v3.25.4
Employee Benefit Plans
 12 Months Ended
Dec. 31, 2025
Retirement Benefits [Abstract]  
Employee Benefit Plans Employee Benefit Plans
We sponsor multiple domestic and international employee benefit plans (the "pension plans"), and the benefits are based upon years of service and compensation.

The employee benefit plan in the U.S. (the "Domestic Plan") covers certain employees not earning union benefits. This plan was frozen for participant benefit accruals in 1996; therefore, the projected benefit obligation is equal to the accumulated benefit obligation. The plan assets will be used to pay benefits due to employees for service through December 31, 1996. Since employees have not accrued additional benefits from that time, we do not utilize salary or pension inflation assumptions in calculating our benefit obligation for the Domestic Plan.

The employee benefit plans covering certain of our international employees include: (i) a plan that covers employees in the U.K. (the "U.K. Plan"), which was frozen to further service accruals in 2013 and (ii) a number of smaller plans that cover employees in various countries around the world (the "International Plans"). We do not consider the International Plans to be material to our consolidated financial statements.

The annual measurement date for all of our plans is December 31. We are required to recognize the funded status of our pension plans, which is the difference between the fair value of plan assets and the projected benefit obligations, in our consolidated balance sheet and make corresponding adjustments for changes in the difference between the fair value of plan assets and the projected benefit obligations through accumulated other comprehensive income (loss), net of taxes.
The following table presents the projected benefit obligation, fair value of plan assets, funded status and accumulated benefit obligation for the Domestic Plan and the U.K. Plan:

Domestic PlanU.K. Plan
2025202420252024
(in millions)
Change in projected benefit obligation
Benefit obligation at beginning of year$223 $281 $275 $309 
Service cost— — 2 2 
Interest cost11 14 15 14 
Actuarial loss (gain), net of expenses
14 (8)(6)(32)
Settlements(1)
(68)(41)— — 
Effect of foreign currency exchange rates— — 20 (2)
Benefits paid(18)(23)(15)(16)
Benefit obligation at end of year$162 $223 $291 $275 
Change in plan assets
Fair value of plan assets at beginning of year$231 $278 $275 $298 
Actual return on plan assets, net of expenses28 13 12 (14)
Employer contributions11 4 10 9 
Settlements(1)
(68)(41)— — 
Effect of foreign currency exchange rates— — 20 (2)
Benefits paid(18)(23)(15)(16)
Fair value of plan assets at end of year184 231 302 275 
Funded status at end of year(2)
22 8 11 — 
Accumulated benefit obligation$162 $223 $291 $275 
____________
(1)During the years ended December 31, 2025 and 2024, the Company purchased group annuity contracts (the "annuity purchases") and transferred $68 million and $41 million, respectively, of its pension plan assets and related benefit obligations related to its Domestic Plan to a third-party insurer.
(2)Funded amounts are recognized in other long-term assets in our consolidated balance sheets.

Changes in amounts recorded in accumulated other comprehensive loss consisted of the following:

Domestic PlanU.K. Plan
202520242023202520242023
(in millions)
Net actuarial loss (gain)(1)
$— $(3)$(3)$20 $3 $27 
Amortization of prior service cost(4)(4)(4)— — — 
Amortization of net loss(1)(1)— (7)(8)(6)
Settlement losses(2)
(19)(10)— — — — 
Net amount recognized$(24)$(18)$(7)$13 $(5)$21 
____________
(1)Amounts for the U.K. Plan include the impact of foreign currency exchange.
(2)Amounts for the years ended December 31, 2025 and 2024 include losses for settlements related to the Company's Domestic Plan as a result of the annuity purchases, which were recognized in other non-operating income (loss), net in our consolidated statements of operations.
The net periodic pension cost (credit) was as follows:

Domestic PlanU.K. Plan
202520242023202520242023
(in millions)
Service cost(1)
$— $— $3 $2 $2 $2 
Interest cost(2)
11 14 15 15 14 14 
Expected return on plan assets(2)
(16)(18)(20)(23)(23)(22)
Amortization of prior service cost(2)
4 4 4 — — — 
Amortization of net loss(2)
1 1 — 7 8 6 
Settlement losses(3)
19 10 — — — — 
Net periodic pension cost
$19 $11 $2 $1 $1 $— 
____________
(1)Recognized in ownership expenses and general and administrative expenses, as applicable, in our consolidated statements of operations.
(2)Recognized in other non-operating income (loss), net in our consolidated statements of operations.
(3)During the years ended December 31, 2025 and 2024, as a result of the annuity purchases, we recognized non-cash pension settlement losses in other non-operating income (loss), net in our consolidated statements of operations.

The weighted average assumptions used to determine benefit obligations were as follows:

Domestic PlanU.K. Plan
2025202420252024
Discount rate5.3 %5.6 %5.5 %5.5 %
Salary inflationN/AN/A2.2 2.5 
Pension inflationN/AN/A2.6 2.9 

The weighted average assumptions used to determine net periodic pension cost (credit) were as follows:

Domestic PlanU.K. Plan
202520242023202520242023
Discount rate5.6 %5.2 %5.6 %5.5 %4.5 %4.8 %
Expected return on plan assets7.5 7.0 6.8 8.3 7.5 7.3 
Salary inflationN/AN/AN/A2.5 2.4 2.6 
Pension inflationN/AN/AN/A2.9 2.8 3.1 

The investment objectives for the various plans are preservation of capital, current income and long-term growth of capital. All plan assets are managed by third-party investment managers and do not include investments in Hilton stock. Asset allocations are reviewed periodically by the investment managers.

Expected long-term returns on plan assets are determined using historical performance for return-seeking assets and liability-driven investments held by our plans, actual performance of plan assets and current and expected market conditions. Expected returns are formulated based on the target asset allocation. As of December 31, 2025, the target asset allocations for the Domestic Plan and U.K. Plan were 30 percent and 65 percent, respectively, in return-seeking assets, and 70 percent and 35 percent, respectively, in liability-driven investments and cash.
The following tables present the fair value hierarchy of total plan assets measured at fair value by asset category:

Domestic Plan
U.K. Plan
December 31,
December 31,
2025202420252024
(in millions)
Level 1
Cash
$— $— $11 $2 
Bond funds
4 7 — — 
Level 2
Bond funds
— — 28 36 
Net asset value(1)
Cash equivalents
— — 9 6 
Bond funds
— — 80 72 
Common collective trusts
180 224 — — 
Alternative investments
— — 130 110 
Other
— — 44 49 
$184 $231 $302 $275 
____________
(1)Certain investments are measured at net asset value per share as a practical expedient and, therefore, have not been classified in the fair value hierarchy.

As of December 31, 2025, the benefits expected to be paid in the next five years and in the aggregate for the five years thereafter were as follows:

Domestic PlanU.K. Plan
Year(in millions)
2026$21 $16 
202714 16 
202814 16 
202914 17 
203014 17 
2031-203560 92 
$137 $174 

In 2007, the Domestic Plan and plans maintained for certain domestic hotels currently or formerly managed by us were merged into a multiple employer plan, which, as of December 31, 2024 had combined plan assets of $240 million and a projected benefit obligation of $230 million. During the year ended December 31, 2025, the multiple employer plan was merged into the Domestic Plan, resulting in a single employer plan.