Brian Wallace Group Finance Director

1
Brian WallaceGroup Finance Director
2
Hilton Group plc - Summary of Performance
Half Year to 30 June 2000m
Proforma Half Year to 30 June 1999m
Hilton International 111.0 96.0 Betting
Gaming 51.3 63.5 Central costs and
income (6.8) (9.8) Operating profit 155.5 149.7 Go
odwill amortisation (18.5) (9.7)Interest (46.7) (
32.1) Profit before tax 90.3 107.9 Tax (22.9) (26
.7) Profit after tax 67.4 81.2
EBITDA before exceptional items 206.5 197.6 Profit
before tax, goodwill,FRS15 exceptional
items 120.5 127.5
3
Hilton International - Underlying Performance
Half Year to 30 June 2000m
Proforma Half Year to 30 June 1999m
Increase
Operating profitas reported 111.0 96.0 15.6 Net
effect of UK propertychanges (mainly
disposals) (1.5) (9.4) Inclusion of
overheadstreated centrally in 1999 - (5.0) Effect
of treating Stakis asacquired on 1 January
1999 - 19.9 Adjusted operating
profit 109.5 101.5 7.9
4
Hilton International
2000
1999 Proforma
Turnover Profit Turnover Profit
Revpar m m m m Growth
UK 281.3 65.1 226.0 63.8 9.1 Europe 267.4 30.0
235.0 20.1 14.8 Middle Eastand
Africa 103.0 6.6 93.8 6.2 (1.2) Asia /
Australasia 243.4 4.2 230.4 2.2 8.8 Americas 114.
4 10.0 97.9 10.4 4.9 LivingWell 19.4 2.0 9.0 0.9
- 1,028.9 117.9 892.1 103.6 9.0 Central
non-operating Items (6.9) (7.6) 111.0 96.0
15.6
At constant currencies and including full 6
months of Stakis results.
5
UK Hotels - PL Overview
2000m
Proforma 1999m
Total Sales 281.3 287.4 Comparable
sales 265.3 255.9 Comparable GOP 123.4 117.9 GOP
percentage 46.5 46.1 Incremental
conversion 59 Other costs (46.5) (36.0) FRS15
depreciation (8.3) (8.1) Comparable
profit 68.6 73.8 Costs treated centrally (5.0) - F
RS15 on disposed properties - (0.6) Stakis first
quarter profit - (18.8) Non comparable
profit 1.5 9.4 Reported profit 65.1 63.8
Including Stakis for 6 months
6
UK Hotels - "Other Costs" Movement
m
m
1999 costs (36.0) Depreciation (1.7) Owners
return / rental (1.6) Pensions (0.5) Insurance /
rates (0.8) Training (1.0) Sales marketing /
brand relaunch (5.4) Inflation (1.5) (12.5) Sav
ings 2.0 2000 costs (46.5)
7
Gross Operating Profit by Area
Like for Like GOP

48
2000
1999
43
38
33
28
Americas
Asia Pacific Australia
Middle East Africa
ContinentalEurope
UK
Total
8
Managed Hotels - New Openings
Year of operation
Average contribution per hotel in 2000 000
No. Hotels
First Year 14 95 Second Year 9 252 Third
Year 5 356
Note Excludes Hanoi projected loss of 1.5m in
2000
9
Betting Gaming Half Year Profit Comparison
Retail Betting
Telephone Betting / Internet
Americas
Casinos
Vernons
Total
m
m
m
m
m
m
30 June 1999 40.1 13.2 3.8 3.7 2.7 63.5 High
roller activity (8.9) (8.9) Sale ofGolden
Gate Fields (3.9) (3.9) Stakis
Q1 2.6 2.6 Adjusted profit 40.1 4.3 (0.1) 6.3
2.7 53.3 30 June 2000 43.4 (4.7) 2.9 6.8 2.9 51.3
Movement 3.3 (9.0) 3.0 0.5 0.2 (2.0) Analysed
as-UK Retail Betting 1.9 Other
businesses 1.4 3.3
10
UK Retail Betting - Comparative Analysis
Variancem
2000m
1999m
Turnover 842.4 860.2 (17.8) Gross
profit (including AWPs) 155.5 146.7 8.8 Gross
profit - including AWPs 18.5 17.0 1.5 -
excluding AWPs 16.9 15.4 1.5 Operating
costs (116.6) (109.7) (6.9) Net
profit 38.9 37.0 1.9
11
Gross Betting Margin Before Costs ()
2000
1999
Week 1-26
Week 1-23
Week 24-26
Week 1-26
Horses 16.0 10.3 15.2 14.3 Greyhounds 21.1 16.9 20
.5 19.2 Numbers 29.2 27.2 29.0 27.9 Other
Sports 10.6 24.5 12.6 14.6 Football 25.0 6.3 21.3
7.2 Total 17.8 11.7 16.9 15.4
12
Retail Betting - Analysis of Cost Increase
2000 m
Levy 1.0 Pension 1.0 Sunday opening 0.9 Marketing
0.9 Other 3.1 Total 6.9
13
Analysis of Telephone Betting / Internet - Half
Year Profits
Variancem
2000m
1999m
UK - Telephone Betting 0.1 1.9 (1.8) -
Internet Betting (3.5) - (3.5) International -
Elite Telebetting 0.3 2.4 (2.1) - Other
Telebetting (1.3) - (1.3) - High Roller
activity 0.7 8.9 (8.2) - Internet
Betting (1.0) - (1.0) (4.7) 13.2 (17.9)
14
Telebetting Analysis
UK Telebetting
Gibraltar Call Centre
Gibraltar Elite
Total
2000 m
1999 m
2000 m
1999 m
2000 m
1999 m
2000 m
1999 m
49.3 3.9 (3.8) 0.1 1.3m 33.88 7.9
69.8 4.8 (2.9) 1.9 1.3m 49.24 6.9
32.0 1.1 (2.4) (1.3) 0.5m 68.73 3.4
33.0 1.2 (0.9) 0.3 32k 1,030 3.6
45.3 3.1 (0.7) 2.4 27k 1,655 6.8
114.3 6.2 (7.1) (0.9) 1.8m 61.70 5.4
115.1 7.9 (3.6) 4.3 1.4m 84.64 6.9
Turnover Gross profit Costs Net profit No. of
calls Stake per call Gross profit
- - - - - - -
Note Excludes high roller activity in Gibraltar
15
Cumulative Internet Registrations
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
February
March
April
May
June
July
August to date
16
Internet Turnover
m
Monthly turnover
14
Cumulative turnover
12
10
8
6
4
2
0
February
March
April
May
June
July
17
Central Costs Analysis
1999 m
2000 m
Central costs reported 6.8 9.8 Include Stakis
first quarter costs - 3.5 Year 2000
costs - (1.5) Costs reallocated to hotels
division - (5.0) Comparable costs 6.8 6.8
18
Group Cash Flow
2000m
1999m
Inflow from operating activities 176.8 136.5 Inter
est paid (26.9) (19.2) Tax paid (22.0) (8.6) Divid
ends paid (75.2) (130.6) Free cash
flow 52.7 (21.9) Capital expenditure (216.2) (180.
0) Proceeds from asset sales 0.9 67.7 Acquisitions
, disposals 4.8 (350.9) (157.8) (485.1) Exchange
other movements (19.5) (4.9) Opening net
debt (1,336.8) (949.5) Closing net
debt (1,514.1) (1,439.5)
19
Analysis of Capital Expenditure
Hilton
Overseas Sao Paulo 24.1 Munich
Park 12.8 Caribe 11.8 Other 12.7 61.4 28
UK Caledonian 45.2 London Metropole 21.3 Pa
rk Lane 6.0 Nottingham 5.0 Other 50.0 127.
5 57 LivingWell 13.3 6 Refurbishment /
relocation 5.4 BS2000 EPOS system 3.5 E-commer
ce 4.5 Other 6.5 19.9 9 222.1
m
m
Betting Gaming
Note Includes 5.9m of accrued expenditure
20
Profit Before Tax - Analysts Forecasts for 2000
m
Consensus analyst forecast at May 1999 for
2000 380 Consensus analyst forecast at August
2000 for 2000 300 Movement 80 Factors
(estimates) UK revenue growth shortfall
(15m) 10 Hotel closing / delays (eg Caribe,
Nottingham) 5 Hilton TV campaign, marketing and
training 6 Foreign exchange 4 Accounting
changes 4 Absence of high staking Gibraltar
activity 12 Investment in E-Gaming (marketing,
set up costs, etc) gt10 Below expectation Euro
2000 / major race events in June 13 Increased UK
pension costs 4 Other 12 80
Note This is not a company forecast !
21
Hilton International
Profit Analysis by Contract Type
Owned
Fixed Lease
Contingent Lease
Mgmt Contract
LivingWell
Total

• No. of hotels 97 16 28 79 N/A 220
• No. of rooms 20,999 5,928 9,914 25,699 N/A 62,540

m
m
m
m
m
m
Turnover 320.6 121.8 151.9 415.2 19.4 1,028.9 Gros
s Operating Profit 126.2 45.6 61.4 148.1 19.4 400.
7 Less Rental / Owners return (2.6) (19.6) (39.3)
(133.5) -
(195.0) Depreciation (25.0) (7.6) (1.1) - (1.6)
(35.3) Other Costs / Income (23.3) (6.1) (7.
3) - (15.8) (52.5) Half year to 30 June
2000 75.3 12.3 13.7 14.6 2.0 117.9 Proforma to 30
June 1999 71.0 7.4 13.8 10.5 0.9 103.6
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David MichelsGroup Chief Executive
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New Executive Team

• David Michels

Anthony Harris
Charles Anson
Ian Payne
Brian Wallace
Bryan Taker
Chris Bell
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Objectives

• More falls to the bottom line
• These businesses are as customer-friendly aswe
  can make them
• That our physical hotel estate lives up to
  Hiltons perceived reputation
• That our e-gaming investment is sensibly directed
• That we expand the group
• To improve the long term return on capital ofthe
  group as a whole

25
Revenue Per Available Room (Comparable Stakis)
Half Year to June
Underlying Growth
2000
1999
Growth
London 74.9 69.7 7.5 7.5 Provinces 46.6 42.5 9.
6 9.6 Total UK 57.3 52.5 9.1 9.1 Continental
Europe 56.4 52.0 8.5 14.8 Africa / Middle
East 31.4 31.3 0.3 (1.2) Total
EMEA 46.9 44.1 6.3 10.7 Asia /
Australasia 47.9 40.9 17.1 8.8 The
Americas 43.7 40.1 9.0 4.9 Overall -
Occupancy 68.1 65.8 - Average room
rate 72.3 68.4 5.7 5.3 - Revpar 49.2 45.0 9.3
9.0
Note The 1999 figures include results of Stakis
for the full 6 months for comparability purposes
26
Hilton UK - Year on Year Revpar Growth

14
12
10
8
6
4
2
0
-2
-4
-6
-8
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
1999
2000
27
Hilton International - Forecast Capital
Expenditure
2000 Totalm
2001 Maintenancem
UK 205 30 Europe, Middle East
Africa 52 15 Asia / Australasia 7 5 Americas 54 5
LivingWell 42 5 Total 360 60
28
Value of Hotel Portfolio
UK 1.9 International 0.7 Total 2.6
bn
29
Number of Hotels by Type
Fixed Lease
Contingent Lease
Management Contract
Owned
Total
UK 76 2 3 3 84 Continental Europe 11 10 12 12 45
Africa / Middle East 2 0 5 25 32 Asia /
Australasia 1 3 2 28 34 The Americas 7 1 6 11 25 T
otal 97 16 28 79 220
30
Signings Openings
1994
1995
1996
1997
1998
1999
2001
2000
2002
Openings 5 5 3 10 7 8 15 20 10 Signings 8 7 11 20
20 10 18 - -
31
Hilton Alliance

• Hilton Reservations Worldwide
• Hilton.com
• Conrad
• HHonors
• Joint sales and marketing
• Joint database
• Promus effect

32
HHonors
As at June 30 2000
Total current members 8.5m Current active
members 4.6m Since 1999 Jan 1 - June 30
stays 3.2m Improvement on last year Split of
active membership US 3.3m Non-US 1.3m
77
74
33
Europe on Line - Accor / Forte / Hilton Web Site
Strategic Objectives

• Retain / regain control over inventory
• Retain direct relationship with customers
• Grow incremental revenues
• Reduce distribution cost
• Share cost of investment in technology

34
Hilton.com

• 2000 Total investment - 13m
• Hilton International investment - 2m
• 180,000 reservations in first half
• Two-fold increase on previous year

35
Conrad
Existing Conrad Hotels
Istanbul Singapore Egypt (x3) Bali
Hong Kong Brussels Dublin London
36
UK Shop First Half Performance
1993
1994
1995
1996
1997
1998
2000
1999
Average number of shops PBIT m 24.6 26.8 22.8 2
9.1 37.1 42.8 34.4 35.6 PBIT per shop
k 12.8 14.1 12.1 15.9 19.6 23.0 18.1 19.0
1,921 1,899 1,878 1,831 1,892 1,892 1,901 1,870
Investment, productivity and product mixhave
stimulated growth
37
On-Course Theoretical Margins
Runners
Margin
Per Runner
1995 9.6 120.7 2.16 1996 10.2 122.2 2.18 1997 9.8
121.3 2.17 1998 10.1 122.3 2.21 1999 10.4 120.6 1.
98 2000 10.4 121.1 2.03
Theoretical margins are returning towards
historic levels
38
Gambling Review Body - Hilton Submission

• Gambling is for adults aged 18 and over
• Maintain high levels of probity and
  socialresponsibility requirements of operators
• Careful review of existing legislation and
  regulation e.g. opening hours, number of slot
  machines and pay-out levels
• Legislation and regulation to apply to both
  bricks and clicks
• Create a single regulator to manage future
  industryrules and guidelines
• Create a competitive taxation regime that
  satisfies UKand international customers

The UK gambling industry is a world
leaderAppropriate modernisation is required
39
E-Gaming - Distribution Channels
Platform
Channel
Timing
Internet Ladbrokes.com Launched Ladbrokes.co.
uk Launched Bet.co.uk Launched Vernons.co.u
k October Digital TV Cable Telewest Best
Bets Launched CWC Matchball Lucky
Clover Launched Best Bets NTL In
discussion Satellite BSkyB In
discussion Open November Terrestrial On-Digi
tal In discussion Mobile WAP BT
Cellnet Launched GPRS BT Summer 2001 Hotel
Bedrooms Hilton Web ADSL On test
40
E-Gaming Partnerships
Partner
Activity
Timing
Teamtalk UK Soccer June Big Brother Channel 4 TV
- Busiest site in UK August QXL Auction
on-line August ITN News August Umbro Sportswear Au
gust
41
E-Gaming Future Developments
Activity
Timing

• Video streamed greyhounds August 2000
• Full audio service September 2000
• Fantasy sports games October 2000
• Casino slots October 2000
• Vernons Pools October 2000
• Bingo numbers games Mid 2001
• Video streamed casino games End 2001

Develop a best of breed betting and gaming portal
42
Industry Developments
Timing
Media Rights Now - March 2002 - SIS - RCA Horse
Race Levy replacement Now - 2003 - Media
Rights - Duty General Betting Duty Now -
ongoing - Gross Profits Tax - Place of
Consumption Gambling Review Now - 2001 -
Regulation - Legislation
43
Ladbroke Casinos
UK Provinces 21 Clubs London 6
Clubs Overseas 4 Clubs
44
LivingWell
Current Membership Numbers over 100,000
Planned Openings
2000
2001
Sutton Coldfield Nottingham Malta Carlisle
Ashford Inverness York Perth Barnsley Burton on
Trent Peterborough
Dresden Weimar Berlin Mainz Sydney Prague