Resumes Capital Return to Shareholders
Hilton Worldwide Holdings Inc. (NYSE: HLT) today reported its first quarter 2022 results. Highlights include:
- 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.
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.
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. |