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Hilton Reports First Quarter Results; Resumes Capital Return to Shareholders

Hilton Worldwide Holdings Inc. ("Hilton" or the "Company") (NYSE: HLT) today reported its first quarter 2022 results. Highlights include:

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220503005151/en/

Hilton Reports Q1 2022 Earnings

Hilton Reports Q1 2022 Earnings

  • Diluted EPS was $0.75 for the first quarter, and diluted EPS, adjusted for special items, was $0.71
  • Net income was $211 million for the first quarter
  • Adjusted EBITDA was $448 million for the first quarter
  • System-wide comparable RevPAR increased 80.5 percent, on a currency neutral basis, for the first quarter compared to the same period in 2021
  • System-wide comparable RevPAR was down 17.0 percent, on a currency neutral basis, for the first quarter compared to the same period in 2019
  • Approved 22,200 new rooms for development during the first quarter, bringing Hilton's development pipeline to more than 410,000 rooms as of March 31, 2022
  • Added 13,200 rooms to Hilton's system in the first quarter, contributing to 7,800 net additional rooms in Hilton's system during the period, which represented 5.0 percent net unit growth from March 31, 2021
  • Resumed share repurchases in March 2022 and repurchased 907,000 shares of Hilton common stock for approximately $130 million in the first quarter and 1.8 million shares for approximately $265 million through April
  • Declared a $0.15 per share quarterly cash dividend in May 2022
  • Full year 2022 system-wide comparable RevPAR is expected to increase between 32.0 percent and 38.0 percent on a currency neutral basis compared to 2021; full year net income is projected to be between $1,001 million and $1,071 million; full year Adjusted EBITDA is projected to be between $2,250 million and $2,350 million
  • Full year 2022 capital return is projected to be between $1.4 billion and $1.8 billion

Overview

Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, "We are happy to report solid first quarter results, with all segments driving better than expected top line performance in March. Our results in the quarter, coupled with our confidence in continued recovery throughout the year, enabled us to begin returning capital to shareholders earlier than we had anticipated. In March, we resumed our share repurchase program and, in the second quarter, we declared a quarterly cash dividend. Our team members worked hard to effectively navigate the pandemic and position the Company for the future, and we are excited for the growth opportunities that lie ahead."

For the three months ended March 31, 2022, system-wide comparable RevPAR increased 80.5 percent compared to the same period in 2021, due to increases in both occupancy and ADR, and fee revenues increased 79 percent compared to the same period in 2021. For comparison to pre-pandemic results, system-wide comparable RevPAR for the three months ended March 31, 2022 was down 17.0 percent compared to the three months ended March 31, 2019.

For the three months ended March 31, 2022, diluted EPS was $0.75 and diluted EPS, adjusted for special items, was $0.71 compared to $(0.39) and $0.02, respectively, for the three months ended March 31, 2021. Net income (loss) and Adjusted EBITDA were $211 million and $448 million, respectively, for the three months ended March 31, 2022, compared to $(109) million and $198 million, respectively, for the three months ended March 31, 2021.

Development

In the first quarter of 2022, Hilton opened 76 new hotels contributing to 13,200 additional rooms and achieved net unit growth of 7,800 rooms. During the quarter, Hilton celebrated the opening of the 500th Homewood Suites in the U.S., as well as other notable openings including the Hilton Singapore Orchard, Hilton's largest hotel in the Asia Pacific region, and two new lifestyle hotels in destination cities under its Canopy by Hilton brand, the Canopy by Hilton Boston Downtown and the Canopy by Hilton New Orleans Downtown.

As of March 31, 2022, Hilton's development pipeline totaled 2,730 hotels representing more than 410,000 rooms throughout 113 countries and territories, including 27 countries and territories where Hilton does not currently have any existing hotels. Additionally, of the rooms in the development pipeline, nearly 200,000 of the rooms were under construction and over 245,000 of the rooms were located outside the U.S. Adding to Hilton's development pipeline during the quarter were two notable international deals under its Curio Collection by Hilton brand, the Royal Palm Galapagos in Ecuador and the Palacio Bellas Artes San Sebastian in Spain.

Balance Sheet and Liquidity

As of March 31, 2022, Hilton had $8.8 billion of long-term debt outstanding, excluding deferred financing costs and discount, with a weighted average interest rate of 4.00 percent. Excluding finance lease liabilities and other debt of Hilton's consolidated variable interest entities, Hilton had $8.6 billion of long-term debt outstanding with a weighted average interest rate of 3.97 percent and no scheduled maturities until 2025. No debt amounts were outstanding under Hilton's $1.75 billion senior secured revolving credit facility as of March 31, 2022, which had an available borrowing capacity of $1,690 million after considering $60 million of outstanding letters of credit. Total cash and cash equivalents were $1,510 million as of March 31, 2022, including $78 million of restricted cash and cash equivalents.

In March 2022, the Company resumed share repurchases, which, along with dividend payments, had been suspended to preserve cash during the pandemic. The Company repurchased 0.9 million shares of its common stock in March 2022 at a cost of approximately $130 million and an average price per share of $143.89, and, in 2022, through April 29th, the Company had repurchased 1.8 million shares at a cost of approximately $265 million and an average price per share of $148.29.

In May 2022, Hilton's board of directors authorized a quarterly cash dividend of $0.15 per share of common stock, which will be paid on or before June 24, 2022 to holders of record of its common stock as of the close of business on May 27, 2022.

Outlook

Share-based metrics in Hilton's outlook include actual share repurchases to date, but do not include the effect of potential share repurchases hereafter.

Full Year 2022

  • System-wide comparable RevPAR, on a currency neutral basis, is expected to increase between 32.0 percent and 38.0 percent compared to 2021, and to be down between 5.0 percent to 9.0 percent from 2019.
  • Diluted EPS, before special items, is projected to be between $3.56 and $3.81.
  • Diluted EPS, adjusted for special items, is projected to be between $3.77 and $4.02.
  • Net income is projected to be between $1,001 million and $1,071 million.
  • Adjusted EBITDA is projected to be between $2,250 million and $2,350 million.
  • Contract acquisition costs and capital expenditures, excluding amounts indirectly reimbursed by hotel owners, are expected to be between $250 million and $275 million.
  • Capital return is projected to be between $1.4 billion and $1.8 billion.
  • General and administrative expenses are projected to be between $410 million and $430 million.
  • Net unit growth is expected to be approximately 5.0 percent.

Second Quarter 2022

  • System-wide comparable RevPAR, on a currency neutral basis, is expected to increase between 45.0 percent and 50.0 percent compared to the second quarter of 2021, and to be down between 5.0 percent to 10.0 percent from the second quarter of 2019.
  • Diluted EPS, before special items, is projected to be between $0.89 and $0.94.
  • Diluted EPS, adjusted for special items, is projected to be between $0.98 and $1.03.
  • Net income is projected to be between $250 million and $264 million.
  • Adjusted EBITDA is projected to be between $590 million and $610 million.

Conference Call

Hilton will host a conference call to discuss first quarter 2022 results on May 3, 2022 at 10:00 a.m. Eastern Time. Participants may listen to the live webcast by logging on to the Hilton Investor Relations website at https://ir.hilton.com/events-and-presentations. A replay and transcript of the webcast will be available within 24 hours after the live event at https://ir.hilton.com/financial-reporting.

Alternatively, participants may listen to the live call by dialing 1-888-317-6003 in the United States ("U.S.") or 1-412-317-6061 internationally using the conference ID 3306232. Participants are encouraged to dial into the call or link to the webcast at least fifteen minutes prior to the scheduled start time. A telephone replay will be available for seven days following the call. To access the telephone replay, dial 1-877-344-7529 in the U.S. or 1-412-317-0088 internationally using the conference ID 2469261.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to the expectations regarding the impact of and recovery from the coronavirus ("COVID-19") pandemic (the "pandemic"), the performance of Hilton's business, financial results, liquidity and capital resources and other non-historical statements. In some cases, these forward-looking statements can be identified by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "could," "seeks," "projects," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties including, among others, risks inherent to the hospitality industry, macroeconomic factors beyond Hilton's control, such as challenges due to labor shortages and supply chain disruptions, risks related to the impact of the pandemic, including as a result of new strains or variants of the virus and uncertainty of acceptance of the COVID-19 vaccines and their effectiveness, competition for hotel guests and management and franchise contracts, risks related to doing business with third-party hotel owners, performance of Hilton's information technology systems, growth of reservation channels outside of Hilton's system, risks of doing business outside of the U.S., risks associated with the Russian invasion of Ukraine and Hilton's indebtedness. Additional factors that could cause Hilton's results to differ materially from those described in the forward-looking statements can be found under the section entitled "Part I—Item 1A. Risk Factors" of Hilton's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the Securities and Exchange Commission (the "SEC"), as such factors may be updated from time to time in Hilton's periodic filings with the SEC, which are accessible on the SEC's website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in Hilton's filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Definitions

See the "Definitions" section for the definition of certain terms used within this press release, including within the schedules.

Non-GAAP Financial Measures

The Company refers to certain financial measures that are not recognized under U.S. generally accepted accounting principles ("GAAP") in this press release, including: net income (loss), adjusted for special items; diluted EPS, adjusted for special items; EBITDA; Adjusted EBITDA; Adjusted EBITDA margin; net debt; and net debt to Adjusted EBITDA ratio. See the schedules to this press release, including the "Definitions" section, for additional information and reconciliations of such non-GAAP financial measures.

About Hilton

Hilton (NYSE: HLT) is a leading global hospitality company with a portfolio of 18 world-class brands comprising nearly 6,900 properties and nearly 1.1 million rooms, in 122 countries and territories. Dedicated to fulfilling its founding vision to fill the earth with the light and warmth of hospitality, Hilton has welcomed more than 3 billion guests in its more than 100-year history, earned a top spot on Fortune's 100 Best Companies to Work For list and been recognized as a global leader on the Dow Jones Sustainability Indices for five consecutive years. Hilton has introduced several industry-leading technology enhancements to improve the guest experience, including Digital Key Share, automated complimentary room upgrades and the ability to book confirmed connecting rooms. Through the award-winning guest loyalty program Hilton Honors, the 133 million members who book directly with Hilton can earn Points for hotel stays and experiences money can't buy. With the free Hilton Honors app, guests can book their stay, select their room, check in, unlock their door with a Digital Key and check out, all from their smartphone. Visit newsroom.hilton.com for more information, and connect with Hilton on facebook.com/hiltonnewsroom, twitter.com/hiltonnewsroom, linkedin.com/company/hilton, instagram.com/hiltonnewsroom and youtube.com/hiltonnewsroom.

HILTON WORLDWIDE HOLDINGS INC.

EARNINGS RELEASE SCHEDULES

TABLE OF CONTENTS

 

Condensed Consolidated Statements of Operations

Comparable and Currency Neutral System-Wide Hotel Operating Statistics

Property Summary

Capital Expenditures and Contract Acquisition Costs

Reconciliations of Non-GAAP Financial Measures

Definitions

HILTON WORLDWIDE HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in millions, except per share data)

 

Three Months Ended

 

March 31,

 

2022

 

2021

Revenues

 

 

 

Franchise and licensing fees

$

413

 

 

$

242

 

Base and other management fees

 

55

 

 

 

25

 

Incentive management fees

 

34

 

 

 

13

 

Owned and leased hotels

 

150

 

 

 

56

 

Other revenues

 

18

 

 

 

17

 

 

 

670

 

 

 

353

 

Other revenues from managed and franchised properties

 

1,051

 

 

 

521

 

Total revenues

 

1,721

 

 

 

874

 

 

 

 

 

Expenses

 

 

 

Owned and leased hotels

 

185

 

 

 

110

 

Depreciation and amortization

 

44

 

 

 

51

 

General and administrative

 

91

 

 

 

97

 

Other expenses

 

11

 

 

 

10

 

 

 

331

 

 

 

268

 

Other expenses from managed and franchised properties

 

1,021

 

 

 

585

 

Total expenses

 

1,352

 

 

 

853

 

 

 

 

 

Operating income

 

369

 

 

 

21

 

 

 

 

 

Interest expense

 

(90

)

 

 

(103

)

Gain (loss) on foreign currency transactions

 

(4

)

 

 

2

 

Loss on debt extinguishment

 

 

 

 

(69

)

Other non-operating income, net

 

16

 

 

 

5

 

 

 

 

 

Income (loss) before income taxes

 

291

 

 

 

(144

)

 

 

 

 

Income tax benefit (expense)

 

(80

)

 

 

35

 

 

 

 

 

Net income (loss)

 

211

 

 

 

(109

)

Net loss attributable to noncontrolling interests

 

1

 

 

 

1

 

Net income (loss) attributable to Hilton stockholders

$

212

 

 

$

(108

)

 

 

 

 

Weighted average shares outstanding:

 

 

 

Basic

 

279

 

 

 

278

 

Diluted

 

282

 

 

 

278

 

 

 

 

 

Earnings (loss) per share:

 

 

 

Basic

$

0.76

 

 

$

(0.39

)

Diluted

$

0.75

 

 

$

(0.39

)

HILTON WORLDWIDE HOLDINGS INC.

COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS

BY REGION, BRAND AND SEGMENT

(unaudited)

 

Three Months Ended March 31,

 

Occupancy

 

ADR

 

RevPAR

 

2022

 

vs. 2021

 

2022

 

vs. 2021

 

2022

 

vs. 2021

By Region:

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

61.8

%

 

14.1

%

pts.

 

$

144.32

 

36.4

%

 

$

89.12

 

76.8

%

Americas (excluding U.S.)

50.7

 

 

21.7

 

 

 

 

126.05

 

35.7

 

 

 

63.92

 

137.0

 

Europe

47.9

 

 

29.2

 

 

 

 

120.70

 

74.8

 

 

 

57.77

 

348.8

 

Middle East & Africa

66.2

 

 

26.0

 

 

 

 

159.07

 

34.6

 

 

 

105.28

 

121.4

 

Asia Pacific

42.5

 

 

(0.4

)

 

 

 

104.13

 

12.0

 

 

 

44.28

 

11.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By Brand:

 

 

 

 

 

 

 

 

 

 

 

 

Waldorf Astoria Hotels & Resorts

47.7

%

 

23.6

%

pts.

 

$

599.50

 

7.5

%

 

$

286.03

 

113.0

%

Conrad Hotels & Resorts

45.8

 

 

15.6

 

 

 

 

229.69

 

33.4

 

 

 

105.21

 

102.1

 

Canopy by Hilton

53.4

 

 

23.1

 

 

 

 

186.89

 

34.7

 

 

 

99.89

 

137.2

 

Hilton Hotels & Resorts

49.6

 

 

20.1

 

 

 

 

169.18

 

38.2

 

 

 

83.85

 

132.9

 

Curio Collection by Hilton

52.6

 

 

19.0

 

 

 

 

214.50

 

27.7

 

 

 

112.83

 

100.1

 

DoubleTree by Hilton

52.9

 

 

17.5

 

 

 

 

127.02

 

32.9

 

 

 

67.24

 

98.5

 

Tapestry Collection by Hilton

53.8

 

 

18.1

 

 

 

 

145.89

 

28.3

 

 

 

78.48

 

93.2

 

Embassy Suites by Hilton

59.6

 

 

16.2

 

 

 

 

161.99

 

36.8

 

 

 

96.52

 

87.8

 

Hilton Garden Inn

59.0

 

 

13.8

 

 

 

 

124.60

 

34.8

 

 

 

73.56

 

75.8

 

Hampton by Hilton

60.5

 

 

10.8

 

 

 

 

118.90

 

30.3

 

 

 

71.98

 

58.4

 

Tru by Hilton

63.1

 

 

12.3

 

 

 

 

112.29

 

35.4

 

 

 

70.86

 

68.3

 

Homewood Suites by Hilton

73.6

 

 

9.5

 

 

 

 

135.97

 

28.6

 

 

 

100.09

 

47.8

 

Home2 Suites by Hilton

73.7

 

 

10.2

 

 

 

 

123.65

 

27.2

 

 

 

91.16

 

47.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By Segment:

 

 

 

 

 

 

 

 

 

 

 

 

Management and franchise

58.4

%

 

14.4

%

pts.

 

$

138.77

 

35.0

%

 

$

81.08

 

79.2

%

Ownership(1)

38.0

 

 

25.0

 

 

 

 

176.04

 

31.1

 

 

 

66.82

 

283.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

System-wide

58.1

%

 

14.6

%

pts.

 

$

139.17

 

35.2

%

 

$

80.84

 

80.5

%

____________

(1)

Includes hotels owned or leased by entities in which Hilton owns a noncontrolling financial interest.

HILTON WORLDWIDE HOLDINGS INC.

PROPERTY SUMMARY

As of March 31, 2022

 

Owned / Leased(1)

 

Managed

 

Franchised

 

Total

 

Properties

 

Rooms

 

Properties

 

Rooms

 

Properties

 

Rooms

 

Properties

 

Rooms

Waldorf Astoria Hotels & Resorts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

11

 

4,224

 

 

 

11

 

4,224

Americas (excluding U.S.)

 

 

2

 

261

 

 

 

2

 

261

Europe

2

 

463

 

4

 

898

 

 

 

6

 

1,361

Middle East & Africa

 

 

5

 

1,224

 

 

 

5

 

1,224

Asia Pacific

 

 

6

 

1,259

 

 

 

6

 

1,259

LXR Hotels & Resorts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

3

 

426

 

3

 

426

Americas (excluding U.S.)

 

 

 

 

1

 

76

 

1

 

76

Europe

 

 

2

 

383

 

 

 

2

 

383

Middle East & Africa

 

 

1

 

41

 

1

 

234

 

2

 

275

Asia Pacific

 

 

 

 

1

 

114

 

1

 

114

Conrad Hotels & Resorts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

5

 

1,922

 

1

 

1,496

 

6

 

3,418

Americas (excluding U.S.)

 

 

3

 

787

 

 

 

3

 

787

Europe

 

 

4

 

1,155

 

 

 

4

 

1,155

Middle East & Africa

1

 

614

 

3

 

1,569

 

 

 

4

 

2,183

Asia Pacific

1

 

164

 

22

 

7,074

 

1

 

659

 

24

 

7,897

Canopy by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

25

 

4,296

 

25

 

4,296

Americas (excluding U.S.)

 

 

2

 

272

 

 

 

2

 

272

Europe

 

 

1

 

123

 

4

 

917

 

5

 

1,040

Middle East & Africa

 

 

1

 

200

 

 

 

1

 

200

Asia Pacific

 

 

4

 

614

 

 

 

4

 

614

Signia by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

1

 

1,009

 

 

 

1

 

1,009

Hilton Hotels & Resorts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

57

 

43,212

 

188

 

59,118

 

245

 

102,330

Americas (excluding U.S.)

1

 

405

 

28

 

10,562

 

26

 

7,826

 

55

 

18,793

Europe

39

 

11,514

 

44

 

14,888

 

43

 

11,268

 

126

 

37,670

Middle East & Africa

5

 

1,992

 

36

 

12,555

 

3

 

1,565

 

44

 

16,112

Asia Pacific

5

 

2,999

 

112

 

39,294

 

8

 

3,247

 

125

 

45,540

Curio Collection by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

8

 

3,593

 

60

 

12,915

 

68

 

16,508

Americas (excluding U.S.)

 

 

2

 

99

 

12

 

1,750

 

14

 

1,849

Europe

 

 

4

 

360

 

21

 

2,894

 

25

 

3,254

Middle East & Africa

 

 

4

 

741

 

2

 

557

 

6

 

1,298

Asia Pacific

 

 

4

 

773

 

2

 

248

 

6

 

1,021

DoubleTree by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

32

 

10,605

 

341

 

77,510

 

373

 

88,115

Americas (excluding U.S.)

 

 

3

 

587

 

35

 

7,085

 

38

 

7,672

Europe

 

 

13

 

3,418

 

109

 

18,419

 

122

 

21,837

Middle East & Africa

 

 

18

 

4,710

 

5

 

568

 

23

 

5,278

Asia Pacific

 

 

77

 

20,478

 

5

 

1,395

 

82

 

21,873

HILTON WORLDWIDE HOLDINGS INC.

PROPERTY SUMMARY (continued)

As of March 31, 2022

 

Owned / Leased(1)

 

Managed

 

Franchised

 

Total

 

Properties

 

Rooms

 

Properties

 

Rooms

 

Properties

 

Rooms

 

Properties

 

Rooms

Tapestry Collection by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

63

 

7,545

 

63

 

7,545

Americas (excluding U.S.)

 

 

1

 

138

 

5

 

479

 

6

 

617

Europe

 

 

 

 

4

 

238

 

4

 

238

Asia Pacific

 

 

1

 

266

 

1

 

175

 

2

 

441

Embassy Suites by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

40

 

10,585

 

211

 

47,377

 

251

 

57,962

Americas (excluding U.S.)

 

 

2

 

354

 

6

 

1,649

 

8

 

2,003

Motto by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

3

 

871

 

3

 

871

Hilton Garden Inn

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

4

 

425

 

730

 

100,857

 

734

 

101,282

Americas (excluding U.S.)

 

 

12

 

1,757

 

51

 

7,664

 

63

 

9,421

Europe

 

 

18

 

3,499

 

59

 

9,515

 

77

 

13,014

Middle East & Africa

 

 

17

 

3,555

 

3

 

474

 

20

 

4,029

Asia Pacific

 

 

49

 

10,771

 

1

 

177

 

50

 

10,948

Hampton by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

26

 

3,366

 

2,282

 

225,332

 

2,308

 

228,698

Americas (excluding U.S.)

 

 

13

 

1,644

 

109

 

13,305

 

122

 

14,949

Europe

 

 

16

 

2,697

 

101

 

15,769

 

117

 

18,466

Middle East & Africa

 

 

4

 

1,238

 

 

 

4

 

1,238

Asia Pacific

 

 

 

 

236

 

38,195

 

236

 

38,195

Tru by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

213

 

20,736

 

213

 

20,736

Americas (excluding U.S.)

 

 

 

 

2

 

179

 

2

 

179

Homewood Suites by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

10

 

1,172

 

493

 

56,282

 

503

 

57,454

Americas (excluding U.S.)

 

 

3

 

406

 

24

 

2,688

 

27

 

3,094

Home2 Suites by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

2

 

210

 

522

 

54,829

 

524

 

55,039

Americas (excluding U.S.)

 

 

 

 

7

 

753

 

7

 

753

Asia Pacific

 

 

 

 

5

 

783

 

5

 

783

Other

 

 

3

 

1,343

 

10

 

2,317

 

13

 

3,660

Total hotels

54

 

18,151

 

740

 

232,316

 

6,038

 

822,772

 

6,832

 

1,073,239

Hilton Grand Vacations

 

 

 

 

60

 

9,489

 

60

 

9,489

Total system

54

 

18,151

 

740

 

232,316

 

6,098

 

832,261

 

6,892

 

1,082,728

____________

(1)

Includes hotels owned or leased by entities in which Hilton owns a noncontrolling financial interest.

HILTON WORLDWIDE HOLDINGS INC.

CAPITAL EXPENDITURES AND CONTRACT ACQUISITION COSTS

(unaudited, dollars in millions)

 

Three Months Ended

 

 

 

March 31,

 

Increase / (Decrease)

 

2022

 

2021

 

$

 

%

Capital expenditures for property and equipment(1)

$

4

 

 

$

3

 

 

1

 

 

33.3

 

Capitalized software costs(2)

 

10

 

 

 

8

 

 

2

 

 

25.0

 

Total capital expenditures

 

14

 

 

 

11

 

 

3

 

 

27.3

 

Contract acquisition costs

 

15

 

 

 

43

 

 

(28

)

 

(65.1

)

Total capital expenditures and contract acquisition costs

$

29

 

 

$

54

 

 

(25

)

 

(46.3

)

____________

(1)

Represents expenditures for hotels, corporate and other property and equipment, which include amounts indirectly reimbursed by hotel owners of less than $1 million for both the three months ended March 31, 2022 and 2021. Excludes expenditures for FF&E replacement reserves of $12 million and $4 million for the three months ended March 31, 2022 and 2021, respectively.

(2)

Includes $9 million and $7 million of expenditures that were indirectly reimbursed by hotel owners for the three months ended March 31, 2022 and 2021, respectively.

HILTON WORLDWIDE HOLDINGS INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

NET INCOME (LOSS) AND DILUTED EPS, ADJUSTED FOR SPECIAL ITEMS

(unaudited, in millions, except per share data)

 

Three Months Ended

 

March 31,

 

2022

 

2021

Net income (loss) attributable to Hilton stockholders, as reported

$

212

 

 

$

(108

)

Diluted EPS, as reported

$

0.75

 

 

$

(0.39

)

Special items:

 

 

 

Net other (revenues) expenses from managed and franchised properties

$

(30

)

 

$

64

 

Purchase accounting amortization(1)

 

12

 

 

 

12

 

FF&E replacement reserves

 

12

 

 

 

4

 

Loss on debt extinguishment(2)

 

 

 

 

69

 

Other adjustment items(3)

 

(10

)

 

 

3

 

Total special items before taxes

 

(16

)

 

 

152

 

Income tax benefit (expense) on special items

 

5

 

 

 

(38

)

Total special items after taxes

$

(11

)

 

$

114

 

 

 

 

 

Net income, adjusted for special items

$

201

 

 

$

6

 

Diluted EPS, adjusted for special items

$

0.71

 

 

$

0.02

 

____________

(1)

Amounts represent the amortization expenses related to finite-lived intangible assets that were recorded at fair value in 2007 when the Company became a wholly owned subsidiary of affiliates of Blackstone Inc. The majority of these assets will be fully amortized during 2023.

(2)

The amount relates to the redemption of senior unsecured notes and includes a redemption premium of $55 million and the accelerated recognition of unamortized deferred financing costs related to those senior unsecured notes of $14 million.

(3)

The amount for the three months ended March 31, 2022 primarily includes a gain related to Hilton's investments in unconsolidated affiliates, which was recognized in other non-operating income, net.

HILTON WORLDWIDE HOLDINGS INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN

(unaudited, dollars in millions)

 

Three Months Ended

 

March 31,

 

2022

 

2021

Net income (loss)

$

211

 

 

$

(109

)

Interest expense

 

90

 

 

 

103

 

Income tax expense (benefit)

 

80

 

 

 

(35

)

Depreciation and amortization expenses

 

44

 

 

 

51

 

EBITDA

 

425

 

 

 

10

 

Loss (gain) on foreign currency transactions

 

4

 

 

 

(2

)

Loss on debt extinguishment

 

 

 

 

69

 

FF&E replacement reserves

 

12

 

 

 

4

 

Share-based compensation expense

 

37

 

 

 

39

 

Amortization of contract acquisition costs

 

8

 

 

 

7

 

Net other expenses (revenues) from managed and franchised properties

 

(30

)

 

 

64

 

Other adjustments(1)

 

(8

)

 

 

7

 

Adjusted EBITDA

$

448

 

 

$

198

 

____________

(1)

Amount for the three months ended March 31, 2022 primarily includes a gain related to Hilton's investments in unconsolidated affiliates. Both periods include severance and other items.

 

Three Months Ended

 

March 31,

 

2022

 

2021

Total revenues, as reported

$

1,721

 

 

$

874

 

Add: amortization of contract acquisition costs

 

8

 

 

 

7

 

Less: other revenues from managed and franchised properties

 

(1,051

)

 

 

(521

)

Total revenues, as adjusted

$

678

 

 

$

360

 

 

 

 

 

Adjusted EBITDA

$

448

 

 

$

198

 

 

 

 

 

Adjusted EBITDA margin

 

66.1

%

 

 

55.0

%

HILTON WORLDWIDE HOLDINGS INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

NET DEBT AND NET DEBT TO ADJUSTED EBITDA RATIO

(unaudited, dollars in millions)

 

March 31,

 

December 31,

 

2022

 

2021

Long-term debt, including current maturities

$

8,765

 

 

$

8,766

 

Add: unamortized deferred financing costs and discount

 

84

 

 

 

87

 

Long-term debt, including current maturities and excluding unamortized deferred financing costs and discount

 

8,849

 

 

 

8,853

 

Less: cash and cash equivalents

 

(1,432

)

 

 

(1,427

)

Less: restricted cash and cash equivalents

 

(78

)

 

 

(85

)

Net debt

$

7,339

 

 

$

7,341

 

 

Three Months Ended

 

Year Ended

 

TTM Ended

 

March 31,

 

December 31,

 

March 31,

 

2022

 

2021

 

2021

 

2022

Net income (loss)

$

211

 

 

$

(109

)

 

$

407

 

 

$

727

 

Interest expense

 

90

 

 

 

103

 

 

 

397

 

 

 

384

 

Income tax expense (benefit)

 

80

 

 

 

(35

)

 

 

153

 

 

 

268

 

Depreciation and amortization expenses

 

44

 

 

 

51

 

 

 

188

 

 

 

181

 

EBITDA

 

425

 

 

 

10

 

 

 

1,145

 

 

 

1,560

 

Loss on sale of assets, net

 

 

 

 

 

 

 

7

 

 

 

7

 

Loss (gain) on foreign currency transactions

 

4

 

 

 

(2

)

 

 

7

 

 

 

13

 

Loss on debt extinguishment

 

 

 

 

69

 

 

 

69

 

 

 

 

FF&E replacement reserves

 

12

 

 

 

4

 

 

 

48

 

 

 

56

 

Share-based compensation expense

 

37

 

 

 

39

 

 

 

193

 

 

 

191

 

Amortization of contract acquisition costs

 

8

 

 

 

7

 

 

 

32

 

 

 

33

 

Net other expenses (revenues) from managed and franchised properties

 

(30

)

 

 

64

 

 

 

110

 

 

 

16

 

Other adjustments(1)

 

(8

)

 

 

7

 

 

 

18

 

 

 

3

 

Adjusted EBITDA

$

448

 

 

$

198

 

 

$

1,629

 

 

$

1,879

 

 

 

 

 

 

 

 

 

Net debt

 

 

 

 

 

 

$

7,339

 

 

 

 

 

 

 

 

 

Net debt to Adjusted EBITDA ratio

 

 

 

 

 

 

 

3.9

 

____________

(1)

Amounts for all periods include severance and other items. Amount for the three months ended March 31, 2022 also includes a gain related to Hilton's investments in unconsolidated affiliates and for the year ended December 31, 2021 also includes costs recognized for certain legal settlements.

HILTON WORLDWIDE HOLDINGS INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

OUTLOOK: NET INCOME AND DILUTED EPS, ADJUSTED FOR SPECIAL ITEMS

FORECASTED 2022

(unaudited, in millions, except per share data)

 

Three Months Ending

 

June 30, 2022

 

Low Case

 

High Case

Net income attributable to Hilton stockholders, before special items

$

250

 

 

$

264

 

Diluted EPS, before special items(1)

$

0.89

 

 

$

0.94

 

Special items(2):

 

 

 

Purchase accounting amortization

$

12

 

 

$

12

 

FF&E replacement reserves

 

20

 

 

 

20

 

Total special items before tax

 

32

 

 

 

32

 

Income tax expense on special items

 

(7

)

 

 

(7

)

Total special items after tax

$

25

 

 

$

25

 

 

 

 

 

Net income, adjusted for special items

$

275

 

 

$

289

 

Diluted EPS, adjusted for special items(1)

$

0.98

 

 

$

1.03

 

 

Year Ending

 

December 31, 2022

 

Low Case

 

High Case

Net income attributable to Hilton stockholders, before special items

$

1,001

 

 

$

1,071

 

Diluted EPS, before special items(1)

$

3.56

 

 

$

3.81

 

Special items(2):

 

 

 

Net other revenues from managed and franchised properties

$

(30

)

 

$

(30

)

Purchase accounting amortization

 

47

 

 

 

47

 

FF&E replacement reserves

 

65

 

 

 

65

 

Other adjustment items

 

(10

)

 

 

(9

)

Total special items before tax

 

72

 

 

 

73

 

Income tax expense on special items

 

(13

)

 

 

(13

)

Total special items after tax

$

59

 

 

$

60

 

 

 

 

 

Net income, adjusted for special items

$

1,060

 

 

$

1,131

 

Diluted EPS, adjusted for special items(1)

$

3.77

 

 

$

4.02

 

____________

(1)

Does not include the effect of potential share repurchases.

(2)

See "—Net Income (Loss) and Diluted EPS, Adjusted for Special Items" for details of these special items.

HILTON WORLDWIDE HOLDINGS INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

OUTLOOK: ADJUSTED EBITDA

FORECASTED 2022

(unaudited, in millions)

 

Three Months Ending

 

June 30, 2022

 

Low Case

 

High Case

Net income

$

250

 

$

264

Interest expense

 

108

 

 

 

108

 

Income tax expense

 

106

 

 

 

112

 

Depreciation and amortization expenses

 

41

 

 

 

41

 

EBITDA

 

505

 

 

 

525

 

FF&E replacement reserves

 

20

 

 

 

20

 

Share-based compensation expense

 

49

 

 

 

49

 

Amortization of contract acquisition costs

 

9

 

 

 

9

 

Other adjustments(1)

 

7

 

 

 

7

 

Adjusted EBITDA

$

590

 

 

$

610

 

 

Year Ending

 

December 31, 2022

 

Low Case

 

High Case

Net income

$

1,001

 

 

$

1,071

 

Interest expense

 

421

 

 

 

421

 

Income tax expense

 

415

 

 

 

444

 

Depreciation and amortization expenses

 

169

 

 

 

169

 

EBITDA

 

2,006

 

 

 

2,105

 

Loss on foreign currency transactions

 

4

 

 

 

4

 

FF&E replacement reserves

 

65

 

 

 

65

 

Share-based compensation expense

 

160

 

 

 

160

 

Amortization of contract acquisition costs

 

39

 

 

 

39

 

Net other revenues from managed and franchised properties

 

(30

)

 

 

(30

)

Other adjustments(1)

 

6

 

 

 

7

 

Adjusted EBITDA

$

2,250

 

 

$

2,350

 

____________

(1)

Includes adjustments for severance and other items.

HILTON WORLDWIDE HOLDINGS INC.

DEFINITIONS

Trailing Twelve Month Financial Information

This press release includes certain unaudited financial information for the trailing twelve months ("TTM") ended March 31, 2022, which is calculated as the three months ended March 31, 2022 plus the year ended December 31, 2021 less the three months ended March 31, 2021. This presentation is not in accordance with GAAP. However, the Company believes that this presentation provides useful information to investors regarding its recent financial performance, and it views this presentation of the four most recently completed fiscal quarters as a key measurement period for investors to assess its historical results. In addition, the Company's management uses TTM information to evaluate the Company's financial performance for ongoing planning purposes.

The pandemic had a material adverse impact on the Company's results for the TTM period ended March 31, 2022 when compared to periods prior to the onset of the pandemic. As such, this TTM period, as well as upcoming periods, are unlikely to be comparable to periods prior to the onset of the pandemic or to other periods affected by the pandemic, and are not indicative of future performance. As such, TTM information may not be useful for projecting future operating results.

Net Income (Loss), Adjusted for Special Items, and Diluted EPS, Adjusted for Special Items

Net income (loss), adjusted for special items, and diluted earnings (loss) per share ("EPS"), adjusted for special items, are not recognized terms under GAAP and should not be considered as alternatives to net income (loss) or other measures of financial performance or liquidity derived in accordance with GAAP. In addition, the Company's definition of net income (loss), adjusted for special items, and diluted EPS, adjusted for special items, may not be comparable to similarly titled measures of other companies.

Net income (loss), adjusted for special items, and diluted EPS, adjusted for special items, are included to assist investors in performing meaningful comparisons of past, present and future operating results and as a means of highlighting the results of the Company's ongoing operations.

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin

EBITDA, presented herein, reflects net income (loss), excluding interest expense, a provision for income tax benefit (expense) and depreciation and amortization expenses. Adjusted EBITDA, presented herein, is calculated as EBITDA, as previously defined, further adjusted to exclude certain items, including gains, losses, revenues and expenses in connection with: (i) asset dispositions for both consolidated and unconsolidated investments; (ii) foreign currency transactions; (iii) debt restructurings and retirements; (iv) furniture, fixtures and equipment ("FF&E") replacement reserves required under certain lease agreements; (v) share-based compensation; (vi) reorganization, severance, relocation and other expenses; (vii) non-cash impairment; (viii) amortization of contract acquisition costs; (ix) the net effect of reimbursable costs included in other revenues and other expenses from managed and franchised properties; and (x) other items.

Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of total revenues, adjusted to exclude the amortization of contract acquisition costs and other revenues from managed and franchised properties.

The Company believes that EBITDA, Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors about the Company's financial condition and results of operations for the following reasons: (i) these measures are among the measures used by the Company's management team to evaluate its operating performance and make day-to-day operating decisions and (ii) these measures are frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in the industry. Additionally, these measures exclude certain items that can vary widely across different industries and among competitors within the Company's industry. For instance, interest expense and income taxes are dependent on company specifics, including, among other things, capital structure and operating jurisdictions, respectively, and, therefore, could vary significantly across companies. Depreciation and amortization expenses, as well as amortization of contract acquisition costs, are dependent upon company policies, including the method of acquiring and depreciating assets and the useful lives that are used. For Adjusted EBITDA, the Company also excludes items such as: (i) FF&E replacement reserves for leased hotels to be consistent with the treatment of capital expenditures for property and equipment, where payments for such capitalized assets are depreciated over their useful lives; (ii) share-based compensation, as this could vary widely among companies due to the different plans in place and the usage of them; (iii) the net effect of the Company's cost reimbursement revenues and reimbursed expenses, as the Company contractually does not operate the related programs to generate a profit over the terms of the respective contracts; and (iv) other items, such as amounts related to debt restructurings and debt retirements and reorganization and related severance costs, that are not core to the Company's operations and are not reflective of the Company's operating performance.

EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are not recognized terms under GAAP and should not be considered as alternatives, either in isolation or as a substitute, for net income (loss) or other measures of financial performance or liquidity, including cash flows, derived in accordance with GAAP. Further, EBITDA, Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools, may not be comparable to similarly titled measures of other companies and should not be considered as other methods of analyzing the Company's results as reported under GAAP.

Net Debt and Net Debt to Adjusted EBITDA Ratio

Net debt and net debt to Adjusted EBITDA ratio, presented herein, are non-GAAP financial measures that the Company uses to evaluate its financial leverage. Net debt is calculated as: long-term debt, including current maturities and excluding unamortized deferred financing costs and discount; reduced by: (i) cash and cash equivalents and (ii) restricted cash and cash equivalents. Beginning as of March 31, 2022, the Company has modified its definition of net debt to no longer include Hilton's share of unconsolidated affiliate debt. Since this debt is not consolidated by the Company, the modified definition more accurately reflects how the Company and the Company's investors evaluate Hilton's financial leverage, as well as its indebtedness.

Net debt should not be considered as a substitute to debt presented in accordance with GAAP, and net debt to Adjusted EBITDA ratio should not be considered as an alternative to measures of financial condition derived in accordance with GAAP. Net debt and net debt to Adjusted EBITDA ratio may not be comparable to similarly titled measures of other companies. The Company believes net debt and net debt to Adjusted EBITDA ratio provide useful information about its indebtedness to investors as they are frequently used by securities analysts, investors and other interested parties to compare the indebtedness between companies.

Comparable Hotels

The Company defines comparable hotels as those that: (i) were active and operating in the Company's system for at least one full calendar year as of the end of the current period, and open January 1st of the previous year; (ii) have not undergone a change in brand or ownership type during the current or comparable periods reported; and (iii) have not sustained substantial property damage, business interruption, undergone large-scale capital projects or for which comparable results were not available. Of the 6,832 hotels in the Company's system as of March 31, 2022, 6,069 hotels were classified as comparable hotels. The 763 non-comparable hotels included 99 hotels, or one percent of the total hotels in the Company's system, that were removed from the comparable group during the last twelve months because they have sustained substantial property damage, business interruption, undergone large-scale capital projects or comparable results were otherwise not available.

When considering business interruption in the context of the Company's definition of comparable hotels, no hotel that had completely or partially suspended operations on a temporary basis at any time as a result of the pandemic was excluded from the definition of comparable hotels on that basis alone. Despite these temporary suspensions of hotel operations, the Company believes that including these hotels within the hotel operating statistics of occupancy, average daily rate ("ADR") and revenue per available room ("RevPAR"), if they would have otherwise been included, reflects the underlying results of the business for the three months ended March 31, 2022 and 2021.

Occupancy

Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel or group of hotels for a given period. Occupancy measures the utilization of the hotels' available capacity. Management uses occupancy to gauge demand at a specific hotel or group of hotels in a given period. Occupancy levels also help management determine achievable ADR pricing levels as demand for hotel rooms increases or decreases.

ADR

ADR represents hotel room revenue divided by the total number of room nights sold for a given period. ADR measures the average room price attained by a hotel, and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in the industry, and management uses ADR to assess pricing levels that the Company is able to generate by type of customer, as changes in rates charged to customers have different effects on overall revenues and incremental profitability than changes in occupancy, as described above.

RevPAR

RevPAR is calculated by dividing hotel room revenue by the total number of room nights available to guests for a given period. Management considers RevPAR to be a meaningful indicator of the Company's performance as it provides a metric correlated to two primary and key drivers of operations at a hotel or group of hotels, as previously described: occupancy and ADR. RevPAR is also a useful indicator in measuring performance over comparable periods for comparable hotels.

References to occupancy, ADR and RevPAR throughout this press release are presented on a comparable basis, based on the comparable hotels as of March 31, 2022, and references to ADR and RevPAR are presented on a currency neutral basis, unless otherwise noted. As such, comparisons of these hotel operating statistics for the three months ended March 31, 2022 and 2021 or 2019, use the foreign currency exchange rates used to translate the results of the Company's foreign operations within its condensed consolidated financial statements for the three months ended March 31, 2022.

Contacts

Investors

Jill Slattery

+1 703 883 5476

Media Contact

Kent Landers

+1 703 883 3246

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