<PAGE>
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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                            ------------------------
 
                                   FORM 10-K
 
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934
 
For the fiscal year ended December 31, 1995
 
                                       OR
 
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934
 
For the transition period from . . . . . . . . . . . . . . . to . . . . . . . .
 . . . . . . .
 
Commission File Number 1-3427
 
                           HILTON HOTELS CORPORATION
 
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                               <C>
            DELAWARE                         36-2058176
  (STATE OR OTHER JURISDICTION            (I.R.S. EMPLOYER
      OF INCORPORATION OR              IDENTIFICATION NUMBER)
         ORGANIZATION)
 
    9336 CIVIC CENTER DRIVE                    90210
   BEVERLY HILLS, CALIFORNIA                 (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
            OFFICES)
</TABLE>
 
      Registrant's telephone number, including area code:  (310) 278-4321
 
          Securities registered pursuant to Section 12(b) of the Act:
 
<TABLE>
<CAPTION>
                                                  Name of each exchange
          Title of each class                      on which registered
----------------------------------------  --------------------------------------
<S>                                       <C>
Common Stock, par value $2.50 per share             New York, Pacific
</TABLE>
 
          Securities registered pursuant to Section 12(g) of the Act:
 
                                      None
 
    Indicate  by check  mark whether  the Registrant  (1) has  filed all reports
required to be filed by  Section 13 or 15(d) of  the Securities Exchange Act  of
1934  during  the preceding  12  months (or  for  such shorter  period  that the
Registrant was required to file such reports), and (2) has been subject to  such
filing requirements for the past 90 days: Yes /X/    No / /
 
    Indicate  by check mark if disclosure  of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's  knowledge, in definitive  proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
 
    Based  upon the February 29,  1996 New York Stock  Exchange closing price of
$93.75 per share, the aggregate market value of Registrant's outstanding  Common
Stock  held by non-affiliates of the  Registrant was approximately $3.1 billion.
On that date, there were 48,720,634 shares of Common Stock outstanding.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
    Certain portions  of  Registrant's annual  report  to stockholders  for  the
fiscal  year ended December 31, 1995 are incorporated by reference under Parts I
and II. Certain portions of Registrant's definitive proxy statement, to be filed
with the Securities and Exchange Commission pursuant to Regulation 14A not later
than 120 days after the close of the Registrant's fiscal year, are  incorporated
by reference under Part III.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                                     PART I
 
ITEM 1.  BUSINESS
 
                              GENERAL INFORMATION
 
CURRENT OPERATIONS
 
    Hilton Hotels Corporation and its majority and wholly-owned subsidiaries are
collectively  referred  to  as "Hilton"  or  the "Company,"  unless  the context
indicates otherwise.  The Company  is  primarily engaged  in the  ownership  and
management  of hotels and hotel-casinos. All  of these properties are located in
the United States,  with the  exception of  six hotels  and three  hotel-casinos
operated  by the Company's wholly-owned  subsidiary, Conrad International Hotels
Corporation and its subsidiaries ("Conrad International").
 
    On February  1, 1996,  Hilton owned  or leased  and operated  23 hotels  and
managed  44 hotels partially or wholly-owned  by others. In addition, 164 hotels
were operated under the "Hilton," "Hilton Garden Inn" and "Hilton Suites"  names
by others pursuant to franchises granted by a subsidiary of Hilton.
 
    Eight  of the hotels  have substantial gaming operations,  five of which are
wholly-owned by the Company and are located in Nevada and the other three hotels
are partially owned by the Company and are located in Australia and Turkey.  The
Company  also partially owns and  manages one river casino  in the United States
and owns a minority interest in a  company which operates one casino in  Canada.
The  Company's gaming operations accounted for approximately 71%, 58% and 50% of
its total operating income in 1993, 1994 and 1995, respectively. For  additional
information, see the Ten Year Summary on pages 58 and 59 in the Company's Annual
Report  to  Stockholders  for  the  fiscal year  ended  December  31,  1995 (the
"Stockholders Report"), which report  is included as Exhibit  13 hereto and,  to
the  extent specific  references are made  thereto, incorporated  herein by such
references.
 
    The Company,  along  with  other  entities  in  which  the  Company  has  an
investment, is also engaged in various other activities incidental or related to
the operation of hotels and hotel-casinos. See "Additional Information."
 
    Hilton was organized in the State of Delaware on May 29, 1946. Its principal
executive  offices  are  located  at 9336  Civic  Center  Drive,  Beverly Hills,
California 90210, and its telephone number is (310) 278-4321.
 
RECENT DEVELOPMENTS
 
    Since January 1, 1995, the  Company took advantage of various  opportunities
to  expand its business, the  most significant of which  included the opening of
new vacation ownership resorts  in Las Vegas, Nevada  and Orlando, Florida;  the
completion  of the third of  three new 12,600 to  15,400 square foot "Sky Villa"
luxury suites  at the  Las Vegas  Hilton;  the opening  of the  136-room  Conrad
International  Treasury hotel-casino in Brisbane,  Australia; chartering a river
casino to  serve as  a complementary  facility for  Casino Windsor  in  Windsor,
Ontario,  Canada; the  management of  a 294-room  hotel in  Durango, Colorado, a
260-room hotel in Hurghada, Egypt and a 412-room hotel in Barcelona, Spain;  and
the  announcement  of a  major expansion  of Hilton  Garden Inn  properties. The
Company also  announced in  January 1996  that  it would  not proceed  with  the
proposed spin-off of its gaming operations.
 
    For  a more detailed  description of the  Company's recent developments, see
"Hotel Operations," "Gaming Operations" and "Additional Information --  Vacation
Ownership"   below.  For  a  description  of  the  Company's  planned  expansion
activities, see "Hotel Operations --  Expansion Program" and "Gaming  Operations
-- Expansion Program" below.
 
INDUSTRY SEGMENTS
 
    Hilton's  revenues and  income are derived  primarily from  two sources: (i)
hotel operations,  which  include the  operation  of Hilton's  owned  or  leased
hotels,  management and franchise fees  and operating income from unconsolidated
affiliates and (ii) gaming operations,  which include the operation of  Hilton's
owned  hotel-casinos  and management  fees and  operating income  from partially
owned hotel-casinos  and  river casinos.  For  financial data  relating  to  the
Company's  hotel and  gaming operations for  the three years  ended December 31,
1995, see "Segments  of Business"  in the  Notes to  the Company's  Consolidated
Financial Statements on pages 55 and 56 in the Stockholders Report.
<PAGE>
    The  Company re-entered the  international arena in  November 1985, with the
opening of a hotel-casino in Queensland, Australia and, thereafter, the  opening
of  additional managed (and in some  cases, partially owned) hotel properties in
Ireland, England, Hong  Kong, Turkey,  Belgium, Australia, Spain  and Egypt.  To
date,  the  amounts  of  revenues,  operating  profits  and  identifiable assets
attributable to geographic areas,  other than the United  States, have not  been
material.
 
                                HOTEL OPERATIONS
 
OWNED HOTELS
 
    On  February 1, 1996, the following hotels were owned in fee and operated by
Hilton:
 
<TABLE>
<CAPTION>
                                                      NUMBER OF                    MORTGAGE
                                                    ROOMS/SUITES     YEAR        INDEBTEDNESS
                                                      (YEAR OF     ACQUIRED    AS OF FEBRUARY 1,
NAME AND LOCATION                                    COMPLETION)   BY HILTON         1996
--------------------------------------------------  -------------  ---------   -----------------
<S>                                                 <C>            <C>         <C>
Atlanta Airport Hilton & Towers                          503         1960         $50,000,000
  Atlanta, Georgia(1)                                  (1989)
Palmer House Hilton                                     1,639        1988            --
  Chicago, Illinois(2)                              (1925; 1945)
Flamingo Hilton-Las Vegas                               3,642
  Las Vegas, Nevada                                   (various       1971            --
                                                        dates
                                                    through 1995)
Las Vegas Hilton                                        3,174
  Las Vegas, Nevada                                   (various       1971            --
                                                        dates
                                                    through 1995)
Flamingo Hilton-Laughlin                                2,000        1990            --
  Laughlin, Nevada                                     (1990)
New Orleans Airport Hilton                               317         1959         $32,000,000
  New Orleans, Louisiana(1)                            (1989)
Waldorf=Astoria                                         1,380        1977            --
  New York, New York(3)                                (1931)
Portland Hilton                                          455         1963            --
  Portland, Oregon                                     (1963)
Flamingo Hilton-Reno                                     604         1981            --
  Reno, Nevada(4)                                      (1978)
Reno Hilton                                             2,001        1992            --
  Reno, Nevada                                         (1978)
Hilton Garden Inn                                        195         1993            --
  Southfield, Michigan(5)                              (1988)
Hilton Suites                                            224         1991            --
  Auburn Hills, Michigan                               (1991)
Hilton Suites                                            203         1989            --
  Brentwood, Tennessee                                 (1989)
Hilton Suites                                            230         1989            --
  Orange, California                                   (1989)
Hilton Suites                                            226         1990            --
  Phoenix, Arizona                                     (1990)
</TABLE>
 
---------
 
(1) The Atlanta Airport Hilton & Towers and the New Orleans Airport Hilton  were
    closed and demolished in 1986 and, thereafter, rebuilt and reopened in 1989.
 
                                       2
<PAGE>
(2)  The Company owned  the Palmer House  Hilton from May  1946 to December 1962
    and, thereafter,  operated  the Palmer  House  Hilton under  a  lease  until
    acquiring the property in February 1988.
 
(3)  The Company operated  the Waldorf=Astoria under a  lease from February 1950
    until acquiring the property in April 1977.
 
(4) An extension of the casino operation is contained in a structure located  on
    an  adjacent block with a  skywalk connecting it to  the main building. This
    structure is  held under  four long-term  leases or  subleases, expiring  on
    various  dates from  January 1, 2001  to August 31,  2034, including renewal
    options, all of which may not necessarily be exercised.
 
(5) The Company managed the Hilton Garden Inn from July 1991 until acquiring the
    property in July 1993.
 
LEASED HOTELS
 
    Hilton leases the  land upon which  eight hotels have  been built. Upon  the
expiration  of  such  leases,  the buildings  and  other  leasehold improvements
presently owned by Hilton revert to the landlords. See "Leases" in the Notes  to
the  Company's Consolidated Financial Statements on  page 56 in the Stockholders
Report. Hilton, in all cases, owns  all furniture and equipment, is  responsible
for  repairs,  maintenance, operating  expenses and  lease rentals,  and retains
complete  managerial  discretion  over  operations.  Generally,  Hilton  pays  a
percentage  rental based  on the  gross revenues  of the  facility, but  in some
instances the rental is a fixed amount.
 
    On February  1, 1996,  the  following hotels  were  leased and  operated  by
Hilton:
 
<TABLE>
<CAPTION>
                                             NUMBER OF
                                           ROOMS (YEAR OF
                                        INITIAL COMPLETION;
                                           YEAR ACQUIRED
          NAME AND LOCATION                  BY HILTON)                       EXPIRATION DATE
-------------------------------------  ------------------------------------------------------------------------
<S>                                    <C>                   <C>
Logan Airport Hilton                            516          2014, with renewal options aggregating 25 years
  Boston, Massachusetts(1)                  (1959; 1988)      under specified circumstances
O'Hare Hilton                                   858          2018
  Chicago, Illinois(2)                      (1973; 1991)
Oakland Airport Hilton                          363          2033
  Oakland, California                       (1970; 1970)
Pittsburgh Hilton & Towers                      712          2004, with renewal options aggregating 30 years
  Pittsburgh, Pennsylvania                  (1959; 1959)
San Diego Hilton Beach & Tennis                 357          2019
  Resort                                    (1962; 1965)
  San Diego, California
San Francisco Airport Hilton                    527          1998
  San Francisco, California                 (1959; 1959)
Seattle Airport Hilton                          173          2004, with renewal options aggregating 30 years
  Seattle, Washington                       (1961; 1961)
Tarrytown Hilton                                236          2003, with renewal options aggregating 40 years
  Tarrytown, New York(3)                    (1961; 1993)
</TABLE>
 
---------
 
(1)  The Company  managed and was  a joint  venture partner with  respect to the
    Logan Airport  Hilton  from 1975  until  July  1988, when  it  acquired  the
    remaining  equity interest in the joint  venture leasing the land underlying
    the hotel.
 
(2) The Company managed the O'Hare Hilton from 1974 until October 1991, when the
    Company purchased  the then  remaining leasehold  of the  hotel. The  O'Hare
    Hilton was closed for renovation in October 1991 and reopened in July 1992.
 
                                       3
<PAGE>
(3)  The Company  managed and was  a joint  venture partner with  respect to the
    Tarrytown Hilton from 1975 until August 1993, when it acquired the remaining
    equity interest in the joint venture leasing the land underlying the hotel.
 
    During the  three  years ended  December  31, 1995,  Hilton  paid  aggregate
rentals,  including rentals attributable  to the properties  listed in the above
table,  of   $11,300,000,  $13,300,000   and  $15,300,000,   respectively.   For
information  relating to minimum rental commitments  in the future, see "Leases"
in the Notes to  the Company's Consolidated Financial  Statements on page 56  in
the Stockholders Report.
 
MANAGED HOTELS
 
    On   February  1,  1996,  Hilton  operated   35  domestic  hotels  and  nine
international hotels under management agreements. Under its standard  management
arrangement,  Hilton operates a hotel for the benefit of its owner, which either
owns or  leases  the  hotel  and  the  associated  personal  property.  Hilton's
management fee is generally based on a percentage of each hotel's gross revenues
plus,  in  the  majority of  properties,  an  incentive fee  based  on operating
performance.
 
    Under the management agreements, all  operating and other expenses are  paid
by the owner, and Hilton is generally reimbursed for its out-of-pocket expenses.
In  turn, Hilton's managerial discretion is subject  to approval by the owner in
certain major areas, including adoption of  capital budgets. In some cases,  the
owner  of a  managed hotel  is a  joint venture  in which  Hilton has  an equity
interest. In addition, the Company has a  right of first refusal to purchase  an
interest  in  certain  managed  hotels.  For  information  relating  to Hilton's
investment in entities  that own  managed properties, see  "Investments" in  the
Notes  to the Company's Consolidated Financial Statements  on pages 48 and 49 in
the Stockholders Report.
 
    The Company has also  agreed to provide loans  or additional investments  to
the  owners  of  certain  managed  hotels  under  specified  circumstances.  See
"Commitments  and  Contingent  Liabilities"  in  the  Notes  to  the   Company's
Consolidated Financial Statements on page 57 in the Stockholders Report.
 
    On  February 1,  1996, the  following hotels  were operated  by Hilton under
management agreements:
 
<TABLE>
<CAPTION>
                                       NUMBER OF ROOMS/SUITES
          NAME AND LOCATION             (YEAR OF COMPLETION)                  EXPIRATION DATE
-------------------------------------  ------------------------------------------------------------------------
<S>                                    <C>                   <C>
DOMESTIC
Anaheim Hilton & Towers                        1,576         2014, with renewal options aggregating 30 years,
  Anaheim, California(1)                       (1984)         subject to certain termination rights
Anchorage Hilton                                591          2006, with renewal options aggregating 20 years
  Anchorage, Alaska                        (various dates
                                           through 1986)
Atlanta Hilton & Towers                        1,224         2006, with a renewal option for 10 years
  Atlanta, Georgia                             (1976)
Beverly Hilton                                  581          2007, with renewal options aggregating 20 years,
  Beverly Hills, California                 (1955; 1967)      subject to certain termination rights
Chicago Hilton & Towers                        1,543         2005, with renewal options aggregating 20 years
  Chicago, Illinois(2)                     (various dates
                                           through 1986)
Tamarron Hilton Resort                          294          2015, subject to certain termination rights
  Durango, Colorado                            (1975)
Brunswick Hilton & Towers                       405          2013, subject to certain termination rights
  East Brunswick, New Jersey(1)                (1989)
Hilton Hawaiian Village                        2,542         1997, with renewal options aggregating 20 years
  Honolulu, Hawaii(3)                      (various dates
                                           through 1988)
</TABLE>
 
                                       4
<PAGE>
<TABLE>
<CAPTION>
                                       NUMBER OF ROOMS/SUITES
          NAME AND LOCATION             (YEAR OF COMPLETION)                  EXPIRATION DATE
-------------------------------------  ------------------------------------------------------------------------
<S>                                    <C>                   <C>
Long Beach Hilton                               393          2012, with renewal options aggregating 20 years,
  Long Beach, California                       (1992)         subject to certain termination rights
Los Angeles Airport Hilton & Towers            1,234         1999, with renewal options aggregating 10 years,
  Los Angeles, California                      (1983)         subject to certain termination rights
McLean Hilton                                   458          2007, with renewal options aggregating 20 years
  McLean, Virginia(2)                          (1987)
Fontainebleau Hilton Resort & Towers           1,206         1998, with a renewal option for 10 years, subject
  Miami, Florida                               (1954)         to certain termination rights
Miami Airport Hilton & Towers                   500          2004, with renewal options aggregating 20 years
  Miami, Florida(2)                            (1983)
Minneapolis Hilton & Towers                     814          2012, with renewal options aggregating 20 years,
  Minneapolis, Minnesota                       (1992)         subject to certain termination rights
Newark Airport Hilton                           374          2003
  Newark, New Jersey                           (1988)
New Orleans Hilton Riverside & Towers          1,600         2007, with a renewal option for 10 years
  New Orleans, Louisiana(4)                 (1977; 1983)
Millenium Hilton                                561          2004, with a renewal option for 10 years, subject
  New York, New York                           (1992)         to certain termination rights
New York Hilton & Towers                       2,041         (5)
  New York, New York(3)                        (1963)
Turtle Bay Hilton Golf & Tennis                 485          2004, with a renewal option for 10 years
  Resort                                       (1972)
  Oahu, Hawaii
Hilton at Walt Disney World                     814          2003, with renewal options aggregating 20 years,
  Orlando, Florida(1)                          (1983)         subject to certain termination rights
Pasadena Hilton                                 291          2004, with a renewal option for 10 years, subject
  Pasadena, California                         (1970)         to certain termination rights
The Pointe Hilton Resort on                     636          2012, with renewal options aggregating 20 years,
  South Mountain                               (1986)         subject to certain termination rights
  Phoenix, Arizona
The Pointe Hilton Resort at Squaw               563          2012, with renewal options aggregating 20 years,
  Peak                                         (1977)         subject to certain termination rights
  Phoenix, Arizona
The Pointe Hilton Resort at                     585          2012, with renewal options aggregating 20 years,
  Tapatio Cliffs                               (1982)         subject to certain termination rights
  Phoenix, Arizona
Rye Town Hilton                                 438          (5)
  Rye Brook, New York(3)                    (1973; 1978)
Hilton Palacio del Rio                          481          1998, with a renewal option for 10 years
  San Antonio, Texas                           (1968)
</TABLE>
 
                                       5
<PAGE>
<TABLE>
<CAPTION>
                                       NUMBER OF ROOMS/SUITES
          NAME AND LOCATION             (YEAR OF COMPLETION)                  EXPIRATION DATE
-------------------------------------  ------------------------------------------------------------------------
<S>                                    <C>                   <C>
San Antonio Airport Hilton                      387          2001, subject to certain termination rights
  San Antonio, Texas(1)                        (1982)
San Francisco Hilton & Towers                  1,895         2005, with a renewal option for 10 years
  San Francisco, California(3)             (various dates
                                           through 1988)
Hilton at Short Hills                           300          2000, with a renewal option for 5 years, subject
  Short Hills, New Jersey                      (1988)         to certain termination rights
Innisbrook Hilton Resort                        873          2013, subject to certain termination rights
  Tarpon Springs, Florida(1)                   (1972)
Hilton Waikoloa Village                        1,238         2013, subject to certain termination rights
  Waikoloa, Hawaii(2)                          (1988)
Capital Hilton                                  543          2005, with a renewal option for 10 years
  Washington, D.C.(3)                       (1943; 1985)
Washington Hilton & Towers                     1,123         (5)
  Washington, D.C.(3)                          (1965)
Hilton Suites                                   212          2009, with renewal options aggregating 20 years
  Oakbrook Terrace, Illinois(1)(3)             (1989)
Hilton Garden Inn                               152          2012, subject to certain termination rights
  Valencia, California(2)                      (1991)
 
INTERNATIONAL
Conrad International Barcelona                  412          2007, with a renewal option for 5 years
  Barcelona, Spain(1)                          (1992)
Conrad International Treasury                   136          2010
  Brisbane, Australia(2)                       (1995)
Conrad International Brussels                   269          2013, with renewal options aggregating 20 years
  Brussels, Belgium                            (1993)
Conrad International Dublin                     191          2010, with renewal options aggregating 20 years
  Dublin, Ireland(1)(2)                        (1989)
Conrad International Hong Kong                  513          2021
  Hong Kong(2)                                 (1990)
Conrad International Hurghada                   260          2015, with renewal options aggregating 20 years,
  Hurghada, Egypt                              (1994)         subject to certain termination rights
Conrad International Istanbul                   620          2011, with a renewal option for 20 years
  Istanbul, Turkey(1)(2)                       (1992)
Conrad International London                     159          2016, with renewal options aggregating 20 years
  London, England                              (1990)
Hotel Conrad & Jupiters Casino                  605          2010
  Gold Coast,                                  (1986)
  Queensland, Australia(2)
</TABLE>
 
---------
 
(1) Hilton has made loans to the owners of each of the referenced properties.
 
(2) Hilton has equity  interests of less  than 50% in  joint ventures which  own
    each  of the  referenced properties. See  "Investments" in the  Notes to the
    Company's Consolidated  Financial  Statements on  pages  48 and  49  in  the
    Stockholders Report.
 
                                       6
<PAGE>
(3)  Hilton has equity interests of 50% in  joint ventures which own each of the
    referenced properties. See note 2 above.
 
(4) Hilton has a 67.4% equity interest  in the joint venture which owns the  New
    Orleans Hilton Riverside & Towers. See note 2 above.
 
(5)  The management agreements with respect to each of the referenced properties
    expired on December  31, 1995, but  Hilton continues to  manage each of  the
    properties for the fees specified in the expired agreements.
 
FRANCHISE HOTELS
 
    Pursuant to franchises granted by the Company, franchise hotels are operated
under  the "Hilton," "Hilton Garden Inn" or "Hilton Suites" names. The franchise
hotels operated under  the "Hilton"  name are  generally smaller  than the  full
service  hotels owned, leased or managed by Hilton and average approximately 250
rooms in  size.  Franchise hotels  bearing  the  "Hilton Garden  Inn"  name  are
approximately  90 to 250 rooms in size  and utilize a modular design constructed
around a courtyard containing  an indoor or outdoor  swimming pool. The  "Hilton
Suites"   properties  operated  pursuant  to  franchise  agreements  utilize  an
all-suites design with approximately 200 to 250 suites. In each instance, Hilton
approves the plan for and the location of franchise hotels and assists in  their
design.
 
    On  February 1, 1996, there were 164 franchise hotels operated by others, of
which 160 were operated under the  "Hilton" name, three were operated under  the
"Hilton Garden Inn" name and one was operated under the "Hilton Suites" name. In
general, each franchisee pays Hilton an initial fee based on the number of rooms
in  a  franchise  hotel  and a  continuing  fee  based on  a  percentage  of the
facility's room revenues. Although Hilton  does not directly participate in  the
management or operation of franchise hotels, it conducts periodic inspections to
ensure that Hilton's standards are maintained and renders advice with respect to
hotel operations.
 
    The  Company has continued  its ongoing program  of monitoring and improving
its franchise operations.  The Company  added six  franchises to  its system  in
1995,  while  five  franchise  arrangements  were  terminated,  several  due  to
noncompliance with the Company's standards.
 
EXPANSION PROGRAM
 
    In January 1996,  Hilton announced  plans for  a major  expansion of  Hilton
Garden Inn properties. Hilton plans to add up to 100 new Hilton Garden Inns over
the  next five years. Approximately 80% of the additional Hilton Garden Inns are
anticipated to  be  newly  constructed  facilities, with  the  remainder  to  be
conversions  of existing properties. The properties constructed during the first
phase of the Hilton Garden Inns expansion are expected to be financed by Hilton,
either solely or with local partners.
 
    Hilton also intends to expand its domestic operations through conversion  of
existing  hotels  into  management  and  franchise  properties  in strategically
significant markets and through development and management of vacation ownership
resorts. The Company will  invest in new domestic  hotel projects or  conversion
properties where the return on investment meets the Company's criteria.
 
    The  Company is  actively exploring international  hotel opportunities, with
particular emphasis  on city  center business  hotels and  resort hotels.  These
international   properties  will   generally  be   operated  under   the  Conrad
International name  pursuant  to  long-term management  agreements.  In  certain
instances,  the Company may invest in or make advances to the entity that owns a
hotel. The  Company  has  entered  into  management  contracts  to  operate  the
following  new  hotels, the  anticipated opening  dates  of which  are indicated
parenthetically: the  350-room Conrad  International Sharm  El Sheikh  in  Egypt
(fall  1996);  the  510-room  Conrad International  Singapore  (fall  1996); the
700-room Conrad International Jakarta in  Indonesia (1998); the 400-room  Conrad
International  Amman  in Jordan  (1998); and  the 400-room  Conrad International
Bangkok in Thailand (1999).
 
    Negotiations relating to the management of other international hotels are in
varying stages  and, in  certain  instances, letters  of intent  for  management
contracts  have  been  executed.  However,  no  assurances  can  be  given  that
management contracts for such other hotels  will be executed or that such  other
hotels will be constructed and, thereafter, operated by the Company.
 
                                       7
<PAGE>
    The  operation of  hotels internationally is  affected by  the political and
economic conditions of the countries and  regions in which they are located,  in
addition  to factors affecting  the hotel industry  generally. Certain countries
have also restricted, from time to time, the repatriation of funds. The  Company
considers  the  foregoing factors,  among others,  when evaluating  a management
and/or investment opportunity  abroad, but  the Company can  give no  assurances
that   changes  in  law  or  governmental   policy  will  not  adversely  affect
international operations in the future.
 
TERRITORIAL RESTRICTIONS
 
    Hilton has  entered into  various  agreements which  restrict its  right  to
operate hotels in various areas, including those hereinafter described which, in
management's  opinion, represent the most  significant restrictions to which the
Company is subject. In  addition, pursuant to an  agreement entered into at  the
time of Hilton's distribution on December 1, 1964 to its stockholders of all the
issued   and  outstanding  capital   stock  of  Hilton   International  Co.,  as
subsequently amended,  Hilton  may not  operate  facilities outside  the  United
States  identified  as  "Hilton" hotels  and  Hilton International  Co.  may not
operate facilities within the continental  United States identified as  "Hilton"
hotels.  The  Company's  international  hotel  and  hotel-casino  operations are
conducted under  the  Conrad  International name.  See  "Hotel  Operations"  and
"Gaming  Operations --  International Hotel-Casinos."  Subject to  the foregoing
restrictions as to the use of the "Hilton" name, Hilton and Hilton International
Co. can  compete  in  all, and  do  compete  in certain,  markets.  The  Compass
computerized  reservation system utilized by Hilton and Hilton International Co.
provides information as to their respective hotels, if any, in each market.  See
"Additional Information -- Computer Systems" and "Reservation System."
 
    The  Company,  under the  terms of  expired  agreements with  The Prudential
Insurance Company of America ("Prudential"), had agreed (a) that, except for the
New York Hilton &  Towers and the Waldorf=Astoria  (or the ownership,  operation
and  management of  a substitute hotel  having substantially the  same number of
rooms) and a hotel with  not more than 1,600 rooms,  the Company would not  own,
operate,  manage  or  otherwise  have  an  interest  in  any  hotel  or  similar
establishment in the Borough of Manhattan,  (b) that, except for the  Washington
Hilton  &  Towers  and  the  Capital Hilton  (or  the  ownership,  operation and
management of substitute hotels having substantially the same number of  rooms),
the  Company would not own, operate, manage or otherwise have an interest in any
other hotel or similar establishment in  the District of Columbia, and (c)  that
the  Company would not own, operate, manage or otherwise have an interest in any
additional hotels or similar establishments within  a radius of 20 miles of  the
Rye  Town Hilton, except that certain areas within said 20 mile radius have been
excluded from the territorial restriction. The Company has also entered into  an
agreement  with Prudential which provides that,  except for the Chicago Hilton &
Towers,  the  Palmer  House  Hilton,  the  O'Hare  Hilton  and  specified  other
properties,  the Company  would not manage  or operate, or  possess an ownership
interest in, or license or franchise, any hotel in Chicago, except the ownership
and/or  management  of  a  hotel  with  less  than  800  rooms  at  the   O'Hare
International  Airport and  a hotel with  not more  than 400 rooms  at any other
location in Chicago.
 
PROPERTY TRANSACTIONS
 
    In 1995,  the  Company  recorded  a $1,500,000  pretax  gain  from  property
transactions primarily as a result of the sale of land to Hilton Grand Vacations
Company  for  its vacation  ownership resort  located  adjacent to  the Flamingo
Hilton-Las  Vegas.  Gains  on  this  transaction  are  being  recognized  on  an
installment basis. See "Additional Information -- Vacation Ownership."
 
    Hilton  continuously evaluates its property portfolio and intends to dispose
of its interests in hotels or properties  that, in its opinion, no longer  yield
an  adequate return on investment or conform to Hilton's long range plans. In so
doing, the Company expects to maintain a balanced mix of sources of revenues and
a favorable return on stockholders' equity.
 
FOREIGN CURRENCY TRANSACTIONS
 
    The Company's international operations are  subject to certain economic  and
political  risks, including foreign currency  fluctuations. The Company monitors
its foreign operations and, where appropriate, adopts
 
                                       8
<PAGE>
hedging strategies to  minimize the  impact of changing  economic and  political
environments.  See  "Financial  Instruments"  in  the  Notes  to  the  Company's
Consolidated Financial Statements on pages 50 and 51 in the Stockholders Report.
 
                               GAMING OPERATIONS
 
NEVADA HOTEL-CASINOS
 
    The Company owns and operates five hotel-casinos in the State of Nevada: the
3,174-room Las  Vegas  Hilton, the  3,642-room  Flamingo Hilton-Las  Vegas,  the
2,000-room Flamingo Hilton-Laughlin, the 2,001-room Reno Hilton and the 604-room
Flamingo Hilton-Reno.
 
    The  Las Vegas Hilton is located adjacent to the Las Vegas Convention Center
and focuses on  up-scale individual  leisure guests and  convention groups.  The
Flamingo  Hilton-Las Vegas, the  Reno Hilton and  the Flamingo Hilton-Reno focus
primarily on the middle market, in particular the group tour and travel segment.
The Flamingo Hilton-Laughlin targets the budget and middle market segments. Each
of  the  Company's  hotel-casinos  has  gaming,  convention,  dining,  shopping,
entertainment  and, with the  exception of the  Flamingo Hilton-Reno, indoor and
outdoor recreational facilities. A variety of popular entertainment is  featured
in  theaters and  lounges at  each hotel. The  Company also  operates a vacation
ownership resort  adjacent to  the Flamingo  Hilton-Las Vegas.  See  "Additional
Information -- Vacation Ownership."
 
    The  Company continues to refurbish and expand existing facilities in Nevada
to maintain their presence as premier properties in the market. In 1995, the Las
Vegas Hilton completed construction of the  third of three new 12,600 to  15,400
square  foot "Sky Villa" luxury suites for premium players. The Las Vegas Hilton
also completed new VIP  baccarat facilities and opened  a new 6,800 square  foot
luxury  European  Suite. The  Flamingo Hilton-Las  Vegas completed  an extensive
expansion and  renovation project,  including  a new  600-room tower,  a  10,000
square  foot casino expansion, a new  21,000 square foot ballroom, remodeling of
the race  and sports  book,  new entertainment,  recreation, retail  and  dining
facilities,  exterior  enhancements  and guest  room  renovations.  The Flamingo
Hilton-Laughlin upgraded its guest room bathrooms and continued its slot machine
replacement program. The Reno  Hilton completed a renovation  of its casino  and
the  registration, entertainment and retail areas  of the property, and opened a
new Johnny Rockets restaurant. The Flamingo Hilton-Reno renovated its casino and
remodeled the Top of the Flamingo Hilton restaurant.
 
    The space  utilized  by  the  Company's  casinos  in  Nevada,  in  terms  of
approximate  square footage,  is as follows:  Las Vegas Hilton  -- 78,000 square
feet (inclusive of 29,000 square feet attributable to the race and sports book);
Flamingo Hilton-Las Vegas -- 74,000 square feet (inclusive of 20,000 square feet
attributable to  O'Sheas Irish  theme casino  adjacent to  the hotel);  Flamingo
Hilton-Laughlin   --  58,000  square  feet   (inclusive  of  3,000  square  feet
attributable to the race  and sports book); Reno  Hilton -- 118,000 square  feet
(inclusive  of 12,000 square feet attributable to the race and sports book); and
Flamingo Hilton-Reno  -- 46,000  square  feet (inclusive  of 2,500  square  feet
attributable to the race and sports book).
 
    Each  of the hotel-casinos  is open 24 hours  a day, seven  days a week, for
gaming  activities.  Games  operated  in  these  casinos  include  "21,"  craps,
roulette,  big "6," baccarat, poker, keno and  slot and other coin machines. The
Las Vegas Hilton's race and sports book is tied in by satellite or modem to  the
casinos at the Flamingo Hilton-Las Vegas, the Flamingo Hilton-Laughlin, the Reno
Hilton and the Flamingo Hilton-Reno.
 
    It  is impracticable for  Hilton's hotel-casinos to  record the total amount
bet in the casinos, although the amount  of chips issued for cash and credit  is
determined  regularly. The amount  of gaming activity  varies significantly from
time to  time  primarily  due  to general  economic  conditions,  popularity  of
entertainment  in the hotels, and  occupancy rates in the  hotels and in the Las
Vegas, Laughlin and Reno markets. The amount of revenues from gaming  operations
varies depending upon the amount of gaming activity as well as variations in the
odds  for  different  games and  the  factor  of chance.  Casino  activities are
conducted by experienced personnel who are supervised at all times.
 
                                       9
<PAGE>
    As in the case of any business extensively involved in the handling of cash,
gaming  operations  at  the  Company's  hotel-casinos  are  subject  to  risk of
substantial loss as a result of  dishonesty. However, the Company believes  that
it  has reduced such risk,  by means of procedures  for supervision of employees
and other controls, to the fullest extent practicable without impediment to play
and within the  limits of reasonable  costs. Substantially all  table games  and
slot  machines can be  monitored by remote  control television and substantially
all slot machines at all five Nevada properties are monitored by computers.
 
    The Las Vegas Hilton and, to a lesser extent, the Flamingo Hilton-Las Vegas,
the Flamingo  Hilton-Reno and  the Reno  Hilton invite  VIP customers  to  their
casinos  and may pay for  or reimburse the cost  of their air transportation and
provide them with complimentary rooms, food  and beverage. In addition, the  Las
Vegas  Hilton  and  the Reno  Hilton  have instituted  special  flight programs,
pursuant to which free air transportation on Company owned or chartered aircraft
and complimentary rooms, food  and beverage are provided  to groups or  selected
persons.  These persons either have established  casino credit limits or cash on
deposit in  the casinos  and  have previously  evidenced  a willingness  to  put
substantial  amounts at  risk at  the casinos.  The special  flight programs are
sometimes referred  to as  junkets. The  Las Vegas  Hilton and  the Reno  Hilton
hosted  11 and 13 special flight programs in  1995, compared to nine and 27 such
programs in 1994, respectively.
 
    Revenues from the  Company's casinos  are accounted for  in accordance  with
applicable  laws and rules and regulations. As is customary in the Nevada gaming
industry, activities are  conducted on  a credit  as well  as a  cash basis,  in
accordance   with   procedures   established  and   supervised   by  management.
Fluctuations in collecting casino  receivables could have  a material effect  on
results  of  operations  of  these  properties.  An  allowance  is  provided for
estimated  uncollectible  casino  receivables.  Casino  receivables   aggregated
$47,900,000,  subject to a  $7,600,000 (approximately 16%)  reserve, at December
31, 1993; $69,100,000, subject to a $16,000,000 (approximately 23%) reserve,  at
December 31, 1994; and $87,300,000, subject to a $13,500,000 (approximately 15%)
reserve, at December 31, 1995.
 
INTERNATIONAL HOTEL-CASINOS
 
    The  Company,  through  Conrad  International,  manages  three international
hotel-casinos which  feature table  games  and slot  machines similar  to  those
offered at the Company's hotel-casinos in Nevada.
 
    In  April  1995,  the Company  commenced  operation of  the  136-room Conrad
International Treasury  in Brisbane,  Australia.  This hotel-casino  features  a
65,000  square foot casino and has the  exclusive right to conduct casino gaming
in Brisbane  until 2005.  The Company  has a  19.9% ownership  interest in  this
property.
 
    The Company also has a 19.9% ownership interest in the 605-room Hotel Conrad
&  Jupiters Casino, which  opened in 1985.  This hotel-casino is  located on the
Gold Coast in Queensland, Australia, and  features a 70,000 square foot  casino.
This  property had the exclusive right  to conduct casino gaming on Queensland's
Gold Coast through 1995.
 
    The  Company  has  a   25%  ownership  interest   in  the  620-room   Conrad
International  Istanbul,  which opened  in  1992. This  hotel-casino  includes a
12,000 square foot casino.
 
CASINO WINDSOR
 
    The Company and the other two shareholders of Windsor Casino Limited ("WCL")
operate the Casino  Windsor, an interim  50,000 square foot  casino in  Windsor,
Ontario,  Canada.  The  Company,  through  Conrad  International,  owns  a 33.3%
interest in  WCL,  which  operates  this  project  for  the  Ontario  provincial
government.  The Company anticipates that the interim casino will be replaced by
a permanent facility in early 1998, which will include a hotel of  approximately
400 rooms, a 75,000 square foot casino, entertainment and meeting facilities.
 
    Since December 1995, the Company has chartered a river casino to the Ontario
provincial  government to serve as a  complementary facility for Casino Windsor.
This vessel provides an  additional 25,000 square feet  of casino space for  the
property.
 
                                       10
<PAGE>
NEW ORLEANS RIVER CASINO
 
    Since  February  1994,  the  Company has  operated  a  river  casino located
adjacent to the  New Orleans Hilton  Riverside & Towers.  The Company  currently
operates  a  1,500  passenger  vessel  which has  a  20,000  square  foot casino
featuring table  games  and  slot  machines similar  to  those  offered  at  the
Company's  hotel-casinos. This vessel is wholly-owned  by the Company and leased
to a joint venture, of which the Company owns a 50% interest.
 
EXPANSION PROGRAM
 
    In  January  1995,  the  Company  and  Paramount  Parks  Inc.  ("Paramount")
announced  plans to  build a  65,000 square foot  attraction to  be called "Star
Trek: The Experience at the Las  Vegas Hilton." This attraction is scheduled  to
open in spring 1997 and will feature a motion-based simulation ride, interactive
video  and virtual  reality stations,  dining and  souvenir shops.  The building
housing the Star  Trek attraction will  be owned  by the Company  and leased  to
Paramount. The attraction will also be managed by Paramount. In conjunction with
the  Star Trek attraction, the Company plans to construct a themed 22,000 square
foot casino addition at the Las Vegas Hilton, which is also scheduled to open in
spring 1997.
 
    In 1996, the Las Vegas Hilton plans to rebuild its marquee sign and renovate
700 of its guest rooms.  The Flamingo Hilton-Las Vegas  plans to complete a  new
main  entrance to the property and  renovate the registration area. The Flamingo
Hilton-Laughlin plans  to  renovate  1,000  of its  guest  rooms,  refinish  the
exterior  facade and continue its slot  machine replacement program. At the Reno
Hilton, renovation of restaurants,  meeting rooms and  guest rooms are  planned.
The  Flamingo  Hilton-Reno plans  to renovate  guest rooms  and open  a Benihana
restaurant.
 
    The government of Uruguay has selected Conrad International and its partners
to develop a new 300-room hotel-casino in Punta del Este, Uruguay. This project,
which will be the first privately operated  casino in Uruguay in 30 years,  will
include  a 38,000 square foot casino.  Conrad International will manage and have
an equity  interest of  approximately 43%  in the  hotel-casino. The  casino  is
scheduled to open in early 1997 and the hotel is expected to commence operations
in late 1997.
 
    Conrad  International has entered into an agreement to develop and operate a
700-room hotel-casino  in Cairo,  Egypt.  This property  will feature  a  17,000
square  foot European-style casino. Conrad International  will manage and have a
10% equity interest  in the  hotel-casino, which is  scheduled to  open in  late
1997.
 
    The  Company is also developing a river casino in Kansas City, Missouri. The
Company will manage and own a 90% interest in this project, which will include a
30,000 square foot casino  on a continuously docked  130,000 square foot  barge,
concessions and entertainment facilities. Subject to the receipt of all required
gaming  licenses and permits, this project is scheduled to open in mid-1996. The
Company also plans to build a 260-room hotel adjacent to the river casino, which
is scheduled to open in mid-1997.
 
    The New Jersey Casino Control  Commission has granted the Company's  request
for   a  Statement  of  Compliance,  finding  that  the  Company  satisfies  all
non-facility related criteria for a casino license in Atlantic City, New Jersey.
At present, the  Company does  not own,  nor has  the Company  entered into  any
agreement  to manage, a hotel-casino property  in Atlantic City. See "Additional
Information -- Regulation and Licensing -- New Jersey Gaming Laws."
 
                             ADDITIONAL INFORMATION
 
VACATION OWNERSHIP
 
    The Company owns a 50% interest in the Hilton Grand Vacations Company  joint
venture  ("HGVC"),  which currently  operates 12  vacation ownership  resorts in
Florida and  one in  Nevada. In  January  1995, HGVC  commenced operation  of  a
200-unit vacation ownership resort adjacent to the Flamingo Hilton-Las Vegas. In
August  1995, HGVC  also commenced  operation of the  first phase  of a 360-unit
vacation  ownership  resort   adjacent  to  Sea   World  in  Orlando,   Florida.
Development,  construction and certain operating costs of HGVC's projects in Las
Vegas and Orlando have been substantially funded  by the Company in the form  of
revolving  loan  facilities.  HGVC  is  actively  seeking  new  development  and
acquisition opportunities in other resort locations.
 
                                       11
<PAGE>
DESIGN AND FURNISHING SERVICES
 
    Hilton, through its wholly-owned  subsidiary, Hilton Equipment  Corporation,
and  through its  hotels division, provides  design and  furnishing services and
distributes  furniture,  furnishings,  equipment  and  supplies  to  hotels  and
hotel-casinos  owned, leased  or managed by  Hilton and to  hotels franchised by
Hilton or owned and  operated by others. The  revenues of this operation  depend
primarily  on the number of  new hotels operated or  franchised by Hilton and on
refurbishing and remodeling of existing Hilton hotels.
 
COMPUTER SYSTEMS
 
    Compass Computer Services, Inc. ("Compass"), 50% of which is owned by Hilton
and the balance by Budget Rent-A-Car, Inc., operates a computerized  reservation
system  for, among other  things, hotel reservations.  This system also provides
Hilton with certain statistical data and registration packets. Compass is  being
managed by Litton Computer Services.
 
RESERVATION SYSTEM
 
    The  Compass computerized reservation system is presently utilized by Hilton
Service Corporation, the operator of  a worldwide system of reservation  offices
for  hotels operated by  Hilton, Hilton International  Co., their affiliates and
others. Hilton Service  Corporation is  owned 51% by  Hilton and  49% by  Hilton
International Co.
 
MARKETING
 
    Hotel  occupancy at Hilton's metropolitan  and airport properties is derived
primarily from  the convention  and  meeting market  and the  business  traveler
market  (businesspersons  traveling as  individuals or  in small  groups). Hotel
occupancy at the Company's resort properties is derived primarily from the  tour
and  leisure market (tourists traveling either  as individuals or in groups) and
the  convention  and   meeting  market.   Hotel  occupancy   at  the   Company's
hotel-casinos  is derived primarily from the  convention and meeting market, the
tour and  leisure  market  and  junket and  VIP  programs.  As  indicated  under
"Additional  Information -- Business Risks" below, these sources of business are
sensitive to general  economic and  other conditions. In  addition, the  Company
participates  in certain joint marketing programs  with business partners in the
airline, car rental and cruise line industries.
 
STATISTICAL DATA
 
    For information  regarding the  Company's  properties, number  of  available
rooms,  occupancy ratios  and management  and franchise  fees, see  the Ten Year
Summary on pages 58 and 59 in the Stockholders Report.
 
BUSINESS RISKS
 
    In 1995, the Company was able to increase average room rates by five percent
over 1994. The Company's future operating results could be adversely impacted by
industry overcapacity  and  weak  demand, which  could  restrict  the  Company's
ability  to  raise room  rates  to keep  pace with  the  rate of  inflation. The
Company's  business  could   also  be   adversely  affected   by  increases   in
transportation  and fuel costs or  sustained recessionary periods. The operating
results for  the Company's  hotel-casinos  can be  volatile depending  upon  the
table-game play of premium players.
 
    Hilton's  occupancy ratios are  affected by general  economic conditions, as
well as by competition,  work stoppages and  other factors affecting  particular
properties.  Occupancy ratios  at the Company's  hotels could  also be adversely
impacted by a decrease  in travel resulting from  fluctuations in the  worldwide
economy and by excess industry capacity.
 
COMPETITION
 
    Hilton  believes it is one of the largest operators of hotels located within
the United States.  Competition from  other hotels, motels  and inns,  including
facilities  owned  by  local  interests and  facilities  owned  by  national and
international chains, is  vigorous in  all areas  in which  Hilton operates  its
facilities.  Hilton  hotels  also  compete  generally  with  facilities offering
similar services and located in cities  and other locations where Hilton  hotels
are  not present.  The Company's precise  competitive position in  most areas in
which its hotels are located cannot be determined from the information and  data
available to Hilton.
 
                                       12
<PAGE>
    To  the extent that hotel  capacity is expanded by others  in a city where a
Hilton hotel  is located,  competition  will increase.  In this  regard,  recent
capacity  additions have increased competition in  all segments of the Las Vegas
market. Certain of the Company's competitors have announced new casino  projects
in  Las Vegas which, if  completed, will add significant  casino space and hotel
rooms to the market. Such new capacity  additions to the Las Vegas market  could
adversely  impact  the Company's  gaming income.  In  addition, the  business of
Hilton's Nevada hotel-casinos might be  adversely affected if gaming  operations
of  the type conducted  in Nevada were to  be permitted under  the laws of other
states, particularly California. The legalization  of casino gaming in  Atlantic
City,  New Jersey has had  an impact on the  Company's Nevada hotel-casinos. The
legalization of riverboat  gaming in  a number of  states and  the operation  of
casino  gaming on Native  American tribal lands could  also impact the Company's
hotel-casinos in Nevada.
 
REGULATION AND LICENSING
 
    Each of the Company's casinos is subject to extensive regulation under laws,
rules and supervisory procedures, primarily in the jurisdiction where located or
docked. Some  jurisdictions, however,  empower their  regulators to  investigate
participation  by  licensees in  gaming outside  their jurisdiction  and require
access to and periodic reports respecting such gaming activities. Violations  of
laws   in  one  jurisdiction  could  result  in  disciplinary  action  in  other
jurisdictions.
 
    NEVADA GAMING LAWS.  The ownership and operation of casino gaming facilities
in the State  of Nevada, such  as those at  the Las Vegas  Hilton, the  Flamingo
Hilton-Las Vegas, the Flamingo Hilton-Laughlin, the Reno Hilton and the Flamingo
Hilton-Reno,  are subject to  the Nevada Gaming Control  Act and the regulations
promulgated thereunder (the  "Nevada Act")  and various  local regulations.  The
Company's  gaming operations are subject to the licensing and regulatory control
of the  Nevada Gaming  Commission (the  "Gaming Commission"),  the Nevada  State
Gaming  Control Board (the "Control Board"),  the Clark County Liquor and Gaming
Licensing Board (the  "CCB") and the  City of Reno.  The Gaming Commission,  the
Control  Board, the CCB and the City of Reno are collectively referred to as the
"Nevada Gaming Authorities."
 
    The laws,  regulations  and  supervisory procedures  of  the  Nevada  Gaming
Authorities  are based  upon declarations of  public policy  which are concerned
with, among other things: (i) the  prevention of unsavory or unsuitable  persons
from  having a direct or indirect involvement with  gaming at any time or in any
capacity; (ii)  the  establishment  and maintenance  of  responsible  accounting
practices  and procedures; (iii) the maintenance  of effective controls over the
financial  practices  of  licensees,  including  the  establishment  of  minimum
procedures  for  internal  fiscal affairs  and  the safeguarding  of  assets and
revenues, providing reliable record keeping and requiring the filing of periodic
reports with the Nevada Gaming Authorities; (iv) the prevention of cheating  and
fraudulent  practices; and  (v) the  provision of  a source  of state  and local
revenues through taxation and licensing fees. Changes in such laws,  regulations
and procedures could have an adverse effect on the Company's gaming operations.
 
    The  Company's subsidiaries which operate  the casinos (the "Licensees") are
required to be  licensed by the  Nevada Gaming Authorities.  The gaming  license
requires  the periodic payment  of fees and  taxes and is  not transferable. The
Company is registered by the Gaming Commission as a publicly-traded  corporation
("Registered  Corporation") and, as such, it  is required periodically to submit
detailed financial and operating  reports to the  Gaming Commission and  furnish
any  other information  which the Gaming  Commission may require.  No person may
become a  stockholder  of,  or  receive any  percentage  of  profits  from,  the
Licensees  without first obtaining licenses and approvals from the Nevada Gaming
Authorities. The Company and the Licensees have obtained from the Nevada  Gaming
Authorities  the various registrations, approvals, permits and licenses required
in order to engage in gaming activities in Nevada.
 
    The Nevada  Gaming Authorities  may  investigate any  individual who  has  a
material  relationship  to, or  material involvement  with,  the Company  or the
Licensees in order to determine whether such individual is suitable or should be
licensed as a business associate of  a gaming licensee. Officers, directors  and
certain  key employees of  the Licensees must file  applications with the Nevada
Gaming Authorities and may be required to  be licensed or found suitable by  the
Nevada  Gaming Authorities. Officers, directors and key employees of the Company
who are actively and directly involved in gaming activities of the Licensees may
be required to
 
                                       13
<PAGE>
be licensed  or found  suitable by  the Nevada  Gaming Authorities.  The  Nevada
Gaming  Authorities may  deny an application  for licensing for  any cause which
they deem reasonable. A finding of  suitability is comparable to licensing,  and
both  require submission of detailed personal and financial information followed
by a  thorough  investigation. The  applicant  for  licensing or  a  finding  of
suitability must pay for all the costs of the investigation. Changes in licensed
positions  must be reported to the Nevada Gaming Authorities and, in addition to
their authority  to  deny  an  application  for  a  finding  of  suitability  or
licensure,  the  Nevada Gaming  Authorities  have jurisdiction  to  disapprove a
change in a corporate position.
 
    If the Nevada Gaming  Authorities were to find  an officer, director or  key
employee   unsuitable  for  licensing   or  unsuitable  to   continue  having  a
relationship with the  Company or  the Licensees, the  companies involved  would
have  to  sever all  relationships  with such  person.  In addition,  the Gaming
Commission may require the Company or the Licensees to terminate the  employment
of  any person who  refuses to file  appropriate applications. Determinations of
suitability or of questions pertaining to licensing are not subject to  judicial
review in Nevada.
 
    The  Company and the Licensees are required to submit detailed financial and
operating reports to  the Gaming Commission.  Substantially all material  loans,
leases,  sales of securities and similar financing transactions by the Licensees
must be reported to, or approved by, the Gaming Commission.
 
    If it were determined that the Nevada Act was violated by the Licensees, the
gaming licenses they hold could  be limited, conditioned, suspended or  revoked,
subject  to  compliance with  certain  statutory and  regulatory  procedures. In
addition, the Licensees, the Company and  the persons involved could be  subject
to  substantial  fines for  each separate  violation  of the  Nevada Act  at the
discretion of the Gaming Commission. Further, a supervisor could be appointed by
the Gaming  Commission to  operate the  Company's gaming  properties and,  under
certain  circumstances, earnings  generated during  the supervisor's appointment
(except for  the reasonable  rental value  of the  Company's gaming  properties)
could  be  forfeited  to  the  State  of  Nevada.  Limitation,  conditioning  or
suspension of any gaming license or  the appointment of a supervisor could  (and
revocation  of  any  gaming  license  would)  materially  adversely  affect  the
Company's gaming operations.
 
    Any beneficial  holder of  the  Company's Common  Stock, regardless  of  the
number of shares owned, may be required to file an application, be investigated,
and  have  such person's  suitability as  a beneficial  holder of  the Company's
Common Stock determined if the Gaming Commission has reason to believe that such
ownership would  otherwise be  inconsistent with  the declared  policies of  the
State  of Nevada. The applicant must pay  all costs of investigation incurred by
the Nevada Gaming Authorities in conducting any such investigation.
 
    The Nevada  Act  requires  any person  who  acquires  more than  5%  of  the
Company's  Common Stock to report the  acquisition to the Gaming Commission. The
Nevada Act requires  that beneficial owners  of more than  10% of the  Company's
Common  Stock apply to the Gaming Commission for a finding of suitability within
thirty days after  the Chairman of  the Control Board  mails the written  notice
requiring such filing. Under certain circumstances, an "institutional investor,"
as  defined in the Nevada  Act, which acquires more than  10%, but not more than
15%, of the  Company's Common Stock  may apply  to the Gaming  Commission for  a
waiver  of such finding of suitability  if such institutional investor holds the
Common Stock for investment purposes  only. An institutional investor shall  not
be  deemed to hold  the Common Stock  for investment purposes  unless the Common
Stock was  acquired  and is  held  in the  ordinary  course of  business  as  an
institutional  investor  and  not  for  the  purpose  of  causing,  directly  or
indirectly, the election of a majority of the members of the Board of  Directors
of  the  Company,  any  change  in  the  Company's  corporate  charter,  bylaws,
management, policies  or  operations  of  the Company,  or  any  of  its  gaming
affiliates,  or  any  other  action  which the  Gaming  Commission  finds  to be
inconsistent with holding  the Company's  Common Stock  for investment  purposes
only.  Activities which  are not deemed  to be inconsistent  with holding voting
securities for investment purposes only include: (i) voting on all matters voted
on by stockholders; (ii) making financial  and other inquiries of management  of
the type normally made by securities analysts for informational purposes and not
to cause a change in its management, polices or operations; and (iii) such other
activities  as the  Gaming Commission may  determine to be  consistent with such
investment intent. If  the beneficial holder  of voting securities  who must  be
found    suitable    is    a    corporation,    partnership    or    trust,   it
 
                                       14
<PAGE>
must submit  detailed business  and financial  information including  a list  of
beneficial  owners. The applicant is required to pay all costs of investigation.
Barron Hilton, the Company's largest stockholder,  has been found suitable as  a
controlling stockholder of the Company.
 
    Any  person who fails or refuses to apply  for a finding of suitability or a
license within 30 days after being ordered to do so by the Gaming Commission  or
by  the  Chairman  of  the  Control Board  may  be  found  unsuitable.  The same
restrictions apply to a record owner  if the record owner, after request,  fails
to  identify  the beneficial  owner. Any  stockholder  found unsuitable  and who
holds, directly or indirectly, any beneficial ownership of the Company's  Common
Stock  beyond such period of time as  may be prescribed by the Gaming Commission
may be guilty  of a  criminal offense. The  Company is  subject to  disciplinary
action  if,  after  it receives  notice  that a  person  is unsuitable  to  be a
stockholder or to have any other relationship with the Company or the Licensees,
the Company (i) pays that person any dividend or interest upon voting securities
of the Company; (ii) allows that person to exercise, directly or indirectly, any
voting right  conferred  through securities  held  by that  person;  (iii)  pays
remuneration  in any form to that person  for services rendered or otherwise; or
(iv) fails to  pursue all lawful  efforts to require  such unsuitable person  to
relinquish  the voting securities  for cash at  fair market value. Additionally,
the CCB has taken the position that it has the authority to approve all  persons
owning or controlling the stock of any corporation controlling a gaming license.
 
    The Gaming Commission may, in its discretion, require the holder of any debt
security  of a Registered Corporation to  file applications, be investigated and
be found suitable to own the debt  security of a Registered Corporation. If  the
Gaming  Commission determines that a person  is unsuitable to own such security,
then pursuant to the Nevada Act,  the Registered Corporation can be  sanctioned,
including the loss of its approvals, if without the prior approval of the Gaming
Commission,  it (i) pays to the unsuitable  person any dividend, interest or any
distribution whatsoever; (ii)  recognizes any  voting right  by such  unsuitable
person  in connection  with such  securities; (iii)  pays the  unsuitable person
remuneration in any form; or (iv) makes any payment to the unsuitable person  by
way  of  principal,  redemption, conversion,  exchange,  liquidation  or similar
transaction.
 
    The Company is required to maintain  a current stock ledger in Nevada  which
may  be examined by the Nevada Gaming Authorities at any time. If any securities
are held in trust by an agent or by a nominee, the record holder may be required
to  disclose  the  identity  of  the  beneficial  owner  to  the  Nevada  Gaming
Authorities.  A failure to make  such disclosure may be  grounds for finding the
record holder  unsuitable.  The  Company  is also  required  to  render  maximum
assistance  in  determining the  identity of  the  beneficial owner.  The Gaming
Commission has the power to require  the Company's stock certificates to bear  a
legend indicating that the securities are subject to the Nevada Act. However, to
date, the Gaming Commission has not imposed such a requirement on the Company.
 
    The  Company may not  make a public  offering of its  securities without the
prior approval  of the  Gaming  Commission if  the  securities or  the  proceeds
therefrom  are  intended to  be  used to  construct,  acquire or  finance gaming
facilities in  Nevada, or  to retire  or extend  obligations incurred  for  such
purposes. Such approval, if given, does not constitute a finding, recommendation
or  approval by the Gaming Commission or the Control Board as to the accuracy or
adequacy of  the prospectus  or the  investment merits  of the  securities.  Any
representation  to the contrary is unlawful. The Company was granted approval on
September 28, 1995 to make  public offerings of securities  for a period of  one
year,  subject  to  certain  reporting requirements  and  the  authority  of the
Chairman of the  Control Board  to issue an  interlocutory stop  order for  good
cause.
 
    Changes  in control of  the Company through  merger, consolidation, stock or
asset acquisitions, management or consulting  agreements, or any act or  conduct
by a person whereby such person obtains control, may not occur without the prior
approval  of the  Gaming Commission.  Entities seeking  to acquire  control of a
Registered Corporation must satisfy the Control Board and Gaming Commission in a
variety of  stringent standards  prior to  assuming control  of such  Registered
Corporation.  The Gaming  Commission may also  require controlling stockholders,
officers,  directors  and  other  persons  having  a  material  relationship  or
involvement with the entity proposing to acquire control, to be investigated and
licensed as part of the approval process relating to the transaction.
 
                                       15
<PAGE>
    The Nevada legislature has declared that some corporate acquisitions opposed
by  management, repurchases of  voting securities and  corporate defense tactics
affecting  Nevada  gaming  licensees,  and  Registered  Corporations  that   are
affiliated  with those  operations, may  be injurious  to stable  and productive
corporate gaming. The Gaming Commission  has established a regulatory scheme  to
ameliorate  the  potentially adverse  effects of  these business  practices upon
Nevada's gaming  industry and  to further  Nevada's policy  to: (i)  assure  the
financial  stability of  corporate gaming  operators and  their affiliates; (ii)
preserve the beneficial aspects  of conducting business  in the corporate  form;
and  (iii) promote a neutral environment for the orderly governance of corporate
affairs. Approvals  are,  in certain  circumstances,  required from  the  Gaming
Commission  before  the  Company  can  make  exceptional  repurchases  of voting
securities above  the  current  market  price thereof  and  before  a  corporate
acquisition  opposed  by  management can  be  consummated. The  Nevada  Act also
requires prior approval of a plan of recapitalization proposed by the  Company's
Board  of  Directors  in  response  to  a  tender  offer  made  directly  to its
stockholders for the purpose of acquiring control of the Company.
 
    License fees and taxes,  computed in various ways  depending on the type  of
gaming  or activity  involved, are  payable to  the State  of Nevada  and to the
counties and cities  in which  the Nevada licensee's  respective operations  are
conducted.  Depending upon  the particular fee  or tax involved,  these fees and
taxes are  payable either  monthly, quarterly  or annually  and are  based  upon
either:  (i) a  percentage of  the gross revenues  received; (ii)  the number of
gaming devices operated; or (iii) the  number of table games operated. A  casino
entertainment  tax  is also  paid by  casino  operations where  entertainment is
furnished in connection with the selling of food or refreshments.
 
    The Company and its affiliates and Licensees, who propose to become involved
in a gaming venture outside of Nevada, are required to deposit with the  Control
Board, and thereafter maintain, a revolving fund in the amount of $10,000 to pay
the  expenses of  investigation of the  Control Board of  their participation in
such foreign gaming. The  revolving fund is subject  to increase or decrease  in
the  discretion  of  the  Gaming Commission.  Thereafter,  the  Company  and its
affiliates  and  Licensees  are  required  to  comply  with  certain   reporting
requirements  imposed  by the  Nevada Act.  These entities  are also  subject to
disciplinary action by the Gaming Commission if they knowingly violate any  laws
of  the foreign jurisdiction pertaining to the foreign gaming operation, fail to
conduct the foreign gaming operation in accordance with the standards of honesty
and integrity required of  Nevada gaming operations,  engage in activities  that
are  harmful to the State  of Nevada or its ability  to collect gaming taxes and
fees, or employ a person in the foreign operation who has been denied a  license
or finding of suitability in Nevada on the ground of personal unsuitability.
 
    LOUISIANA  GAMING LAWS.   The ownership and operation  of a riverboat gaming
vessel in the State of Louisiana is subject to the Louisiana Riverboat  Economic
Development  and Gaming Control Act (the "Act"). Gaming activities are regulated
by  the  Louisiana  Riverboat  Gaming  Commission  (the  "Commission")  and  the
Louisiana  Riverboat Gaming Enforcement Division  (the "Division"), a department
within the Louisiana State Police. The Division is responsible for investigating
the background of all applicants seeking a riverboat gaming license, issuing the
license and  enforcing the  laws, rules  and regulations  relating to  riverboat
gaming activities.
 
    The  applicant, its officers, directors, key personnel, partners and persons
holding a 5% or greater interest in the holder of a gaming license are  required
to  be found suitable by the Division.  This requires the filing of an extensive
application to the Division  disclosing personal, financial, criminal,  business
and  other information.  On October  13, 1993,  the Division  issued a riverboat
gaming license to the Queen of New Orleans, a joint venture of which the Company
owns a  50% interest.  The Company's  joint venture  commenced riverboat  gaming
operations in New Orleans, Louisiana on February 10, 1994.
 
    The  transfer of a Louisiana gaming license is prohibited under the Act. The
sale, assignment, transfer, pledge or disposition of securities which  represent
5%  or more of the total  outstanding shares issued by a  holder of a license is
subject to  Division approval  and the  transferee must  be found  suitable.  In
addition,  all contracts and  leases entered into  by a licensee  are subject to
approval and certain enterprises which transact business with the licensee  must
be licensed.
 
                                       16
<PAGE>
    The  Commission must  approve all security  holders of the  licensee and may
find any such security holder not  qualified to own those securities.  Louisiana
law  may require  that the charter  or bylaws  of the licensee  provide that its
securities are held subject to  the condition that, if a  holder is found to  be
disqualified by the Commission, the holder must dispose of the securities of the
licensee.  If a security holder of a  licensee is found disqualified, it will be
unlawful for the security  holder to (i) receive  any dividend or interest  with
regard  to the  securities; (ii)  exercise, directly  or indirectly,  any rights
conferred by the securities; or (iii) receive any remuneration from the licensee
for services rendered or otherwise.  The Commission may impose similar  approval
requirements  on holders of securities of any intermediary or holding company of
the licensee,  but may  waive  those requirements  with  respect to  holders  of
publicly-traded securities of intermediary and holding companies if such holders
do  not have the ability to control the publicly-traded corporation or elect one
or more directors thereof.
 
    NEW JERSEY  GAMING  LAWS.    The ownership  and  operation  of  hotel-casino
facilities  in  Atlantic  City,  New  Jersey  are  subject  to  extensive  state
regulation under the New Jersey Casino Control Act (the "Act"). No  hotel-casino
facility may operate unless various licenses and approvals are obtained from New
Jersey  regulatory  authorities, including  the  Casino Control  Commission (the
"Commission"). The Commission is authorized  under the Act to adopt  regulations
covering  a  broad  spectrum of  gaming  and  gaming related  activities  and to
prescribe the methods and forms of applications for licenses.
 
    The Act permits an applicant to  request a Statement of Compliance from  the
Commission finding that it satisfies one or more of the eligibility criteria for
licensure.  The  Statement  of  Compliance  request may  be  made  prior  to the
construction or acquisition of a casino in  Atlantic City. It is only after  all
eligibility criteria are met that a casino license may be issued. On February 4,
1991,  the  Company and  a  New Jersey  subsidiary  filed applications  with the
Commission for  a  casino  license under  the  Act.  At the  conclusion  of  the
application  investigation,  the  Company requested  a  Statement  of Compliance
regarding all non-facility related  criteria. On June  26, 1991, the  Commission
granted  the Company's request  for a Statement of  Compliance. The Company does
not now  own, nor  has  the Company  entered into  any  agreement to  manage,  a
hotel-casino  in Atlantic  City. The  Company filed  the license  application in
contemplation of possibly  owning and/or  operating a  hotel-casino in  Atlantic
City.
 
    In  order  to  be granted  a  casino  license under  the  Act,  officers and
directors of a licensee and  its employees who are  employed in hotel or  casino
operations  in Atlantic  City are  required to  be licensed  or approved  by the
Commission. In addition,  all contracts and  leases entered into  by a  licensee
would  be subject  to approval and  certain enterprises  which transact business
with the licensee  would themselves  have to be  licensed. New  Jersey law  also
authorizes  the  Commission to  approve security  holders of  a licensee  in the
manner described above under the caption "Louisiana Gaming Laws."
 
    QUEENSLAND GAMING LAWS.  Queensland,  Australia, like Nevada, Louisiana  and
New  Jersey, has  comprehensive laws  and regulations  governing the  conduct of
casino gaming.  All persons  connected with  the ownership  and operation  of  a
casino,  including the Company,  its subsidiary that manages  the Hotel Conrad &
Jupiters Casino  and the  Conrad  International Treasury  and certain  of  their
principal  stockholders,  directors and  officers,  must be  found  suitable and
licensed. A casino  license once issued  remains in force  until surrendered  or
cancelled.  Queensland law  defines the  grounds for  cancellation and,  in such
event, an administrator may be appointed  to assume control of the  hotel-casino
complex. The Queensland authorities have conducted an investigation of, and have
found suitable, the Company and its subsidiary.
 
    ONTARIO  GAMING  LAWS.    Ontario,  Canada  also  has  laws  and regulations
governing the conduct of casino gaming.  Ontario law requires that the  operator
of a casino must be found suitable and be registered. A registration once issued
remains   in  force  until   revoked.  Ontario  law   defines  the  grounds  for
registration, as  well as  revocation or  suspension of  such registration.  The
Company  and two  other shareholders  formed Windsor  Casino Limited  ("WCL") to
operate  the  Casino  Windsor.  The   Ontario  authorities  have  conducted   an
investigation  of,  and  have found  suitable,  the  Company and  the  other two
shareholders of WCL in connection with the Ontario registration of WCL.
 
                                       17
<PAGE>
    TURKEY  GAMING  LAWS.    Turkey  has  laws  and  regulations  governing  the
establishment and operation of  casino gaming. The  Turkish Ministry of  Tourism
inspects  all  casino  premises  prior to  the  commencement  of  operations and
conducts random inspections of ongoing  casino operations. Under Turkish  gaming
laws,  access to casinos is limited to persons carrying a foreign passport or to
Turkish citizens receiving  a permit from  the Ministry of  Tourism. The  casino
located  in the  Conrad International  Istanbul has  been authorized  to conduct
casino operations by the Turkish Ministry of Tourism.
 
    IRS REGULATIONS.  The Internal Revenue Service ("IRS") requires operators of
casinos located  in the  United  States to  file  information returns  for  U.S.
citizens  (including names and  addresses of winners) for  keno and slot machine
winnings in excess  of stipulated amounts.  The IRS also  requires operators  to
withhold  taxes on certain keno, bingo  and slot machine winnings of nonresident
aliens. Management  is unable  to predict  the  extent, if  any, to  which  such
requirements, if extended, might impede or otherwise adversely affect operations
of, and/or income from, such other games.
 
    Regulations  adopted by  the IRS  and the  gaming regulatory  authorities in
certain domestic jurisdictions in which the Company operates, or has applied for
licensing to operate, casinos require the reporting of currency transactions  in
excess of $10,000 occurring within a gaming day, including identification of the
patron  by name and social security  number. This reporting obligation commenced
in  May  1985  and  may  have  resulted  in  the  loss  of  gaming  revenues  to
jurisdictions  outside the United States which are  exempt from the ambit of IRS
regulations.
 
    OTHER LAWS AND REGULATIONS.  Each  of the hotels and hotel-casinos  operated
by  the Company is  subject to extensive  state and local  regulations and, on a
periodic basis,  must  obtain  various licenses  and  permits,  including  those
required  to sell alcoholic beverages. Management  believes that the Company has
obtained all required licenses and permits  and its businesses are conducted  in
substantial compliance with applicable laws.
 
EMPLOYEES
 
    At  February 1, 1996, Hilton employed  approximately 48,000 persons, of whom
approximately 25,000  are covered  by various  collective bargaining  agreements
providing,  generally, for basic  pay rates, working  hours, other conditions of
employment and orderly settlement  of labor disputes.  Hilton believes that  the
aggregate  compensation benefits  and working conditions  afforded its employees
compare favorably  with those  received by  employees in  the hotel  and  gaming
industries  generally. Although strikes of short duration have from time to time
occurred at  certain  of  Hilton's  facilities,  Hilton  believes  its  employee
relations are satisfactory.
 
ITEM 2.  PROPERTIES
 
    Hilton  considers its hotels  and casinos to  be leading establishments with
respect to  desirability  of  location, size,  facilities,  physical  condition,
quality  and variety of services offered in most  of the areas in which they are
located. Obsolescence arising from age and  condition of facilities is a  factor
in  the hotel and gaming industries. Accordingly, Hilton expends, and intends to
continue to expend, substantial funds to maintain its facilities in  first-class
condition in order to remain competitive.
 
    Hotels  and casinos  owned and  operated, leased  and managed  by Hilton are
briefly described under  Item 1 and,  in particular, under  the captions  "Hotel
Operations" and "Gaming Operations." In addition, contemplated additions to, and
major  refurbishing and  remodeling of, existing  properties and  new hotels and
casinos presently under construction that will be operated by Hilton are briefly
described under the captions "Hotel Operations -- Expansion Program" and "Gaming
Operations -- Expansion Program" under Item 1.
 
ITEM 3.  LEGAL PROCEEDINGS
 
    In management's  opinion,  disposition  of pending  litigation  against  the
Company  is not expected  to have a  material effect on  the Company's financial
position or results of operations.
 
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
    Not applicable.
 
                                       18
<PAGE>
EXECUTIVE OFFICERS
 
    The following  table sets  forth  certain information  with respect  to  the
executive officers of the Company:
 
<TABLE>
<CAPTION>
                                                POSITIONS AND OFFICES
NAME                                              WITH THE COMPANY                             AGE
-------------------------  ---------------------------------------------------------------  ---------
<S>                        <C>                                                              <C>
Barron Hilton              Chairman of the Board, and previously served as Chief Executive     68
                           Officer until February 1996, and President until February 1993
Stephen F. Bollenbach      President and Chief Executive Officer since February 1996           53
Eric M. Hilton             Vice Chairman of the Board since May 1993, Executive Vice           62
                           President -- International Operations from May 1992 until May
                           1993, President, Conrad International Hotels Corporation until
                           May 1993, and Senior Vice President -- Real Estate Development,
                           International until May 1992
Floyd M. Celey, Jr.        Executive Vice President and President -- Gaming Operations         56
                           since September 1994, Senior Vice President -- Global Gaming
                           Operations from May 1993 until September 1994, and prior
                           thereto, Senior Vice President -- Corporate Casino Operations,
                           Conrad International Hotels Corporation
Dieter H. Huckestein       Executive Vice President and President -- Hotel Operations          52
                           since May 1994, Senior Vice President --
                           Hawaii/California/Arizona Region from May 1991 until May 1994,
                           and prior thereto, Senior Vice President -- Hawaiian Region
F. Michael O'Brien         Executive Vice President -- Gaming Development since September      55
                           1995, Executive Vice President -- Gaming and Hotel Development
                           from September 1994 until September 1995, Senior Vice President
                           -- Gaming and Hotel Development from January 1994 until
                           September 1994, and from May 1992 until January 1994, Senior
                           Vice President -- Corporate Properties
Steve Krithis              Senior Vice President -- Finance since November 1994, and prior     66
                           thereto, Vice President and Corporate Comptroller
William C. Lebo, Jr.       Senior Vice President and General Counsel                           52
</TABLE>
 
    Unless  otherwise noted  in the  table, all  positions and  offices with the
Company indicated have been continuously held since January 1991. The  executive
officers  are responsible  for all major  policy making functions  and all other
corporate and  divisional  officers  are  responsible  to,  and  are  under  the
supervision  of,  the  executive officers.  None  of the  above  named executive
officers are related, except that Messrs. Barron and Eric Hilton are brothers.
 
    Similar information  for directors  of the  Company will  be included  under
"Election  of Directors" in the Company's  definitive proxy statement to be used
in connection with its  annual meeting of stockholders  scheduled to be held  on
May  9, 1996  (the "Proxy  Statement"). The  Company expects  to file  the Proxy
Statement with the Securities and Exchange  Commission prior to April 30,  1996,
and   reference  is  expressly   made  thereto  for   the  specific  information
incorporated herein by the aforesaid reference.
 
                                       19
<PAGE>
                                    PART II
 
ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
 
    The  Company's Common  Stock is  listed on  the New  York and  Pacific Stock
Exchanges and  is traded  under the  symbol "HLT."  Information regarding  sales
prices,  dividend  payments and  record holders  with  respect to  the Company's
Common Stock is  set forth  under "Supplementary Financial  Information" in  the
Notes  to  the Company's  Consolidated Financial  Statements on  page 57  in the
Stockholders Report, which information is incorporated herein by reference.
 
    On July 14,  1988, Hilton  adopted a  Preferred Share  Purchase Rights  Plan
("Plan")  and declared a  dividend distribution of  one Preferred Share Purchase
Right ("Rights") on each  outstanding share of Hilton  Common Stock. The  Rights
are transferable only with the Common Stock until they become exercisable.
 
    Generally,  the Rights become  exercisable only if a  person or group (other
than Hilton Interests, as hereinafter defined) acquires 20% or more of  Hilton's
Common Stock or announces a tender offer, the consummation of which would result
in ownership by a person or group of 20% or more of the Common Stock. Each Right
entitles  stockholders to buy  one one-hundredth of  a share of  a new series of
junior participating preferred stock at an exercise price of $150.
 
    If the  Company  is acquired  in  a  merger or  other  business  combination
transaction,  each Right  entitles its holder  to purchase, at  the Right's then
current price, a number of the  acquiring company's common shares having a  then
current  market value  of twice  the Right's exercise  price. In  addition, if a
person or  group (other  than Hilton  Interests)  acquires 30%  or more  of  the
Company's  outstanding Common  Stock, otherwise than  pursuant to  a cash tender
offer for all  shares in which  such person  or group increases  its stake  from
below  20% to 80% or more of the  outstanding shares of Common Stock, each Right
entitles its  holder  (other than  such  person or  members  of such  group)  to
purchase,  at the Right's  then current exercise price,  shares of the Company's
Common Stock having a market value of twice the Right's exercise price.
 
    Following the acquisition by  a person or group  of beneficial ownership  of
30%  or more of the Company's Common Stock and prior to an acquisition of 50% or
more of the Common  Stock, Hilton's Board of  Directors may exchange the  Rights
(other  than Rights owned by such  person or group), in whole  or in part, at an
exchange ratio of one share of Common Stock (or one one-hundredth of a share  of
the new series of junior participating preferred stock) per Right.
 
    Prior to the acquisition by a person or group of beneficial ownership of 20%
or  more of the Company's  Common Stock, the Rights  are redeemable for one cent
per Right at the option of the Company's Board of Directors.
 
    "Hilton Interests" refer to Barron Hilton and the Conrad N. Hilton Fund  and
the shares of Common Stock beneficially owned by them.
 
    The  full text  of the Plan  has been filed  as Exhibit 4.5  hereto, and the
foregoing summary is qualified in its entirety by reference to Exhibit 4.5.
 
ITEM 6.  SELECTED FINANCIAL DATA
 
    See the Company's Ten Year  Summary on pages 58  and 59 in the  Stockholders
Report  and "Segments  of Business" in  the Notes to  the Company's Consolidated
Financial Statements on pages 55 and 56 in the Stockholders Report.
 
    The ratio of earnings to fixed charges for the five years ended December 31,
1995 is as follows: 1995 - 3.2  to 1; 1994 - 2.8 to 1;  1993 - 2.7 to 1; 1992  -
2.9  to 1; and 1991 -  2.6 to 1. The computation  of the aforesaid ratios is set
forth in Exhibit 12 hereto.
 
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
 
    See pages 36 through 41 in the Stockholders Report.
 
                                       20
<PAGE>
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
    The consolidated financial statements and supplemental information  required
by  this Item are contained  in the Stockholders Report  on the pages indicated,
which information is incorporated herein by reference.
 
<TABLE>
<CAPTION>
                                                                                            PAGE
                                                                                            -----
<S>                                                                                      <C>
Report of independent public accountants...............................................          57
Consolidated statements of income for
 the three years ended December 31, 1995...............................................          42
Consolidated balance sheets as of December 31, 1995 and 1994...........................          43
Consolidated statements of cash flows for
 the three years ended December 31, 1995...............................................          44
Consolidated statements of stockholders' equity for
 the three years ended December 31, 1995...............................................          45
Notes to consolidated financial statements.............................................          46
Segment data for the five years ended December 31, 1995
 contained in the Ten Year Summary.....................................................          58
</TABLE>
 
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
 
    None.
 
                                    PART III
 
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
    Certain of the  information respecting executive  officers required by  this
Item  is  set forth  under the  caption  "Executive Officers"  in Part  I. Other
information respecting  certain  executive officers,  as  well as  the  required
information  for  directors,  will  be contained  in  the  Proxy  Statement, and
reference is expressly  made thereto for  the specific information  incorporated
herein by the aforesaid reference.
 
ITEM 11.  EXECUTIVE COMPENSATION
 
    The  information required  by this Item  will be set  forth under "Executive
Compensation" in the Proxy  Statement, and except for  information set forth  in
the  Proxy  Statement  under  "Personnel and  Compensation  Committee  Report on
Executive Compensation" and "Stockholder Return Performance Graph," reference is
expressly made thereto for the  specific information incorporated herein by  the
aforesaid reference.
 
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
    The  information required by this Item will be set forth under "Common Stock
Ownership of Certain Beneficial Owners and Executive Officers" and "Election  of
Directors"  in the Proxy Statement, and  reference is expressly made thereto for
the specific information incorporated herein by the aforesaid reference.
 
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
    The information required by this Item  will be set forth under "Election  of
Directors -- Certain Relationships and Interests in Certain Transactions" in the
Proxy  Statement,  and  reference is  expressly  made thereto  for  the specific
information incorporated herein by the aforesaid reference.
 
                                       21
<PAGE>
                                    PART IV
 
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
 
(A) INDEX TO FINANCIAL STATEMENTS
 
    1.  Financial Statements:
 
        The index to consolidated financial statements and supplementary data is
        set forth under Item 8 on page 21 hereof.
 
    2.  Financial Statement Schedules:
 
<TABLE>
<CAPTION>
                                                                                            PAGE
                                                                                            -----
<S>                                                                                      <C>
Report of Independent Public Accountants...............................................          23
Schedule II -- Valuation and Qualifying Accounts.......................................          24
Supplemental Note to Consolidated Financial Statements.................................          25
</TABLE>
 
    All other schedules are inapplicable or the required information is included
elsewhere herein.
 
(B) REPORTS ON FORM 8-K
 
    None.
 
(C) EXHIBITS
 
    Reference  is  made  to  the Index  to  Exhibits  immediately  preceding the
exhibits hereto.
 
                                       22
<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                  SUPPLEMENTAL SCHEDULE AND SUPPLEMENTAL NOTE
 
To Hilton Hotels Corporation:
 
    We  have audited in  accordance with generally  accepted auditing standards,
the  consolidated  financial  statements   of  Hilton  Hotels  Corporation   and
subsidiaries  included  in the  Annual  Report to  Stockholders  incorporated by
reference in this Form 10-K, and  have issued our report thereon dated  February
1,  1996. Our  audit was  made for the  purpose of  forming an  opinion on those
statements taken as a whole. The  supplemental schedule II and the  supplemental
note  to consolidated financial statements  as shown on pages  24 and 25 are the
responsibility of the  Company's management  and are presented  for purposes  of
complying  with the Securities and Exchange  Commission's rules and are not part
of the basic  consolidated financial statements.  The supplemental schedule  and
the  supplemental  note  to  the  consolidated  financial  statements  have been
subjected to  the  auditing  procedures  applied  in  the  audit  of  the  basic
consolidated  financial  statements and,  in our  opinion,  fairly state  in all
material respects  the  financial data  required  to  be set  forth  therein  in
relation to the basic consolidated financial statements taken as a whole.
 
                                          ARTHUR ANDERSEN LLP
 
Los Angeles, California
February 1, 1996
 
                                       23
<PAGE>
                   HILTON HOTELS CORPORATION AND SUBSIDIARIES
                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                                 (IN MILLIONS)
 
<TABLE>
<CAPTION>
                                                                                         CHARGED
                                                              BALANCE AT   CHARGED TO   (CREDITED)                        BALANCE AT
                                                              BEGINNING    COSTS AND     TO OTHER                           END OF
                                                              OF PERIOD     EXPENSES     ACCOUNTS    DEDUCTIONS   OTHER     PERIOD
                                                              ----------   ----------   ----------   ----------   -----   ----------
<S>                                                           <C>          <C>          <C>          <C>          <C>     <C>
YEAR ENDED DECEMBER 31, 1995
  Allowance for doubtful accounts
    Hotel and other.........................................    $11.4          2.0         (.6)          4.4       --         8.4
    Casino..................................................     16.0         18.1        --            20.6       --        13.5
  Reserve for loss on other investments.....................     20.6        --           --             1.1       --        19.5
 
YEAR ENDED DECEMBER 31, 1994
  Allowance for doubtful accounts
    Hotel and other.........................................    $11.6          1.7          .5           2.4       --        11.4
    Casino..................................................      7.6         13.2        --             4.8       --        16.0
  Reserve for loss on other investments.....................     12.5        --           --           --          8.1(A)    20.6
 
YEAR ENDED DECEMBER 31, 1993
  Allowance for doubtful accounts
    Hotel and other.........................................    $ 7.2          1.8         4.5           1.9       --        11.6
    Casino..................................................     14.4         10.9        --            17.7       --         7.6
  Reserve for loss on other investments                         --            12.5        --           --          --        12.5
</TABLE>
 
------------------------
(A) Represents unrealized holding losses on certain equity securities.
 
                                       24
<PAGE>
                   HILTON HOTELS CORPORATION AND SUBSIDIARIES
             SUPPLEMENTAL NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
                         AT DECEMBER 31, 1995 AND 1994
                                 (IN MILLIONS)
 
<TABLE>
<CAPTION>
                                                                                                    1995       1994
                                                                                                  ---------  ---------
<S>                                                                                               <C>        <C>
Accounts payable and accrued expenses at December 31, consisted of:
  Accounts and notes payable....................................................................  $    94.0       87.2
  Accrued salaries and wages....................................................................       31.2       29.5
  Insurance.....................................................................................       27.3       28.7
  Interest......................................................................................       18.8       20.6
  Other accrued expenses........................................................................      135.2      118.0
                                                                                                  ---------  ---------
                                                                                                  $   306.5      284.0
                                                                                                  ---------  ---------
                                                                                                  ---------  ---------
</TABLE>
 
                                       25
<PAGE>
                                   SIGNATURES
 
    Pursuant  to  the requirements  of  Section 13  or  15(d) of  the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on March 14, 1996.
 
                                          HILTON HOTELS CORPORATION
                                                     (Registrant)
 
                                          By:            STEVE KRITHIS
 
                                             -----------------------------------
                                                        Steve Krithis
                                                Senior Vice President-Finance
 
    Pursuant to the requirements  of the Securities Exchange  Act of 1934,  this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities indicated on March 14, 1996.
 
<TABLE>
<S>                                           <C>
          RAYMOND C. AVANSINO, JR.                         ROBERT L. JOHNSON
-------------------------------------------   -------------------------------------------
          Raymond C. Avansino, Jr.                         Robert L. Johnson
                  Director                                      Director
 
           STEPHEN F. BOLLENBACH                             DONALD R. KNAB
-------------------------------------------   -------------------------------------------
           Stephen F. Bollenbach                             Donald R. Knab
   President and Chief Executive Officer                        Director
         (Chief Executive Officer)
 
              A. STEVEN CROWN                                STEVE KRITHIS
-------------------------------------------   -------------------------------------------
              A. Steven Crown                                Steve Krithis
                  Director                           Senior Vice President-Finance
                                                (Chief Financial and Accounting Officer)
 
             GREGORY R. DILLON                            BENJAMIN V. LAMBERT
-------------------------------------------   -------------------------------------------
             Gregory R. Dillon                            Benjamin V. Lambert
                  Director                                      Director
 
               BARRON HILTON                                DONNA F. TUTTLE
-------------------------------------------   -------------------------------------------
               Barron Hilton                                Donna F. Tuttle
           Chairman of the Board                                Director
 
               ERIC M. HILTON                              SAM D. YOUNG, JR.
-------------------------------------------   -------------------------------------------
               Eric M. Hilton                              Sam D. Young, Jr.
                  Director                                      Director
 
            DIETER H. HUCKESTEIN
-------------------------------------------
            Dieter H. Huckestein
                  Director
</TABLE>
 
                                       26
<PAGE>
                               INDEX TO EXHIBITS
 
<TABLE>
<CAPTION>
                                                                                                               SEQUENTIALLY
EXHIBIT                                                                                                          NUMBERED
 NUMBER                                              DESCRIPTION                                                   PAGE
-------- ----------------------------------------------------------------------------------------------------  ------------
<C>      <S>                                                                                                   <C>
   3.1   Restated  Certificate of Incorporation  of Registrant, as amended  (incorporated herein by reference
         from Exhibit 3.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1987)
   3.2   By-Laws of Registrant, as amended (incorporated herein by reference from Exhibit 3.2 to Registrant's
         Annual Report on Form 10-K for the year ended December 31, 1992)
   3.3   Amendment to By-Laws of Registrant, relating to Exhibit 3.2 hereto..................................
   4.1   Indenture, dated as of July 1, 1988,  between Registrant and Citibank, N.A., regarding  Registrant's
         Subordinated  Debt Securities (incorporated  herein by reference from  Exhibit 4.1 to Post-Effective
         Amendment No. 2 to Registrant's Registration Statement on Form S-3 (File No. 2-95746))
   4.2   Indenture, dated as of  July 1, 1988, between  Registrant and Morgan Guaranty  Trust Company of  New
         York,  regarding Registrant's Senior Debt Securities  (incorporated herein by reference from Exhibit
         4.1 to Post-Effective Amendment No. 1 to  Registrant's Registration Statement on Form S-3 (File  No.
         2-99967))
   4.3   First  Supplemental Indenture,  dated as of  June 30,  1992, between Registrant  and Morgan Guaranty
         Trust Company of New York,  regarding Registrant's Senior Debt  Securities, relating to Exhibit  4.2
         hereto (incorporated herein by reference from Exhibit 4.3 to Registrant's Annual Report on Form 10-K
         for the year ended December 31, 1992)
   4.4   Reimbursement  Agreements, dated as of  November 15, 1990, among  Registrant, Swiss Bank Corporation
         and the financial institutions signatory thereto (incorporated herein by reference from Exhibit  4.7
         to Registrant's Annual Report on Form 10-K for the year ended December 31, 1990)
   4.5   Rights  Agreement, dated  as of July  14, 1988,  between Registrant and  The First  National Bank of
         Chicago (incorporated herein by reference from Exhibit 1 to Registrant's Current Report on Form 8-K,
         dated July 14, 1988)
  10.1   1984 Stock Option and Stock Appreciation Rights  Plan of Registrant, together with the Stock  Option
         Agreement  relating thereto , both as amended (incorporated herein by reference from Exhibit 10.5 to
         Registrant's Annual Report on Form 10-K for the year ended December 31, 1989)*
  10.2   Amendment, dated October 18, 1990,  to the 1984 Stock Option  and Stock Appreciation Rights Plan  of
         Registrant,  relating to Exhibit 10.1 hereto (incorporated  herein by reference from Exhibit 10.3 to
         Registrant's Annual Report on Form 10-K for the year ended December 31, 1990)*
  10.3   1990 Stock Option and Stock Appreciation Rights  Plan of Registrant, together with the Stock  Option
         Agreement  relating thereto, both as amended (incorporated  herein by reference from Exhibit 10.4 to
         Registrant's Annual Report on Form 10-K for the year ended December 31, 1990)*
  10.4   Amendment, dated January 20, 1994,  to the 1990 Stock Option  and Stock Appreciation Rights Plan  of
         Registrant,  relating to Exhibit 10.3 hereto (incorporated  herein by reference from Exhibit 10.5 to
         Registrant's Annual Report on Form 10-K for the year ended December 31, 1993)*
</TABLE>
 
                                       27
<PAGE>
<TABLE>
<CAPTION>
                                                                                                               SEQUENTIALLY
EXHIBIT                                                                                                          NUMBERED
 NUMBER                                              DESCRIPTION                                                   PAGE
-------- ----------------------------------------------------------------------------------------------------  ------------
<C>      <S>                                                                                                   <C>
  10.5   Amendment, dated January 19, 1995,  to the 1990 Stock Option  and Stock Appreciation Rights Plan  of
         Registrant, relating to Exhibits 10.3 and 10.4 hereto (incorporated herein by reference from Exhibit
         10.5 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1994)*
  10.6   1996 Stock Incentive Plan of Registrant*............................................................
  10.7   1996 Chief Executive Stock Incentive Plan of Registrant*............................................
  10.8   Incentive  Compensation Plan of  Registrant (incorporated herein  by reference from  Exhibit 10.4 to
         Registrant's Annual Report on Form 10-K for the year ended December 31, 1980)*
  10.9   Amendment, dated as of January 1, 1994,  to the Incentive Compensation Plan of Registrant,  relating
         to  Exhibit 10.8 hereto (incorporated  herein by reference from  Exhibit 10.7 to Registrant's Annual
         Report on Form 10-K for the year ended December 31, 1993)*
  10.10  Retirement Plan  of Registrant,  as amended  and  restated (incorporated  herein by  reference  from
         Exhibit 10.8 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1994)*
  10.11  First  Amendment, dated as of November  15, 1995, to the Retirement  Plan of Registrant, relating to
         Exhibit 10.10 hereto*...............................................................................
  10.12  Supplemental Executive Retirement Plan of Registrant,  as amended (incorporated herein by  reference
         from Exhibit 10.6 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1991)*
  10.13  Amendment,  effective April 1,  1994, to the  Supplemental Executive Retirement  Plan of Registrant,
         relating  to  Exhibit  10.12  hereto  (incorporated  herein  by  reference  from  Exhibit  10.10  to
         Registrant's Annual Report on Form 10-K for the year ended December 31, 1994)*
  10.14  Directors'  Retirement Benefit Plan of Registrant, as amended (incorporated herein by reference from
         Exhibit 10.7 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1991)*
  10.15  Retirement Benefit Replacement Plan of Registrant, as amended (incorporated herein by reference from
         Exhibit 10.9 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1992)*
  10.16  Amendment, dated as of January  1, 1994, to the Retirement  Benefit Replacement Plan of  Registrant,
         relating  to  Exhibit  10.15  hereto  (incorporated  herein  by  reference  from  Exhibit  10.12  to
         Registrant's Annual Report on Form 10-K for the year ended December 31, 1993)*
  10.17  Amendment, effective  April 1,  1994, to  the  Retirement Benefit  Replacement Plan  of  Registrant,
         relating  to Exhibits 10.15 and 10.16 hereto (incorporated herein by reference from Exhibit 10.14 to
         Registrant's Annual Report on Form 10-K for the year ended December 31, 1994)*
  10.18  Thrift Savings Plan of Registrant,  as amended and restated  (incorporated herein by reference  from
         Exhibit 10.15 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1994)*
  10.19  First  Amendment, dated as of March 16, 1995, to  the Thrift Savings Plan of Registrant, relating to
         Exhibit 10.18 hereto*...............................................................................
</TABLE>
 
                                       28
<PAGE>
<TABLE>
<CAPTION>
                                                                                                               SEQUENTIALLY
EXHIBIT                                                                                                          NUMBERED
 NUMBER                                              DESCRIPTION                                                   PAGE
-------- ----------------------------------------------------------------------------------------------------  ------------
<C>      <S>                                                                                                   <C>
  10.20  Form of  Executive Employment  Agreement, dated  as of  November 17,  1994 (incorporated  herein  by
         reference  from Exhibit 10.16 to Registrant's Annual Report on Form 10-K for the year ended December
         31, 1994)*
  10.21  Employment Agreement, dated as of February 1, 1996, between Registrant and Stephen F. Bollenbach*...
  11     Computation of Earnings Per Share...................................................................
  12     Computation of Ratios of Earnings to Fixed Charges..................................................
  13     Registrant's Annual Report to Stockholders for the year ended December 31, 1995.....................
  21     List of Registrant's Subsidiaries...................................................................
  23     Consent of Independent Public Accountants...........................................................
  99     Undertakings........................................................................................
</TABLE>
 
------------------------
*  Management contracts or  compensatory plans  or arrangements  required to  be
   filed  as exhibits  to this Form  10-K by Item  601(b)(10)(iii) of Regulation
   S-K, previously filed where indicated and incorporated herein by reference.
 
    Pursuant to  Regulation Section229.601,  Item 601(b)(4)(iii)  of  Regulation
S-K,  upon request  of the  Securities and  Exchange Commission,  the Registrant
hereby undertakes to furnish a copy of any unfiled instrument which defines  the
rights  of  holders of  long-term debt  of the  Registrant and  its consolidated
subsidiaries (and for any of its unconsolidated subsidiaries for which financial
statements are required  to be  filed) wherein  the total  amount of  securities
authorized  thereunder does not  exceed 10% of the  total consolidated assets of
the Registrant.
 
                                       29