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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-K

|ý                                           | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|------------------------------------------- | ----------------------------------------------------------------------------------------
|For the fiscal year ended December 31, 2002
|OR                                         
|o                                           | 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

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HILTON HOTELS CORPORATION(Exact Name of Registrant as Specified in its Charter)

|Delaware(State or other jurisdiction
of incorporation or organization)                    |  | 36-2058176(I.R.S. Employer
Identification Number)
|----------------------------------------------------------------------------------------- |  | -------------------------------------------------
|9336 Civic Center Drive
Beverly Hills, California(Address of principal executive offices) |  | 90210(Zip Code)                                  

Registrant's
telephone number, including area code:(310) 278-4321

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange
on which registeredCommon Stock, par value $2.50 per share
8% Quarterly Interest Bonds due 2031

New York, Pacific
New York


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 ý    No o

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.     Yes ý    No o

Indicate
by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the
Act).    Yes ý    No o

Based
upon the June 28, 2002, New York Stock Exchange closing price of $13.90 per share, the aggregate market value of the Registrant's outstanding Common Stock held by
non-affiliates of the Registrant was approximately $4.8 billion. On that date, there were 375,947,229 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, 2002 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.

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TABLE OF CONTENTS

|                       |                                   |                                                     |    | Page
|---------------------- | --------------------------------- | --------------------------------------------------- | -- | ----
|PART I                 |                                   | 1                                                  
|Item 1.                |                                   | Business                                            |    | 1   
|General Information    |                                   | 1                                                  
|                       | Current Operations                |                                                     | 1 
|                       | Recent Developments               |                                                     | 1 
|                       | Promus Acquisition                |                                                     | 2 
|                       | Separation of Gaming Business     |                                                     | 2 
|                       | Industry Segments                 |                                                     | 2 
|Operations             |                                   | 3                                                  
|                       | Hotel Properties                  |                                                     | 3 
|                       | Hotel Brands                      |                                                     | 4 
|                       | Timeshare Operations              |                                                     | 5 
|                       | Development                       |                                                     | 6 
|                       | Alliances                         |                                                     | 7 
|                       | Development Financing             |                                                     | 8 
|                       | Territorial Restrictions          |                                                     | 9 
|                       | Potential Acquisitions            |                                                     | 9 
|                       | Property Transactions             |                                                     | 9 
|                       | Statistical Information           |                                                     | 10
|Additional Information |                                   | 12                                                 
|                       | Casino Windsor                    |                                                     | 12
|                       | Design and Furnishing Services    |                                                     | 12
|                       | Reservation System                |                                                     | 12
|                       | HHonors                           |                                                     | 12
|                       | E-Business                        |                                                     | 13
|                       | Trademarks                        |                                                     | 13
|                       | Marketing                         |                                                     | 13
|                       | Business Risks                    |                                                     | 14
|                       | Competition                       |                                                     | 14
|                       | Forward-Looking Statements        |                                                     | 15
|                       | Environmental Matters             |                                                     | 16
|                       | Regulation and Licensing          |                                                     | 16
|                       | Employees                         |                                                     | 17
|                       | Available Information             |                                                     | 17
|Item 2.                |                                   | Properties                                          |    | 17  
|Item 3.                |                                   | Legal Proceedings                                   |    | 17  
|Item 4.                |                                   | Submission of Matters to a Vote of Security Holders |    | 17  
|                       | Executive Officers of the Company |                                                     | 18

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|PART II           |                                      | 19                                                                                            
|----------------- | ------------------------------------ | ----------------------------------------------------------------------------------------------
|Item 5.           |                                      | Market for Registrant's Common Equity and Related Stockholder Matters                         
|                  | Rights Agreement                     |                                                                                               
|Item 6.           |                                      | Selected Financial Data                                                                       
|Item 7.           |                                      | Management's Discussion and Analysis of Financial Condition and Results of Operations         
|Item 7A.          |                                      | Quantitative and Qualitative Disclosures About Market Risk                                    
|Item 8.           |                                      | Financial Statements and Supplementary Data                                                   
|Item 9.           |                                      | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure          
|PART III          |                                      | 22                                                                                            
|Item 10.          |                                      | Directors and Executive Officers of the Registrant                                            
|Item 11.          |                                      | Executive Compensation                                                                        
|Item 12.          |                                      | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|                  | Equity Compensation Plan Information |                                                                                               
|Item 13.          |                                      | Certain Relationships and Related Transactions                                                
|Item 14.          |                                      | Controls and Procedures                                                                       
|PART IV           |                                      | 25                                                                                            
|Item 15.          |                                      | Exhibits, Financial Statement Schedules and Reports on Form 8-K                               
|                  | (a) Index to Financial Statements    |                                                                                               
|                  | (b) Reports on Form 8-K              |                                                                                               
|                  | (c) Exhibits                         |                                                                                               
|Signatures        |                                      | 26                                                                                            
|Certifications    |                                      | 27                                                                                            
|Index to Exhibits |                                      | 29                                                                                            

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PART I

Item 1. Business

GENERAL INFORMATION

Current Operations

Hilton Hotels Corporation is engaged, together with its subsidiaries, in the ownership, management and development of hotels, resorts and timeshare properties and
the franchising of lodging properties. As of December 31, 2002, our system contained 2,084 properties, totaling over 337,000 rooms worldwide. Of such properties, we owned an interest in and
operated 128 hotels, leased seven hotels, managed 201 hotels owned by others and franchised 1,721 hotels owned and operated by third parties. Also included in the number of properties in our system
are 27 timeshare properties which we managed or franchised. All of these properties are located in the United States, with the exception of 12 hotels in which we own an interest and/or manage and 45
hotels which we franchise.

Our
hotel brands include Hilton, Hilton Garden Inn, Doubletree, Embassy Suites, Hampton, Homewood Suites by Hilton and Conrad. We develop and operate timeshare resorts through Hilton
Grand Vacations Company and its related entities, which we wholly own. We are also engaged in various other activities related or incidental to the operation of hotels.

Hilton
was organized in the State of Delaware on May 29, 1946. Our principal executive offices are located at 9336 Civic Center Drive, Beverly Hills, California 90210, and our
telephone number is (310) 278-4321.

For
additional information, see our Annual Report to Stockholders for the fiscal year ended December 31, 2002 (the "Stockholder Report"). Portions of the Stockholder Report are
included as Exhibit 13 to this Form 10-K and, to the extent specific references are made to such portions of the Stockholder Report, those provisions are incorporated in this
Form 10-K by reference.

Recent Developments



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For a description of our planned expansion activities, see "OperationsDevelopment." For additional information, see "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 17 through 32 in the Stockholder Report.

Promus Acquisition

On November 30, 1999, we consummated our acquisition of Promus Hotel Corporation ("Promus") through the merger of Promus into a wholly owned subsidiary of
Hilton (the "Promus Acquisition"). As a result of the Promus Acquisition, we added over 1,450 properties representing over 200,000 rooms to our hotel system, along with a complementary portfolio of
hotel brand names including Doubletree, Embassy Suites, Hampton, Homewood Suites, Red Lion and Harrison Conference Centers. The Promus Acquisition has created a more diversified and balanced income
stream by increasing the percentage of revenue that we derive from management and franchise fees, both of which require little or no ongoing capital investment by us.

Separation of Gaming Business

On December 31, 1998, we completed a spin-off that split our operations into two independent public corporations, one for conducting our hotel
business and one for conducting our gaming business. Hilton retained ownership of the hotel business. We transferred the gaming business to a new corporation named Park Place Entertainment
Corporation, and distributed the stock of Park Place to our stockholders on a one-for-one basis.

Industry Segments

We operate in three reportable business segments which are based on similar products or services: Hotel Ownership; Managing and Franchising; and Timeshare. For
additional information, see "Segment Information" in the Notes to Consolidated Financial Statements on page 51 in the Stockholder Report.

As
of December 31, 2002, we managed (and in some cases, partially owned) hotel properties in Belgium, Egypt, England, Hong Kong, Ireland, Mexico, Puerto Rico, Singapore and
Turkey. We also franchised hotel properties in Canada, Colombia, Costa Rica, Ecuador, Mexico, Peru, Puerto Rico and Venezuela. To date, the amounts of revenues, operating profits and identifiable
assets attributable to geographic areas outside the United States have not been material.

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OPERATIONS

Hotel Properties



As of December 31, 2002, we owned a majority or controlling financial interest in and operated 63 hotels, representing 34,664 rooms. The owned hotels
include some of our largest and most profitable hotels, including:



Included
in the number of owned hotels are 12 hotels for which we lease the land upon which the hotels are located. The expiration dates of the leases range up to 2044, with certain
leases containing renewal options for 30 to 40 years. Under these leases, we own the buildings and leasehold improvements and all furniture and equipment, are responsible for repairs,
maintenance, operating expenses and lease rentals, and retain complete managerial discretion over operations. Lease terms generally require us to pay a fixed monthly base rent and may require us to
pay additional rent based on a percentage of revenue or income. Upon the expiration of such leases, the buildings and other leasehold improvements presently owned by us revert to the landlords. For
additional information, see "Leases" in the Notes to Consolidated Financial Statements on page 52 in the Stockholder Report.



As of December 31, 2002, we leased seven hotels, representing 2,650 rooms. Under these leases, we lease the hotel from its owner, manage the hotel and are
generally responsible for all aspects of the hotel's operations and recognize all revenues and substantially all expenses associated with the hotel's operations. Although, in general, replacement of
furniture, fixtures and equipment is the landlord's responsibility, we are obligated under certain leases to maintain and replace these items. Lease terms typically require us to pay a fixed monthly
base rent regardless of the performance of the hotel and a variable rent based on a percentage of revenue or income.



As of December 31, 2002, we had a minority or non-controlling financial interest in and operated 65 hotels, representing 19,093 rooms. These
hotels are owned by joint ventures of which we own a minority or non-controlling interest. We have a right of first refusal to purchase additional equity interests in certain of these
joint ventures. We manage each of the partially owned hotels for the entity owning the hotel. For additional information, see "Alliances" below.

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As of December 31, 2002, we managed 201 hotels, representing 52,004 rooms, which are wholly owned by others. Under our standard management agreement, we
operate a hotel for the benefit of its owner, which either owns or leases the hotel and the associated personal property. Our management fee is generally based on a percentage of each hotel's gross
revenue plus, in the majority of properties, an incentive fee based on operating performance. The terms of our management agreements are for various periods and generally contain renewal options,
subject to certain termination rights.

In
general, under our management agreements all operating and other expenses are paid by the owner and we are reimbursed for our out-of-pocket expenses. In turn,
our managerial discretion is subject to approval by the owner in certain major areas, including the approval of capital expenditure budgets.



As of December 31, 2002, we franchised 1,721 hotels, representing 225,588 rooms, which are owned and operated by third parties. In general, franchisees pay
us an initial fee based on the number of rooms in a franchise hotel and a continuing fee based on a percentage of the hotel's rooms revenue, which may be up to 5% of rooms revenue depending on the
brand. Although we do not directly participate in the management or operation of franchise hotels, we conduct periodic inspections to ensure that our standards are maintained and render advice with
respect to hotel operations. We generally approve the plans for, and the location of, franchise hotels and assist in their design.

Hotel Brands

We operate hotels through the brands described below, which target a wide variety of markets and geographic areas. According to data from Smith Travel Research,
in 2002, our Hilton, Hilton Garden Inn, Doubletree, Embassy Suites, Homewood Suites by Hilton and Hampton brands all achieved growth in the system-wide RevPAR (rooms revenue divided by the
number of available rooms) index, which represents the share of RevPAR these properties attain versus their respective competitive sets. Cross-selling among the brands and the positive impact of the
Hilton HHonors guest loyalty program contributed to gains in market share across our family of brands in 2002.



Hilton hotels are our upscale, full-service hotels that typically include swimming pools, gift shops and retail facilities, meeting and banquet
facilities, restaurants and lounges, room service, parking facilities and other services. The Hilton brand also includes Hilton Suites hotels which are upscale, extended stay all-suite
hotels. As of December 31, 2002, there were 231 Hilton hotels, representing 87,710 rooms, located in 37 states, the District of Columbia, Canada and Mexico. As of December 31, 2002,
there were six Hilton hotels under construction, of which three will be franchise hotels and three will be managed hotels.



Hilton Garden Inn hotels are our upper mid-market, limited-service hotels that utilize a modular design constructed around a courtyard containing an
indoor or outdoor swimming pool. In 2002, the Hilton Garden Inn brand earned the first place J.D. Power Award for "Highest Customer Satisfaction" in its category. As of December 31, 2002, there
were 161 Hilton Garden Inn hotels, representing 22,097 rooms, located in 37 states, the District of Columbia, Canada and Mexico. As of December 31, 2002, 26 Hilton Garden Inn hotels were under
construction, of which 25 will be franchise hotels and one will be a managed hotel.

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Doubletree hotels are our full-service hotels in the mid-market to upscale hotel category. The Doubletree brand also includes the
Doubletree Guest Suites all-suite hotels and the moderately priced Doubletree Club hotels. As of December 31, 2002, there were 154 Doubletree hotels, representing 41,342 rooms,
located in 38 states, the District of Columbia and Latin America. As of December 31, 2002, four Doubletree hotels were under construction, all of which will be franchise hotels.



Embassy Suites are our upscale, all-suite hotels that feature two-room guest suites with a separate living room and dining/work area and a
complimentary cooked-to-order breakfast. Most Embassy Suites hotels
are built around a landscaped atrium. In 2002, the Embassy Suites brand earned the first place J.D. Power Award for "Highest Customer Satisfaction" in its category for a fourth consecutive year, a
first in the history of the J.D. Power Award in the lodging category. As of December 31, 2002, there were 169 Embassy Suites, representing 41,142 rooms, located in 37 states, the District of
Columbia, Puerto Rico and Latin America. As of December 31, 2002, five Embassy Suites hotels were under construction, all of which will be franchise hotels.



Homewood Suites by Hilton are our upscale, extended stay hotels that feature residential-style accommodations including business centers, swimming pools,
convenience stores and limited meeting facilities. As of December 31, 2002, there were 121 Homewood Suites, representing 13,728 rooms, located in 33 states, the District of Columbia and Canada.
As of December 31, 2002, nine Homewood Suites hotels were under construction, all of which will be franchise hotels.



Hampton Inn hotels are our moderately priced hotels with limited food and beverage facilities. The Hampton brand also includes Hampton Inn & Suites hotels
which offer both traditional hotel room accommodations and apartment-style suites within one property. As of December 31, 2002, there were 1,206 Hampton hotels, representing 123,041 rooms,
located in 49 states, Canada, Puerto Rico and Latin America. As of December 31, 2002, 60 Hampton hotels were under construction, of which 58 will be franchise hotels and two will be managed
hotels.



In addition to the hotel brands described above, as of December 31, 2002, there were 15 hotels, representing 4,939 rooms, operated under other brand names.
These hotels are operated under our Conrad brand described below or under third party brands pursuant to contractual arrangements.



Timeshare Operations

We conduct our timeshare operations through Hilton Grand Vacations Company and its related entities ("HGVC"), which we wholly own. As of December 31, 2002,
HGVC managed 18 timeshare resorts in Florida, two in Nevada and one in each of Hawaii, Colorado and New York. We also manage two

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timeshare resorts and franchise two resorts in the United States under the Embassy Vacation Resort name. In addition, HGVC operates the HGVClub, a points based reservation and exchange system. We
have affiliated 29 timeshare resorts with HGVClub.

Development



We intend to grow our hotel brands primarily through franchising and the addition of management contracts, which require little or no capital investment. In
addition, we will continue to invest in capital improvements and select projects at our owned hotels and we may seek to acquire hotel properties on a strategic and selective basis. We will also
continue to invest in the development of timeshare properties.

During
2002, we added 143 properties with approximately 18,000 rooms to our portfolio. A total of 45 properties with approximately 8,400 rooms were removed from our system in 2002,
primarily due to asset sales and the termination of our affiliation with the Camino Real chain. In 2003, we expect to add 100 to 115 hotels with 12,000 to 15,000 rooms to our system, with Hampton and
Hilton Garden Inn accounting for most of the new development. Conversions from outside of our family of brands to one of our brands are expected to account for approximately 10% of the unit growth.
Virtually all of the growth is expected to be through franchise and management agreements.

Our
ability to grow the number of managed and franchised hotels is affected by the factors set forth under "Additional InformationForward-Looking Statements," including
national and regional economic conditions, including the magnitude and duration of the current economic downturn in the United States; the effects of actual and threatened terrorist attacks and
international conflicts; credit availability; relationships with franchisees and property owners; and competition from other hotel brands.



We seek to maintain our competitive advantage by consistently improving our hotel system through renovation programs and additions to existing hotels. Since
January 1, 2002, we have completed construction projects or renovation programs at a number of our owned properties, including the following:



See
"Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 17 through 32 in the Stockholder Report.



Of the 143 property additions in 2002, 134 were franchise properties, six were managed properties owned by third parties and two were managed properties in which
we own a minority interest. Included in these additions are 26 properties which, due in part to the market share leadership of our brands and the challenging environment for many hotel operators, were
converted to our family of brands in 2002. The 26 conversions include nine Hamptons, six Homewood Suites by Hilton, five Doubletrees, four Hiltons, one Hilton Garden Inn and one Conrad property.

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In
2002, our Embassy Suites and Hilton Garden Inn brands earned first place J.D. Power Awards for "Highest Customer Satisfaction" in their respective categories. Embassy Suites was a
winner for a fourth consecutive year, a first in the history of the J.D. Power Award in the lodging category.

In
2002, franchisees announced the development of five new Hampton Inn hotels in New York City, representing the brand's first entry into the country's largest metropolitan area. We also
announced an agreement to manage a new 450-room convention hotel in Omaha, Nebraska. The Hilton Omaha, adjacent to the new Omaha Convention Center, is scheduled to open in the second
quarter of 2004. We were previously selected to manage a new 1,200-room convention hotel in Houston, Texas and a new 800-room convention hotel in Austin, Texas. The Houston
property is scheduled to open in the fourth quarter of 2003 and the Austin property is scheduled to open in the first quarter of 2004.



HGVC has recently opened or is currently developing the following projects:



HGVC
is actively seeking new management, development and acquisition opportunities in other destination resort locations. For additional information, see "Summary of Significant
Accounting PoliciesRevenue Recognition" in the Notes to Consolidated Financial Statements on page 39 in the Stockholder Report.

Alliances



In 1997, we entered into agreements with Hilton Group plc ("Hilton Group"), whose wholly owned subsidiary Hilton International Co. ("HI"), owns the rights to the
Hilton name outside the United States. The agreements provide for the reunification of the Hilton brand worldwide through a strategic alliance between the companies, including cooperation on sales and
marketing, loyalty programs and other operational matters. Pursuant to these agreements, both companies have integrated their reservation systems under Hilton Reservations Worldwide, launched the
Hilton HHonors Worldwide loyalty program, integrated worldwide sales offices, developed joint marketing initiatives and adopted a Hilton brand identity used by both companies. See "Additional
InformationReservation System" and "HHonors." Stephen F. Bollenbach, our President and Chief Executive Officer, is a non-executive director of Hilton Group and
David Michels, Chief Executive of Hilton Group, is one of our non-executive directors.

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In 2000, we announced the formation of a joint venture company with Hilton Group to expand the Conrad brand of luxury hotels on a worldwide basis. The joint venture company, which is
owned 50% by each of Hilton and HI, seeks to develop the Conrad brand primarily through management contracts, the construction of new hotels requiring modest investment by the joint venture partners
and through the conversion of existing hotels to the Conrad brand. In 2001, we renamed the Towers portion of the Waldorf=Astoria as the Waldorf Towers, a Conrad Hotel, making it the first Conrad hotel
in North America.

Development
of additional international hotels by us under the "Hilton" and "Conrad" names is subject to our alliance agreements with Hilton Group. See "Territorial Restrictions."
Pursuant to the joint venture with Hilton Group, we have entered into a management agreement to operate on behalf of the joint venture a newly built Conrad hotel in Bali, Indonesia, which is scheduled
to open in the fourth quarter of 2004. We also commenced management of the new 392-room Conrad Bangkok in Thailand in January 2003 and continue to manage and retain our ownership
interest, if any, in the Conrad hotels we operated prior to formation of the joint venture. See "Hotel BrandsOther BrandsConrad."



In February 2003, we completed a transaction in which we formed a partnership with CNL Hospitality Corp. ("CNL") that has acquired the
following properties: the 500-room Doubletree at Lincoln Centre in Dallas, Texas; the 428-room Sheraton El Conquistador Resort and Country Club in Tucson, Arizona (converted to
the Hilton brand); the 437-room Hilton Rye Town in New York; the 630-room Doubletree Crystal City in Virginia; the 267-suite Embassy Suites Crystal City in
Virginia; the 257-suite Embassy Suites Santa Clara in California; and the 174-suite Embassy Suites Orlando Airport in Florida. We contributed the Hilton Rye Town to the
partnership, CNL contributed the Doubletree Crystal City and the partnership acquired the remaining properties. We have a 25% interest in this partnership and manage each of the seven hotel properties
under long-term agreements.

In
2001, we completed a transaction with CNL in which the two companies formed a partnership that owns four hotel properties: the 500-room Hilton Miami Airport in Florida;
the 276-suite Embassy Suites Portland in Oregon; the 484-room Hilton Costa Mesa in California; and the 224-suite Hilton Suites Auburn Hills in Michigan. We
contributed the Embassy Suites Portland and the Hilton Suites Auburn Hills and CNL contributed the Hilton Miami Airport and the Hilton Costa Mesa to the partnership.
We have a 30% interest in this partnership and manage each of the four hotel properties under long-term agreements.



As of December 31, 2002, FelCor Lodging Trust Inc. ("FelCor") owned or had an interest in 82 of our hotels and we owned approximately
1.5 million shares of FelCor common stock, representing approximately 2% of FelCor's outstanding common stock.

Development Financing

To assist prospective franchisees in obtaining financing for hotel projects, we have programs to provide alternative capital sources to qualified franchisees.
Hilton Managers Acceptance Corp. ("HilMAC"), a third party lending entity, provides first mortgage construction financing to franchisees for select Hilton Garden Inn, Homewood Suites by Hilton,
Hampton and Embassy Suites hotels. As of December 31, 2002, we guaranteed $38 million of loans outstanding under the HilMAC program. In addition to HilMAC, we have guaranteed
$15 million of obligations of our franchisees. We also provide secondary financing to franchisees under a mezzanine financing program. As of December 31, 2002, loans outstanding under
this mezzanine financing program totaled approximately $48 million. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 17 through 32 in
the Stockholder Report.

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Territorial Restrictions

Certain franchise and management agreements entered into by Hilton and Promus contain provisions that may have the effect of limiting or restricting Hilton's or
Promus' right to own, manage or franchise additional hotels, or in some cases brands, in a specified geographic area. Such provisions vary significantly in their applicability and scope and may be
subject to differing interpretations. As a result of the Promus Acquisition, we own, manage or franchise hotels in circumstances that may give rise to claims that such hotels conflict with or violate
such provisions. To the extent that such conflicts arise, we seek to resolve them by negotiation with the relevant parties. In the event that such resolution cannot be achieved, litigation may result
in damages or other remedies against us. Such remedies could include termination of the right to own, manage or franchise the relevant property. Although no assurance can be given that we will be able
to renegotiate successfully or otherwise resolve the effects of such conflicts in each instance, these conflicts have not had, and are not expected to have, a material adverse effect on our financial
position or results of operations.

We
have entered into agreements which restrict our right to operate hotels in various areas under the "Hilton" or "Conrad" names. Pursuant to an agreement entered into in 1964 at the
time we distributed to our stockholders all of the issued and outstanding capital stock of HI, we were prohibited from operating facilities outside the United States identified as "Hilton" hotels and
HI was prohibited from operating facilities within the United States identified as "Hilton" hotels. We conduct certain of our international hotel operations under the Conrad name. See "Hotel
BrandsOther BrandsConrad."

We
have entered into alliance agreements with the Hilton Group, the parent company of HI, to reunite the Hilton name. Pursuant to these agreements, HI has granted a license to us to
develop franchise properties under the Hilton and Hilton Garden Inn names in Canada, Mexico and the Island of St. John, U.S. Virgin Islands, for a period of 20 years. We have formed a joint
venture with HI to develop the Conrad brand on a worldwide basis. Subject to the foregoing restrictions as to the use of the "Hilton" and "Conrad" names, Hilton and HI can compete in all, and do
compete in certain, markets. See "AlliancesHilton Group" above.

Potential Acquisitions

We continuously evaluate acquisition opportunities and may, from time to time, negotiate to engage in a business combination transaction or other acquisition.
However, there is no assurance that we will engage in any such transactions.

Property Transactions

We continuously evaluate our portfolio of owned assets and may seek to sell certain non-strategic assets from time to time. See "General
InformationRecent DevelopmentsHotel Properties" for a description of certain properties we sold in 2002 and 2003. In addition, we will continue to review our portfolio of
owned assets for potential repositioning or rebranding opportunities.

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Statistical Information

The following table sets forth certain information for our properties system-wide with respect to the number of properties and rooms as of
December 31, 2001 and 2002:

|                          |               | 2001
Number of |       | 2002
Number of |         | Change in
Number of |      
|------------------------- | ------------- | -------------- | ----- | -------------- | ------- | ------------------- | -----
|
|
|Hilton                    |               |                |       |                |         |                     |      
|                          | Owned         |                | 38    |                | 27,519  |                     | 39   
|                          | Leased        |                | 1     |                | 499     |                     | 1    
|                          | Joint Venture |                | 6     |                | 3,104   |                     | 6    
|                          | Managed       |                | 15    |                | 9,970   |                     | 17   
|                          | Franchised    |                | 169   |                | 44,971  |                     | 168  
|                          |               |                |       |                |         |                     |      
|                          |               | Total          |       | 229            |         | 86,063              |      
|Hilton Garden Inn         |               |                |       |                |         |                     |      
|                          | Owned         |                | 1     |                | 162     |                     | 1    
|                          | Joint Venture |                | 2     |                | 280     |                     | 2    
|                          | Franchised    |                | 122   |                | 16,846  |                     | 158  
|                          |               |                |       |                |         |                     |      
|                          |               | Total          |       | 125            |         | 17,288              |      
|Doubletree                |               |                |       |                |         |                     |      
|                          | Owned         |                | 9     |                | 3,156   |                     | 9    
|                          | Leased        |                | 6     |                | 2,151   |                     | 6    
|                          | Joint Venture |                | 30    |                | 8,277   |                     | 30   
|                          | Managed       |                | 61    |                | 16,870  |                     | 57   
|                          | Franchised    |                | 45    |                | 10,434  |                     | 52   
|                          |               |                |       |                |         |                     |      
|                          |               | Total          |       | 151            |         | 40,888              |      
|Embassy Suites            |               |                |       |                |         |                     |      
|                          | Owned         |                | 5     |                | 1,023   |                     | 5    
|                          | Joint Venture |                | 23    |                | 6,339   |                     | 24   
|                          | Managed       |                | 61    |                | 15,771  |                     | 61   
|                          | Franchised    |                | 79    |                | 18,202  |                     | 79   
|                          |               |                |       |                |         |                     |      
|                          |               | Total          |       | 168            |         | 41,335              |      
|Homewood Suites by Hilton |               |                |       |                |         |                     |      
|                          | Owned         |                | 7     |                | 905     |                     | 7    
|                          | Managed       |                | 29    |                | 3,473   |                     | 30   
|                          | Franchised    |                | 68    |                | 7,225   |                     | 84   
|                          |               |                |       |                |         |                     |      
|                          |               | Total          |       | 104            |         | 11,603              |      
|Hampton                   |               |                |       |                |         |                     |      
|                          | Owned         |                | 1     |                | 133     |                     | 1    
|                          | Managed       |                | 27    |                | 3,570   |                     | 25   
|                          | Franchised    |                | 1,116 |                | 114,103 |                     | 1,180
|                          |               |                |       |                |         |                     |      
|                          |               | Total          |       | 1,144          |         | 117,806             |      
|Timeshare                 |               | 25             |       | 2,911          |         | 27                  |      
|Other(1)                  |               |                |       |                |         |                     |      
|                          | Owned         |                | 4     |                | 638     |                     | 1    
|                          | Leased        |                | 2     |                | 186     |                     |     
|                          | Joint Venture |                | 4     |                | 1,604   |                     | 3    
|                          | Managed       |                | 17    |                | 4,122   |                     | 11   
|                          | Franchised    |                | 13    |                | 3,043   |                     |     
|                          |               |                |       |                |         |                     |      
|                          |               | Total          |       | 40             |         | 9,593               |      
|Total                     |               |                |       |                |         |                     |      
|                          | Owned         |                | 65    |                | 33,536  |                     | 63   
|                          | Leased        |                | 9     |                | 2,836   |                     | 7    
|                          | Joint Venture |                | 65    |                | 19,604  |                     | 65   
|                          | Managed       |                | 210   |                | 53,776  |                     | 201  
|                          | Franchised    |                | 1,612 |                | 214,824 |                     | 1,721
|                          | Timeshare     |                | 25    |                | 2,911   |                     | 27   
|                          |               |                |       |                |         |                     |      
|TOTAL PROPERTIES          |               | 1,986          |       | 327,487        |         | 2,084               |      
|                          |               |                |       |                |         |                     |      

---

10

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For purposes of the table above, "owned" properties are those in which we have a majority or controlling financial interest and "joint venture"
properties are those in which we have a minority or non-controlling financial interest. For additional information, see "Hotel Properties" above.

The
following table sets forth certain information for our hotels system-wide with respect to occupancy rates, average room rates and revenue per available room for the
fiscal years ended December 31, 2001 and 2002:

|                          |              | 2001(1) |   | 2002(1) |   | % Change |       
|------------------------- | ------------ | ------- | - | ------- | - | -------- | ------
|Hilton                    |              |         |   |         |   |          |       
|                          | Occupancy    |         |   | 67.4    | % |          | 68.1  
|                          | Average rate |         | $ | 131.84  |   | $        | 127.16
|                          | RevPAR(2)    |         | $ | 88.92   |   | $        | 86.61 
|Hilton Garden Inn         |              |         |   |         |   |          |       
|                          | Occupancy    |         |   | 64.0    | % |          | 66.1  
|                          | Average rate |         | $ | 101.25  |   | $        | 96.87 
|                          | RevPAR(2)    |         | $ | 64.77   |   | $        | 64.07 
|Doubletree                |              |         |   |         |   |          |       
|                          | Occupancy    |         |   | 66.6    | % |          | 66.1  
|                          | Average rate |         | $ | 106.05  |   | $        | 101.01
|                          | RevPAR(2)    |         | $ | 70.61   |   | $        | 66.76 
|Embassy Suites            |              |         |   |         |   |          |       
|                          | Occupancy    |         |   | 68.0    | % |          | 69.3  
|                          | Average rate |         | $ | 126.14  |   | $        | 120.00
|                          | RevPAR(2)    |         | $ | 85.77   |   | $        | 83.18 
|Homewood Suites by Hilton |              |         |   |         |   |          |       
|                          | Occupancy    |         |   | 70.9    | % |          | 72.7  
|                          | Average rate |         | $ | 98.83   |   | $        | 94.30 
|                          | RevPAR(2)    |         | $ | 70.04   |   | $        | 68.53 
|Hampton                   |              |         |   |         |   |          |       
|                          | Occupancy    |         |   | 66.7    | % |          | 67.1  
|                          | Average rate |         | $ | 77.21   |   | $        | 77.01 
|                          | RevPAR(2)    |         | $ | 51.47   |   | $        | 51.66 
|Other(3)                  |              |         |   |         |   |          |       
|                          | Occupancy    |         |   | 59.7    | % |          | 61.3  
|                          | Average rate |         | $ | 138.79  |   | $        | 124.87
|                          | RevPAR(2)    |         | $ | 82.81   |   | $        | 76.49 

---

For
additional information regarding our hotel brands, see "Hotel Brands" above.

11

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The following table sets forth certain statistical information for our hotels system-wide by geographic region as of and for the year ended December 31, 2002:

|Regions                           |       | Properties                  |     | Rooms   |         | Occupancy |      | Room Rate |       | RevPAR
|--------------------------------- | ----- | --------------------------- | --- | ------- | ------- | --------- | ---- | --------- | ----- | ------
|Owned, Leased and Managed Hotels: |       |                             |     |         |         |           |      |           |       |       
|                                  |       | Pacific/Mountain            |     | 108     |         | 39,413    |      | 68.3      | %     | $     
|                                  |       | North Central               |     | 41      |         | 13,744    |      | 66.9      |       |       
|                                  |       | South Central               |     | 65      |         | 15,754    |      | 66.5      |       |       
|                                  |       | New England/Middle Atlantic |     | 35      |         | 13,759    |      | 74.8      |       |       
|                                  |       | South Atlantic              |     | 74      |         | 21,376    |      | 69.6      |       |       
|                                  |       | International               |     | 13      |         | 4,365     |      | 63.7      |       |       
|                                  |       |                             |     |         |         |           |      |           |       |       
|                                  | Total |                             | 336 |         | 108,411 |           | 68.8 |           |       | 126.36
|                                  |       |                             |     |         |         |           |      |           |       |       
|Franchise Hotels                  |       | 1,721                       |     | 225,588 |         | 67.0      | %    | $         | 88.81 |       
|                                  |       |                             |     |         |         |           |      |           |       |       

In
the table above, statistics are for comparable hotels, and include only those hotels in our system as of December 31, 2002 and owned, operated or franchised by us since
January 1, 2001. For additional information regarding our number of properties, number of available rooms and statistical information, see the Supplementary Financial Information and Five Year
Summary on pages 55, 56 and 57 in the Stockholder Report.

ADDITIONAL INFORMATION

Casino Windsor

We own a 50% equity interest in Windsor Casino Limited, which operates the 400-room Casino Windsor in Windsor, Ontario, Canada for the Ontario
provincial government under a management contract. This hotel casino features a 75,000 square foot casino and entertainment and meeting facilities. See "Additional InformationRegulation
and LicensingOntario Gaming Laws."

Design and Furnishing Services

Hilton Supply Management, our wholly owned subsidiary, provides design and furnishing services to our hotels and to hotels owned and operated by others. These
services include the purchase and distribution of furniture, furnishings, equipment, food, beverage and operating supplies. The revenues of this operation depend primarily on the number of new hotels
we operate or franchise and on refurbishing and remodeling of our existing hotels.

Reservation System

Hilton Reservations Worldwide, LLC ("HRW") oversees a worldwide reservation system for hotels owned, operated or franchised by Hilton, Hilton Group, our
respective affiliates and others. Hilton and Hilton Group each own a 50% interest in HRW which operates an updated computerized reservation system. The domestic HRW reservation agents utilize an
automated system that enables them to automatically cross-sell among all of our hotel brands which has benefited, and which we expect will continue to benefit, all of our hotel brands.

HHonors

Pursuant to the alliance agreements we entered into with Hilton Group, Hilton and Hilton Group each own a 50% interest in the Hilton HHonors Worldwide, LLC guest
loyalty program ("HHonors"). HHonors includes the Hilton, Hilton Garden Inn, Doubletree, Embassy Suites, Homewood Suites by Hilton, Hampton and Conrad brands, as well as brands operated by Hilton
Group. Members of the HHonors program earn points based on their spending at most of the hotel properties operated and

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franchised by us and Hilton Group. HHonors accumulates and tracks points on the member's behalf and fulfills the awards upon request. Points can be redeemed for hotel stays at participating
properties, and for a variety of other awards such as airline tickets, cruises and car rentals. We expect HHonors to continue to have a positive impact on our brands. See "Summary of Significant
Accounting PoliciesHilton HHonors" in the Notes to Consolidated Financial Statements on page 40 in the Stockholder Report.

E-Business

We operate the Hilton worldwide internet website (www.hiltonworldwide.com) and our various hotel brand websites which provide cost effective customer service,
including online hotel reservations and HHonors enrollment. We also provide various business, technology and information services for our hotel guests.

Trademarks

The following trademarks used herein are owned by us and are registered as trademarks in the United States and in certain foreign countries:
Doubletree®, Doubletree Club Hotel®, Doubletree Guest Suites®, Embassy Suites Hotels®, Embassy Vacation Resort®, Hampton®,
Hampton Inn®, Hampton Inn & Suites®, HGVClub®, Hilton®, Hilton Garden Inn®, Hilton Grand Vacations Company®, Hilton
Hawaiian Village®, Homewood Suites by Hilton®, Palmer House® and Waldorf=Astoria®. The Conrad® trademark is owned by Conrad Hospitality,
LLC, of which Hilton and Hilton Group each own a 50% interest. The HHonors®, Senior HHonors®, Double Dip®, Double Dipping®, and Points &
Miles® trademarks are owned by Hilton HHonors Worldwide, LLC. We consider all of these marks, and the associated name recognition, to be valuable to our business. See "Summary of
Significant Accounting PoliciesBrands" in the Notes to Consolidated Financial Statements on page 38 in the Stockholder Report.

Marketing

Our hotel properties offer multiple product lines to a broad range of customers in many geographic markets. Our properties include full-service and
limited-service hotels in urban, airport, resort and suburban locations, as well as timeshare resorts.

Our
metropolitan and airport properties primarily serve the convention and meeting market and the business traveler market (business persons traveling as individuals or in small groups).
Our resort properties primarily serve the tour and leisure market (tourists traveling either as individuals or in groups) and the convention and meeting market. Our suburban properties primarily serve
the leisure and business traveler markets. As indicated under "Business Risks" below, these sources of business are sensitive to general economic and other conditions.

We
believe that the Promus Acquisition has yielded and will continue to yield synergies, economies of scale and revenue enhancements by providing greater opportunity for expansion and
cross-selling with multiple brands and market segments; spreading overhead over a wider base of properties; and including the Promus brands in the HHonors frequent guest program, the HRW central
reservation system and our sales and marketing initiatives.

We
believe that our alliance with Hilton Group (which currently owns the rights to the Hilton name outside the U.S.) has improved the performance of our operations as our properties have
benefited from the worldwide integration of the Hilton brand, reservation systems, marketing programs and sales organizations. See "OperationsAlliancesHilton Group."

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Business Risks

We are subject to all of the operating risks common in the lodging and timeshare industries.Our results are significantly
affected by occupancy and room rates achieved by hotels, our ability to manage costs, the relative mix of owned, leased, managed and franchised hotels, the number and pricing of timeshare interval
sales and the change in the number of available hotel rooms through acquisition, development and disposition. Our results are also impacted by, among other things, the factors identified under
"Forward-Looking Statements" below. Any of these factors or conditions could adversely impact hotel room demand and pricing, which could limit our ability to pass through operating cost increases in
the form of higher room rates. Additionally, our ability to manage costs could be adversely impacted by increases in energy, heathcare, insurance and other operating expenses, resulting in lower
operating margins. Increases in transportation and fuel costs or sustained recessionary periods in the U.S. (affecting domestic travel) and internationally (affecting inbound travel from abroad) could
also unfavorably impact future results.

Economic and political conditions may negatively impact our results.Our results in 2002 were adversely impacted by a slowly
improving, but still fragile U.S. economy in the aftermath of the September 11, 2001 terrorist attacks, which impacted business travel and led to downward pressure on room rates. Results in
2002 were also adversely impacted by a charge related to mold remediation in certain areas of the Hilton Hawaiian Village. We anticipate that economic and political factors beyond our control will
continue to create challenges for the lodging industry and the Company in 2003. Soft economic conditions and the uncertain world political situation are expected to impact the recovery of independent
business travel, placing continued pressure on room rates. Higher insurance costs and property taxes, coupled with this rate pressure, are expected to adversely affect margins.

We may have disputes with the owners of hotels we manage for others.We have the responsibility to manage each hotel at a
level consistent with the standard set forth in the relevant management agreement. Such provisions vary in scope and may be subject to differing interpretations. In the ordinary course of business, we
encounter disagreements with the owners of our managed hotels as to whether the duties in our management agreements have been satisfied. To the extent that such conflicts arise, we seek to resolve
them by negotiation with the relevant parties. In the event that such resolution cannot be achieved, litigation may result in damages or other remedies against us. Such remedies could include
termination of the right to manage the relevant property. No assurance can be given that we will be able to negotiate successfully or otherwise resolve such conflicts in each instance.

Competition

We seek to maintain the quality of our lodging business while expanding both domestically and internationally, primarily through franchising and the addition of
management contracts. We intend to
improve our business by leveraging our strong brand names, maximizing operating efficiencies, utilizing cost containment programs and expanding and enhancing properties. We may also acquire or develop
properties as appropriate.

Our
position as a multi-branded owner, operator, manager and franchisor of hotels makes us one of the largest hotel companies in the United States. Competition in the industry is based
primarily on the level of service, quality of accommodations, convenience of locations and room rates. 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 we operate or franchise our facilities. Our hotels also compete generally with facilities offering similar
services and located in cities and other locations where our hotels are not present. If hotel capacity is expanded by others in a city where a Company branded hotel is located, competition will
increase. Competition in the timeshare business is based primarily on the quality and location of timeshare resorts, the pricing of timeshare intervals and the availability of program benefits, such
as exchange programs. We believe that our focus on core business strategies, combined with our financial strength, diverse market presence, strong brands and

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well-maintained, strategically located properties, will enable us to remain competitive. For additional information, see "Business Risks" above.

Forward-Looking Statements

Forward-looking statements in this report, including without limitation, those set forth under the captions "OperationsDevelopment,"
"Territorial Restrictions," "Potential Acquisitions" and "Property Transactions" and "Additional InformationReservation System,"
"HHonors," "Marketing," "Business Risks," "Competition," "Environmental Matters" and "Regulation and Licensing,",
"Properties," "Legal Proceedings" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" (which is incorporated in this Form 10-K by reference),
and statements relating to our plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995.

The
words "believes," "anticipates," "expects," "intends," "plans," "estimates" and similar expressions are intended to identify forward-looking statements. These forward-looking
statements reflect our current views with respect to future events and financial performance, and are subject to risks and uncertainties, including those identified under
"OperationsDevelopment" and "Territorial Restrictions," "Additional InformationMarketing," "Business Risks," "Competition,"
"Environmental Matters" and "Regulation and Licensing," and "Management's Discussion and Analysis of Financial Condition and Results of Operations," as well as:



Any
of these risks and uncertainties could cause actual results to differ materially from historical results or those anticipated. Although we believe the expectations reflected in these
forward-looking

15

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statements are based upon reasonable assumptions, we can give no assurance that our expectations will be attained and caution you not to place undue reliance on such statements. We undertake no
obligation to publicly update or revise any forward-looking statements to reflect current or future events or circumstances.

Environmental Matters

We, like others in our industry, are subject to various Federal, state, local and, in some cases, foreign laws, ordinances and regulations that:



Environmental
Laws could make us liable for costs of removing or cleaning up hazardous or toxic substances on, under or in property we currently own or operate or that we previously
owned or operated. Those laws could impose liability without regard to whether we knew of, or were responsible for, the presence of hazardous or toxic substances or wastes. We endeavor to maintain
compliance with Environmental Laws but, from time to time, our operations may have resulted or may result in noncompliance or liability for cleanup pursuant to Environmental Laws. In that regard, we
have been notified of contamination resulting from past disposals of wastes at four sites to which hazardous or non-hazardous wastes may have been sent from our facilities in the past.
Based on information reviewed by and available to us, including:



we
believe that any liability arising from such disposals under Environmental Laws would not have a material adverse effect on our financial position or results of operations. However, there can be no
assurance that this will be the case.

For
information relating to our remediation efforts concerning mold found in certain areas of the Hilton Hawaiian Village, see "Impairment Loss and Related Costs" in the Notes to
Consolidated Financial Statements on page 43 in the Stockholder Report.

Regulation and Licensing

Ontario Gaming Laws.Ontario, Canada 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 Ontario authorities have conducted an investigation of, and have found suitable, Hilton and the other shareholder of Windsor Casino Limited in
connection with the Ontario registration of Windsor Casino Limited. See "Additional InformationCasino Windsor."

16

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Other Laws and Regulations.Each of the hotels and timeshare resorts we operate 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. Federal and state laws and regulations also require certain
registration, disclosure statements and other practices with respect to the franchising of hotels. We believe that we have obtained all required licenses and permits and our businesses are conducted
in substantial compliance with applicable laws.

Employees

At December 31, 2002, we employed approximately 74,000 persons, of whom approximately 17,000 were covered by various collective bargaining agreements
providing, generally, for basic pay rates, working hours, other conditions of employment and orderly settlement of labor disputes. We believe that the aggregate compensation benefits and working
conditions afforded our employees compare favorably with those received by employees in the hotel industry generally. We believe our employee relations are satisfactory.

Available Information

Our internet website is located at www.hiltonworldwide.com. We make available free of charge through this website our annual report on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material, or furnish it to, the Securities and Exchange Commission. The
information made available through our website is not incorporated by reference in this Form 10-K.

Item 2. Properties

We consider our hotels to be leading establishments with respect to desirability of location, size, facilities, physical condition, quality and the 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 industry. Accordingly, we spend, and intend to
continue to spend, substantial funds to maintain our owned facilities in first-class condition in order to remain competitive.

Hotels
and timeshare properties owned, leased, managed and franchised by us are briefly described under "Item 1" and, in particular, under the caption "Operations." In addition,
contemplated additions to or renovations of existing properties and new properties presently under construction that we will operate are briefly described under "OperationsDevelopment"
under "Item 1."

Item 3. Legal Proceedings

We are subject to litigation in the ordinary course of our business. Management believes that resolution of pending litigation against us will not have a material
adverse effect on our financial position or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.

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Executive Officers of the Company

The following table sets forth certain information with respect to our executive officers.

|Name                  |  | Positions and Offices with the Company                                                                                                                                                                     |  | Age
|--------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---
|Stephen F. Bollenbach |  | President and Chief Executive Officer                                                                                                                                                                      |  | 60 
|Matthew J. Hart       |  | Executive Vice President and Chief Financial Officer, and Treasurer from January 1999 until January 2000                                                                                                   |  | 50 
|Dieter Huckestein     |  | Executive Vice President and PresidentHotel Division until March 2001 and, thereafter, Executive Vice President and PresidentHotel Operations Owned and Managed                                          |  | 59 
|Thomas L. Keltner     |  | Executive Vice President and PresidentFranchise Hotel Group from December 1999 until March 2001 and, thereafter, Executive Vice President and PresidentBrand Performance and Franchise Development Group |  | 56 
|Madeleine A. Kleiner  |  | Executive Vice President and General Counsel since January 2001 and Corporate Secretary since March 2001                                                                                                   |  | 51 

Unless
otherwise noted in the table, all positions and offices with Hilton indicated have been continuously held since January 1998. 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.

Messrs. Bollenbach
and Huckestein also serve as directors of Hilton. Prior to joining Hilton, Mr. Keltner served as President, Brand Performance and Development Group of
Promus since February 1999, and as Executive Vice President and Chief Development Officer of Promus from July 1997 until February 1999. Prior to joining Hilton, Ms. Kleiner
served as Senior Executive Vice President, Chief Administrative Officer and General Counsel of H.F. Ahmanson & Company from May 1995 until October 1998, and was a partner with the
law firm of Gibson, Dunn & Crutcher prior thereto.

Additional
information for our directors will be included under "Election of Directors" in our definitive proxy statement to be used in connection with our annual meeting of stockholders
scheduled to be held on May 22, 2003 (the "Proxy Statement"), and this information is incorporated in this Form 10-K. See Cover Page"Documents Incorporated by
Reference."

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PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

Our Common Stock is listed on the New York and Pacific Stock Exchanges and is traded under the symbol "HLT." We have made quarterly dividend payments of $.02 per
share for each of the periods indicated in the table below. As of December 31, 2002, we had approximately 16,000 stockholders of record. The high and low reported sales prices per share of our
Common Stock are set forth in the following table for the periods indicated:

|                                     |  | High  |  | Low  
|------------------------------------ |  | ----- |  | -----
|2001                                 |  |       |  |      
|1st Quarter                          |  | 12.63 |  | 10.05
|2nd Quarter                          |  | 13.57 |  | 9.57 
|3rd Quarter                          |  | 13.39 |  | 6.15 
|4th Quarter                          |  | 11.08 |  | 7.55 
|2002                                 |  |       |  |      
|1st Quarter                          |  | 14.69 |  | 10.87
|2nd Quarter                          |  | 17.09 |  | 12.80
|3rd Quarter                          |  | 14.15 |  | 9.80 
|4th Quarter                          |  | 14.00 |  | 9.56 
|2003                                 |  |       |  |      
|1st Quarter (through March 27, 2003) |  | 13.48 |  | 10.38

Rights Agreement

On November 29, 1999, we adopted a new preferred share purchase rights plan (the "Rights Plan") and declared a dividend distribution of one preferred share
purchase right (a "Right") on each outstanding share of our Common Stock. The new Rights Plan replaced our prior rights plan which had been originally adopted in 1988 and readopted in 1998 prior to
its expiration. We have entered into a Rights Agreement, dated as of November 29, 1999, which was amended as of February 15, 2001 to provide for the substitution of The Bank of New York
as Rights Agent (as amended, the "Rights Agreement"). The Rights are transferred only with the Common Stock, unless and until they become exercisable. The Rights will expire on November 29,
2009, subject to our right to extend, unless earlier redeemed or exchanged by us or terminated.

Generally,
the Rights become exercisable only if a person or group (other than Hilton Interests, as defined below):



When
exercisable, each Right entitles a shareholder to purchase from us one one-hundredth of a share of Series A Junior Participating Preferred Stock at an exercise
price of $80, subject to adjustment (the "Purchase Price").

After
a person becomes an Acquiring Person, each holder of a Right (other than Rights owned by the Acquiring Person) will have the right to receive, upon exercise of such Right, a number
of shares of Common Stock having a market value equal to two times the then current Purchase Price of the Right.
After a person becomes an Acquiring Person, if we engage in certain mergers or transfers of assets, each holder of a Right (other than Rights owned by the Acquiring Person) will have the right to
receive upon

19

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exercise, at the Right's exercise price, a number of the acquiring company's common shares having a market value of twice the Right's Purchase Price.

Once
a person becomes an Acquiring Person, but prior to their acquisition of 50% or more of the outstanding Common Stock, our Board of Directors may cause us to exchange the Rights
(other than Rights owned by an Acquiring Person), in whole or in part, for shares of Common Stock at an exchange ratio based on the value of the Common Stock at that time, subject to adjustment.

Prior
to a person or group becoming an Acquiring Person, the Rights are redeemable for $.001 per Right at the option of our 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
Rights Agreement, as amended, has been filed as Exhibits 4.15 and 4.16 to this Form 10-K, and the foregoing summary is qualified in its entirety by reference
thereto.

Item 6. Selected Financial Data

The following selected financial data as of and for the years ended December 31, 1998 through 2002 has been derived from the Company's consolidated
financial statements. The following data should be read in conjunction with the Company's consolidated financial statements, the related notes thereto and "Management's Discussion and Analysis of
Financial Condition and Results of Operations," which information is included in the Stockholder Report and incorporated in this Form 10-K by reference.

|                                                    |  | Year Ended December 31,
|--------------------------------------------------- |  | -----------------------
|
|
|Results of Operations:                              |  |                        
|Revenue                                             |  | $                      
|Income from continuing operations                   |  |                        
|Income from continuing operations per shareBasic   |  |                        
|Income from continuing operations per shareDiluted |  |                        
|Other Financial Data:                               |  |                        
|Dividends per common share                          |  | $                      
|Balance Sheet Data:                                 |  |                        
|Total assets                                        |  | $                      
|Long-term debt                                      |  |                        

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

See pages 17 through 32 in the Stockholder Report, which information is incorporated in this Form 10-K by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk in the form of changes in interest rates and the potential impact such changes may have on the cash flows from our floating rate
debt and the fair values of our fixed rate debt. We attempt to limit the impact of changes in interest rates to our debt portfolio by attaining an appropriate mix of borrowings under our floating rate
bank credit facilities relative to our long-term fixed rate debt. We are also exposed to interest rate risk on our floating rate notes receivable and the fair values of our fixed rate
notes receivable.

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We
utilize, on a selective basis, interest rate swaps to manage our relative levels of fixed and floating rate debt. As of December 31, 2002, we had a derivative contract which
swaps the fixed interest payments on our $375 million 7.95% Senior Notes due 2007 to a floating interest rate equal to the six month LIBOR rate plus 415 basis points. We also have a derivative
contract which swaps the floating rate mortgage of one of our majority owned hotels, which had a principal balance of $36 million at December 31, 2002, to a fixed interest rate.

We
are also exposed to market risk in the form of changes in foreign currency exchange rates and the potential impact such changes may have on the cash flow related to our foreign
currency denominated debt. In August 2001, we issued $100 million of 7.43% bonds due 2009 denominated in Chilean Pesos. Payments of principal and interest on the bonds are adjusted for
movements of the Unidad de Fomento (the Chilean inflation index) published monthly by the Central Bank of Chile. We have swapped out the Chilean currency exchange rate and inflation risk by entering
into a derivative contract which swaps the principal payment to a fixed U.S. dollar amount of $100 million with fixed interest payments at 7.65% of that amount. We believe it is unlikely that
the counterparty will be unable to perform under the terms of the derivative instrument.

The
following table sets forth the scheduled maturities and the total fair value of our derivative and other financial instruments as of December 31, 2002:

|                                                                                                      |  | Maturities by Period |     |   |      |   |    
|----------------------------------------------------------------------------------------------------- |  | -------------------- | --- | - | ---- | - | ---
|
|
|AssetsMaturities represent principal receipts, fair values represent assets                          |  |                      |     |   |      |   |    
|Timeshare notes receivable                                                                            |  | $                    | 13  |   | 13   |   | 13 
|Average interest rate                                                                                 |  |                      |     |   |      |   |    
|Other notes receivable                                                                                |  | $                    | 3   |   | 12   |   | 2  
|Average interest rate                                                                                 |  |                      |     |   |      |   |    
|LiabilitiesMaturities represent principal payments, fair values represent liabilities                |  |                      |     |   |      |   |    
|Fixed rate debt                                                                                       |  | $                    | (10 | ) | (336 | ) | (12
|Average interest rate                                                                                 |  |                      |     |   |      |   |    
|Floating rate debt                                                                                    |  | $                    | (1  | ) | (671 | ) | (1 
|Average interest rate                                                                                 |  |                      |     |   |      |   |    
|Interest Rate SwapsMaturities represent notional amounts, fair values represent assets (liabilities) |  |                      |     |   |      |   |    
|Variable to fixed                                                                                     |  | $                    | 1   |   | 1    |   | 1  
|Average pay rate                                                                                      |  |                      |     |   |      |   |    
|Average receive rate                                                                                  |  |                      |     |   |      |   |    
|Fixed to variable                                                                                     |  | $                    |    |   |     |   |   
|Average pay rate                                                                                      |  |                      |     |   |      |   |    
|Average receive rate                                                                                  |  |                      |     |   |      |   |    
|Fixed (CLP) to Fixed ($US)                                                                            |  | $                    |    |   |     |   |   
|Average pay rate                                                                                      |  |                      |     |   |      |   |    
|Average receive rate                                                                                  |  |                      |     |   |      |   |    

The fixed rate debt includes the $325 million 7% Senior Notes due July 2004 allocated to Park Place Entertainment. As of
December 31, 2002, approximately 27% of our long-term debt (excluding the Park Place allocated debt and including the impact of interest rate swaps) was floating rate debt.

21

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Item 8. Financial Statements and Supplementary Data

The consolidated financial statements and supplemental information required by this Item are contained in the Stockholder Report on the pages indicated, which
information is incorporated in this Form 10-K by reference.

|                                                                                            |  | Page
|------------------------------------------------------------------------------------------- |  | ----
|Consolidated Statements of Income for the three years ended December 31, 2002               |  | 33  
|Consolidated Balance Sheets as of December 31, 2002 and 2001                                |  | 34  
|Consolidated Statements of Cash Flow for the three years ended December 31, 2002            |  | 35  
|Consolidated Statements of Stockholders' Equity for the three years ended December 31, 2002 |  | 36  
|Notes to Consolidated Financial Statements                                                  |  | 37  
|Report of Independent Public Accountants                                                    |  | 53  
|Predecessor Auditor's Report.                                                               |  | 54  

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 of the Company" in
Part I. Other information respecting executive officers, as well as the required information for directors, will be set forth under "Election of Directors" and "Section 16(a) Beneficial
Ownership Reporting Compliance" in our Proxy Statement, and reference is expressly made to the Proxy Statement for the specific information incorporated in this Form 10-K.

Item 11. Executive Compensation

The information required by this Item will be set forth under "Executive Compensation," "Compensation Committee Report on Executive CompensationChief
Executive Officer Compensation," "Retirement Plans" and "Change of Control Agreements" in our Proxy Statement, and reference is expressly made to the Proxy Statement for the specific information
incorporated in this Form 10-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Certain of the information required by this Item will be set forth under "Security Ownership of Certain Beneficial Owners and Executive Officers" and "Election of
Directors" in our Proxy Statement, and reference is expressly made to the Proxy Statement for the specific information incorporated in this Form 10-K.

22

---

Equity Compensation Plan Information

The following table provides information as of December 31, 2002 with respect to the shares of the Company's Common Stock that may be issued under the
Company's existing equity compensation plans.

|Plan category                                                 |  | Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
(a) |     | Weighted average
exercise price of
outstanding options,
warrants and rights
(b) |       | Number of securities
remaining available for
future issuance under equity
compensation plans (excluding securities reflected in column (a))
(c) |           
|------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------- | --- | ------------------------------------------------------------------------------- | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------- | ----------
|Equity compensation plans approved by security holders(1)     |  | 36,890,765                                                                                      |     | $                                                                               | 13.33 |                                                                                                                                                 | 18,443,094
|Equity compensation plans not approved by security holders(2) |  | 2,832,985                                                                                       | (3) |                                                                                 | N/A   | (4)                                                                                                                                             | 763,801   
|                                                              |  |                                                                                                 |     |                                                                                 |       |                                                                                                                                                 |           
|Total                                                         |  | 39,723,750                                                                                      |     | $                                                                               | 13.33 |                                                                                                                                                 | 19,206,895
|                                                              |  |                                                                                                 |     |                                                                                 |       |                                                                                                                                                 |           

---

Supplemental Retirement and Retention Plan

The Supplemental Retirement and Retention Plan (the "SRRP") was approved by the Company's Board of Directors as of June 9, 2000. The SRRP is not a
stockholder approved plan. Under the SRRP, a total of up to 3,500,000 supplemental retirement benefit units ("Units") may be granted to senior officers of the Company. Each grant of Units vests 25%
per year over a four-year period and entitles the grantee to receive shares of the Company's Common Stock on a one-for-one basis upon retirement, with limited
distribution available during employment. The SRRP also provides for an upward adjustment in the number of Units in a participant's account based upon dividends and distributions paid by the Company
with respect to the underlying shares of Common Stock, until distribution of such shares. The Units will become immediately vested in the event of a change of control of the Company, as defined in the
SRRP. Shares of Common Stock issued under the SRRP consist of treasury shares of the Company. As of December 31, 2002, 2,823,607 Units were outstanding under the SRRP and 647,597 Units remained
available for grant.

23

---

Directors' Stock and Deferred Retainer Plan

The Directors' Stock and Deferred Retainer Plan ("Director Retainer Plan") was approved by the Company's Board of Directors on September 11, 2001,
effective as of January 1, 2002. The Director Retainer Plan is not a stockholder approved plan. The Director Retainer Plan provides non-employee directors the right to elect to
receive their annual retainer fee in the form of (i) cash; (ii) the Company's Common Stock payable on a quarterly basis; or (iii) deferred units that vest immediately and are
payable in shares of Common Stock on a one-for-one basis subsequent to a director's retirement from the Board. The number of shares of Common Stock or deferred units received
by a participant each quarter are based upon the closing price of the Company's Common Stock on the NYSE on the last trading date of such quarter. Shares of Common Stock issued under the Director
Retainer Plan consist
of treasury shares of the Company. As of December 31, 2002, nine non-employee directors were eligible to defer all or a portion of their $40,000 annual retainer fee into Common
Stock or deferred units under the Director Retainer Plan. As of December 31, 2002, 8,433 shares of Common Stock had been issued under the Director Retainer Plan and 9,378 deferred units were
allocated to the accounts of non-employee directors.

Employee Stock Purchase Plan

The Employee Stock Purchase Plan ("Employee Stock Plan") was approved by the Company's Board of Directors on November 14, 1996, effective as of
January 1, 1997. The Employee Stock Plan is not a stockholder approved plan. The Employee Stock Plan provides that all full-time employees (except for certain persons covered by
collective bargaining agreements) may purchase shares of the Company's Common Stock on a semi-annual basis at a 10% discount below the fair market value of the Common Stock on the first or
last trading date of the purchase period, whichever value is lower. The maximum investment which may be made by an employee under the Employee Stock Plan is $25,000 per year. The Board of Directors
authorized 2,000,000 shares of Common Stock to be available for purchase under the Employee Stock Plan. Including the purchase period ended on December 31, 2002, 1,883,796 shares of Common
Stock had been purchased under the Employee Stock Plan and 116,204 shares of Common Stock were available for purchase thereunder. Effective January 1, 2003, the Employee Stock Plan was
suspended indefinitely.

Item 13. Certain Relationships and Related Transactions

The information required by this Item will be set forth under "Certain Relationships and Related Transactions" in our Proxy Statement, and reference is expressly
made to the Proxy Statement for the specific information incorporated in this Form 10-K.

Item 14. Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our filings under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management,
including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and
procedures, management recognized that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and
management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Also, we have investments in certain
unconsolidated entities that we do not control. Our disclosure controls and procedures with respect to such entities are necessarily substantially more limited than those we maintain with respect to
our consolidated subsidiaries.

24

---

Within
90 days prior to the date of this report, we carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive
Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures were effective.

There
have been no significant changes in our internal controls or in other factors that could significantly affect the internal controls subsequent to the date we completed our
evaluation.

PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K





25

---



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, as of March 27, 2003.

| |  | HILTON HOTELS CORPORATION(Registrant)
| |  | -------------------------------------
| |  | By:                                  

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 as of March 27, 2003.

|                                                                                                          |  |                                                   
|--------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------
|/s/STEPHEN F. BOLLENBACHStephen F. Bollenbach
President, Chief Executive Officer
and Director             |  | /s/BENJAMIN V. LAMBERTBenjamin V. Lambert
Director
|/s/A. STEVEN CROWNA. Steven Crown
Director                                                                |  | /s/DAVID MICHELSDavid Michels
Director            
|/s/PETER M. GEORGEPeter M. George
Director                                                                |  | /s/JOHN H. MYERSJohn H. Myers
Director            
|/s/MATTHEW J. HARTMatthew J. Hart
Executive Vice President and
Chief Financial Officer                    |  | /s/JOHN L. NOTTERJohn L. Notter
Director          
|/s/BARRON HILTONBarron Hilton
Chairman of the Board                                                       |  | /s/DONNA F. TUTTLEDonna F. Tuttle
Director        
|/s/DIETER HUCKESTEINDieter Huckestein
Director                                                            |  | /s/PETER V. UEBERROTHPeter V. Ueberroth
Director  
|/s/ROBERT L. JOHNSONRobert L. Johnson
Director                                                            |  | /s/SAM D. YOUNGSam D. Young
Director              
|/s/ROBERT M. LA FORGIARobert M. La Forgia
Senior Vice President and Controller
(Chief Accounting Officer) |  |                                                   

26

---

CERTIFICATIONS

I,
Stephen F. Bollenbach, certify that:





|Date: March 27, 2003 |                                                             |  | 
|-------------------- | ----------------------------------------------------------- |  | 
|                     | /s/STEPHEN F. BOLLENBACH                                    |  | 
|                     | Stephen F. Bollenbach President and Chief Executive Officer
|                     |                                                             |  | 

27

---

I, Matthew J. Hart, certify that:





|Date: March 27, 2003 |                                                                      |  | 
|-------------------- | -------------------------------------------------------------------- |  | 
|                     | /s/MATTHEW J. HART                                                   |  | 
|                     | Matthew J. Hart Executive Vice President and Chief Financial Officer
|                     |                                                                      |  | 

28

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|INDEX TO EXHIBITS
|-----------------
|Exhibit
Number   
|2.1              
|2.2              
|3.1              
|3.2              
|3.3              
|3.4              
|3.5              
|3.6              
|3.7              
|4.1              
|4.2              
|4.3              
|4.4.1            
|                 

29

---

|4.4.2  |  | First Supplemental Indenture, dated as of December 31, 1998, among Registrant, Park Place and BNY Western Trust Company, as Trustee, regarding Registrant's Debt Securities, relating to Exhibit 4.4.1 hereto (incorporated herein by reference from
Exhibit 4.1 to Registrant's Current Report on Form 8-K, dated January 8, 1999)                                          
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.4.3  |  | Officers' Certificate containing terms of 7.95% Senior Notes due 2007 (incorporated herein by reference from Exhibit 99 to Registrant's Current Report on Form 8-K, dated April 15, 1997)                                                                                                                                                                                    
|4.4.4  |  | Officers' Certificate containing terms of 7% Senior Notes due 2004 (incorporated herein by reference from Exhibit 99.01 to Registrant's Current Report on Form 8-K, dated July 17, 1997)                                                                                                                                                                                     
|4.4.5  |  | Officers' Certificate containing terms of 7.20% Senior Notes due 2009 and 7.5% Senior Notes due 2017 (incorporated herein by reference from Exhibit 4.1 to Registrant's Current Report on Form 8-K, dated December 17, 1997)                                                                                                                                                 
|4.4.6  |  | Officers' Certificate containing terms of 8.25% Senior Notes due 2011 (incorporated herein by reference from Exhibit 99.01 to Registrant's Current Report on Form 8-K, dated February 12, 2001)                                                                                                                                                                              
|4.4.7  |  | Officers' Certificate containing terms of 7.625% Senior Notes due 2008 (incorporated herein by reference from Exhibit 99.01 to Registrant's Current Report on Form 8-K, dated May 10, 2001)                                                                                                                                                                                  
|4.4.8  |  | Officers' Certificate containing terms of 8% Quarterly Interest Bonds due 2031 (incorporated herein by reference from Exhibit 99.01 to Registrant's Current Report on Form 8-K, dated August 16, 2001)                                                                                                                                                                       
|4.4.9  |  | Officers' Certificate containing terms of 7.43% Chilean Inflation-Indexed (UF) Notes due 2009 (incorporated herein by reference from Exhibit 99.01 to Registrant's Current Report on Form 8-K, dated August 29, 2001)                                                                                                                                                        
|4.4.10 |  | Officers' Certificate containing terms of 7.625% Senior Notes due 2012 (incorporated herein by reference from Exhibit 99.01 to Registrant's Current Report on Form 8-K, dated November 21, 2002)                                                                                                                                                                             
|4.5    |  | Five Year Credit Agreement, dated as of November 30, 1999, among Registrant, Bank of America, N.A., as Administrative Agent, and the financial institutions signatory thereto (incorporated herein by reference from Exhibit 4.5 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1999)                                                            
|4.6    |  | First Amendment to Five Year Credit Agreement, dated as of September 15, 2000, among Registrant, Bank of America, N.A., as Administrative Agent, and the financial institutions signatory thereto, relating to Exhibit 4.5 hereto (incorporated herein by
reference from Exhibit 99.05 to Registrant's Quarterly Report on Form 10-Q for the period ended September 30, 2000)
|4.7    |  | Second Amendment to Five Year Credit Agreement, dated as of November 8, 2001, among Registrant, Bank of America, N.A., as Administrative Agent, and the financial institutions signatory thereto, relating to Exhibits 4.5 and 4.6 hereto (incorporated
herein by reference from Exhibit 4.7 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001)
|       |  |                                                                                                                                                                                                                                                                                                                                                                              

30

---

|4.8  |  | Short Term Credit Agreement, dated as of November 26, 2002, among Registrant, Bank of America, N.A., as Administrative Agent, and the financial institutions signatory thereto                                                                                                                                                                                                                                                                                                                                 
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.9  |  | Credit Agreement, dated as of June 1, 1998, among Hilton Hawaiian Village LLC, Registrant, NationsBank, N.A., as Syndication Agent, First Union National Bank, as Documentation Agent, The Bank of New York, as Administrative Agent, and the financial
institutions signatory thereto (incorporated herein by reference from Exhibit 4.10 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999)                                                                                    
|4.10 |  | Amendment No. 1 to Credit Agreement, dated as of December 10, 1998, among Hilton Hawaiian Village LLC, Registrant, NationsBank, N.A., as Syndication Agent, First Union National Bank, as Documentation Agent, The Bank of New York, as Administrative
Agent, and the financial institutions signatory thereto, relating to Exhibit 4.9 hereto (incorporated herein by reference from Exhibit 4.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999)                            
|4.11 |  | Amendment No. 2 to Credit Agreement, dated as of November 30, 1999, among Hilton Hawaiian Village LLC, Registrant, Bank of America, N.A., as Syndication Agent, First Union National Bank, as Documentation Agent, The Bank of New York, as Administrative
Agent, and the financial institutions signatory thereto, relating to Exhibits 4.9 and 4.10 hereto (incorporated herein by reference from Exhibit 4.12 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999)              
|4.12 |  | Amendment No. 3 to Credit Agreement, dated as of September 15, 2000, among Hilton Hawaiian Village LLC, Registrant, Bank of America, N.A., as Syndication Agent, First Union National Bank, as Documentation Agent, The Bank of New York, as
Administrative Agent, and the financial institutions signatory thereto, relating to Exhibits 4.9, 4.10 and 4.11 hereto (incorporated herein by reference from Exhibit 99.04 to Registrant's Quarterly Report on Form 10-Q for the period ended September
30, 2000)
|4.13 |  | Loan Agreement, dated as of September 27, 2000, among Phoenix SP Hilton LLC, S.F. Hilton, Inc., Chicago Hilton LLC, Short Hills Hilton LLC and McLean Hilton LLC, as Borrowers, and Secore Financial Corporation, as Lender (incorporated herein by
reference from Exhibit 99.01 to Registrant's Quarterly Report on Form 10-Q for the period ended September 30, 2000)                                                                                                                                        
|4.14 |  | First Amendment to Loan Agreement, dated as of October 30, 2000, among Phoenix SP Hilton LLC, S.F. Hilton, Inc., Chicago Hilton LLC, Short Hills Hilton LLC and McLean Hilton LLC, as Borrowers, and Morgan Stanley Dean Witter Mortgage Capital Inc., as
Lender, relating to Exhibit 4.13 hereto (incorporated herein by reference from Exhibit 99.02 to Registrant's Quarterly Report on Form 10-Q for the period ended September 30, 2000)                                                                  
|4.15 |  | Rights Agreement, dated as of November 29, 1999, between Registrant and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (incorporated herein by reference from Exhibit 1 to Registrant's Registration Statement on Form 8-A, dated December 1,
1999)                                                                                                                                                                                                                                                 
|4.16 |  | Amendment to Rights Agreement Changing Rights Agent, dated as of February 15, 2001, between Registrant and The Bank of New York, as Rights Agent, relating to Exhibit 4.15 hereto (incorporated herein by reference from Exhibit 4.22 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 2000)                                                                                                                                                                                         
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

31

---

|4.17  |  | Registration Rights Agreement, dated May 1, 2002, between Registrant and Pan Global Partners (incorporated herein by reference from Exhibit 4.7 to Registrant's Registration Statement on Form S-3 (File No. 333-87570))                                                                            
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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  |  | Amendment, dated November 14, 1996, to the 1984 Stock Option and Stock Appreciation Rights Plan of Registrant, relating to Exhibits 10.1 and 10.2 hereto (incorporated herein by reference from Exhibit 10.3 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1996)*      
|10.4  |  | Third Amendment, dated as of December 31, 1998, to the 1984 Stock Option and Stock Appreciation Rights Plan of Registrant, relating to Exhibits 10.1, 10.2 and 10.3 hereto (incorporated herein by reference from Exhibit 99.8 to Registrant's Current
Report on Form 8-K, dated January 8, 1999)*  
|10.5  |  | 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)*                
|10.6  |  | Amendment, dated January 20, 1994, to the 1990 Stock Option and Stock Appreciation Rights Plan of Registrant, relating to Exhibit 10.5 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)*                 
|10.7  |  | Amendment, dated January 19, 1995, to the 1990 Stock Option and Stock Appreciation Rights Plan of Registrant, relating to Exhibits 10.5 and 10.6 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)*       
|10.8  |  | Amendment, dated November 14, 1996, to the 1990 Stock Option and Stock Appreciation Rights Plan of Registrant, relating to Exhibits 10.5, 10.6 and 10.7 hereto (incorporated herein by reference from Exhibit 10.7 to Registrant's Annual Report on Form
10-K for the year ended December 31, 1996)*
|10.9  |  | Fourth Amendment, dated as of December 31, 1998, to the 1990 Stock Option and Stock Appreciation Rights Plan of Registrant, relating to Exhibits 10.5 through 10.8 hereto (incorporated herein by reference from Exhibit 99.9 to Registrant's Current
Report on Form 8-K, dated January 8, 1999)*   
|10.10 |  | Amended and Restated 1996 Stock Incentive Plan of Registrant (incorporated herein by reference from Exhibit 4.1 to Registrant's Post-Effective Amendment No. 1 to Registration Statement on Form S-8 (File No. 333-04273))*                                                                         
|      |  |                                                                                                                                                                                                                                                                                                     

32

---

|10.11 |  | Amendment, dated as of November 14, 2001, to the Amended and Restated 1996 Stock Incentive Plan of Registrant, relating to Exhibit 10.10 hereto (incorporated herein by reference from Exhibit 10.11 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2001)*                     
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.12 |  | 1996 Chief Executive Stock Incentive Plan of Registrant (incorporated herein by reference from Exhibit 10.7 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1995)*                                                                                                              
|10.13 |  | First Amendment, dated as of December 31, 1998, to the Chief Executive Stock Incentive Plan of Registrant, relating to Exhibit 10.12 hereto (incorporated herein by reference from Exhibit 99.10 to Registrant's Current Report on Form 8-K, dated January
8, 1999)*                                       
|10.14 |  | 1997 Independent Director Stock Option Plan of Registrant (incorporated herein by reference from Exhibit 10.10 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1997)*                                                                                                           
|10.15 |  | First Amendment, dated as of December 31, 1998, to the 1997 Independent Director Stock Option Plan of Registrant, relating to Exhibit 10.14 hereto (incorporated herein by reference from Exhibit 99.11 to Registrant's Current Report on Form 8-K, dated
January 8, 1999)*                                
|10.16 |  | Second Amendment, dated as of November 11, 1999, to the 1997 Independent Director Stock Option Plan of Registrant, relating to Exhibits 10.14 and 10.15 hereto (incorporated herein by reference from Exhibit 10.15 to Registrant's Annual Report on Form
10-K for the year ended December 31, 1999)*      
|10.17 |  | Third Amendment, dated as of November 14, 2001, to the 1997 Independent Director Stock Option Plan of Registrant, relating to Exhibits 10.14, 10.15 and 10.16 hereto (incorporated herein by reference from Exhibit 10.17 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001)*
|10.18 |  | Directors' Stock and Deferred Retainer Plan of Registrant (incorporated herein by reference from Exhibit 99.1 to Registrant's Registration Statement on Form S-8 (File No. 333-72906))*                                                                                                                    
|10.19 |  | 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)*                                                                                                                            
|10.20 |  | Retirement Plan of Registrant, as amended and restated*                                                                                                                                                                                                                                                    
|10.21 |  | Amendment 2002-1 to the Retirement Plan of Registrant, relating to Exhibit 10.20 hereto*                                                                                                                                                                                                                   
|10.22 |  | Amendment 2002-2 to the Retirement Plan of Registrant, relating to Exhibits 10.20 and 10.21 hereto*                                                                                                                                                                                                        
|10.23 |  | Amendment 2002-3 to the Retirement Plan of Registrant, relating to Exhibits 10.20, 10.21 and 10.22 hereto*                                                                                                                                                                                                 
|10.24 |  | Amendment 2002-4 to the Retirement Plan of Registrant, relating to Exhibits 10.20 through 10.23 hereto*                                                                                                                                                                                                    
|10.25 |  | 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)*                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                            

33

---

|10.26 |  | Amendment, effective April 1, 1994, to the Supplemental Executive Retirement Plan of Registrant, relating to Exhibit 10.25 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)*                               
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.27 |  | Amendment, effective December 31, 1996, to the Supplemental Executive Retirement Plan of Registrant, relating to Exhibits 10.25 and 10.26 hereto (incorporated herein by reference from Exhibit 10.19 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1996)*                
|10.28 |  | Doubletree Hotels Corporation Supplemental Executive Retirement Plan, dated as of February 15, 1997, as amended by letter dated December 9, 1997 (incorporated herein by reference from Exhibit 10.29 to the Promus Hotel Corporation Annual Report on
Form 10-K for the year ended December 31, 1998)*
|10.29 |  | 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)*                                                                                                     
|10.30 |  | First Amendment, dated July 31, 1997, to the Directors' Retirement Benefit Plan of Registrant, relating to Exhibit 10.29 hereto (incorporated herein by reference from Exhibit 10.22 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997)*                                 
|10.31 |  | 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)*                                                                                                    
|10.32 |  | Amendment, dated as of January 1, 1994, to the Retirement Benefit Replacement Plan of Registrant, relating to Exhibit 10.31 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)*                              
|10.33 |  | Amendment, effective April 1, 1994, to the Retirement Benefit Replacement Plan of Registrant, relating to Exhibits 10.31 and 10.32 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)*                       
|10.34 |  | Amendment, effective December 31, 1996, to the Retirement Benefit Replacement Plan of Registrant, relating to Exhibits 10.31, 10.32 and 10.33 hereto (incorporated herein by reference from Exhibit 10.24 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 1996)*            
|10.35 |  | 401(k) Savings Plan of Registrant, as amended and restated effective January 1, 2001 (incorporated herein by reference from Exhibit 99.01 to Registrant's Quarterly Report on Form 10-Q for the period ended June 30, 2001)*                                                                           
|10.36 |  | Amendment 2001-1 to the 401(k) Savings Plan of Registrant, relating to Exhibit 10.35 hereto (incorporated herein by reference from Exhibit 10.38 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001)*                                                                     
|10.37 |  | Amendment 2002-1 to the 401(k) Savings Plan of Registrant, relating to Exhibits 10.35 and 10.36 hereto*                                                                                                                                                                                                
|10.38 |  | Amendment 2002-2 to the 401(k) Savings Plan of Registrant, relating to Exhibits 10.35, 10.36 and 10.37 hereto*                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                        

34

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|10.39 |  | Executive Deferred Compensation Plan of Registrant, as amended and restated effective January 1, 2000 (incorporated herein by reference from Exhibit 10.39 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999)*                                                 
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.40 |  | Amendment 2001-1 to the Executive Deferred Compensation Plan of Registrant, relating to Exhibit 10.39 hereto (incorporated herein by reference from Exhibit 10.40 to Registrant's Annual Report on Form 10-K for the year ended December 31,
2001)*                                          
|10.41 |  | Amendment 2001-2 to the Executive Deferred Compensation Plan of Registrant, relating to Exhibits 10.39 and 10.40 hereto (incorporated herein by reference from Exhibit 10.41 to Registrant's Annual Report on Form 10-K for the year ended December 31,
2001)*                               
|10.42 |  | Amendment 2002-1 to the Executive Deferred Compensation Plan of Registrant, relating to Exhibits 10.39, 10.40 and 10.41 hereto (incorporated herein by reference from Exhibit 10.1 to Registrant's Quarterly Report on Form 10-Q for the period ended
September 30, 2002)*                   
|10.43 |  | Employee Stock Purchase Plan of Registrant (incorporated herein by reference from Exhibit 10.29 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1996)*                                                                                                            
|10.44 |  | Amendment, effective January 1, 1997, to the Employee Stock Purchase Plan of Registrant, relating to Exhibit 10.43 hereto (incorporated herein by reference from Exhibit 10.34 to Registrant's Annual Report on Form 10-K for the year ended December 31,
1997)*                             
|10.45 |  | Second Amendment, dated as of December 31, 1998, to the Employee Stock Purchase Plan of Registrant, relating to Exhibits 10.43 and 10.44 hereto (incorporated herein by reference from Exhibit 99.12 to Registrant's Current Report on Form 8-K, dated
January 8, 1999)*                     
|10.46 |  | Supplemental Retirement and Retention Plan of Registrant, dated as of June 1, 2000 (incorporated herein by reference from Exhibit 10.42 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2000)*                                                                    
|10.47 |  | First Amendment to the Supplemental Retirement and Retention Plan of Registrant, relating to Exhibit 10.46 hereto (incorporated herein by reference from Exhibit 10.46 to Registrant's Annual Report on Form 10-K for the year ended December 31,
2001)*                                     
|10.48 |  | Form of Change of Control Agreement between Registrant and each of Matthew J. Hart, Dieter Huckestein, Thomas L. Keltner and Madeleine A. Kleiner (incorporated herein by reference from Exhibit 10.43 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1999)*     
|10.49 |  | First Amendment to form of Change of Control Agreement, relating to Exhibit 10.48 hereto (incorporated herein by reference from Exhibit 10.48 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2001)*                                                              
|10.50 |  | Employment Agreement, dated as of March 9, 2000, between Registrant and Stephen F. Bollenbach (incorporated herein by reference from Exhibit 10.44 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1999)*                                                         
|10.51 |  | First Amendment, dated as of November 14, 2001, to Employment Agreement between Registrant and Stephen F. Bollenbach, relating to Exhibit 10.50 hereto (incorporated herein by reference from Exhibit 10.50 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001)*
|10.52 |  | Letter Agreement, dated as of May 23, 2002, amending Employment Agreement between Registrant and Stephen F. Bollenbach, relating to Exhibits 10.50 and 10.51 hereto*                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                              

35

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|10.53 |  | Distribution Agreement, dated as of December 31, 1998, between Registrant and Park Place (incorporated herein by reference from Exhibit 99.1 to Registrant's Current Report on Form 8-K, dated January 8, 1999)                                                    
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.54 |  | Debt Assumption Agreement, dated as of December 31, 1998, between Registrant and Park Place (incorporated herein by reference from Exhibit 99.2 to Registrant's Current Report on Form 8-K, dated January 8, 1999)                                                 
|10.55 |  | Assignment and License Agreement, dated as of December 31, 1998, between Registrant, Conrad International Royalty Corporation and Park Place (incorporated herein by reference from Exhibit 99.3 to Registrant's Current Report on Form 8-K, dated January
8, 1999)
|10.56 |  | Employee Benefits and Other Employment Matters Allocation Agreement, dated as of December 31, 1998, between Registrant and Park Place (incorporated herein by reference from Exhibit 99.6 to Registrant's Current Report on Form 8-K, dated January 8,
1999)       
|10.57 |  | Tax Allocation and Indemnity Agreement, dated as of December 31, 1998, between Registrant and Park Place (incorporated herein by reference from Exhibit 99.7 to Registrant's Current Report on Form 8-K, dated January 8, 1999)                                    
|11    |  | Computation of Earnings Per Share                                                                                                                                                                                                                                  
|12    |  | Computation of Ratios of Earnings to Fixed Charges                                                                                                                                                                                                                 
|13    |  | Incorporated portions of Registrant's Annual Report to Stockholders for the fiscal year ended December 31, 2002                                                                                                                                                    
|21    |  | List of Registrant's Subsidiaries                                                                                                                                                                                                                                  
|23    |  | Consent of Independent Auditors                                                                                                                                                                                                                                    
|99    |  | Undertakings                                                                                                                                                                                                                                                       

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Pursuant
to Regulation §229.601, 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.

36

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