HLTHilton Worldwide

We note your disclosures on pages 45 and 46 about other revenues and expenses from managed and franchised properties. Other revenue represents amounts that are contractually reimbursed to you by property owners, either directly as costs are incurred or indirectly through monthly program fees related to certain costs and expenses supporting the operations of the related properties.

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Please help us better understand these arrangements. • You state that revenues and expenses for direct reimbursements have no net effect on operating income (loss) or net income (loss). Tell us in more detail if the revenue and related expenses directly offset each other in each period presented. If not, please explain. • With respect to the amounts reimbursed to you indirectly, timing differences can occur between the costs incurred and the related reimbursement from hotel owners in the reporting period. Tell us how you determine the amount and timing of reimbursements and if historically the fees collected offset the expenses incurred exactly. • Please clarify for us if there is anything that could cause a net surplus or deficit over time (e.g. uncollectable reimbursements). • Please tell us if the net difference between other revenue and expenses from managed and franchised properties as presented in the Consolidated Statements of Operations on page 69 was a result of timing differences only.

•The Company respectfully confirms that revenues and expenses for direct reimbursements directly offset each other in each period presented.

•With respect to amounts reimbursed indirectly, we incur costs to operate the programs prescribed in our contracts with managed and franchised hotel owners (including costs to build and maintain technology systems and operate brand, marketing, sales, revenue management, loyalty and other programs) and recognize revenues based on the underlying hotel’s sales or usage as services are performed.

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Our contracts with owners of managed and franchised hotels require that we (i) operate the programs for the benefit of the system of managed and franchised hotels, and (ii) not profit from temporary excesses and not bear losses from temporary shortfalls of the programs. Our ability to incur costs in an individual period in excess of the revenues in that period is discretionary, which allows us to act in the best long-term interests of the programs that we are contractually obligated to operate, while having the right to use future collections to recover prior period expenditures. In either case, our management and franchise contracts maintain an overarching principle that payments received for these programs are a cost recovery mechanism and not an opportunity to profit, as they maintain the obligation to use surplus funds collected and a right to recover deficits incurred to ultimately break even over time.

For instances where we incur temporary excesses or temporary shortfalls from the programs, we monitor the cumulative amounts collected and costs incurred to ensure we are meeting our contractual obligations over time. Depending on economic and industry conditions, the cumulative total of amounts collected and expended may reflect temporary excesses (amounts collected in excess of costs incurred) or temporary shortfalls (costs incurred in excess of amounts collected) at any given point in time. In the 10 full years since our December 2013 initial public offering, on a cash basis, we have experienced 5 years of increases in our total cumulative cash surplus or deficit and 5 years of decreases in our total cumulative cash surplus or deficit, such that we are meeting our overall contractual obligation to manage toward a cumulative offsetting of funds collected and expended on behalf of our programs.

•We respectfully note that there are no specific factors that could cause an ultimate net surplus or deficit based on our contractual obligations to manage the programs to break even over time. We adjust our use of the funds collected on behalf of the system to account for any uncollectable or unpaid reimbursements, such that the program would not run a net deficit over time.

•As described above, we manage the programs under our contracts to have reimbursements equal costs incurred over time. Accordingly, we believe that the differences between other revenues from managed and franchised properties and other expenses from managed and franchised properties are only a result of differences in the timing of revenues recognized and costs incurred within a reporting period as we operate the programs in accordance with our contractual obligations.

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We note your adjustment for “net other expenses from managed and franchised properties” in your reconciliation of Adjusted EBITDA on page 51. Please provide us the composition of expenses included in the adjustment, for example what are the type of expenses included and if it solely relates to indirect reimbursements.

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You state that the direct reimbursements from hotel owners are typically reimbursed as the costs are incurred and have no net effect on net income (loss) and that the expenses incurred related to the indirect reimbursements are expected to equal the revenues earned. Please tell us if there were times in the last year that the typical situations and expectations were not met and if so, the effect on your non-GAAP adjustment. This comment also applies to your presentation of Adjusted EBITDA and Net income, adjusted for special items in your earnings release.

The Company respectfully notes that the adjustment for net other revenues from managed and franchised properties or net other expenses from managed and franchised properties in our reconciliations of our non-GAAP Adjusted EBITDA and Net income, adjusted for special items measures reflects an adjustment to (i) reduce the respective non-GAAP measures in any period that the amount of our indirect reimbursement revenues exceed indirect reimbursement expenses within that individual reporting period or (ii) increase the respective non-GAAP measure in any reporting period in which indirect

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reimbursement expenses exceed our indirect reimbursement revenues within that individual reporting period. The expenses incurred include costs to build and maintain technology systems and operate brand, marketing, sales, revenue management, loyalty and other programs to benefit the system of managed and franchised hotels as specified in our management and franchise contracts with third-party hotel owners. We respectfully refer to our responses to Comment 1 above regarding our contractual requirements and approach to managing the programs to a cumulative break-even balance by offsetting amounts collected and costs incurred over time. The net difference between other revenues and other expenses from managed and franchised properties in any single reporting period does not change our overall approach to managing these programs to break even on a cash basis over time, and we did not experience times in the last year that the typical situations and expectations of managing the programs in this fashion were not met. We exclude the difference between other revenues and other expenses from managed and franchised properties from these non-GAAP financial measures because we believe that in periods that we generate a surplus that increases GAAP net income or incur a deficit that decreases GAAP net income, it would not be useful to investors to include such amounts given our contractual obligations with our hotel owners to not profit from temporary excesses and not bear losses from temporary shortfalls. Moreover, because we are obligated to manage the underlying programs to break even over time, management uses metrics to evaluate the performance of our business, including measures of segment operating income (loss), that exclude any temporary net surplus or deficit generated by these programs, as the inclusion of such amounts in any given period is not reflective of our ongoing operational performance and would decrease period-to-period comparability.

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We note your distinction between comparable and non-comparable hotels on page 47 and your presentation of hotel operating statistics for your comparable hotels on page 50. Please tell us how you considered also including non-comparable hotel operating statistics and related operating results discussion for each period, given they comprise 1,532 of the total 7,438 hotels in your system as of December 31, 2023.

We respectfully note that approximately half of the hotels that were deemed non-comparable for the reporting periods specified were added as new hotels in our system at some point between January 1, 2022 and December 31, 2023. As such, statistics to compare the individual properties to an equivalent prior time period were unavailable for the full periods presented.

Similarly, in other situations where a hotel is determined to be non-comparable, we believe their inclusion could cause our presentation of system-wide, brand or regional statistics to misrepresent the performance of our business.

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As an example, a hotel that remained in our system, but was undergoing a renovation with significant disruption to operations in the prior year and had no renovation disruption in the current period, would typically show a significant increase in statistics such as occupancy and revenue per available room in the current period, but such increase would not be a meaningful indicator of overall performance.

When we considered this limitation, we believe that a statistical comparison of non-comparable hotels would not be a meaningful indicator of the Company’s overall performance. As non-comparable hotels do affect our total base and other and incentive management fees, franchise and licensing fees and owned and leased hotels revenues, we have included disclosure of significant changes in the net number of non-comparable managed and franchised hotels as well as the change in revenues from non-comparable owned and leased hotels related to lease exits, renovations and business interruption in our existing disclosures. We respectfully refer to our response to Comment 4 below, confirming that we will in future filings separately quantify any material impact from non-comparable hotels on our operating results.

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We note you have identified multiple factors that impact your operating results but it does not appear that you have separately quantified each factor. For example purposes only, you state that (1) increases in franchise fees and management fees were primarily the result of increases in RevPAR at your comparable franchised and managed hotels, respectively, (2) you added 664 franchised and managed properties on a net

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basis, providing an additional 102,100 rooms to your management and franchise segment, which also contributed to the increases in franchise and management fees, and (3) licensing fees increased as a result of increases in fees from your strategic partnerships and HGV. When there are multiple factors impacting your operating results, please revise your disclosures to separately quantify the impact from each factor.

to the Staff’s comment, we respectfully confirm that in future Exchange Act periodic reports when multiple factors impact operating results, we will clarify our disclosures to separately quantify any material impact of the relevant factors in accordance with Item 303 of Regulation S-K. Read in the reply ↗

We have considered your responses to prior comments 1 and 2. We observe that the adjustment for “net other expenses from managed and franchised properties” to arrive at Adjusted EBITDA and Net income, adjusted for special items and the adjustment for "other revenues from managed and franchised properties" to arrive at Total revenues, as adjusted appear to change the pattern of recognition of revenue and expense as

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prescribed by GAAP, resulting in tailored non-GAAP measures. In this regard, please tell us how you considered Question 100.04 of the Non-GAAP Financial Measures Compliance & Disclosure Interpretations in your determination that it is appropriate to present these adjustments.

The Company respectfully notes that the adjustments to arrive at Adjusted EBITDA, Net income, adjusted for special items and Total revenues, as adjusted, exclude activities that relate to the operation of programs that are delivered under the terms of contracts with owners of managed and franchised hotels.

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These programs are designed and conducted under the terms of contracts with third-party owners of managed and franchised hotels to ensure that Hilton does not profit from temporary excesses nor bear losses from temporary shortfalls of all of those contractually specified programs, and the Company notes that it makes adjustments to its non-GAAP measures to exclude both temporary excesses and temporary shortfalls relating to the revenues and expenses generated by these programs for all interim and annual reporting periods.

The business purpose of these transactions is to create a cost recovery pool for the benefit of third-party owners of hotels associated with our brands, which does not serve as a profit center for the Company. These programs (i) deliver economies of scale to the procurement of services, such as marketing, loyalty, sales quality assurance, information technology and others, (ii) deliver a consistent customer experience that builds loyalty to hotels that are associated with our brands and (iii) allow for hotels in our system to manage risks in the supply chain by delivering broad scale platforms for certain services and activities to be procured and delivered on a combined basis. These programs ultimately create value for hotel owners that choose to affiliate with our brands, but they are not part of the value proposition that Hilton delivers as a benefit to its investors, given that the programs are operated to break even over the long term. Thus, these transactions, while facilitated by Hilton, do not exist to directly serve the economic interest of the Company or its stockholders, but instead serve to match amounts expended with those collected over the long term.

The Company believes that the exclusion of all revenues and expenses associated with these program activities, as presented in “other revenues from managed and franchised hotels” and “other expenses from managed and franchised hotels,” from its non-GAAP measures provides investors a view of its business that reflects the fact that over the life of these contracts, the Company is prohibited from profiting from temporary excesses and has the right to recover temporary shortfalls that ultimately yield neither a benefit nor a detriment to our enterprise, aligned with management’s approach to running the business. Further, the Company has specific disclosure controls and procedures in place to ensure that the activities relating to its programs are separately recorded and are accurately reported in the relevant line items of its GAAP statement of operations and non-GAAP reconciliations.

In considering Question 100.04 of the Non-GAAP Financial Measures Compliance & Disclosure Interpretations (the “Non-GAAP C&DIs”), the Company respectfully notes that its approach to presenting the non-GAAP measures referenced in the Staff’s comment is to exclude activities for which we do not benefit from temporary excesses nor suffer from temporary shortfalls in totality, so as to exclude activities that do not bear on the ultimate ability to realize value for investors. The Company’s approach in the non-GAAP measures does not change the nature or timing of those activities from that reported under GAAP. The Company notes that Question 100.04 is primarily focused on adjustments that may cause the presentation of a non-GAAP measure, taken together with the information accompanying the measure, to be misleading in violation of Rule 100(b) of Regulation G. The Company does not view adjustments for activities that are operated to break even over time as misleading in any way. Specifically, the adjustments included in the Company’s non-GAAP measures do not change the amount or timing of the recognition of results related to the operation of these programs which are mandated to break even over the long term, and the Company monitors these programs through its internal accounting practices and procedures on an ongoing basis to ensure achievement of that result. The Company believes excluding the revenues and expenses of the program activities from its non-GAAP measures provides useful information to investors about the Company’s results of operations as such activities are not reflective of its ongoing operational performance. Because of the value of these adjusted measures to investors, the Company also respectfully notes that others in the hospitality industry, as well as franchisors in other industries who operate programs of a similar nature, regularly make similar adjustments in their non-GAAP measures relating to the operation of similar types of programs conducted on behalf of franchisees or other third parties. We understand from investors and analysts that cover companies in our industry that they request information relating to these programs to be presented in this manner as it is understood by those parties and represents a view consistent with that of management of industry participants.

In specifically addressing Question 100.04 of the Non-GAAP C&DIs, there are three examples of measures that the Staff highlighted as potentially misleading. Each of these examples involves the use of alternate recognition or measurement principles in order to shift the timing of when a company recognizes the financial impact of certain non-descript business activities or otherwise recharacterizes the substance of such non-descript business activities to yield a financial impact different from what would otherwise be required under GAAP, in each case without an analysis of the nature of the business activities themselves. However, in the case of the adjustments related to the Company’s program activities described above, it is ultimately the nature of the activities and the fact that they are operated under its contractual arrangements to break-even over time that is driving the adjustment. The Company believes that the exclusion of these activities, which are not reflective of the Company’s operational performance, from its non-GAAP measures is not misleading and is distinct from presenting an individually tailored measure that applies alternate recognition patterns or measurement principles in the accounting for such activities. To address each of the examples from Question 100.04, the Company notes the following:

•The full exclusion of the class of transactions recorded under GAAP for these program activities that do not ultimately bear on the Company’s long-term rights to economic resources does not change the pattern of revenue or expense recognition by accelerating, deferring or otherwise changing the timing of revenue or expense. Given the equal or greater prominence with which the Company presents the GAAP measures that include these activities, the approach of excluding both revenues and expenses relating to these program activities from its non-GAAP measures provides users an alternate view of the Company’s results that reflects the nature of the contractual arrangements in that temporary excesses or shortfalls of these programs are (i) not part of operations that create returns that are available to investors in the long-term, (ii) not used by our management to evaluate the performance of the business, including programs to determine compensation and (iii) not included in our definitions of segment revenues or segment profitability.

•The measure of revenue that we present in “Total revenues, as adjusted,” which is presented in quarterly earnings releases, excludes all revenues that are ultimately not sources available to investors for their benefit. The presentation of this adjustment to exclude GAAP revenues relating to these programs in their entirety does not change the gross or net presentation of these revenues or the timing of the recognition of any aspect of such revenues.

•The presentation of these adjustments to exclude the revenues and expenses related to these program activities does not change the presentation to a different basis of accounting, such as presenting them on a cash basis, that might create a greater benefit or change the timing of when temporary excesses or shortfalls or revenues are reflected, but instead fully excludes the activities relating to these programs, such that investors understand that the adjustment to our GAAP measures reflects neither temporary excesses or shortfalls or the revenues in any individual reporting period.

The Company believes that presenting non-GAAP measures inclusive of the adjustments described is important to provide investors an alternative view to the GAAP measures that we present with equal or greater prominence to reflect the activities that do ultimately create returns that are available to investors and avoid potential misunderstandings of the magnitude and persistence of the Company’s ability to generate returns for investors. Such misunderstandings could ultimately yield mispricing if a reflection of short-term benefits derived or costs incurred from these programs would not be reported clearly, driving investors to consider performance to be more favorable than it will be in the long term or believe that temporary shortfalls would not be recovered in the future, as they are specified to operate under contracts with third-party owners.

This position is supported by valuation techniques used by investment advisors and analysts when considering valuation of companies in the hospitality industry. The Company notes that when analyzing values in the industry investment advisors and analysts typically use Adjusted EBITDA, consistent with the definition applied by the hospitality industry, to exclude activities relating to these programs, as a measure to determine enterprise values for hospitality company valuations. It is also the Company’s understanding that industry investment advisors and analysts also prefer consistent measures of Adjusted EBITDA across the industry to facilitate comparative analyses of value and Adjusted EBITDA multiples across competitors. Third party valuation firms also exclude program-related activities when considering underlying fair value of assets acquired or reporting unit value to provide estimates used in the valuation of assets for purposes of business combinations or goodwill impairment and similar analyses. In addition to being consistent with the Company’s approach to analyzing fair value estimates for use in operations and accounting analyses, these third-party sources provide validation that the cost recovery activities of these programs are understood by investors and valuation specialists to be break-even activities that are not a profit center for the companies and are not viewed as a driver of enterprise value by investors, and that the presentation of such adjustments provide important supplemental information to complement GAAP measures that help investors understand which activities undertaken by the Company are available for the benefit of investors and which activities should not ultimately bear on valuation as they relate only to timing. We further note that in addition to the Company’s use and presentation of the non-GAAP measures referred to above as performance measures in its disclosures and filings, calculations of compliance with minimum debt ratios required by its credit agreements likewise exclude the temporary excesses or shortfalls relating to these programs among other adjustments, and we believe that the alignment of measuring our performance to the way that our lenders require us to evaluate such results in comparison to our material debt obligations is also meaningful to investors.

While the Company continues to believe that its non-GAAP measures and relevant adjustments to arrive at such non-GAAP measures meet the requirements of Regulation G and related interpretations, the Company has considered certain enhancements to its existing disclosures of non-GAAP measures that may further improve the understanding of investors using this information. For the Staff’s consideration, in future filings we propose to include enhanced disclosures substantially similar to those below from the 2023 Form 10-K (marked to show proposed changes to disclosures in response to the Staff’s comment).

“Key Business and Financial Metrics Used by Management

EBITDA and Adjusted EBITDA

EBITDA reflects net income (loss), excluding interest expense, a provision for income tax benefit (expense) and depreciation and amortization expenses. Adjusted EBITDA is calculated as EBITDA, as previously defined, further adjusted to exclude certain items, including gains, losses, revenues and expenses in connection with: (i) asset dispositions for both consolidated and unconsolidated investments; (ii) foreign currency transactions; (iii) debt restructurings and retirements; (iv) furniture, fixtures and equipment ("FF&E") replacement reserves required under certain lease agreements; (v) share-based compensation; (vi) reorganization, severance, relocation and other expenses; (vii) non-cash impairment; (viii) amortization of contract acquisition costs; (ix) the net effect of our cost reimbursement revenues and expenses included in other revenues from managed and franchised properties and other expenses from managed and franchised properties; and (x) other items.

We believe that EBITDA and Adjusted EBITDA provide useful information to investors about us and our financial condition and results of operations for the following reasons: (i) these measures are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions and (ii) these measures are frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in our industry. Additionally, these measures exclude certain items that can vary widely across different industries and among competitors within our industry. For instance, interest expense and income taxes are dependent on company specifics, including, among other things, capital structure and operating jurisdictions, respectively, and, therefore, could vary significantly across companies. Depreciation and amortization expenses, as well as amortization of contract acquisition costs, are dependent upon company policies, including the method of acquiring and depreciating assets and the useful lives that are assigned to those depreciating or amortizing assets for accounting purposes. For Adjusted EBITDA, we also exclude items such as: (i) FF&E replacement reserves for leased hotels to be consistent with the treatment of capital expenditures for property and equipment, where depreciation of such capitalized assets is reported within depreciation and amortization expenses; (ii) share-based compensation, as this could vary widely among companies due to the different plans in place and the usage of them; and (iii) other items that are not reflective of our operating performance, such as amounts related to debt restructurings and debt retirements and reorganization and related severance costs, to enhance period-over-period comparisons of our ongoing operations. Further, Adjusted EBITDA excludes the net effect of our cost reimbursement revenues and expenses, both other revenues from managed and franchised properties and other expenses from managed and franchised properties as we contractually do not operate the related programs to generate a profit over the terms of the respective contracts and have the contractual rights to adjust future collections to recover prior period expenditures. The direct reimbursements from hotel owners are typically reimbursed billable and reimbursable as the costs are incurred and have no net effect on net income (loss) in the reporting period. The fees we recognize related to the indirect reimbursements may be from hotel owners are typically billed and collected monthly, based on the underlying hotel's sales or usage (e.g., gross room revenue or number of reservations processed), while the associated costs are recognized before or after the related expenses are as incurred, causing by Hilton, creating timing differences between the costs incurred and the related reimbursement from hotel owners, with the net effect impacting net income (loss) in the reporting period. These timing differences are due to our discretion to spend in excess of revenues earned or less than revenues earned in a single period to ensure that the programs are operated in the best long-term interests of our hotel owners. However, over the life of the operation of these programs, the expenses incurred related to the indirect reimbursements are designed expected to equal the revenues earned from the indirect reimbursements over time such that, in the long term, the programs will not earn a profit or generate a loss, and, do not impact our economics, either positively or negatively. tTherefore, the net effect of our cost reimbursement revenues and expenses is not used by our management team to evaluate our operating performance, determine executive compensation or make day-to-day other operating decisions, and we exclude their impact when evaluating period over period performance results.

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

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

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

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

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

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

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

•other companies in our industry may calculate EBITDA and Adjusted EBITDA differently, limiting their usefulness as comparative measures.

Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as discretionary cash available to us to reinvest in the growth of our business, return to our stockholders through share repurchases and dividends or as measures of cash that will be available to us to meet our obligations.

Results of Operations

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

Year Ended December 31,

2023 2022

(in millions)

Net income $ 1,151 $ 1,257

Interest expense 464 415

Income tax expense 541 477

Depreciation and amortization expenses 147 162

EBITDA 2,303 2,311

Loss (gain) on foreign currency transactions 16 (5)

Loss on investments in unconsolidated affiliate(1)

92 —

FF&E replacement reserves 63 54

Share-based compensation expense 169 162

Impairment losses 38 —

Amortization of contract acquisition costs 43 38

Net other expenses from managed and franchised properties 337 39

Other revenues from managed and franchised properties (5,827) (5,037)

Other expenses from managed and franchised properties 6,164 5,076

Other adjustments(2)

28 —

Adjusted EBITDA $ 3,089 $ 2,599

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(1)Amount includes losses recognized related to equity and debt financing that we had previously provided to an unconsolidated affiliate with underlying investments in certain hotels that we currently manage or franchise; refer to Note 5: Loss on Investments in Unconsolidated Affiliate in our consolidated financial statements for additional information.

(2)Amount for the year ended December 31, 2022 was less than $1 million. Amounts for both periods include net losses (gains) related to certain of Hilton's investments in unconsolidated affiliates, other than the loss included separately in "loss on investments in unconsolidated affiliate," net losses (gains) on asset dispositions, severance and other items. Amount for the year ended December 31, 2023 also includes expenses recognized in connection with the amendment of our senior secured term loan facilities (the "Term Loans").”

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You disclose that a currency neutral basis is when all periods use the same exchange rates. Please revise future filings to clarify which period’s exchange rate is used.

to the Staff’s comment, we respectfully confirm that in future Exchange Act periodic reports where we include currency neutral presentations of RevPAR, ADR or other metrics we will clarify which period’s exchange rate is used as such items are presented. Read in the reply ↗

Please tell us how you determined it was not necessary to classify the assets and liabilities of Park and HGV as held for sale as of December 31, 2016. Further, please tell us how you determined it was not necessary to reclassify the Park and HGV results of operations as discontinued operations for the periods presented. Please refer to ASC 205-20-45.

The Company respectfully notes that effective as of 5:00 p.m. Eastern time on January 3, 2017 (the “Distribution Date”), the Company completed the separation of its business into three independent, publicly traded companies (the “spin-offs”), which was accomplished by the distribution of the outstanding shares of common stock of Park and HGV (together, “the components”) to the Company’s stockholders.

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Prior to the Distribution Date, including the entirety of the year ended December 31, 2016, the assets and liabilities of the components continued to be used in the Company’s business.

As Park and HGV were disposed of in a transaction other than by sale, the Company applied the guidance in ASC paragraph 360-10-45-15 when considering whether they would be presented as assets held for sale as of December 31, 2016. Accordingly, the Company determined that the assets and liabilities of the components should not be classified as held for sale until disposed of, in this case, on the Distribution Date. Also, as described in ASC paragraph 360-10-45-15, the requirements of ASC paragraphs 205-20-45-1 through ASC 205-20-45-5 with respect to reporting results of operations as discontinued operations did not apply until the Distribution Date. Based on our application of this guidance to the spin-offs, we classified the assets and liabilities of the components as held and used and did not separately classify results of operations of the components as discontinued operations as of and for the year ended December 31, 2016.

The Company will report the assets and liabilities of Park and HGV as assets and liabilities from discontinued operations and their results of operations as discontinued operations for all historical periods presented beginning in the quarterly period ending March 31, 2017 and all periods required thereafter.

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