Hilton Worldwide Holdings Inc. (NYSE: HLT) today reported its third quarter 2021 results. The following results reflect the material impact that the novel coronavirus ("COVID-19") pandemic has had on Hilton's business. Highlights include:
- Diluted EPS was $0.86 for the third quarter, and diluted EPS, adjusted for special items, was $0.78
- Net income was $240 million for the third quarter
- Adjusted EBITDA was $519 million for the third quarter
- System-wide comparable RevPAR increased 98.7 percent on a currency neutral basis for the third quarter from the same period in 2020
- System-wide comparable RevPAR decreased 18.8 percent on a currency neutral basis for the third quarter from the same period in 2019
- Approved 23,600 new rooms for development during the third quarter, bringing Hilton's development pipeline to 404,000 rooms as of September 30, 2021
- Added 14,700 rooms to Hilton's system in the third quarter, contributing to 11,200 net additional rooms during the period and approximately 6.6 percent annualized net unit growth from September 30, 2020
- Full year 2021 net unit growth is expected to be between 5.0 percent and 5.5 percent
Overview
Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, "We are pleased with our third quarter results which continue to reflect recovery from the adverse impact of the COVID-19 pandemic. Leisure travel remained strong and business travel continued to pick up during the quarter. We continue to expand our global footprint driven by the power of our industry-leading brand portfolio. Overall, we remain confident in a strong recovery in global tourism in the months and years ahead, as well as our positioning within the industry, which will enable us to continue to differentiate ourselves and deliver exceptional performance for all of our stakeholders.
During the three and nine months ended September 30, 2021, the COVID-19 pandemic continued to negatively impact Hilton's business and hotel operating statistics; however, Hilton experienced significant improvement in its results as compared to the same periods in 2020, due to an upward trend in travel and tourism. As a result of the pandemic, certain hotels suspended operations at various times throughout 2020, but the majority of those hotels were reopened by 2021. In line with the recovery, although some hotels did suspend operations during the nine months ended September 30, 2021, reopenings significantly outpaced suspensions. As such, the operations of only approximately 335 hotels, or 5 percent, of Hilton's system-wide properties as of September 30, 2021, which were primarily located in the U.S. and Europe, were suspended for some period of time during the nine months ended September 30, 2021, as compared to approximately 1,270 hotels during the nine months ended September 30, 2020. As of September 30, 2021, all but 88, or approximately 1 percent, of Hilton's system-wide hotels were open and Hilton expects nearly all of its system-wide hotels to be open by the end of 2021.
For the three and nine months ended September 30, 2021, system-wide comparable RevPAR increased 98.7 percent and 47.6 percent, respectively, compared to the same periods in 2020, due to increases in both occupancy and ADR, and the three months ended September 30, 2021 was down 18.8 percent compared to the three months ended September 30, 2019. For the three and nine months ended September 30, 2021, fee revenues increased 93 percent and 49 percent, respectively, compared to the same periods in 2020.
For the three months ended September 30, 2021, diluted EPS was $0.86 and diluted EPS, adjusted for special items, was $0.78 compared to $(0.29) and $0.06, respectively, for the three months ended September 30, 2020. Net income (loss) and Adjusted EBITDA were $240 million and $519 million, respectively, for the three months ended September 30, 2021, compared to $(81) million and $224 million, respectively, for the three months ended September 30, 2020.
For the nine months ended September 30, 2021, diluted EPS was $0.94 and diluted EPS, adjusted for special items, was $1.36 compared to $(1.77) and $0.20, respectively, for the nine months ended September 30, 2020. Net income (loss) and Adjusted EBITDA were $259 million and $1,117 million, respectively, for the nine months ended September 30, 2021, compared to $(495) million and $638 million, respectively, for the nine months ended September 30, 2020.
Development
In the third quarter of 2021, Hilton opened 96 new hotels totaling approximately 14,700 rooms and achieved net unit growth of 11,200 rooms. During the quarter, Hilton opened three new hotels under LXR Hotels & Resorts, including the brand's first property in the Asia Pacific region. Additionally, Hilton celebrated the opening of the 500th hotel under its Home2 Suites by Hilton brand only ten years after the brand was introduced, making it one of the fastest growing hotel brands in industry history.
As of September 30, 2021, Hilton's development pipeline totaled more than 2,620 hotels representing 404,000 rooms throughout 114 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, 249,000 rooms were located outside the U.S., and 204,000 rooms were under construction.
Balance Sheet and Liquidity
As of September 30, 2021, Hilton had $8.9 billion of long-term debt outstanding, excluding deferred financing costs and discount, with a weighted average interest rate of 3.99 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 3.95 percent and no scheduled maturities until 2025. No amounts were outstanding under Hilton's $1.75 billion senior secured revolving credit facility as of September 30, 2021, 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 $1,387 million as of September 30, 2021, including $99 million of restricted cash and cash equivalents.
About Hilton
Hilton (NYSE: HLT) is a leading global hospitality company with a portfolio of 18 world-class brands comprising more than 6,700 properties and more than 1 million rooms in 122 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 | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenues | ||||||||||||||||
| Franchise and licensing fees | $ | 451 | $ | 241 | $ | 1,062 | $ | 712 | ||||||||
| Base and other management fees | 49 | 24 | 116 | 92 | ||||||||||||
| Incentive management fees | 26 | 7 | 60 | 25 | ||||||||||||
| Owned and leased hotels | 199 | 94 | 376 | 335 | ||||||||||||
| Other revenues | 18 | 19 | 56 | 52 | ||||||||||||
| 743 | 385 | 1,670 | 1,216 | |||||||||||||
| Other revenues from managed and franchised properties | 1,006 | 548 | 2,282 | 2,201 | ||||||||||||
| Total revenues | 1,749 | 933 | 3,952 | 3,417 | ||||||||||||
| Expenses | ||||||||||||||||
| Owned and leased hotels | 200 | 144 | 452 | 478 | ||||||||||||
| Depreciation and amortization | 46 | 90 | 143 | 269 | ||||||||||||
| General and administrative | 107 | 66 | 302 | 189 | ||||||||||||
| Reorganization costs | — | — | — | 38 | ||||||||||||
| Impairment losses | — | 9 | — | 136 | ||||||||||||
| Other expenses | 12 | 21 | 31 | 48 | ||||||||||||
| 365 | 330 | 928 | 1,158 | |||||||||||||
| Other expenses from managed and franchised properties | 944 | 592 | 2,339 | 2,482 | ||||||||||||
| Total expenses | 1,309 | 922 | 3,267 | 3,640 | ||||||||||||
| Loss on sale of assets, net | (8 | ) | — | (8 | ) | — | ||||||||||
| Operating income (loss) | 432 | 11 | 677 | (223 | ) | |||||||||||
| Interest expense | (98 | ) | (116 | ) | (302 | ) | (316 | ) | ||||||||
| Gain (loss) on foreign currency transactions | — | (12 | ) | 1 | (16 | ) | ||||||||||
| Loss on debt extinguishment | — | — | (69 | ) | — | |||||||||||
| Other non-operating income (loss), net | 6 | 3 | 16 | (20 | ) | |||||||||||
| Income (loss) before income taxes | 340 | (114 | ) | 323 | (575 | ) | ||||||||||
| Income tax benefit (expense) | (100 | ) | 33 | (64 | ) | 80 | ||||||||||
| Net income (loss) | 240 | (81 | ) | 259 | (495 | ) | ||||||||||
| Net loss attributable to noncontrolling interests | 1 | 2 | 4 | 4 | ||||||||||||
| Net income (loss) attributable to Hilton stockholders | $ | 241 | $ | (79 | ) | $ | 263 | $ | (491 | ) | ||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 279 | 277 | 278 | 277 | ||||||||||||
| Diluted(1) | 281 | 277 | 281 | 277 | ||||||||||||
| Earnings (loss) per share: | ||||||||||||||||
| Basic | $ | 0.86 | $ | (0.29 | ) | $ | 0.94 | $ | (1.77 | ) | ||||||
| Diluted(1) | $ | 0.86 | $ | (0.29 | ) | $ | 0.94 | $ | (1.77 | ) | ||||||
| Cash dividends declared per share | $ | — | $ | — | $ | — | $ | 0.15 | ||||||||
| ____________ | ||
| (1) | The weighted average shares outstanding used in the calculation of diluted loss per share for the three and nine months ended September 30, 2020 were revised from the previously reported amounts. Refer to “Reconciliations of Non-GAAP Financial Measures – Net Income and Diluted EPS, Adjusted for Special Items” for additional information. | |
| HILTON WORLDWIDE HOLDINGS INC. COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS BY REGION (unaudited) | |||||||||||||||||||
| Three Months Ended September 30, | |||||||||||||||||||
| Occupancy | ADR | RevPAR | |||||||||||||||||
| 2021 | vs. 2020 | 2021 | vs. 2020 | 2021 | vs. 2020 | ||||||||||||||
| U.S. | 67.9 | % | 23.4 | % | pts. | $ | 146.89 | 34.2 | % | $ | 99.71 | 104.9 | % | ||||||
| Americas (excluding U.S.) | 54.4 | 30.1 | 116.18 | 19.9 | 63.15 | 168.3 | |||||||||||||
| Europe | 59.3 | 27.7 | 132.23 | 28.9 | 78.42 | 142.3 | |||||||||||||
| Middle East & Africa | 52.9 | 27.8 | 120.92 | (0.4 | ) | 63.94 | 110.1 | ||||||||||||
| Asia Pacific | 49.5 | (4.8 | ) | 102.67 | 15.4 | 50.86 | 5.2 | ||||||||||||
| System-wide | 64.3 | 21.5 | 140.57 | 32.2 | 90.39 | 98.7 | |||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||
| Occupancy | ADR | RevPAR | |||||||||||||||||
| 2021 | vs. 2020 | 2021 | vs. 2020 | 2021 | vs. 2020 | ||||||||||||||
| U.S. | 59.9 | % | 17.7 | % | pts. | $ | 130.26 | 7.0 | % | $ | 78.00 | 51.9 | % | ||||||
| Americas (excluding U.S.) | 40.7 | 12.1 | 108.63 | (3.1 | ) | 44.25 | 38.0 | ||||||||||||
| Europe | 37.0 | 6.8 | 115.89 | 1.0 | 42.92 | 23.8 | |||||||||||||
| Middle East & Africa | 48.1 | 15.0 | 125.50 | — | 60.40 | 45.2 | |||||||||||||
| Asia Pacific | 49.8 | 9.5 | 99.95 | 3.1 | 49.81 | 27.5 | |||||||||||||
| System-wide | 55.7 | 15.6 | 125.93 | 6.2 | 70.15 | 47.6 | |||||||||||||
| HILTON WORLDWIDE HOLDINGS INC. COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS BY BRAND (unaudited) | |||||||||||||||||||
| Three Months Ended September 30, | |||||||||||||||||||
| Occupancy | ADR | RevPAR | |||||||||||||||||
| 2021 | vs. 2020 | 2021 | vs. 2020 | 2021 | vs. 2020 | ||||||||||||||
| Waldorf Astoria Hotels & Resorts | 46.5 | % | 14.2 | % | pts. | $ | 500.93 | 97.2 | % | $ | 233.15 | 184.2 | % | ||||||
| Conrad Hotels & Resorts | 47.1 | 16.6 | 220.71 | 23.5 | 103.96 | 91.1 | |||||||||||||
| Canopy by Hilton | 58.0 | 24.6 | 166.30 | 27.0 | 96.44 | 120.8 | |||||||||||||
| Hilton Hotels & Resorts | 51.8 | 22.8 | 162.94 | 30.2 | 84.34 | 132.8 | |||||||||||||
| Curio Collection by Hilton | 56.3 | 26.9 | 203.87 | 28.8 | 114.70 | 146.8 | |||||||||||||
| DoubleTree by Hilton | 57.6 | 22.1 | 128.09 | 29.7 | 73.72 | 110.3 | |||||||||||||
| Tapestry Collection by Hilton | 64.7 | 29.8 | 154.38 | 27.8 | 99.86 | 137.3 | |||||||||||||
| Embassy Suites by Hilton | 62.7 | 26.2 | 162.46 | 33.0 | 101.93 | 128.4 | |||||||||||||
| Hilton Garden Inn | 66.4 | 24.0 | 130.36 | 34.3 | 86.55 | 110.1 | |||||||||||||
| Hampton by Hilton | 71.1 | 19.4 | 127.17 | 30.5 | 90.41 | 79.5 | |||||||||||||
| Tru by Hilton | 74.0 | 21.1 | 123.47 | 38.3 | 91.40 | 93.5 | |||||||||||||
| Homewood Suites by Hilton | 80.1 | 18.1 | 136.69 | 23.5 | 109.43 | 59.7 | |||||||||||||
| Home2 Suites by Hilton | 81.1 | 18.4 | 124.14 | 24.7 | 100.64 | 61.2 | |||||||||||||
| System-wide | 64.3 | 21.5 | 140.57 | 32.2 | 90.39 | 98.7 | |||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||
| Occupancy | ADR | RevPAR | |||||||||||||||||
| 2021 | vs. 2020 | 2021 | vs. 2020 | 2021 | vs. 2020 | ||||||||||||||
| Waldorf Astoria Hotels & Resorts | 41.9 | % | 9.4 | % | pts. | $ | 518.82 | 44.2 | % | $ | 217.35 | 85.8 | % | ||||||
| Conrad Hotels & Resorts | 39.8 | 9.0 | 205.63 | 1.0 | 81.82 | 30.4 | |||||||||||||
| Canopy by Hilton | 44.2 | 15.6 | 148.59 | 4.6 | 65.74 | 61.3 | |||||||||||||
| Hilton Hotels & Resorts | 41.9 | 10.2 | 148.20 | 0.8 | 62.16 | 33.2 | |||||||||||||
| Curio Collection by Hilton | 46.9 | 15.2 | 191.67 | 12.1 | 89.87 | 65.7 | |||||||||||||
| DoubleTree by Hilton | 48.2 | 13.4 | 115.19 | 2.7 | 55.54 | 42.2 | |||||||||||||
| Tapestry Collection by Hilton | 51.5 | 17.4 | 138.32 | 12.0 | 71.26 | 69.3 | |||||||||||||
| Embassy Suites by Hilton | 55.1 | 17.5 | 144.88 | 4.0 | 79.78 | 52.4 | |||||||||||||
| Hilton Garden Inn | 57.6 | 17.7 | 114.77 | 6.5 | 66.07 | 53.7 | |||||||||||||
| Hampton by Hilton | 62.7 | 18.1 | 112.69 | 10.2 | 70.66 | 55.1 | |||||||||||||
| Tru by Hilton | 65.8 | 22.5 | 105.98 | 17.7 | 69.70 | 79.0 | |||||||||||||
| Homewood Suites by Hilton | 73.7 | 17.8 | 122.73 | 4.3 | 90.47 | 37.5 | |||||||||||||
| Home2 Suites by Hilton | 74.8 | 20.5 | 112.40 | 9.2 | 84.04 | 50.5 | |||||||||||||
| System-wide | 55.7 | 15.6 | 125.93 | 6.2 | 70.15 | 47.6 | |||||||||||||
| HILTON WORLDWIDE HOLDINGS INC. COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS BY SEGMENT (unaudited) | |||||||||||||||||||
| Three Months Ended September 30, | |||||||||||||||||||
| Occupancy | ADR | RevPAR | |||||||||||||||||
| 2021 | vs. 2020 | 2021 | vs. 2020 | 2021 | vs. 2020 | ||||||||||||||
| Management and franchise | 64.6 | % | 21.5 | % | pts. | $ | 140.12 | 32.2 | % | $ | 90.49 | 98.3 | % | ||||||
| Ownership(1) | 47.4 | 23.3 | 177.92 | 19.8 | 84.31 | 135.2 | |||||||||||||
| System-wide | 64.3 | 21.5 | 140.57 | 32.2 | 90.39 | 98.7 | |||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||
| Occupancy | ADR | RevPAR | |||||||||||||||||
| 2021 | vs. 2020 | 2021 | vs. 2020 | 2021 | vs. 2020 | ||||||||||||||
| Management and franchise | 56.1 | % | 15.9 | % | pts. | $ | 125.62 | 6.4 | % | $ | 70.51 | 48.2 | % | ||||||
| Ownership(1) | 29.5 | 2.5 | 161.78 | (3.1 | ) | 47.75 | 5.9 | ||||||||||||
| System-wide | 55.7 | 15.6 | 125.93 | 6.2 | 70.15 | 47.6 | |||||||||||||
| ____________ | |||||||||||||||||||
| (1) Includes hotels leased by entities in which Hilton owns a noncontrolling financial interest. | |||||||||||||||||||
| HILTON WORLDWIDE HOLDINGS INC. PROPERTY SUMMARY As of September 30, 2021 | ||||||||||||||||
| Owned / Leased(1) | Managed | Franchised | Total | |||||||||||||
| Properties | Rooms | Properties | Rooms | Properties | Rooms | Properties | Rooms | |||||||||
| Waldorf Astoria Hotels & Resorts | ||||||||||||||||
| U.S. | — | — | 13 | 5,319 | — | — | 13 | 5,319 | ||||||||
| 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. | — | — | 6 | 2,211 | 2 | 1,716 | 8 | 3,927 | ||||||||
| 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 | 21 | 6,287 | 1 | 659 | 23 | 7,110 | ||||||||
| Canopy by Hilton | ||||||||||||||||
| U.S. | — | — | — | — | 22 | 3,693 | 22 | 3,693 | ||||||||
| Americas (excluding U.S.) | — | — | 2 | 272 | — | — | 2 | 272 | ||||||||
| Europe | — | — | 1 | 123 | 3 | 577 | 4 | 700 | ||||||||
| Middle East & Africa | — | — | 1 | 200 | — | — | 1 | 200 | ||||||||
| Asia Pacific | — | — | 3 | 489 | — | — | 3 | 489 | ||||||||
| Signia by Hilton | ||||||||||||||||
| U.S. | — | — | 1 | 1,009 | — | — | 1 | 1,009 | ||||||||
| Hilton Hotels & Resorts | ||||||||||||||||
| U.S. | — | — | 61 | 44,712 | 185 | 58,439 | 246 | 103,151 | ||||||||
| Americas (excluding U.S.) | 1 | 405 | 26 | 9,767 | 26 | 7,826 | 53 | 17,998 | ||||||||
| Europe | 44 | 12,413 | 44 | 15,046 | 42 | 11,079 | 130 | 38,538 | ||||||||
| Middle East & Africa | 5 | 1,998 | 38 | 12,809 | 2 | 1,415 | 45 | 16,222 | ||||||||
| Asia Pacific | 5 | 2,999 | 109 | 38,286 | 6 | 2,649 | 120 | 43,934 | ||||||||
| Curio Collection by Hilton | ||||||||||||||||
| U.S. | — | — | 6 | 2,776 | 56 | 11,580 | 62 | 14,356 | ||||||||
| Americas (excluding U.S.) | — | — | 2 | 99 | 12 | 1,750 | 14 | 1,849 | ||||||||
| Europe | — | — | 4 | 360 | 18 | 2,450 | 22 | 2,810 | ||||||||
| Middle East & Africa | — | — | 4 | 685 | 1 | 356 | 5 | 1,041 | ||||||||
| Asia Pacific | — | — | 4 | 773 | 2 | 248 | 6 | 1,021 | ||||||||
| DoubleTree by Hilton | ||||||||||||||||
| U.S. | — | — | 33 | 11,169 | 338 | 77,484 | 371 | 88,653 | ||||||||
| Americas (excluding U.S.) | — | — | 3 | 587 | 34 | 6,745 | 37 | 7,332 | ||||||||
| Europe | — | — | 14 | 3,741 | 106 | 17,997 | 120 | 21,738 | ||||||||
| Middle East & Africa | — | — | 14 | 3,853 | 5 | 568 | 19 | 4,421 | ||||||||
| Asia Pacific | — | — | 72 | 19,453 | 5 | 1,395 | 77 | 20,848 | ||||||||
| ____________ | ||||||||||||||||
| (1) Includes hotels owned or leased by entities in which Hilton owns a noncontrolling financial interest. | ||||||||||||||||
| HILTON WORLDWIDE HOLDINGS INC. PROPERTY SUMMARY (continued) As of September 30, 2021 | ||||||||||||||||
| Owned / Leased(1) | Managed | Franchised | Total | |||||||||||||
| Properties | Rooms | Properties | Rooms | Properties | Rooms | Properties | Rooms | |||||||||
| Tapestry Collection by Hilton | ||||||||||||||||
| U.S. | — | — | — | — | 62 | 7,447 | 62 | 7,447 | ||||||||
| Americas (excluding U.S.) | — | — | 1 | 138 | 4 | 354 | 5 | 492 | ||||||||
| Europe | — | — | — | — | 2 | 102 | 2 | 102 | ||||||||
| Asia Pacific | — | — | 1 | 266 | 1 | 175 | 2 | 441 | ||||||||
| Embassy Suites by Hilton | ||||||||||||||||
| U.S. | — | — | 42 | 11,103 | 209 | 46,773 | 251 | 57,876 | ||||||||
| Americas (excluding U.S.) | — | — | 3 | 667 | 5 | 1,336 | 8 | 2,003 | ||||||||
| Motto by Hilton | ||||||||||||||||
| U.S. | — | — | — | — | 2 | 497 | 2 | 497 | ||||||||
| Hilton Garden Inn | ||||||||||||||||
| U.S. | — | — | 4 | 425 | 726 | 100,275 | 730 | 100,700 | ||||||||
| Americas (excluding U.S.) | — | — | 11 | 1,571 | 48 | 7,270 | 59 | 8,841 | ||||||||
| Europe | — | — | 19 | 3,642 | 58 | 9,451 | 77 | 13,093 | ||||||||
| Middle East & Africa | — | — | 17 | 3,726 | 3 | 474 | 20 | 4,200 | ||||||||
| Asia Pacific | — | — | 46 | 10,136 | — | — | 46 | 10,136 | ||||||||
| Hampton by Hilton | ||||||||||||||||
| U.S. | — | — | 28 | 3,648 | 2,274 | 224,172 | 2,302 | 227,820 | ||||||||
| Americas (excluding U.S.) | — | — | 13 | 1,644 | 108 | 13,158 | 121 | 14,802 | ||||||||
| Europe | — | — | 17 | 2,806 | 92 | 14,171 | 109 | 16,977 | ||||||||
| Middle East & Africa | — | — | 4 | 1,238 | — | — | 4 | 1,238 | ||||||||
| Asia Pacific | — | — | — | — | 205 | 33,369 | 205 | 33,369 | ||||||||
| Tru by Hilton | ||||||||||||||||
| U.S. | — | — | — | — | 209 | 20,367 | 209 | 20,367 | ||||||||
| Americas (excluding U.S.) | — | — | — | — | 2 | 179 | 2 | 179 | ||||||||
| Homewood Suites by Hilton | ||||||||||||||||
| U.S. | — | — | 10 | 1,172 | 488 | 55,667 | 498 | 56,839 | ||||||||
| Americas (excluding U.S.) | — | — | 3 | 406 | 23 | 2,591 | 26 | 2,997 | ||||||||
| Home2 Suites by Hilton | ||||||||||||||||
| U.S. | — | — | 2 | 210 | 501 | 52,551 | 503 | 52,761 | ||||||||
| Americas (excluding U.S.) | — | — | — | — | 7 | 753 | 7 | 753 | ||||||||
| Other | — | — | 3 | 1,800 | 4 | 822 | 7 | 2,622 | ||||||||
| Total hotels | 59 | 19,056 | 735 | 231,852 | 5,905 | 801,430 | 6,699 | 1,052,338 | ||||||||
| Hilton Grand Vacations | — | — | — | — | 59 | 9,348 | 59 | 9,348 | ||||||||
| Total system | 59 | 19,056 | 735 | 231,852 | 5,964 | 810,778 | 6,758 | 1,061,686 | ||||||||
| ____________ | ||||||||||||||||
| (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 | ||||||||||||
| September 30, | Increase / (Decrease) | |||||||||||
| 2021 | 2020 | $ | % | |||||||||
| Capital expenditures for property and equipment(1) | $ | 8 | $ | 8 | — | — | ||||||
| Capitalized software costs(2) | 12 | 5 | 7 | NM(3) | ||||||||
| Total capital expenditures | 20 | 13 | 7 | 53.8 | ||||||||
| Contract acquisition costs | 45 | 14 | 31 | NM(3) | ||||||||
| Total capital expenditures and contract acquisition costs | $ | 65 | $ | 27 | 38 | NM(3) | ||||||
| Nine Months Ended | ||||||||||||
| September 30, | Increase / (Decrease) | |||||||||||
| 2021 | 2020 | $ | % | |||||||||
| Capital expenditures for property and equipment(1) | $ | 17 | $ | 38 | (21 | ) | (55.3 | ) | ||||
| Capitalized software costs(2) | 28 | 38 | (10 | ) | (26.3 | ) | ||||||
| Total capital expenditures | 45 | 76 | (31 | ) | (40.8 | ) | ||||||
| Contract acquisition costs | 160 | 37 | 123 | NM(3) | ||||||||
| Total capital expenditures and contract acquisition costs | $ | 205 | $ | 113 | 92 | 81.4 | ||||||
| ____________ | ||
| (1) | Expenditures for hotels, corporate and other property and equipment, which include amounts indirectly reimbursed by hotel owners of $2 million and $3 million for the three months ended September 30, 2021 and 2020, respectively, and $3 million and $10 million for the nine months ended September 30, 2021 and 2020, respectively. Excludes expenditures for FF&E replacement reserves of $15 million and $18 million for the three months ended September 30, 2021 and 2020, respectively, and $30 million and $39 million for the nine months ended September 30, 2021 and 2020, respectively. | |
| (2) | Includes $11 million and $4 million of expenditures that were indirectly reimbursed by hotel owners for the three months ended September 30, 2021 and 2020, respectively, and $25 million and $31 million for the nine months ended September 30, 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 | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net income (loss) attributable to Hilton stockholders, as reported | $ | 241 | $ | (79 | ) | $ | 263 | $ | (491 | ) | ||||||
| Diluted EPS, as reported(1) | $ | 0.86 | $ | (0.29 | ) | $ | 0.94 | $ | (1.77 | ) | ||||||
| Special items: | ||||||||||||||||
| Net other expenses (revenues) from managed and franchised properties | $ | (62 | ) | $ | 44 | $ | 57 | $ | 281 | |||||||
| Purchase accounting amortization(2) | 11 | 47 | 35 | 143 | ||||||||||||
| FF&E replacement reserves | 15 | 18 | 30 | 39 | ||||||||||||
| Asset dispositions(3) | 8 | — | 8 | — | ||||||||||||
| Reorganization costs | — | — | — | 38 | ||||||||||||
| Impairment losses | — | 9 | — | 136 | ||||||||||||
| Loss on debt extinguishment(4) | — | — | 69 | — | ||||||||||||
| Tax-related adjustment(5) | (8 | ) | — | (38 | ) | — | ||||||||||
| Other adjustments(6) | 9 | 14 | 10 | 39 | ||||||||||||
| Total special items before taxes | (27 | ) | 132 | 171 | 676 | |||||||||||
| Income tax benefit (expense) on special items | 5 | (36 | ) | (52 | ) | (130 | ) | |||||||||
| Total special items after taxes | $ | (22 | ) | $ | 96 | $ | 119 | $ | 546 | |||||||
| Net income, adjusted for special items | $ | 219 | $ | 17 | $ | 382 | $ | 55 | ||||||||
| Diluted EPS, adjusted for special items | $ | 0.78 | $ | 0.06 | $ | 1.36 | $ | 0.20 | ||||||||
| ____________ | ||
| (1) | The weighted average shares outstanding used in the calculation of diluted EPS for both the three and nine months ended September 30, 2020 were revised from the previously reported amount of 279 million to 277 million, as the previously reported dilutive shares were determined to be anti-dilutive as a result of the net loss attributable to Hilton stockholders reported during those periods. | |
| (2) | Represents the amortization of finite-lived intangible assets that were recorded at fair value in October 2007 when the Company became a wholly owned subsidiary of affiliates of Blackstone 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. | |
| (3) | Includes a loss on the sale of one of the Company's owned hotels, which was recognized in loss on sale of assets, net. | |
| (4) | Relates to the redemption of the 5.125% Senior Notes due 2026 and includes a redemption premium of $55 million and the accelerated recognition of unamortized deferred financing costs of $14 million. | |
| (5) | The three and nine months ended September 30, 2021 include income tax benefits recognized related to changes in effective tax rates. The benefits recognized did not have an effect on cash paid for taxes in the periods. | |
| (6) | The three and nine months ended September 30, 2021 and 2020 include costs recognized for certain legal settlements, which were recognized in general and administrative expenses and other expenses, respectively. The nine months ended September 30, 2020, also includes losses related to the disposal of an investment and the settlement of a debt guarantee for a franchised hotel, which were recognized in other non-operating loss, net. | |
| HILTON WORLDWIDE HOLDINGS INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (unaudited, dollars in millions) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net income (loss) | $ | 240 | $ | (81 | ) | $ | 259 | $ | (495 | ) | ||||||
| Interest expense | 98 | 116 | 302 | 316 | ||||||||||||
| Income tax expense (benefit) | 100 | (33 | ) | 64 | (80 | ) | ||||||||||
| Depreciation and amortization expenses | 46 | 90 | 143 | 269 | ||||||||||||
| EBITDA | 484 | 92 | 768 | 10 | ||||||||||||
| Loss on sale of assets, net | 8 | — | 8 | — | ||||||||||||
| Loss (gain) on foreign currency transactions | — | 12 | (1 | ) | 16 | |||||||||||
| Loss on debt extinguishment | — | — | 69 | — | ||||||||||||
| FF&E replacement reserves | 15 | 18 | 30 | 39 | ||||||||||||
| Share-based compensation expense | 52 | 25 | 144 | 37 | ||||||||||||
| Reorganization costs | — | — | — | 38 | ||||||||||||
| Impairment losses | — | 9 | — | 136 | ||||||||||||
| Amortization of contract acquisition costs | 9 | 7 | 23 | 22 | ||||||||||||
| Net other expenses (revenues) from managed and franchised properties | (62 | ) | 44 | 57 | 281 | |||||||||||
| Other adjustments(1) | 13 | 17 | 19 | 59 | ||||||||||||
| Adjusted EBITDA | $ | 519 | $ | 224 | $ | 1,117 | $ | 638 | ||||||||
| ____________ | ||
| (1) | The three and nine months ended September 30, 2021 and 2020 include costs recognized for certain legal settlements. The nine months ended September 30, 2020 also includes losses related to the disposal of an investment and the settlement of a debt guarantee for a franchised hotel. All periods include severance not related to the reorganization activities undertaken in response to the COVID-19 pandemic and other items. | |
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Total revenues, as reported | $ | 1,749 | $ | 933 | $ | 3,952 | $ | 3,417 | ||||||||
| Add: amortization of contract acquisition costs | 9 | 7 | 23 | 22 | ||||||||||||
| Less: other revenues from managed and franchised properties | (1,006 | ) | (548 | ) | (2,282 | ) | (2,201 | ) | ||||||||
| Total revenues, as adjusted | $ | 752 | $ | 392 | $ | 1,693 | $ | 1,238 | ||||||||
| Adjusted EBITDA | $ | 519 | $ | 224 | $ | 1,117 | $ | 638 | ||||||||
| Adjusted EBITDA margin | 69.0 | % | 57.1 | % | 66.0 | % | 51.5 | % | ||||||||
| HILTON WORLDWIDE HOLDINGS INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES NET DEBT AND NET DEBT TO ADJUSTED EBITDA RATIO (unaudited, dollars in millions) | ||||||||||||||||
| September 30, | December 31, | |||||||||||||||
| 2021 | 2020 | |||||||||||||||
| Long-term debt, including current maturities | $ | 8,767 | $ | 10,487 | ||||||||||||
| Add: unamortized deferred financing costs and discount | 90 | 93 | ||||||||||||||
| Long-term debt, including current maturities and excluding unamortized deferred financing costs and discount | 8,857 | 10,580 | ||||||||||||||
| Add: Hilton's share of unconsolidated affiliate debt | 8 | 8 | ||||||||||||||
| Less: cash and cash equivalents | (1,288 | ) | (3,218 | ) | ||||||||||||
| Less: restricted cash and cash equivalents | (99 | ) | (45 | ) | ||||||||||||
| Net debt | $ | 7,478 | $ | 7,325 | ||||||||||||
| Nine Months Ended | Year Ended | TTM Ended | ||||||||||||||
| September 30, | December 31, | September 30, | ||||||||||||||
| 2021 | 2020 | 2020 | 2021 | |||||||||||||
| Net income (loss) | $ | 259 | $ | (495 | ) | $ | (720 | ) | $ | 34 | ||||||
| Interest expense | 302 | 316 | 429 | 415 | ||||||||||||
| Income tax expense (benefit) | 64 | (80 | ) | (204 | ) | (60 | ) | |||||||||
| Depreciation and amortization expenses | 143 | 269 | 331 | 205 | ||||||||||||
| EBITDA | 768 | 10 | (164 | ) | 594 | |||||||||||
| Loss on sale of assets, net | 8 | — | — | 8 | ||||||||||||
| Loss (gain) on foreign currency transactions | (1 | ) | 16 | 27 | 10 | |||||||||||
| Loss on debt extinguishments | 69 | — | 48 | 117 | ||||||||||||
| FF&E replacement reserves | 30 | 39 | 57 | 48 | ||||||||||||
| Share-based compensation expense | 144 | 37 | 97 | 204 | ||||||||||||
| Reorganization costs | — | 38 | 41 | 3 | ||||||||||||
| Impairment losses | — | 136 | 258 | 122 | ||||||||||||
| Amortization of contract acquisition costs | 23 | 22 | 29 | 30 | ||||||||||||
| Net other expenses from managed and franchised properties | 57 | 281 | 397 | 173 | ||||||||||||
| Other adjustments(1) | 19 | 59 | 52 | 12 | ||||||||||||
| Adjusted EBITDA | $ | 1,117 | $ | 638 | $ | 842 | $ | 1,321 | ||||||||
| Net debt | $ | 7,478 | ||||||||||||||
| Net debt to Adjusted EBITDA ratio | 5.7 | |||||||||||||||
| ____________ | ||
| (1) | The nine months ended September 30, 2021 and 2020 include costs recognized for certain legal settlements. The nine months ended September 30, 2020 and year ended December 31, 2020 also include losses related to the disposal of an investment and the settlement of a debt guarantee for a franchised hotel. The year ended December 31, 2020 also includes a gain related to the reimbursement by a third party for taxes owed resulting from the sale of a hotel in a prior period. All periods include severance not related to the reorganization activities undertaken in response to the COVID-19 pandemic and other items. | |