Analysis of Property, Plant and Equipment
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Hilton Worldwide Holdings Inc. pages available for free this week:
- Income Statement
- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Reportable Segments
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2013
- Operating Profit Margin since 2013
- Price to Book Value (P/BV) since 2013
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Property, Plant and Equipment Disclosure
Hilton Worldwide Holdings Inc., balance sheet: property, plant and equipment
US$ in millions
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).
- Land
- The land value remained stable at 11 million USD for 2019 and 2020, followed by a gradual decline to 8 million USD by 2023. This suggests a modest decrease in land holdings or revaluation over the period.
- Buildings and leasehold improvements
- The value decreased from 382 million USD in 2019 to 355 million USD in 2022, representing a consistent downward trend. Slight recovery occurred in 2023, reaching 364 million USD, but the level remained below the 2019 figure. This indicates potential disposals or amortization reducing the net asset base, with some reinvestment or capital improvements in the final year.
- Furniture and equipment
- The value showed a declining trend from 356 million USD in 2019 to 299 million USD in 2022, followed by a significant increase to 407 million USD in 2023. This sharp rise in 2023 may indicate notable acquisitions or replacements of furniture and equipment assets after several years of contraction.
- Construction-in-progress
- This category experienced fluctuations, starting at 20 million USD in 2019, dipping to 7 million USD in 2020, then progressively increasing each year to reach 37 million USD in 2023. The upward trend in recent years may signal heightened investment activity in ongoing projects, suggesting future asset growth.
- Finance lease right-of-use (ROU) assets
- Finance lease ROU assets decreased from 120 million USD in 2019 to 82 million USD in 2022, with a slight increase to 86 million USD in 2023. The overall decline indicates a reduction in leased asset usage or lease term expirations, partially offset by new leases or remeasurements in the latest period.
- Property and equipment, gross
- The gross property and equipment value declined steadily from 889 million USD in 2019 to 769 million USD in 2022 but rebounded sharply to 902 million USD in 2023, surpassing the initial figure. This pattern reflects a period of asset reduction followed by significant asset additions or revaluations in the most recent year.
- Accumulated depreciation and amortization
- Accumulated depreciation fluctuated between -509 million USD and -520 million USD, with a decrease to -486 million USD in 2020 and increases thereafter. The relatively stable range suggests consistent depreciation policies, while the slight increase in 2023 aligns with higher asset values and new acquisitions.
- Property and equipment, net
- The net property and equipment value steadily declined from 380 million USD in 2019 to a low of 280 million USD in 2022, followed by a pronounced increase to 382 million USD in 2023. This trend mirrors the gross asset movements and indicates a recovery in net asset value driven by recent capital expenditures or asset additions.
Asset Age Ratios (Summary)
Hilton Worldwide Holdings Inc., asset age ratios
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).
- Average Age Ratio
- The average age ratio shows an overall increasing trend from 57.97% in 2019 to a peak of 64.34% in 2022, followed by a decline to 58.17% in 2023. This suggests that the proportion of the asset life consumed generally increased until 2022, indicating aging assets, but there was a notable reversal in 2023, implying either asset renewal or adjustments in asset valuation.
- Estimated Total Useful Life
- The estimated total useful life fluctuated between 14 and 21 years over the five-year period. Initially decreasing slightly from 15 years in 2019 to 14 years in 2020, it then increased to 15 years in 2021, further extending to 17 years in 2022, and reaching 21 years in 2023. This steady increase in estimated useful life may reflect re-evaluations of asset longevity, potentially due to improvements in maintenance, technological upgrades, or changes in asset management policies.
- Estimated Age, Time Elapsed Since Purchase
- The estimated age consistently rose by one year annually, from 8 years in 2019 to 12 years in 2023. This aligns with the passage of time and indicates no significant write-offs or disposals that would materially affect the average age of property, plant, and equipment.
- Estimated Remaining Life
- The estimated remaining life remained steady at 6 years from 2019 through 2022, before increasing to 9 years in 2023. This rise corresponds with the increase in the estimated total useful life in the same year, suggesting that assets are expected to function effectively for a longer remaining period than previously projected.
Average Age
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 Average age = 100 × Accumulated depreciation and amortization ÷ (Property and equipment, gross – Land)
= 100 × ÷ ( – ) =
- Property and equipment, gross
- The gross value of property and equipment exhibited a decreasing trend from 2019 through 2022, declining from 889 million US dollars at the end of 2019 to 769 million US dollars by the end of 2022. However, this trend reversed in 2023, with a significant increase to 902 million US dollars, indicating expansion or reinvestment in property and equipment assets in that year.
- Accumulated depreciation and amortization
- Accumulated depreciation and amortization showed minor fluctuations over the five-year period. Starting at 509 million US dollars in 2019, it decreased to 486 million in 2020, then slightly increased to 505 million in 2021 and declined again to 489 million in 2022. In 2023, it rose to 520 million US dollars, reaching the highest level in the observed period. This pattern reflects ongoing asset depreciation consistent with the underlying asset base and possibly influenced by asset disposals or impairments.
- Land
- The recorded value of land remained relatively stable with a gradual downward movement over the period. It started at 11 million US dollars in 2019 and 2020, fell slightly to 9 million in 2021 and 2022, and further decreased to 8 million US dollars in 2023. This decrease may reflect disposals, revaluation, or changes in land holdings.
- Average age ratio
- The average age ratio, a measure indicating the relative age of the property and equipment assets, increased steadily from 57.97% in 2019 to a peak of 64.34% in 2022. This indicates that, on average, the assets were aging through this period. However, in 2023, the average age ratio fell markedly to 58.17%, suggesting the introduction of newer assets or significant asset renewals that lowered the overall age of the property and equipment portfolio.
Estimated Total Useful Life
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 Estimated total useful life = (Property and equipment, gross – Land) ÷ Depreciation and amortization expenses on property and equipment
= ( – ) ÷ =
- Property and Equipment, Gross
- The gross value of property and equipment exhibited a general decline from 2019 through 2022. Starting at 889 million USD in 2019, it decreased steadily to 769 million USD by the end of 2022. However, in 2023, there was a notable increase to 902 million USD, surpassing the initial value recorded in 2019. This suggests a recent reinvestment or acquisition in property and equipment assets after a period of reduction.
- Land
- The value attributed to land showed a slight downward trend over the period. From 11 million USD in 2019 and 2020, it declined gradually to 8 million USD by 2023. This decrease may indicate either disposals, revaluation, or underinvestment in land assets during the years observed.
- Depreciation and Amortization Expenses on Property and Equipment
- Depreciation and amortization expenses consistently decreased year-over-year, moving from 60 million USD in 2019 down to 43 million USD in 2023. This reduction in expenses could reflect a lowering base of depreciable assets or adjustments in depreciation policies or rates.
- Estimated Total Useful Life
- The estimated total useful life of property and equipment increased across the reporting periods, starting at 15 years in 2019, slightly fluctuating in the middle years, and reaching 21 years by 2023. This upward trend may indicate revisions in asset lifespan assumptions, potentially reducing annual depreciation charges and reflecting improved asset durability or changes in maintenance strategies.
Estimated Age, Time Elapsed since Purchase
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 Time elapsed since purchase = Accumulated depreciation and amortization ÷ Depreciation and amortization expenses on property and equipment
= ÷ =
- Accumulated Depreciation and Amortization
- The accumulated depreciation and amortization values exhibit minor fluctuations over the five-year period under review. From 2019 to 2020, there is a slight decrease from 509 million to 486 million US dollars, followed by a modest increase to 505 million in 2021. Subsequently, this figure decreases again to 489 million in 2022 before rising to 520 million in 2023. This pattern suggests variability in asset depreciation, possibly influenced by changes in asset base or depreciation policies.
- Depreciation and Amortization Expenses on Property and Equipment
- The annual depreciation and amortization expenses demonstrate a consistent downward trend throughout the period. Starting at 60 million US dollars in 2019, the expenses decline steadily each year, reaching 43 million US dollars by the end of 2023. This steady decrease may indicate the aging of the asset portfolio, leading to reduced depreciation charges, or adjustments in the amortization schedule.
- Time Elapsed Since Purchase
- The time elapsed since purchase increases uniformly by one year annually, from 8 years in 2019 to 12 years in 2023. This progression reflects the aging of the property, plant, and equipment assets without indication of significant acquisitions or disposals that would alter this average age.
- Overall Observations
- The data suggests an aging asset base with declining annual depreciation expenses, while the accumulated depreciation shows variability rather than a consistent increase. The steady rise in the average asset age supports this observation. The fluctuations in accumulated depreciation might result from asset disposals, impairments, or revaluations not detailed in the numbers. The overall pattern points to a mature asset portfolio with potentially fewer new investments in property and equipment during the period examined.
Estimated Remaining Life
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 Estimated remaining life = (Property and equipment, net – Land) ÷ Depreciation and amortization expenses on property and equipment
= ( – ) ÷ =
- Property and Equipment, Net
- The net value of property and equipment exhibited a decline from 2019 through 2022, decreasing from 380 million US dollars in 2019 to 280 million US dollars in 2022. However, a notable recovery is observed in 2023, with the net value rebounding to 382 million US dollars, slightly exceeding the 2019 level.
- Land
- The value attributed to land assets showed a gradual decrease over the five-year period, starting at 11 million US dollars in 2019 and declining to 8 million US dollars by 2023. This represents a reduction of approximately 27%, indicating possible disposals or revaluations.
- Depreciation and Amortization Expenses on Property and Equipment
- Depreciation and amortization expenses consistently decreased each year, falling from 60 million US dollars in 2019 to 43 million US dollars in 2023. This steady reduction may reflect changes in asset composition, depreciation policies, or the aging of property and equipment.
- Estimated Remaining Life
- The estimated remaining life of the property and equipment remained stable at 6 years from 2019 through 2022. A significant increase was registered in 2023, with the estimated remaining life rising to 9 years, suggesting recent asset additions with longer useful lives or revisions in asset life estimations.
- Overall Insights
- The data presents a general trend of declining net property and equipment values and depreciation expenses from 2019 to 2022, followed by a rebound and extension in asset life expectancy in 2023. Concurrently, the consistent decline in land values could indicate strategic asset management actions. The increase in estimated remaining life in 2023 coupled with the net asset increase implies investments or revaluations of longer-lived assets during that year.