, particularly during the period of financial distress and subsequent recovery between 2020 and 2023.

Net Profit Margin: A significant fluctuation in profitability is observed. The reported margin declined from 9.32% in 2019 to -16.60% in 2020, followed by a recovery to 11.15% in 2023. The adjusted margin demonstrates more extreme variance, with the 2020 deficit deepening to -22.06% and the 2023 margin softening to 8.57%. This suggests that deferred tax accounting provided a cushioning effect during the 2020 downturn and inflated the reported profitability in 2023.
Total Asset Turnover: Asset utilization efficiency exhibits a consistent V-shaped recovery pattern. A sharp contraction occurred in 2020, where both reported and adjusted ratios fell to 0.26, before trending upward to 0.66 and 0.67 respectively by the end of 2023. The minimal variance between reported and adjusted figures indicates that deferred tax adjustments have a negligible impact on the interpretation of asset turnover.
Return on Assets (ROA): ROA trends closely align with the net profit margin patterns. The reported ROA reached a peak of 8.09% in 2022, while the adjusted ROA reached a slightly higher peak of 8.42% in the same year. However, the adjusted ROA experienced a more severe decline in 2020 (-5.74% compared to -4.27% reported) and a more pronounced drop-off in 2023 (5.75% compared to 7.41% reported).
Financial Leverage and Return on Equity (ROE): Analysis of these metrics is constrained by limited available data. In 2019, the adjusted financial leverage was recorded at 69.75, which corresponds with an exceptionally high adjusted ROE of 404.23%.

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	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Hilton stockholders	1,141)	1,255)	410)	(715)	881)
Revenues	10,235)	8,773)	5,788)	4,307)	9,452)
Profitability Ratio
Net profit margin¹	11.15%	14.31%	7.08%	-16.60%	9.32%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to Hilton stockholders	877)	1,289)	406)	(950)	861)
Revenues	10,235)	8,773)	5,788)	4,307)	9,452)
Profitability Ratio
Adjusted net profit margin²	8.57%	14.69%	7.01%	-22.06%	9.11%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Net profit margin = 100 × Net income (loss) attributable to Hilton stockholders ÷ Revenues
= 100 × 1,141 ÷ 10,235 = 11.15%

² Adjusted net profit margin = 100 × Adjusted net income (loss) attributable to Hilton stockholders ÷ Revenues
= 100 × 877 ÷ 10,235 = 8.57%

The financial performance between 2019 and 2023 is characterized by significant volatility, featuring a severe contraction in 2020, a robust recovery peaking in 2022, and a subsequent moderate decline in 2023.

Net Income Trends: Reported net income shifted from 881 million USD in 2019 to a loss of 715 million USD in 2020, before rebounding to a five-year peak of 1,255 million USD in 2022. Adjusted net income exhibited more extreme fluctuations, dropping to a loss of 950 million USD in 2020 and declining to 877 million USD in 2023, representing a more pronounced decrease than seen in the reported figures for the final period.
Net Profit Margin Analysis: Profitability margins experienced a sharp decline in 2020, with the adjusted net profit margin falling to -22.06% compared to the reported margin of -16.60%. Recovery occurred in 2021 and 2022, with the adjusted net profit margin reaching a peak of 14.69% in 2022. By 2023, a contraction is observed, as the adjusted margin fell to 8.57%.
Divergence Between Reported and Adjusted Results: A notable variance exists between reported and adjusted metrics. In 2020, adjusted losses were deeper than reported losses, indicating that non-recurring items provided some cushioning to the reported bottom line. In contrast, by 2023, reported net income of 1,141 million USD significantly exceeded adjusted net income of 877 million USD. This indicates that the reported profit margin of 11.15% was bolstered by items excluded from the adjusted profit margin of 8.57%, suggesting the presence of non-operational gains or tax benefits in the reported figures.

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	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Revenues	10,235)	8,773)	5,788)	4,307)	9,452)
Total assets	15,401)	15,512)	15,441)	16,755)	14,957)
Activity Ratio
Total asset turnover¹	0.66	0.57	0.37	0.26	0.63
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenues	10,235)	8,773)	5,788)	4,307)	9,452)
Adjusted total assets	15,261)	15,308)	15,228)	16,561)	14,857)
Activity Ratio
Adjusted total asset turnover²	0.67	0.57	0.38	0.26	0.64

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Total asset turnover = Revenues ÷ Total assets
= 10,235 ÷ 15,401 = 0.66

² Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 10,235 ÷ 15,261 = 0.67

The analysis of asset utilization between 2019 and 2023 reveals a significant volatility event followed by a sustained recovery. The efficiency of asset usage reached a nadir in 2020 before trending upward to exceed previous levels by the end of the period.

Adjusted Total Asset Turnover Trend: A sharp contraction is observed in 2020, where the adjusted total asset turnover fell from 0.64 in 2019 to 0.26. This represents a substantial decline in the revenue-generating capacity of the asset base. A consistent recovery followed, with the ratio increasing to 0.38 in 2021, 0.57 in 2022, and reaching 0.67 by December 31, 2023, indicating a restoration and subsequent improvement of operational efficiency.
Asset Base Stability: Adjusted total assets peaked in 2020 at 16,561 million US dollars. In the subsequent three years, the asset base remained relatively stable, fluctuating narrowly between 15,228 million and 15,308 million US dollars. The stabilization of the asset base suggests that the recovery in asset turnover was primarily driven by growth in revenue rather than a strategic reduction in total assets.
Comparative Analysis of Reported and Adjusted Metrics: A high degree of correlation exists between reported and adjusted asset turnover ratios throughout the five-year period. The adjusted turnover figures are marginally higher than the reported figures in most years, but the variance remains negligible. This indicates that the adjustments applied to the total assets do not materially alter the interpretation of the company's asset productivity trends.

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	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets	15,401)	15,512)	15,441)	16,755)	14,957)
Total Hilton stockholders’ deficit	(2,360)	(1,102)	(821)	(1,490)	(482)
Solvency Ratio
Financial leverage¹	—	—	—	—	—
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets	15,261)	15,308)	15,228)	16,561)	14,857)
Adjusted total Hilton stockholders’ deficit	(2,099)	(571)	(334)	(1,035)	213)
Solvency Ratio
Adjusted financial leverage²	—	—	—	—	69.75

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Financial leverage = Total assets ÷ Total Hilton stockholders’ deficit
= 15,401 ÷ -2,360 = —

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Hilton stockholders’ deficit
= 15,261 ÷ -2,099 = —

An analysis of the financial position between 2019 and 2023 reveals a period of volatility in equity levels and relative stability in total assets. The company maintains a persistent stockholders' deficit, which has intensified significantly over the five-year period, indicating an increase in liabilities relative to equity.

Asset Trends: Total assets experienced a peak in 2020 at 16,755 million US dollars before correcting to a range between 15,401 and 15,512 million US dollars from 2021 through 2023. The adjusted total assets closely mirror this trend, showing a slight contraction from the 2020 high and remaining stable at approximately 15,261 million US dollars by the end of 2023.
Stockholders' Deficit Expansion: The reported stockholders' deficit grew from 482 million US dollars in 2019 to 2,360 million US dollars in 2023. A notable spike occurred in 2020, followed by a partial recovery in 2021, and a subsequent steady decline in equity through 2023. Adjusted figures show a similar trajectory; while 2019 reflected a positive adjusted equity position of 213 million US dollars, this shifted to a deficit of 2,099 million US dollars by 2023.
Financial Leverage and Solvency: The adjusted financial leverage was recorded at 69.75 in 2019, reflecting a high ratio of assets to adjusted equity. As the adjusted equity transitioned into a deficit starting in 2020 and continued to deepen through 2023, the financial leverage profile shifted. The widening gap between adjusted assets and adjusted equity indicates a reliance on debt financing and an increasingly negative net worth from an accounting perspective.

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	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Hilton stockholders	1,141)	1,255)	410)	(715)	881)
Total Hilton stockholders’ deficit	(2,360)	(1,102)	(821)	(1,490)	(482)
Profitability Ratio
ROE¹	—	—	—	—	—
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to Hilton stockholders	877)	1,289)	406)	(950)	861)
Adjusted total Hilton stockholders’ deficit	(2,099)	(571)	(334)	(1,035)	213)
Profitability Ratio
Adjusted ROE²	—	—	—	—	404.23%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ ROE = 100 × Net income (loss) attributable to Hilton stockholders ÷ Total Hilton stockholders’ deficit
= 100 × 1,141 ÷ -2,360 = —

² Adjusted ROE = 100 × Adjusted net income (loss) attributable to Hilton stockholders ÷ Adjusted total Hilton stockholders’ deficit
= 100 × 877 ÷ -2,099 = —

Analysis of the financial performance from 2019 to 2023 reveals a period of significant volatility in profitability and a systemic expansion of the stockholders' deficit.

Profitability Trends: Reported net income experienced a sharp decline from 881 million US$ in 2019 to a loss of 715 million US$ in 2020. A subsequent recovery is observed, with reported net income increasing to 410 million US$ in 2021 and peaking at 1,255 million US$ in 2022, before moderating to 1,141 million US$ in 2023. Adjusted net income followed a similar pattern, with a peak of 1,289 million US$ in 2022 and a decrease to 877 million US$ in 2023.
Stockholders' Equity Analysis: The company maintains a persistent stockholders' deficit that widened considerably over the five-year period. The reported deficit increased from -482 million US$ in 2019 to -2,360 million US$ in 2023. On an adjusted basis, the equity position transitioned from a positive 213 million US$ in 2019 to a deficit of -2,099 million US$ by the end of 2023, indicating a substantial erosion of the equity base.
Adjusted Return on Equity (ROE): An adjusted ROE of 404.23% is noted for 2019, driven by the combination of positive adjusted net income and positive adjusted stockholders' equity. For the period between 2020 and 2023, the transition to a negative adjusted equity position renders the ROE metric mathematically non-representative, which corresponds with the absence of values for this ratio in the subsequent years.

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	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Hilton stockholders	1,141)	1,255)	410)	(715)	881)
Total assets	15,401)	15,512)	15,441)	16,755)	14,957)
Profitability Ratio
ROA¹	7.41%	8.09%	2.66%	-4.27%	5.89%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to Hilton stockholders	877)	1,289)	406)	(950)	861)
Adjusted total assets	15,261)	15,308)	15,228)	16,561)	14,857)
Profitability Ratio
Adjusted ROA²	5.75%	8.42%	2.67%	-5.74%	5.80%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ ROA = 100 × Net income (loss) attributable to Hilton stockholders ÷ Total assets
= 100 × 1,141 ÷ 15,401 = 7.41%

² Adjusted ROA = 100 × Adjusted net income (loss) attributable to Hilton stockholders ÷ Adjusted total assets
= 100 × 877 ÷ 15,261 = 5.75%

The financial performance between 2019 and 2023 is characterized by significant volatility, marked by a severe contraction in 2020 followed by a strong recovery and subsequent stabilization. The fluctuations in profitability and asset utilization indicate a period of high sensitivity to external market conditions.

Adjusted Net Income Trends: A substantial decline in profitability occurred in 2020, with adjusted net income falling from 861 million US$ in 2019 to a loss of 950 million US$. A recovery phase began in 2021 with a return to profitability at 406 million US$, peaking in 2022 at 1,289 million US$. By 2023, adjusted net income moderated to 877 million US$, returning to levels comparable to the 2019 baseline.
Asset Base Dynamics: Adjusted total assets experienced an increase in 2020, rising to 16,561 million US$ from 14,857 million US$ in 2019. Following this peak, the asset base contracted and remained relatively stable over the subsequent three years, fluctuating minimally between 15,228 million US$ in 2021 and 15,261 million US$ in 2023.
Adjusted Return on Assets (ROA) Performance: The Adjusted ROA mirrored the volatility of net income, dropping from 5.80% in 2019 to -5.74% in 2020. The metric demonstrated a strong upward trajectory thereafter, reaching a period high of 8.42% in 2022. In 2023, the Adjusted ROA decreased to 5.75%, indicating a normalization of asset efficiency to pre-2020 levels.
Comparative Analysis of Reported vs. Adjusted Metrics: A consistent pattern exists where adjusted figures diverge from reported figures, particularly during the 2020 downturn and the 2023 moderation. In 2020, the adjusted net loss was deeper than the reported loss, leading to a more pronounced negative Adjusted ROA (-5.74%) compared to the Reported ROA (-4.27%). Conversely, in 2023, the adjusted net income was lower than reported, resulting in a lower Adjusted ROA (5.75%) relative to the Reported ROA (7.41%).

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