Revenues from Contracts with Customers

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenues from Contracts with Customers

Contract Liabilities

The following table summarizes the activity of our contract liabilities, which are classified as components of current and long-term deferred revenues, during the six months ended June 30, 2022:

	(in millions)
Balance as of December 31, 2021	$	1,166
Cash received in advance and not recognized as revenue	212
Revenue recognized(1)(2)	(241)
Other(3)	(85)
Balance as of June 30, 2022	$	1,052

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(1)Primarily related to Hilton Honors, our guest loyalty program, including co-branded credit card arrangements.

(2)Revenue recognized during the three months ended June 30, 2022 was $113 million. Revenue recognized during the three and six months ended June 30, 2022 included a net reduction in revenue of $13 million and $3 million, respectively, as a result of a change to the estimated breakage of Hilton Honors points for which point expirations have been temporarily suspended.

(3)Primarily represents changes in estimated transaction prices for our performance obligations related to points issued under Hilton Honors, which had no effect on revenues.

Hilton Honors Points Pre-Sale

In April 2020, we pre-sold Hilton Honors points to American Express for $1.0 billion in cash (the "Honors Points Pre-Sale") for their use of points in connection with Hilton Honors co-branded credit cards for promotions, rewards and other such incentive programs. Upon receipt of the cash in 2020, we recognized $636 million in deferred revenues and the remainder in liability for guest loyalty program. During the six months ended June 30, 2022, the remaining points sold in the Honors Points Pre-Sale were used by American Express. All deferred revenues related to points that were outstanding as of June 30, 2022 are included in our Hilton Honors unsatisfied performance obligation described below.

Performance Obligations

As of June 30, 2022, we had deferred revenues for unsatisfied performance obligations consisting of: (i) $363 million related to Hilton Honors that will be recognized as revenue over approximately the next two years; (ii) $33 million related to co-branded credit card arrangements; and (iii) $656 million related to application, initiation and other fees. These performance obligations are recognized as revenue as discussed in Note 2: "Basis of Presentation and Summary of Significant Accounting Policies" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.