Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Hilton Worldwide Holdings Inc., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income (loss)	1,151)	1,257)	407)	(720)	886)
Amortization of contract acquisition costs	43)	38)	32)	29)	29)
Depreciation and amortization expenses	147)	162)	188)	331)	346)
Impairment losses	38)	—)	—)	258)	—)
(Gain) loss on sales of assets, net	—)	—)	7)	—)	(81)
(Gain) loss on foreign currency transactions	16)	(5)	7)	27)	2)
Loss on debt extinguishment	—)	—)	69)	48)	—)
Loss on investments in unconsolidated affiliate	92)	—)	—)	—)	—)
Share-based compensation expense	169)	162)	193)	97)	154)
Amortization of deferred financing costs and discounts	16)	16)	16)	17)	16)
Deferred income taxes	(264)	34)	(4)	(235)	(20)
Contract acquisition costs, net of refunds	(233)	(81)	(200)	(50)	(90)
Accounts receivable, net	(126)	(270)	(301)	488)	(105)
Prepaid expenses	(27)	(21)	(22)	60)	6)
Other current assets	16)	78)	(107)	(26)	15)
Accounts payable, accrued expenses and other	181)	198)	273)	(414)	99)
Changes in operating assets and liabilities	44)	(15)	(157)	108)	15)
Change in operating lease right-of-use assets	73)	105)	96)	94)	43)
Change in operating lease liabilities	(98)	(113)	(123)	(142)	(80)
Change in deferred revenues	215)	174)	(128)	215)	(17)
Change in liability for guest loyalty program	337)	31)	(105)	610)	191)
Change in other liabilities	284)	(11)	(111)	8)	(14)
Other	(84)	(73)	(78)	13)	4)
Adjustments to reconcile net income (loss) to net cash provided by operating activities	795)	424)	(298)	1,428)	498)
Net cash provided by operating activities	1,946)	1,681)	109)	708)	1,384)
Capital expenditures for property and equipment	(151)	(39)	(35)	(46)	(81)
Issuance of financing receivables	(22)	(46)	(3)	(3)	—)
Proceeds from (payments for) undesignated derivative financial instruments	(26)	79)	(5)	(3)	—)
Proceeds from asset dispositions	5)	—)	6)	—)	120)
Capitalized software costs	(96)	(63)	(44)	(46)	(124)
Investments in unconsolidated affiliates	(15)	(53)	—)	—)	—)
Other	—)	(1)	24)	(9)	(38)
Net cash used in investing activities	(305)	(123)	(57)	(107)	(123)
Borrowings	609)	23)	1,510)	4,590)	2,200)
Repayment of debt	(183)	(48)	(3,230)	(2,121)	(1,547)
Debt issuance costs and redemption premium	(20)	—)	(76)	(71)	(29)
Dividends paid	(158)	(123)	—)	(42)	(172)
Repurchases of common stock	(2,338)	(1,590)	—)	(296)	(1,538)
Share-based compensation tax withholdings	(54)	(58)	(49)	(58)	(44)
Proceeds from share-based compensation	51)	29)	52)	31)	17)
Settlements of interest rate swap with financing component	53)	2)	—)	—)	—)
Other	—)	—)	—)	(1)	—)
Net cash provided by (used in) financing activities	(2,040)	(1,765)	(1,793)	2,032)	(1,113)
Effect of exchange rate changes on cash, restricted cash and cash equivalents	(12)	(19)	(10)	—)	(2)
Net increase (decrease) in cash, restricted cash and cash equivalents	(411)	(226)	(1,751)	2,633)	146)
Cash, restricted cash and cash equivalents, beginning of period	1,286)	1,512)	3,263)	630)	484)
Cash, restricted cash and cash equivalents, end of period	875)	1,286)	1,512)	3,263)	630)

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).

Net Income and Profitability Trends: Net income displayed significant volatility over the analyzed period. After a strong positive net income of $886 million at the end of 2019, the company experienced a substantial loss of $720 million in 2020. This was followed by recovery in 2021 and strong profitability in 2022, peaking at $1,257 million before a slight decline to $1,151 million in 2023. This pattern suggests sensitivity to external market conditions with a rebound in earnings post-2020 downturn.
Depreciation and Amortization: Depreciation and amortization expenses saw a marked decrease from $346 million in 2019 to $147 million in 2023, indicating either reduced asset base or changes in capital expenditure strategy. Amortization of contract acquisition costs consistently increased from $29 million in 2019 to $43 million in 2023, reflecting ongoing investment in intangible assets related to customer acquisition.
Impairment and Asset Sales: Impairment losses occurred sporadically, notably a $258 million charge in 2020 and a smaller $38 million expense in 2023, indicating occasional reassessment of asset valuations. The gain or loss on sales of assets varied, with a notable gain of $81 million in 2019 and a minor loss in 2021, highlighting periodic asset disposition activities.
Foreign Currency and Investment Losses: Foreign currency transaction gains and losses fluctuated without a clear trend, with values shifting between positive and negative across years, reflecting exposure to currency risk. A loss on investments in unconsolidated affiliates appeared suddenly in 2023 for $92 million, suggesting impairment or valuation changes in equity investments.
Share-Based Compensation and Financing Costs: Share-based compensation expense decreased sharply in 2020 to $97 million from $154 million in 2019 but then increased again, reaching $169 million in 2023. Amortization of deferred financing costs remained stable around $16-17 million annually, indicating consistent financing operations.
Changes in Working Capital Items: Changes in accounts receivable, prepaid expenses, and other current assets showed volatility, with significant fluctuations in 2020 and 2021. Accounts payable and accrued expenses reversed sharply from a negative $414 million change in 2020 to positive in subsequent years. Changes in deferred revenues and loyalty program liabilities also varied considerably, pointing to dynamic operating conditions and timing differences in cash flow recognition.
Cash Flows from Operating Activities: Net cash provided by operating activities saw a major dip to $109 million in 2021 from $1,384 million in 2019, followed by a recovery to $1,946 million in 2023. Adjustments to reconcile net income to operating cash flows mirrored these trends, indicating that non-cash items and working capital changes contributed significantly to cash flow variability.
Investing Activities: Capital expenditures for property and equipment were relatively moderate until 2023, when spending increased sharply to $151 million, possibly signaling renewed investment. Capitalized software costs fluctuated but showed an upward trend in 2023. Net cash used in investing activities increased in 2023 to $305 million, consistent with these higher investment levels.
Financing Activities: Borrowings peaked in 2020 at $4,590 million, reflecting significant debt issuance, then declined sharply in 2022. Debt repayments were highest in 2021, exceeding $3 billion, indicating active deleveraging. Dividends paid were reduced significantly in 2020 but resumed higher payments in following years. Share repurchases were aggressive in 2019 and 2023, with a major buyback of $2,338 million in 2023, reflecting capital return strategy. Overall, net cash used in financing activities was negative in most years except 2020, indicating outflows toward debt reduction and shareholder distributions.
Liquidity: Cash and cash equivalents surged from $630 million at the end of 2019 to a peak of $3,263 million at the end of 2020, likely due to increased borrowing and capital management measures. A decline followed over the subsequent years, reaching $875 million at the end of 2023, reflecting use of cash for operations, investments, and financing activities. The net decrease in cash in recent years suggests tighter liquidity management or greater cash deployment.
Overall Observations: The financial data reveals that the company experienced a disruption in 2020 coinciding with external challenges, with losses and increased borrowings. Recovery in operating performance and cash flow was evident after 2020, alongside strategic capital expenditures and active capital return to shareholders. Debt management and working capital shifts played significant roles in cash flow variability. The trends denote an adaptive response to challenging market conditions with focus on cash flow improvement and shareholder value.

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Hilton Worldwide Holdings Inc. (NYSE:HLT)

Cash Flow Statement