Hilton Worldwide Holdings Inc. (NYSE: HLT) today reported its first quarter 2021 results. The following results reflect the material impact that the novel coronavirus pandemic has had on Hilton's business. Highlights include:

  • Diluted EPS was $(0.39) for the first quarter, and diluted EPS, adjusted for special items, was $0.02
  • Net loss was $109 million for the first quarter
  • Adjusted EBITDA was $198 million for the first quarter
  • System-wide comparable RevPAR decreased 38.4 percent on a currency neutral basis for the first quarter from the same period in 2020
  • Approved 21,900 new rooms for development during the first quarter, bringing Hilton's development pipeline to 399,000 rooms as of March 31, 2021
  • Added 16,500 rooms to Hilton's system in the first quarter, contributing to 13,100 net additional rooms during the period and approximately 5.8 percent annualized net unit growth from March 31, 2020
  • As of April 28, 2021, 97 percent of Hilton's system-wide hotels were open
  • In March 2021, repaid $250 million of the outstanding debt balance under the Revolving Credit Facility, for a total of $500 million repaid in the first quarter

Overview

Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, "We are pleased with our first quarter results. While rising COVID-19 cases and tightened travel restrictions, particularly across Europe and our Asia Pacific region, weighed on demand in January and February, we saw meaningful improvement in March and April. We expect this positive momentum to continue as vaccines are more widely distributed and our customers feel safe traveling again. We continue to grow our portfolio of hotels in exciting destinations throughout the world, giving our guests more options than ever before to make a Hilton hotel a part of their plans as travel resumes."

The COVID-19 pandemic adversely affected the Asia Pacific region beginning in January 2020 before spanning to the Americas and Europe, Middle East and Africa regions in mid-March 2020. Therefore, the results for the three months ended March 31, 2021 are not comparable to the results for the three months ended March 31, 2020. The operations of approximately 275 properties, which are primarily located in the United States ("U.S.") and Europe, were suspended for some period of time during the three months ended March 31, 2021, as compared to approximately 730 properties during the three months ended March 31, 2020.

For the three months ended March 31, 2021, system-wide comparable RevPAR decreased 38.4 percent compared to the same period in 2020 due to both occupancy and ADR decreases. Additionally, as a result of the pandemic, fee revenues decreased 34 percent during the three months ended March 31, 2021 compared to the same period in 2020.

For the three months ended March 31, 2021, diluted EPS was $(0.39) and diluted EPS, adjusted for special items, was $0.02 compared to $0.06 and $0.74, respectively, for the three months ended March 31, 2020. Net income (loss) and Adjusted EBITDA were $(109) million and $198 million, respectively, for the three months ended March 31, 2021, compared to $18 million and $363 million, respectively, for the three months ended March 31, 2020.

Development

In the first quarter of 2021, Hilton opened 105 new hotels totaling 16,500 rooms and achieved net unit growth of 13,100 rooms. Since the beginning of the year, Hilton has opened its 100th Curio Collection by Hilton, the 1,500-room Virgin Hotels Las Vegas, and its 50th Tapestry Collection by Hilton, demonstrating the strength of its newer, conversion-friendly brands, and executed a management agreement for the first Signia by Hilton, a 975-room new construction project in Atlanta. Additionally, during the quarter, Hilton added over 5,000 rooms to its development pipeline in connection with the exclusive management license agreement with Country Garden to introduce and develop Home2 Suites by Hilton branded properties in China.

As of March 31, 2021, Hilton's development pipeline totaled over 2,570 hotels consisting of nearly 399,000 rooms throughout 114 countries and territories, including 31 countries and territories where Hilton does not currently have any existing hotels. Additionally, of the rooms in the development pipeline, 241,000 rooms were located outside the U.S., and 204,000 rooms were under construction.

Balance Sheet and Liquidity

As of March 31, 2021, Hilton had $10.1 billion of long-term debt outstanding, excluding deferred financing costs and discount, with a weighted average interest rate of 3.66 percent. Excluding finance lease liabilities and other debt of Hilton's consolidated variable interest entities, Hilton had $9.8 billion of long-term debt outstanding with a weighted average interest rate of 3.61 percent and no scheduled maturities until 2024. During the three months ended March 31, 2021, Hilton repaid $500 million of the outstanding debt balance under its $1.75 billion senior secured revolving credit facility (the "Revolving Credit Facility"), resulting in an available borrowing capacity of $500 million. Total cash and cash equivalents were $2,447 million as of March 31, 2021, including $45 million of restricted cash and cash equivalents.

About Hilton

Hilton (NYSE: HLT) is a leading global hospitality company with a portfolio of 18 brands comprising more than 6,500 properties and more than one million rooms in 119 countries and territories.

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,
 

2021

2020

Revenues

  

Franchise and licensing fees

  

$

242

$

339

Base and other management fees

  

25

60

Incentive management fees

  

13

23

Owned and leased hotels

  

56

210

Other revenues

  

17

23
 

353

655

Other revenues from managed and franchised properties

  

521

1,265

Total revenues

  

874

1,920
 

Expenses

  

Owned and leased hotels

  

110

239

Depreciation and amortization

  

51

91

General and administrative

  

97

60

Impairment losses

  

—

112

Other expenses

  

10

14
 

268

516

Other expenses from managed and franchised properties

  

585

1,336

Total expenses

  

853

1,852
 

Operating income

  

21

68
 

Interest expense

  

(103

)

(94

)

Gain on foreign currency transactions

  

2

9

Loss on debt extinguishment

  

(69

)

—

Other non-operating income, net

  

5

—
 

Loss before income taxes

  

(144

)

(17

)
 

Income tax benefit

  

35

35
 

Net income (loss)

  

(109

)

18

Net loss attributable to noncontrolling interests

  

1

—

Net income (loss) attributable to Hilton stockholders

  

$

(108

)

$

18
 

Weighted average shares outstanding:

  

Basic

  

278

277

Diluted

  

278

280
 

Earnings (loss) per share:

  

Basic

  

$

(0.39

)

$

0.06

Diluted

  

$

(0.39

)

$

0.06
 

Cash dividends declared per share

  

$

—

$

0.15
                 
                           

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
 

2021

  

vs. 2020

  

2021

  

vs. 2020

  

2021

  

vs. 2020

U.S.

  

47.7

%

  

(9.9

)%

pts.

  

$

107.23

  

(23.4

)%

  

$

51.10

  

(36.6

)%

Americas (excluding U.S.)

  

30.3

  

(21.3

)

  

94.43

  

(22.7

)

  

28.64

  

(54.6

)

Europe

  

19.3

  

(32.7

)

  

81.59

  

(35.0

)

  

15.74

  

(75.9

)

Middle East & Africa

  

42.6

  

(15.7

)

  

124.56

  

(6.9

)

  

53.12

  

(31.9

)

Asia Pacific

  

43.7

  

6.5

  

97.60

  

(20.5

)

  

42.65

  

(6.6

)

System-wide

  

43.9

  

(11.0

)

  

105.38

  

(23.0

)

  

46.23

  

(38.4

)
     
 

Three Months Ended March 31,
 

Occupancy

  

ADR

  

RevPAR
 

2021

  

vs. 2020

  

2021

  

vs. 2020

  

2021

  

vs. 2020

Waldorf Astoria Hotels & Resorts

  

32.0

%

  

(21.5

)%

pts.

  

$

573.77

  

26.0

%

  

$

183.51

  

(24.6

)%

Conrad Hotels & Resorts

  

31.6

  

(11.9

)

  

182.93

  

(25.2

)

  

57.81

  

(45.6

)

Canopy by Hilton

  

29.7

  

(9.4

)

  

116.77

  

(29.3

)

  

34.73

  

(46.3

)

Hilton Hotels & Resorts

  

30.1

  

(22.8

)

  

125.83

  

(25.2

)

  

37.90

  

(57.4

)

Curio Collection by Hilton

  

34.8

  

(15.5

)

  

172.34

  

(10.1

)

  

59.99

  

(37.8

)

DoubleTree by Hilton

  

36.1

  

(15.7

)

  

96.58

  

(24.5

)

  

34.89

  

(47.3

)

Tapestry Collection by Hilton

  

37.5

  

(9.4

)

  

112.46

  

(16.8

)

  

42.13

  

(33.5

)

Embassy Suites by Hilton

  

43.3

  

(15.9

)

  

119.98

  

(23.7

)

  

51.91

  

(44.2

)

Hilton Garden Inn

  

45.9

  

(9.7

)

  

92.66

  

(24.4

)

  

42.51

  

(37.6

)

Hampton by Hilton

  

50.2

  

(4.4

)

  

92.47

  

(17.9

)

  

46.38

  

(24.5

)

Tru by Hilton

  

53.5

  

5.2

  

83.84

  

(13.0

)

  

44.83

  

(3.6

)

Homewood Suites by Hilton

  

64.2

  

(1.0

)

  

105.82

  

(20.3

)

  

67.94

  

(21.5

)

Home2 Suites by Hilton

  

64.6

  

3.6

  

96.63

  

(13.9

)

  

62.38

  

(8.8

)

System-wide

  

43.9

  

(11.0

)

  

105.38

  

(23.0

)

  

46.23

  

(38.4

)
     
 

Three Months Ended March 31,
 

Occupancy

  

ADR

  

RevPAR
 

2021

  

vs. 2020

  

2021

  

vs. 2020

  

2021

  

vs. 2020

Management and franchise

  

44.3

 %  

(10.6

 )% pts.   $

105.22

  

(22.7

 )%   $

46.66

  

(37.6

)%

Ownership(1)

  

14.5

    

(37.0

 )      

134.90

  

(25.8

 )    

19.62

  

(79.1

)

System-wide

  

43.9

    

(11.0

 )      

105.38

  

(23.0

 )    

46.23

  

(38.4

)
____________

(1)

  

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

HILTON WORLDWIDE HOLDINGS INC.

PROPERTY SUMMARY

As of March 31, 2021
                 
 

Owned / Leased(1)

  

Managed

  

Franchised

  

Total
 

Properties

  

Rooms

  

Properties

  

Rooms

  

Properties

  

Rooms

  

Properties

  

Rooms

Waldorf Astoria Hotels & Resorts

                

U.S.

  

—

—

  

13

  

5,266

  

2

  

1,047

  

15

  

6,313

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.

  

—

—

  

—

  

—

  

1

  

70

  

1

  

70

Americas (excluding U.S.)

  

—

—

  

—

  

—

  

1

  

76

  

1

  

76

Europe

  

—

—

  

2

  

383

  

—

  

—

  

2

  

383

Middle East & Africa

  

—

—

  

—

  

—

  

1

  

234

  

1

  

234

Conrad Hotels & Resorts

              

U.S.

  

—

—

  

6

  

2,211

  

1

  

223

  

7

  

2,434

Americas (excluding U.S.)

  

—

—

  

2

  

438

  

—

  

—

  

2

  

438

Europe

  

—

—

  

4

  

1,155

  

—

  

—

  

4

  

1,155

Middle East & Africa

  

1

614

  

3

  

1,569

  

—

  

—

  

4

  

2,183

Asia Pacific

  

1

164

  

20

  

6,057

  

1

  

659

  

22

  

6,880

Canopy by Hilton

              

U.S.

  

—

—

  

—

  

—

  

20

  

3,363

  

20

  

3,363

Americas (excluding U.S.)

  

—

—

  

2

  

272

  

—

  

—

  

2

  

272

Europe

  

—

—

  

—

  

—

  

2

  

263

  

2

  

263

Middle East & Africa

  

—

—

  

1

  

200

  

—

  

—

  

1

  

200

Asia Pacific

  

—

—

  

3

  

489

  

—

  

—

  

3

  

489

Hilton Hotels & Resorts

              

U.S.

  

—

—

  

62

  

45,765

  

180

  

55,451

  

242

  

101,216

Americas (excluding U.S.)

  

1

405

  

25

  

9,323

  

25

  

7,683

  

51

  

17,411

Europe

  

46

12,757

  

45

  

15,253

  

39

  

10,454

  

130

  

38,464

Middle East & Africa

  

5

1,998

  

39

  

12,923

  

2

  

1,415

  

46

  

16,336

Asia Pacific

  

5

2,999

  

105

  

37,089

  

5

  

2,071

  

115

  

42,159

Curio Collection by Hilton

              

U.S.

  

—

—

  

6

  

2,987

  

52

  

10,912

  

58

  

13,899

Americas (excluding U.S.)

  

—

—

  

2

  

99

  

10

  

1,177

  

12

  

1,276

Europe

  

—

—

  

5

  

520

  

15

  

1,846

  

20

  

2,366

Middle East & Africa

  

—

—

  

4

  

685

  

1

  

356

  

5

  

1,041

Asia Pacific

  

—

—

  

4

  

773

  

2

  

248

  

6

  

1,021

DoubleTree by Hilton

              

U.S.

  

—

—

  

32

  

10,878

  

340

  

77,878

  

372

  

88,756

Americas (excluding U.S.)

  

—

—

  

3

  

587

  

36

  

7,047

  

39

  

7,634

Europe

  

—

—

  

14

  

3,524

  

101

  

17,473

  

115

  

20,997

Middle East & Africa

  

—

—

  

14

  

3,854

  

5

  

568

  

19

  

4,422

Asia Pacific

  

—

—

  

70

  

18,918

  

5

  

1,395

  

75

  

20,313

Tapestry Collection by Hilton

              

U.S.

  

—

—

  

—

  

—

  

54

  

6,510

  

54

  

6,510

Americas (excluding U.S.)

  

—

—

  

—

  

—

  

2

  

190

  

2

  

190

Asia Pacific

  

—

—

  

—

  

—

  

1

  

175

  

1

  

175

Embassy Suites by Hilton

              

U.S.

  

—

—

  

42

  

11,101

  

209

  

46,891

  

251

  

57,992

Americas (excluding U.S.)

  

—

—

  

3

  

667

  

5

  

1,336

  

8

  

2,003

Motto by Hilton

              

U.S.

  

—

—

  

—

  

—

  

1

  

245

  

1

  

245

Hilton Garden Inn

              

U.S.

  

—

—

  

4

  

425

  

711

  

98,209

  

715

  

98,634

Americas (excluding U.S.)

  

—

—

  

12

  

1,723

  

46

  

6,961

  

58

  

8,684

Europe

  

—

—

  

20

  

3,763

  

55

  

9,124

  

75

  

12,887

Middle East & Africa

  

—

—

  

15

  

3,272

  

3

  

474

  

18

  

3,746

Asia Pacific

  

—

—

  

40

  

8,734

  

—

  

—

  

40

  

8,734

Hampton by Hilton

              

U.S.

  

—

—

  

27

  

3,396

  

2,256

  

222,380

  

2,283

  

225,776

Americas (excluding U.S.)

  

—

—

  

12

  

1,540

  

107

  

12,964

  

119

  

14,504

Europe

  

—

—

  

17

  

2,808

  

81

  

12,627

  

98

  

15,435

Middle East & Africa

  

—

—

  

3

  

723

  

—

  

—

  

3

  

723

Asia Pacific

  

—

—

  

—

  

—

  

179

  

29,454

  

179

  

29,454

Tru by Hilton

              

U.S.

  

—

—

  

—

  

—

  

190

  

18,658

  

190

  

18,658

Americas (excluding U.S.)

  

—

—

  

—

  

—

  

2

  

179

  

2

  

179

Homewood Suites by Hilton

              

U.S.

  

—

—

  

9

  

1,008

  

482

  

55,019

  

491

  

56,027

Americas (excluding U.S.)

  

—

—

  

3

  

406

  

22

  

2,457

  

25

  

2,863

Home2 Suites by Hilton

              

U.S.

  

—

—

  

3

  

313

  

468

  

49,148

  

471

  

49,461

Americas (excluding U.S.)

  

—

—

  

—

  

—

  

7

  

753

  

7

  

753

Other

  

—

—

  

4

  

2,164

  

5

  

1,395

  

9

  

3,559

Hotels

  

61

19,400

  

717

  

226,903

  

5,733

  

777,058

  

6,511

  

1,023,361

Hilton Grand Vacations

  

—

—

  

—

  

—

  

56

  

9,051

  

56

  

9,051

Total

  

61

19,400

  

717

  

226,903

  

5,789

  

786,109

  

6,567

  

1,032,412
                                 
____________________
(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)
 

2021

2020

$

%

Capital expenditures for property and equipment(1)

  

$

3

$

12

(9

)

(75.0

)

Capitalized software costs(2)

  

8

17

(9

)

(52.9

)

Total capital expenditures

  

11

29

(18

)

(62.1

)

Contract acquisition costs

  

43

11

32

NM

(3)

Total capital expenditures and contract acquisition costs

  

$

54

$

40

14

35.0

  
____________

(1)

Includes expenditures for hotel, corporate and other property and equipment, which for the three months ended March 31, 2020, included $3 million that were indirectly reimbursed by hotel owners. Excludes expenditures for furniture, fixtures and equipment ("FF&E") replacement reserves of $4 million and $14 million for the three months ended March 31, 2021 and 2020, respectively.

(2)

Includes $7 million and $14 million of expenditures that were indirectly reimbursed by hotel owners for the three months ended March 31, 2021 and 2020, respectively.

(3)

Fluctuation in terms of percentage change is not meaningful.
     
 

HILTON WORLDWIDE HOLDINGS INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

NET INCOME AND DILUTED EPS, ADJUSTED FOR SPECIAL ITEMS

(unaudited, in millions, except per share data)
 
 

Three Months Ended
 

March 31,
 

2021

2020

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

  

$

(108

)

$

18

Diluted EPS, as reported

  

$

(0.39

)

$

0.06

Special items:

  

Net other expenses from managed and franchised properties

  

$

64

$

71

Purchase accounting amortization(1)

  

12

49

FF&E replacement reserves

  

4

14

Impairment losses

  

—

112

Loss on debt extinguishment(2)

  

69

—

Other adjustments

  

3

3

Total special items before taxes

  

152

249

Income tax expense on special items

  

(38

)

(59

)

Total special items after taxes

  

$

114

$

190
 

Net income, adjusted for special items

  

$

6

$

208

Diluted EPS, adjusted for special items

  

$

0.02

$

0.74
____________
(1)  

Represents the amortization of intangible assets that were recorded at fair value in October 2007 when the Company became a wholly owned subsidiary of affiliates of The Blackstone Group Inc. Certain of these assets became fully amortized during the year ended December 31, 2020, and the majority of the remaining finite-lived intangible assets will be fully amortized during 2023.
(2)  

Relates to the redemption of the 5.125% Senior Notes due 2026, which included a redemption premium of $55 million and the accelerated recognition of unamortized deferred financing costs of $14 million.
     
 

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,
 

2021

2020

Net income (loss)

  

$

(109

)

$

18

Interest expense

  

103

94

Income tax benefit

  

(35

)

(35

)

Depreciation and amortization

  

51

91

EBITDA

  

10

168

Gain on foreign currency transactions

  

(2

)

(9

)

Loss on debt extinguishment

  

69

—

FF&E replacement reserves

  

4

14

Share-based compensation expense (benefit)

  

39

(12

)

Impairment losses

  

—

112

Amortization of contract acquisition costs

  

7

8

Net other expenses from managed and franchised properties

  

64

71

Other adjustments(1)

  

7

11

Adjusted EBITDA

  

$

198

$

363
         

____________

        

(1) Includes severance and other items.
         
 

Three Months Ended
 

March 31,
 

2021

2020

Total revenues, as reported

  

$

874

$

1,920

Add: amortization of contract acquisition costs

  

7

8

Less: other revenues from managed and franchised properties

  

(521

)

(1,265

)

Total revenues, as adjusted

  

$

360

$

663
 

Adjusted EBITDA

  

$

198

$

363
 

Adjusted EBITDA margin

  

55.0

%

54.8

%
                 
 

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,
         

2021

2020

Long-term debt, including current maturities

          

$

9,956

  

$

10,487

Add: unamortized deferred financing costs and discount

          

97

  

93

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

          

10,053

  

10,580

Add: Hilton's share of unconsolidated affiliate debt

          

8

  

8

Less: cash and cash equivalents

          

(2,402

)

  

(3,218

)

Less: restricted cash and cash equivalents

          

(45

)

  

(45

)

Net debt

          

$

7,614

  

$

7,325
                 
 

Three Months Ended

Year Ended

TTM(1) Ended
 

March 31,

December 31,

March 31,
 

2021

2020

2020

2021

Net income (loss)

  

$

(109

)

  

$

18

  

$

(720

)

  

$

(847

)

Interest expense

  

103

  

94

  

429

  

438

Income tax benefit

  

(35

)

  

(35

)

  

(204

)

  

(204

)

Depreciation and amortization

  

51

  

91

  

331

  

291

EBITDA

  

10

  

168

  

(164

)

  

(322

)

Loss (gain) on foreign currency transactions

  

(2

)

  

(9

)

  

27

  

34

Loss on debt extinguishments

  

69

  

—

  

48

  

117

FF&E replacement reserves

  

4

  

14

  

57

  

47

Share-based compensation expense (benefit)

  

39

  

(12

)

  

97

  

148

Reorganization costs

  

—

  

—

  

41

  

41

Impairment losses

  

—

  

112

  

258

  

146

Amortization of contract acquisition costs

  

7

  

8

  

29

  

28

Net other expenses from managed and franchised properties

  

64

  

71

  

397

  

390

Other adjustments(2)

  

7

  

11

  

52

  

48

Adjusted EBITDA

  

$

198

  

$

363

  

$

842

  

$

677
       

Net debt

        

$

7,614
       

Net debt to Adjusted EBITDA ratio

        

11.2

____________

(1)

Trailing twelve months ("TTM") for the period ended March 31, 2021 is calculated as the three months ended March 31, 2021 plus the year ended December 31, 2020 less the three months ended March 31, 2020.

(2)

Includes severance not related to the 2020 reorganization and other items. The year ended December 31, 2020 also includes costs recognized for the settlement of a dispute with an owner of a managed hotel, losses related to the disposal of an investment and a loan guarantee for a franchised hotel and a gain related to the reimbursement by a third party for taxes owed resulting from the sale of a hotel in a prior period.