Preliminary Results24 February 2005

Sir Ian RobinsonChairman

Brian WallaceDeputy Group Chief Executive and Group Finance Director

4

Hilton Group plc - Summary of Performance

(1) Before goodwill amortisation and exceptional items

2004£m

2003£m

VarianceB(W)

Hotels 171.3 146.5 16.9%

Betting 273.4 214.1 27.7%

Central costs and income (14.5) (13.6)

Operating profit (1) 430.2 347.0 24.0%

Interest (47.1) (74.6)

Profit before tax (1) 383.1 272.4 40.6%

Effective tax rate (1) 15.5% 22.0%

EBITDA (1) 561.9 485.3 15.8%

EPS (1) 20.4p 13.4p 52.2%

Net Debt 971.9 1,147.7

Year to 31 December

5

Hotels - Like for Like Profit

2004£m

2003£m

VarianceB(W)

Reported profit (1) 171.3 146.5 16.9%

Disposal of Pandox - (5.9)

Closed for refurbishment (0.5) 2.5

Disposals / new openings (7.7) (2.4)

Middle East litigation costs 2.4 -

Foreign exchange 3.9 -

Like for like profit (1) 169.4 140.7 20.4%

Year to 31 December

(1) Before goodwill amortisation and exceptional items

6

Hotels Worldwide Revpar 2004 vs 2003

Like for Like Hotels, Constant Currencies

12.9%12.7%

18.7%

7.8%

11.7%

4.2%

11.2%

(3.1)%

3.6% 4.9%2.5%

5.2%7.6%

(10)%

(5)%

0%

5%

10%

15%

20%

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan

Occupancy % pts growth

Rate growth

Revpar growth

7

Worldwide Revpar by Ownership Type

4.8%

8.5%

14.6%

6.6%5.5%

3.8%

5.7%6.9%

8.6%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Owned & Fixed lease Contingent lease Management contract

Like for Like Hotels, Constant Currencies

H1 H2 FY H1 H2 FY H1 H2 FY

Revpar Growth 2004 vs 2003 - First Half, Second Half, Full Year

8

Hotels - Cost Management

Like for Like, Constant Currencies Total£m

Increasing revenue

£m

Declining revenue

£mFull Year

Revenue movement 144.8 199.8 (55.0)

GOP Movement (1) 73.6 111.0 (37.4)

Incremental conversion 50.8% 55.6% 32.0%

Rental & Owners return (35.3)Property taxes / rates (3.7)Insurance (2.0)Other (3.9)

Operating profit increase (1) 28.7

(1) Before goodwill amortisation and exceptional items

9

(10)%

0%

10%

20%

30%

40%

50%

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan

London

Provinces

Total UK

UK Hotels Revpar 2004 vs 2003

Like for Like Hotels

10

Europe (Hilton Brand) - Revpar by Country

Like for Like, Constant Currencies, First Half, Second Half, Full Year

6.2%

(3.6)%

0.3%

6.6%

(1.9)%

7.9%

6.4%

(2.7)%

4.0%

(6)%

(4)%

(2)%

0%

2%

4%

6%

8%

10%

Germany France Benelux

H1 H2 FY

H1 H2 FY

H1 H2 FY

11

(5.5)%

7.1%

(2.0)%(4.7)%

0.1% 2.9%

8.5%

0.0%

9.2%

0.4%

6.0%7.9%

10.2%

(10)%

(8)%

(6)%(4)%

(2)%

0%

2%

4%

6%8%

10%

12%

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan

Occupancy % pts growth

Rate growth

Revpar growth

Scandic Revpar 2004 vs 2003

Like for Like Hotels, Constant Currencies, Scandic Acquired

12

(a) At constant currencies

(b) Includes support office costs not allocated to individual hotels and foreign exchange

(c) 2003 excludes £5.9m of Pandox associate profit, the investment was sold in December 2003

2004Actual

£mOther (b)

£m

Revenue 500.0 23.4 (6.0) (2.3) 515.1

GOP 162.0 13.2 (5.1) 0.5 170.6Inc. conversion 54.6% 15.0%

Costs (148.1) (4.3) 1.9 (2.5) (153.0)

Profit (c) 13.9 8.9 (3.2) (2.0) 17.6

Like for like revenue

gainers (a)

£m

2003Actual

£m

Like for like revenue losers (a)

£mFull year

Scandic Performance 2004 vs 2003 (excluding Pandox)

13

Betting and Gaming

UK Retail 652.5 575.1 215.3 173.1

Ireland & Belgium 69.0 67.6 13.2 11.5

Telephone Betting - excluding high rollers 39.8 30.5 13.6 10.6 - high rollers 6.3 (1.6) 4.2 (1.2)

46.1 28.9 17.8 9.4

eGaming 89.3 63.7 21.3 14.2

Vernons 20.2 20.2 5.8 5.9

Betting and Gaming 877.1 755.5 273.4 214.1

Gross Win2004 2003£m £m

Operating Profit(1)

2004 2003£m £mYear to 31 December

(1) Before goodwill amortisation and exceptional items

14

UK Retail

(1) Excluding machines

2004£m

2003£m

VarianceB(W)

Gross win 652.5 575.1 13.5%

Duty / Gross profits tax (96.4) (84.4)

Other costs (340.8) (317.6)

Operating profit 215.3 173.1 24.4%

Staff costs per slip 36.30p 32.67p (11.1)%

Stake per slip(1) £8.47 £8.37 1.2%

Year to 31 December

15

Telephone Betting (Excluding High Rollers)

(1) Active customers are those who placed a bet during the period

2004£m

2003£m

VarianceB(W)

Gross win 39.8 30.5 30.5%

Gross profits tax (5.9) (4.6)

Other costs (20.3) (15.3)

Operating profit 13.6 10.6 28.3%

Salary cost per call 69.2p 67.8p (2.1)%

No. of calls (000’s) 6,659 5,995 11.1%

Active customers (000’s) (1) 125.2 117.0 7.0%

Year to 31 December

16

eGaming

2004£m

2003£m

VarianceB(W)

Gross win 89.3 63.7 40.2%

Gross profits tax (4.9) (3.2)

Other costs (63.1) (46.3)

Operating profit 21.3 14.2 50.0%

Year to 31 December

(1) Active customers are those who placed a bet during the period

Active customers (000’s) (1) Sportsbook 306 206 48.5% Casino 81 80 1.3% Poker 64 25 156.0%Sportsbook registrations (000’s) 357 267 33.7%

17

Hilton Group plc - Cash Flow2004£m

2003£m

Cash inflow from operating activities 546.8 501.9 Interest, tax and dividends paid (243.1) (261.5) Cash flow before capex 303.7 240.4 Capital expenditure (189.6) (189.9)Cash flow after capex 114.1 50.5 Proceeds from asset sales 38.6 20.0 Acquisitions / disposals (1) (6.4) 35.3

146.3 105.8Exchange and other movements (2) 29.5 (88.7)Net borrowings movement 175.8 17.1 Opening net borrowings (1,147.7) (1,164.8)

Closing net borrowings (971.9) (1,147.7)

Year to 31 December

(1) Includes betting shop acquisitions(2) Includes £17.8m favourable exchange (2003: £96.0m adverse)

18

HotelsAcquisition linked development 39.1Other 87.9Total Hotels 127.0LivingWell 9.0

136.0Betting and GamingDevelopment – operating assets 20.4FOBTs 9.5Other (including TVs £4.3m, Ireland £2.2m) 17.4eGaming / Telephone betting 6.3

53.6Total Group 189.6

Analysis of 2004 Capital Expenditure£m

19

UK GAAP Pro forma IFRS (2)

2004 Profit Before Tax (1) £383m £374m

2004 EPS (1) 20.4p 20.0p

2004 Net Assets £2,554m £2,388m

(1) Before goodwill amortisation and exceptional items(2) This includes the pro forma impact of IAS 32 and 39, which will not be adopted until 1 January 2005

2%

7%

2%

Impact of IFRS – Business Performance

David MichelsGroup Chief Executive

22

Five Year Record

Dividend 8.50p 8.92p 8.92p 8.92p 9.60p

Debt (£m) 1,374.3 1,473.9 1,164.8 1,147.7 971.9

EPS 14.6p 14.3p 13.4p 13.4p 20.4p

FTSE Ranking 89th 73rd 68th 59th 60th

TSR Growth 9.4% 5.2% (17.1%) 43.2% 31.8%

200320022000 2001 2004As at 31 December

23

2005 – Trading So Far

24

25

EPOS

26

New Shops

44 shops purchased since January 2004

A further 37 agreed in 2005

27

270 shops will be relocated, extended or refurbished

28

29

30

2005

9% increase in number of events

7% increase in trading hours

31

eGaming

32

Telephone Betting

33

Ladbrokes Management

Chris BellChief Executive Ladbrokes

Mike O’KaneTrading Director

Ros BarkerHuman Resources

Director

Andy ScottFinance Director

Alan RossManaging Director

Ladbrokes Ltd

John O’ReillyManaging Director

eGaming Ltd

Steve RobertsManaging Director

Vernons

Richard AmesCommercial Director

Alex KovachInternational BusinessDevelopment Director

34

Blackpool Casino

35

Betting Exchanges

36

Ian Carter

37

Historical Revpar Chart

48

49

50

51

52

53

54

£Rolling 12 months, Like for Like at Constant Currencies

38

State of the Nation

Scan

dic

Athens, GreeceOtaru, Japan

Espoo, Finland

Nagoya, Japan

Morumbi, Brazil

Offenbach, Germany

Hil

ton

Hil

ton

Scan

dic

Hil

ton

Hil

ton

39

Future Openings

• Bari, Italy (Scandic by Hilton)• Shenzhen, China• Qasr al Shaq, Saudi Arabia• Barbados, Caribbean• Santo Domingo, Dominican Republic• Cebu, Philippines• Phuket, Thailand (Conrad)• Barcelona Diagonal Mar, Spain• Dubrovnik, Croatia• Sydney, Australia• Dublin Airport, Ireland• Tokyo, Japan (Conrad)• Millennium Hilton Bangkok, Thailand• Portorosa, Sicily

2005

Mil

lenn

ium

Hil

ton

Bangkok, Thailand Sydney, Australia

Hil

ton

Hil

ton

Barbados

Hil

ton

Tokyo, Japan

32 hotels (7,866 rooms) to open in 2006 and beyond

40

Scandic Franchises

Bari, Italy

Scan

dic

by H

ilto

n

41

Conrad HotelsC

onra

d

Bangkok, Thailand

Con

rad

Con

rad

Waldorf, NY, USA

Istanbul, Turkey

Con

rad

Cairo, Egypt

Con

rad

Miami, USA

42

Hotel Property

Planning to raise £300m-£400m

43

Hilton Taba, Egypt

44

BDRC

**BDRC Survey 2004

Measure Europe*UK* Asia Pacific** Middle East**

RankRank RankRank

Prompted Awareness

Unprompted Awareness

Brand Preference

-1st Choice

-1st or 2nd Choice

Brand Usage

Brand Loyalty

Brand Ranking Index

1st

1st

1st

1st

4th/worse

1st

1st

1st 1st

2nd2nd

3rd1st

1st 2nd

2nd 3rd

2nd

1st 2nd

4th/worse

3rd 3rd

1st

1st

2nd

1st

3rd

*BDRC Survey 2003

45

2005 Capex

(1) Including acquisition linked development

(2) Excludes potential betting shop acquisitions

Capex:

Hotels 278 144 88 71 97 120

Betting 40 40 41 43 54 70

Major property purchases(1) 147 - 59 76 39 20

Capital expenditure(2) 465 184 188 190 190 210

Disposals - hotels (13) (355) (335) (9) (36)

452 (171) (147) 181 154

2000£m

2001£m

2002£m

2003£m

Forecast2005£m

2004£m

Preliminary Results24 February 2005

Appendix

48

Turnover 565.6 276.4 833.8 1,002.7 3.6 50.0 2,732.1

Gross operating profit 197.4 103.0 295.2 370.0 3.6 19.1 988.3Less: Rental & owners return (9.0) (65.5) (182.4) (332.0) - (4.0) (592.9) Depreciation (45.3) (19.4) (27.6) - - (4.5) (96.8) Other costs / income (43.4) (11.4) (41.6) - (0.9) (4.3) (101.6)

2004 Profit 99.7 6.7 43.6 38.0 2.7 6.3 197.0

2003 Profit 82.6 4.3 34.8 35.8 - 7.4 164.9

TotalManaged LivingWell

No. of hotels 64 49 154 110 26 n/a 403

No. of rooms 16,350 10,337 33,625 34,618 7,706 n/a 102,636

OwnedFixed lease

Contingent lease

£m

Franchise

Hotels – Analysis by Contract Type

49

Geographical Revpar by Ownership Type

Like for Like Hotels, Constant Currencies

Owned & fixed lease

Contingent lease Managed

UK 8.7% 5.9% 10.0%

Europe & Africa 1.6% 6.0% 1.9%

Middle East & Asia Pacific 9.1% 14.7% 10.6%

Americas 10.5% 14.0% 18.2%

Total 5.7% 6.9% 8.6%

50

Yield Premium - Hilton vs London Market

Cumulative Year to Date Revpar Premium

Market Source: PKF Hotel Consultancy ServicesMarket is 8 competitor chains - Marriott International, InterContinental, De Vere, Millennium & Copthorne, Thistle, Le Meridien, Whitbread, Sheraton

£50

£55

£60

£65

£70

£75

£80

£85

Jan Feb Mar Apr May June Jul Aug Sep Oct Nov Dec

Rev

par

0%

5%

10%

15%

20%

25%

Rev

par P

rem

ium

Hilton Revpar Premium 2004 Hilton Revpar 2004 Market Revpar 2004

51

Yield Premium - Hilton vs UK Provincial Market

Cumulative Year to Date Revpar Premium

Market Source: PKF Hotel Consultancy ServicesMarket is 8 competitor chains - Marriott International, InterContinental, De Vere, Millennium & Copthorne, Thistle, Le Meridien, Whitbread, Sheraton

£35

£40

£45

£50

£55

£60

Jan Feb Mar Apr May June Jul Aug Sep Oct Nov Dec

Rev

par

0%

5%

10%

15%

20%

25%

Rev

par

Pre

miu

m

Hilton Revpar Premium 2004 Hilton Revpar 2004 Market Revpar 2004

52

Breakdown of Lease Commitments

Fixed lease£m

Minimum guarantee

£mTotal£m

Hotels 79.5 88.2 110.7 278.4

Betting 38.1 - - 38.1

Property / Centre 5.5 - - 5.5

Total 123.1 88.2 110.7 322.0

• Also circa £18m other operating lease commitments

Forecast land and buildings lease commitments for 2005

Contingent lease£m

Forecast contingent commitments are based on 2005 forecast results

53

Background• Under EU regulation, Hilton is required to report its results for 2005 under IFRS

• Key differences from UK GAAP highlighted at 2003 Prelims announcement

• Pensions and employee benefits

• Deferred tax

• Goodwill, brands and licences

• Share-based payments

• Derivatives, hedge accounting and convertible bond

• 2004 opening balance sheet and 2004 comparative information now completed and audited. This comparative information may be amended by future changes in IFRS and its interpretation

• Hilton has adopted Financial Instruments standards (IAS32 & IAS 39) from 1 January 2005

• Unaudited pro forma financial information has been prepared to illustrate the impact of IAS 32 & IAS 39 on 2004 results

International Financial Reporting Standards

54

Key Impacts

• 2004 pro forma EPS reduced by 2%

• Potential for increased volatility due to fair value of derivatives and pensions

• 2004 Net Assets reduced from £2,554m to £2,388m (pro forma)

• Cash flows unaffected

IFRS Timetable

• Detailed reconciliations from UK GAAP are available on website www.hiltongroup.com

• IFRS conference call for interested parties at 10am (UK time) on

3 March 2005

• Interim IFRS financials announced 25 August 2005

IFRS – Summary

55

• Business Combinations

• Employee Benefits

• Share-based payments

• Financial Instruments

• Property, Plant & Equipment

- no restatement prior to Transition Date (1 January 2004)

- all actuarial gains and losses recognised in equity at Transition Date

- only awards granted after 7 November 2002 have been considered

- not adopted until 1 January 2005, pro forma impact on 2004 disclosed

- no remeasurement of assets to fair value at Transition Date

IFRS – First Time Adoption Elections