Hilton Worldwide Holdings Inc (NYSE: HLT) today reported its second quarter 2022 results. Highlights include:
- Diluted EPS was $1.32 for the second quarter, and diluted EPS, adjusted for special items, was $1.29
- Net income was $367 million for the second quarter, exceeding the high end of guidance
- Adjusted EBITDA was $679 million for the second quarter, exceeding the high end of guidance
- System-wide comparable RevPAR increased 54.3 percent, on a currency neutral basis, for the second quarter compared to the same period in 2021
- System-wide comparable RevPAR was down 2.1 percent, on a currency neutral basis, for the second quarter compared to the same period in 2019
- Approved 23,400 new rooms for development during the second quarter, bringing Hilton's development pipeline to 413,000 rooms as of June 30, 2022
- Added 14,400 rooms to Hilton's system in the second quarter, contributing to 13,300 net additional rooms in Hilton's system during the period
- Repurchased 3.6 million shares of Hilton common stock during the second quarter, bringing total capital return, including dividends, to $521 million for the quarter and $812 million year to date through July
- Full year 2022 system-wide comparable RevPAR is expected to increase between 37.0 percent and 43.0 percent, on a currency neutral basis, compared to 2021; full year net income is projected to be between $1,146 million and $1,216 million; full year Adjusted EBITDA is projected to be between $2,400 million and $2,500 million
- Full year 2022 capital return is projected to be between $1.5 billion and $1.9 billion
Overview
Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, "Our second quarter results exceeded the high end of our guidance for system-wide comparable RevPAR, diluted EPS, adjusted for special items and Adjusted EBITDA. Given our strong results in the quarter, coupled with our confidence in continued recovery throughout the year, we are raising our full year guidance, including our outlook for capital return. With a capital-light business model, a strong portfolio of brands and dynamic, industry-leading platforms, we are well-positioned for the opportunities that lie ahead."
For the three months ended June 30, 2022, system-wide comparable RevPAR increased 54.3 percent compared to the same period in 2021, due to increases in both occupancy and ADR, and fee revenues increased 54 percent compared to the same period in 2021. For comparison to pre-pandemic results, system-wide comparable RevPAR for the three months ended June 30, 2022 was down 2.1 percent compared to the three months ended June 30, 2019.
For the six months ended June 30, 2022, system-wide comparable RevPAR increased 64.4 percent compared to the same period in 2021, due to increases in both occupancy and ADR, and fee revenues increased 64 percent compared to the same period in 2021. For comparison to pre-pandemic results, system-wide comparable RevPAR for the six months ended June 30, 2022 was down 9.0 percent compared to the six months ended June 30, 2019.
For the three months ended June 30, 2022, diluted EPS was $1.32 and diluted EPS, adjusted for special items, was $1.29 compared to $0.46 and $0.56, respectively, for the three months ended June 30, 2021. Net income and Adjusted EBITDA were $367 million and $679 million, respectively, for the three months ended June 30, 2022, compared to $128 million and $400 million, respectively, for the three months ended June 30, 2021.
For the six months ended June 30, 2022, diluted EPS was $2.07 and diluted EPS, adjusted for special items, was $2.00 compared to $0.08 and $0.58, respectively, for the six months ended June 30, 2021. Net income and Adjusted EBITDA were $578 million and $1,127 million, respectively, for the six months ended June 30, 2022, compared to $19 million and $598 million, respectively, for the six months ended June 30, 2021.
Development
In the second quarter of 2022, Hilton opened 91 new hotels contributing to 14,400 additional rooms and achieved net unit growth of 13,300 rooms. Hilton celebrated notable openings during the quarter, including the Waldorf Astoria Washington, D.C. and the Hotel Marcel New Haven, Tapestry Collection by Hilton, which is anticipated to be the first net-zero hotel in the U.S. Additionally, in July, Hilton celebrated the opening of its 7,000th property, following the recent openings of the Hilton Maldives Amingiri, the Conrad Los Angeles and the Lost Property St. Paul's London, a Curio Collection hotel.
As of June 30, 2022, Hilton's development pipeline totaled nearly 2,780 hotels representing more than 413,000 rooms throughout 114 countries and territories, including 29 countries and territories where Hilton does not currently have any existing hotels. Additionally, of the rooms in the development pipeline, more than 195,000 of the rooms were under construction and over 246,000 of the rooms were located outside the U.S.
Balance Sheet and Liquidity
As of June 30, 2022, Hilton had $8.8 billion of long-term debt outstanding, excluding the deduction for deferred financing costs and discount, with a weighted average interest rate of 4.12 percent. Further 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 4.10 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 June 30, 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 $1,254 million as of June 30, 2022, including $79 million of restricted cash and cash equivalents.
During the second quarter of 2022, Hilton repurchased 3.6 million shares of its common stock at a cost of $480 million and an average price per share of $133.32. During the six months ended June 30, 2022, Hilton repurchased 4.5 million shares of its common stock at a cost of $610 million and an average price per share of $135.45. The amount remaining under Hilton's stock repurchase program is $1.5 billion.
In June 2022, Hilton paid a quarterly cash dividend of $0.15 per share of common stock, for a total of $41 million. In July 2022, Hilton's board of directors authorized a regular quarterly cash dividend of $0.15 per share of common stock to be paid on or before September 23, 2022 to holders of record of its common stock as of the close of business on August 26, 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 37.0 percent and 43.0 percent compared to 2021, and to be down between 1.0 percent and 5.0 percent from 2019.
- Diluted EPS is projected to be between $4.11 and $4.36.
- Diluted EPS, adjusted for special items, is projected to be between $4.21 and $4.46.
- Net income is projected to be between $1,146 million and $1,216 million.
- Adjusted EBITDA is projected to be between $2,400 million and $2,500 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 $1.5 billion and $1.9 billion.
- General and administrative expenses are projected to be between $400 million and $420 million.
- Net unit growth is expected to be approximately 5.0 percent.
Third Quarter 2022
- System-wide comparable RevPAR, on a currency neutral basis, is expected to increase between 25.0 percent and 30.0 percent compared to the third quarter of 2021, and to increase between 1.0 percent and 5.0 percent from the third quarter of 2019.
- Diluted EPS is projected to be between $1.09 and $1.16.
- Diluted EPS, adjusted for special items, is projected to be between $1.16 and $1.24.
- Net income is projected to be between $303 million and $324 million.
- Adjusted EBITDA is projected to be between $660 million and $690 million.
About Hilton
Hilton (NYSE: HLT) is a leading global hospitality company with a portfolio of 18 brands comprising 7,000 properties and 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 | Six Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Revenues | |||||||||||||||
| Franchise and licensing fees | $ | 545 | $ | 369 | $ | 958 | $ | 611 | |||||||
| Base and other management fees | 75 | 42 | 130 | 67 | |||||||||||
| Incentive management fees | 46 | 21 | 80 | 34 | |||||||||||
| Owned and leased hotels | 282 | 121 | 432 | 177 | |||||||||||
| Other revenues | 25 | 21 | 43 | 38 | |||||||||||
| 973 | 574 | 1,643 | 927 | ||||||||||||
| Other revenues from managed and franchised properties | 1,267 | 755 | 2,318 | 1,276 | |||||||||||
| Total revenues | 2,240 | 1,329 | 3,961 | 2,203 | |||||||||||
| Expenses | |||||||||||||||
| Owned and leased hotels | 257 | 142 | 442 | 252 | |||||||||||
| Depreciation and amortization | 40 | 46 | 84 | 97 | |||||||||||
| General and administrative | 103 | 98 | 194 | 195 | |||||||||||
| Other expenses | 11 | 9 | 22 | 19 | |||||||||||
| 411 | 295 | 742 | 563 | ||||||||||||
| Other expenses from managed and franchised properties | 1,231 | 810 | 2,252 | 1,395 | |||||||||||
| Total expenses | 1,642 | 1,105 | 2,994 | 1,958 | |||||||||||
| Operating income | 598 | 224 | 967 | 245 | |||||||||||
| Interest expense | (99 | ) | (101 | ) | (189 | ) | (204 | ) | |||||||
| Gain (loss) on foreign currency transactions | 8 | (1 | ) | 4 | 1 | ||||||||||
| Loss on debt extinguishment | — | — | — | (69 | ) | ||||||||||
| Other non-operating income, net | 6 | 5 | 22 | 10 | |||||||||||
| Income (loss) before income taxes | 513 | 127 | 804 | (17 | ) | ||||||||||
| Income tax benefit (expense) | (146 | ) | 1 | (226 | ) | 36 | |||||||||
| Net income | 367 | 128 | 578 | 19 | |||||||||||
| Net loss attributable to noncontrolling interests | 1 | 2 | 2 | 3 | |||||||||||
| Net income attributable to Hilton stockholders | $ | 368 | $ | 130 | $ | 580 | $ | 22 | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 278 | 279 | 278 | 278 | |||||||||||
| Diluted | 280 | 281 | 281 | 281 | |||||||||||
| Earnings per share: | |||||||||||||||
| Basic | $ | 1.33 | $ | 0.47 | $ | 2.09 | $ | 0.08 | |||||||
| Diluted | $ | 1.32 | $ | 0.46 | $ | 2.07 | $ | 0.08 | |||||||
| Cash dividends declared per share | $ | 0.15 | $ | — | $ | 0.15 | $ | — | |||||||
HILTON WORLDWIDE HOLDINGS INC. COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS BY REGION, BRAND AND SEGMENT (unaudited)
| Three Months Ended June 30, | ||||||||||||||||||
| Occupancy | ADR | RevPAR | ||||||||||||||||
| 2022 | vs. 2021 | 2022 | vs. 2021 | 2022 | vs. 2021 | |||||||||||||
| By Region | ||||||||||||||||||
| U.S. | 74.3 | % | 10.4 | % | pts. | $ | 162.16 | 26.8 | % | $ | 120.52 | 47.3 | % | |||||
| Americas (excluding U.S.) | 66.4 | 30.1 | 135.85 | 31.4 | 90.17 | 140.3 | ||||||||||||
| Europe | 72.0 | 40.7 | 151.58 | 66.2 | 109.09 | 282.8 | ||||||||||||
| Middle East & Africa | 60.7 | 13.8 | 152.94 | 29.8 | 92.89 | 67.9 | ||||||||||||
| Asia Pacific | 49.7 | (6.2 | ) | 97.52 | 6.5 | 48.51 | (5.3 | ) | ||||||||||
| By Brand | ||||||||||||||||||
| Waldorf Astoria Hotels & Resorts | 57.4 | % | 17.0 | % | pts. | $ | 464.07 | 13.4 | % | $ | 266.46 | 61.1 | % | |||||
| Conrad Hotels & Resorts | 57.2 | 17.9 | 273.10 | 46.5 | 156.16 | 113.2 | ||||||||||||
| Canopy by Hilton | 65.6 | 20.7 | 200.88 | 27.0 | 131.86 | 85.4 | ||||||||||||
| Hilton Hotels & Resorts | 64.8 | 22.1 | 186.11 | 32.0 | 120.67 | 100.1 | ||||||||||||
| Curio Collection by Hilton | 64.9 | 17.2 | 230.02 | 24.2 | 149.34 | 68.9 | ||||||||||||
| DoubleTree by Hilton | 66.2 | 15.9 | 139.89 | 25.3 | 92.55 | 64.9 | ||||||||||||
| Tapestry Collection by Hilton | 68.0 | 17.5 | 173.40 | 27.1 | 117.86 | 71.2 | ||||||||||||
| Embassy Suites by Hilton | 73.2 | 14.9 | 178.27 | 26.3 | 130.52 | 58.5 | ||||||||||||
| Hilton Garden Inn | 71.7 | 11.7 | 143.48 | 26.4 | 102.91 | 51.2 | ||||||||||||
| Hampton by Hilton | 72.8 | 6.3 | 133.46 | 21.1 | 97.19 | 32.6 | ||||||||||||
| Tru by Hilton | 74.7 | 7.5 | 128.33 | 21.9 | 95.81 | 35.5 | ||||||||||||
| Homewood Suites by Hilton | 81.8 | 5.4 | 153.96 | 26.4 | 125.89 | 35.3 | ||||||||||||
| Home2 Suites by Hilton | 81.5 | 3.2 | 138.64 | 22.1 | 112.93 | 27.1 | ||||||||||||
| By Segment | ||||||||||||||||||
| Management and franchise | 70.9 | % | 11.8 | % | pts. | $ | 154.07 | 26.9 | % | $ | 109.19 | 52.2 | % | |||||
| Ownership(1) | 64.4 | 41.7 | 210.22 | 52.8 | 135.33 | 334.4 | ||||||||||||
| System-wide | 70.8 | % | 12.3 | % | pts. | $ | 154.92 | 27.5 | % | $ | 109.62 | 54.3 | % | |||||
HILTON WORLDWIDE HOLDINGS INC. COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS (continued) BY REGION, BRAND AND SEGMENT (unaudited)
| Six Months Ended June 30, | ||||||||||||||||||
| Occupancy | ADR | RevPAR | ||||||||||||||||
| 2022 | vs. 2021 | 2022 | vs. 2021 | 2022 | vs. 2021 | |||||||||||||
| By Region | ||||||||||||||||||
| U.S. | 68.2 | % | 12.3 | % | pts. | $ | 154.12 | 30.1 | % | $ | 105.13 | 58.7 | % | |||||
| Americas (excluding U.S.) | 58.6 | 25.9 | 131.78 | 33.4 | 77.26 | 139.2 | ||||||||||||
| Europe | 60.0 | 34.9 | 139.10 | 67.8 | 83.52 | 300.7 | ||||||||||||
| Middle East & Africa | 63.8 | 20.0 | 156.12 | 32.0 | 99.57 | 92.4 | ||||||||||||
| Asia Pacific | 46.1 | (3.3 | ) | 100.63 | 9.1 | 46.41 | 1.8 | |||||||||||
| By Brand | ||||||||||||||||||
| Waldorf Astoria Hotels & Resorts | 52.6 | % | 20.3 | % | pts. | $ | 524.96 | 13.0 | % | $ | 276.33 | 83.8 | % | |||||
| Conrad Hotels & Resorts | 51.5 | 16.7 | 253.90 | 40.9 | 130.82 | 108.6 | ||||||||||||
| Canopy by Hilton | 59.6 | 21.9 | 194.64 | 29.4 | 115.96 | 104.5 | ||||||||||||
| Hilton Hotels & Resorts | 57.3 | 21.1 | 178.85 | 34.1 | 102.46 | 112.5 | ||||||||||||
| Curio Collection by Hilton | 59.1 | 18.4 | 223.15 | 25.0 | 131.83 | 81.7 | ||||||||||||
| DoubleTree by Hilton | 59.7 | 16.7 | 134.28 | 27.8 | 80.20 | 77.4 | ||||||||||||
| Tapestry Collection by Hilton | 60.7 | 17.9 | 160.80 | 27.2 | 97.67 | 80.5 | ||||||||||||
| Embassy Suites by Hilton | 66.5 | 15.6 | 171.10 | 30.0 | 113.75 | 69.7 | ||||||||||||
| Hilton Garden Inn | 65.6 | 12.8 | 134.98 | 29.2 | 88.50 | 60.7 | ||||||||||||
| Hampton by Hilton | 66.8 | 8.6 | 126.93 | 24.3 | 84.79 | 42.5 | ||||||||||||
| Tru by Hilton | 68.9 | 9.9 | 121.03 | 26.5 | 83.40 | 47.6 | ||||||||||||
| Homewood Suites by Hilton | 77.8 | 7.6 | 145.47 | 27.1 | 113.17 | 40.8 | ||||||||||||
| Home2 Suites by Hilton | 77.7 | 6.7 | 131.57 | 23.8 | 102.18 | 35.5 | ||||||||||||
| By Segment | ||||||||||||||||||
| Management and franchise | 64.8 | % | 13.1 | % | pts. | $ | 147.20 | 29.7 | % | $ | 95.38 | 62.7 | % | |||||
| Ownership(1) | 51.2 | 33.4 | 197.63 | 44.9 | 101.26 | 316.3 | ||||||||||||
| System-wide | 64.6 | % | 13.5 | % | pts. | $ | 147.87 | 30.1 | % | $ | 95.47 | 64.4 | % | |||||
| ____________ | |
| (1) | Includes hotels owned or leased by entities in which Hilton owns a noncontrolling financial interest. |
HILTON WORLDWIDE HOLDINGS INC. PROPERTY SUMMARY As of June 30, 2022
| Owned / Leased(1) | Managed | Franchised | Total | ||||||||||||
| Properties | Rooms | Properties | Rooms | Properties | Rooms | Properties | Rooms | ||||||||
| Waldorf Astoria Hotels & Resorts | |||||||||||||||
| U.S. | — | — | 12 | 4,488 | — | — | 12 | 4,488 | |||||||
| Americas (excluding U.S.) | — | — | 2 | 252 | — | — | 2 | 252 | |||||||
| Europe | 2 | 463 | 4 | 898 | — | — | 6 | 1,361 | |||||||
| Middle East & Africa | — | — | 5 | 1,232 | — | — | 5 | 1,232 | |||||||
| 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 | — | — | 1 | 70 | 1 | 307 | 2 | 377 | |||||||
| Middle East & Africa | — | — | 1 | 41 | 1 | 234 | 2 | 275 | |||||||
| Asia Pacific | — | — | — | — | 1 | 114 | 1 | 114 | |||||||
| Conrad Hotels & Resorts | |||||||||||||||
| U.S. | — | — | 5 | 1,922 | 2 | 1,730 | 7 | 3,652 | |||||||
| Americas (excluding U.S.) | — | — | 3 | 787 | — | — | 3 | 787 | |||||||
| Europe | — | — | 4 | 1,155 | 1 | 107 | 5 | 1,262 | |||||||
| 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. | — | — | 2 | 1,814 | — | — | 2 | 1,814 | |||||||
| Hilton Hotels & Resorts | |||||||||||||||
| U.S. | — | — | 58 | 43,443 | 186 | 58,595 | 244 | 102,038 | |||||||
| Americas (excluding U.S.) | 1 | 405 | 29 | 11,298 | 26 | 7,826 | 56 | 19,529 | |||||||
| Europe | 39 | 11,514 | 44 | 14,927 | 43 | 11,268 | 126 | 37,709 | |||||||
| Middle East & Africa | 5 | 1,992 | 36 | 12,555 | 3 | 1,565 | 44 | 16,112 | |||||||
| Asia Pacific | 5 | 2,999 | 113 | 39,555 | 8 | 3,247 | 126 | 45,801 | |||||||
| Curio Collection by Hilton | |||||||||||||||
| U.S. | — | — | 8 | 3,595 | 61 | 13,381 | 69 | 16,976 | |||||||
| Americas (excluding U.S.) | — | — | 2 | 99 | 15 | 2,004 | 17 | 2,103 | |||||||
| Europe | — | — | 4 | 360 | 22 | 2,931 | 26 | 3,291 | |||||||
| 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 | 10,585 | 342 | 77,829 | 374 | 88,414 | |||||||
| Americas (excluding U.S.) | — | — | 3 | 587 | 36 | 7,246 | 39 | 7,833 | |||||||
| Europe | — | — | 14 | 3,580 | 109 | 18,589 | 123 | 22,169 | |||||||
| Middle East & Africa | — | — | 18 | 4,710 | 5 | 568 | 23 | 5,278 | |||||||
| Asia Pacific | — | — | 77 | 20,593 | 6 | 1,568 | 83 | 22,161 | |||||||
HILTON WORLDWIDE HOLDINGS INC. PROPERTY SUMMARY (continued) As of June 30, 2022
| Owned / Leased(1) | Managed | Franchised | Total | ||||||||||||
| Properties | Rooms | Properties | Rooms | Properties | Rooms | Properties | Rooms | ||||||||
| Tapestry Collection by Hilton | |||||||||||||||
| U.S. | — | — | — | — | 69 | 8,444 | 69 | 8,444 | |||||||
| Americas (excluding U.S.) | — | — | 1 | 138 | 6 | 647 | 7 | 785 | |||||||
| Europe | — | — | — | — | 6 | 360 | 6 | 360 | |||||||
| Asia Pacific | — | — | 1 | 266 | 1 | 175 | 2 | 441 | |||||||
| Embassy Suites by Hilton | |||||||||||||||
| U.S. | — | — | 39 | 10,371 | 215 | 48,458 | 254 | 58,829 | |||||||
| 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. | — | — | 5 | 527 | 733 | 101,364 | 738 | 101,891 | |||||||
| Americas (excluding U.S.) | — | — | 13 | 1,992 | 51 | 7,664 | 64 | 9,656 | |||||||
| Europe | — | — | 18 | 3,499 | 59 | 9,515 | 77 | 13,014 | |||||||
| Middle East & Africa | — | — | 17 | 3,555 | 3 | 474 | 20 | 4,029 | |||||||
| Asia Pacific | — | — | 50 | 11,085 | 2 | 321 | 52 | 11,406 | |||||||
| Hampton by Hilton | |||||||||||||||
| U.S. | — | — | 26 | 3,366 | 2,293 | 226,729 | 2,319 | 230,095 | |||||||
| Americas (excluding U.S.) | — | — | 13 | 1,644 | 112 | 13,604 | 125 | 15,248 | |||||||
| Europe | — | — | 16 | 2,697 | 104 | 16,161 | 120 | 18,858 | |||||||
| Middle East & Africa | — | — | 4 | 1,238 | — | — | 4 | 1,238 | |||||||
| Asia Pacific | — | — | — | — | 248 | 39,928 | 248 | 39,928 | |||||||
| Tru by Hilton | |||||||||||||||
| U.S. | — | — | — | — | 219 | 21,360 | 219 | 21,360 | |||||||
| Americas (excluding U.S.) | — | — | — | — | 3 | 333 | 3 | 333 | |||||||
| Homewood Suites by Hilton | |||||||||||||||
| U.S. | — | — | 9 | 1,131 | 498 | 56,998 | 507 | 58,129 | |||||||
| Americas (excluding U.S.) | — | — | 3 | 406 | 24 | 2,688 | 27 | 3,094 | |||||||
| Home2 Suites by Hilton | |||||||||||||||
| U.S. | — | — | 2 | 210 | 530 | 55,660 | 532 | 55,870 | |||||||
| Americas (excluding U.S.) | — | — | — | — | 7 | 753 | 7 | 753 | |||||||
| Asia Pacific | — | — | — | — | 12 | 1,715 | 12 | 1,715 | |||||||
| Other | — | — | 3 | 1,343 | 5 | 1,217 | 8 | 2,560 | |||||||
| Total hotels | 54 | 18,151 | 746 | 234,993 | 6,115 | 833,376 | 6,915 | 1,086,520 | |||||||
| Hilton Grand Vacations | — | — | — | — | 68 | 11,801 | 68 | 11,801 | |||||||
| Total system | 54 | 18,151 | 746 | 234,993 | 6,183 | 845,177 | 6,983 | 1,098,321 | |||||||
| ____________ | |
| (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 | |||||||||||||
| June 30, | Increase / (Decrease) | ||||||||||||
| 2022 | 2021 | $ | % | ||||||||||
| Capital expenditures for property and equipment(1) | $ | 7 | $ | 6 | 1 | 16.7 | |||||||
| Capitalized software costs(2) | 15 | 8 | 7 | 87.5 | |||||||||
| Total capital expenditures | 22 | 14 | 8 | 57.1 | |||||||||
| Contract acquisition costs | 26 | 72 | (46 | ) | (63.9 | ) | |||||||
| Total capital expenditures and contract acquisition costs | $ | 48 | $ | 86 | (38 | ) | (44.2 | ) | |||||
| Six Months Ended | |||||||||||||
| June 30, | Increase / (Decrease) | ||||||||||||
| 2022 | 2021 | $ | % | ||||||||||
| Capital expenditures for property and equipment(1) | $ | 11 | $ | 9 | 2 | 22.2 | |||||||
| Capitalized software costs(2) | 25 | 16 | 9 | 56.3 | |||||||||
| Total capital expenditures | 36 | 25 | 11 | 44.0 | |||||||||
| Contract acquisition costs | 41 | 115 | (74 | ) | (64.3 | ) | |||||||
| Total capital expenditures and contract acquisition costs | $ | 77 | $ | 140 | (63 | ) | (45.0 | ) | |||||
| ____________ | |
| (1) | Represents expenditures for hotels, corporate and other property and equipment, which include amounts indirectly reimbursed by hotel owners of $1 million for both the three months ended June 30, 2022 and 2021 and $2 million and $1 million for the six months ended June 30, 2022 and 2021, respectively. Excludes expenditures for FF&E replacement reserves of $15 million and $11 million for the three months ended June 30, 2022 and 2021, respectively, and $27 million and $15 million for the six months ended June 30, 2022 and 2021, respectively. |
| (2) | Includes $14 million and $7 million of expenditures that were indirectly reimbursed by hotel owners for the three months ended June 30, 2022 and 2021, respectively, and $23 million and $14 million for the six months ended June 30, 2022 and 2021, respectively. |
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 | Six Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net income attributable to Hilton stockholders, as reported | $ | 368 | $ | 130 | $ | 580 | $ | 22 | |||||||
| Diluted EPS, as reported | $ | 1.32 | $ | 0.46 | $ | 2.07 | $ | 0.08 | |||||||
| Special items: | |||||||||||||||
| Net other expenses (revenues) from managed and franchised properties | $ | (36 | ) | $ | 55 | $ | (66 | ) | $ | 119 | |||||
| Purchase accounting amortization(1) | 11 | 12 | 23 | 24 | |||||||||||
| FF&E replacement reserves | 15 | 11 | 27 | 15 | |||||||||||
| Loss on debt extinguishment(2) | — | — | — | 69 | |||||||||||
| Tax-related adjustment(3) | — | (30 | ) | — | (30 | ) | |||||||||
| Other adjustment items(4) | — | (2 | ) | (10 | ) | 1 | |||||||||
| Total special items before taxes | (10 | ) | 46 | (26 | ) | 198 | |||||||||
| Income tax benefit (expense) on special items | 3 | (19 | ) | 8 | (57 | ) | |||||||||
| Total special items after taxes | $ | (7 | ) | $ | 27 | $ | (18 | ) | $ | 141 | |||||
| Net income, adjusted for special items | $ | 361 | $ | 157 | $ | 562 | $ | 163 | |||||||
| Diluted EPS, adjusted for special items | $ | 1.29 | $ | 0.56 | $ | 2.00 | $ | 0.58 | |||||||
| ____________ | |
| (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) | Amounts include income tax benefits recognized related to changes in effective tax rates, which did not have an effect on cash paid for taxes in the periods. |
| (4) | The amount for the six months ended June 30, 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 | Six Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net income | $ | 367 | $ | 128 | $ | 578 | $ | 19 | |||||||
| Interest expense | 99 | 101 | 189 | 204 | |||||||||||
| Income tax expense (benefit) | 146 | (1 | ) | 226 | (36 | ) | |||||||||
| Depreciation and amortization expenses | 40 | 46 | 84 | 97 | |||||||||||
| EBITDA | 652 | 274 | 1,077 | 284 | |||||||||||
| Loss (gain) on foreign currency transactions | (8 | ) | 1 | (4 | ) | (1 | ) | ||||||||
| Loss on debt extinguishment | — | — | — | 69 | |||||||||||
| FF&E replacement reserves | 15 | 11 | 27 | 15 | |||||||||||
| Share-based compensation expense | 47 | 53 | 84 | 92 | |||||||||||
| Amortization of contract acquisition costs | 10 | 7 | 18 | 14 | |||||||||||
| Net other expenses (revenues) from managed and franchised properties | (36 | ) | 55 | (66 | ) | 119 | |||||||||
| Other adjustments(1) | (1 | ) | (1 | ) | (9 | ) | 6 | ||||||||
| Adjusted EBITDA | $ | 679 | $ | 400 | $ | 1,127 | $ | 598 | |||||||
| ____________ | |
| (1) | Amount for the six months ended June 30, 2022 primarily includes a gain related to Hilton's investments in unconsolidated affiliates. All periods include severance and other items. |
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Total revenues, as reported | $ | 2,240 | $ | 1,329 | $ | 3,961 | $ | 2,203 | |||||||
| Add: amortization of contract acquisition costs | 10 | 7 | 18 | 14 | |||||||||||
| Less: other revenues from managed and franchised properties | (1,267 | ) | (755 | ) | (2,318 | ) | (1,276 | ) | |||||||
| Total revenues, as adjusted | $ | 983 | $ | 581 | $ | 1,661 | $ | 941 | |||||||
| Adjusted EBITDA | $ | 679 | $ | 400 | $ | 1,127 | $ | 598 | |||||||
| Adjusted EBITDA margin | 69.1 | % | 68.8 | % | 67.9 | % | 63.5 | % | |||||||
HILTON WORLDWIDE HOLDINGS INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES NET DEBT AND NET DEBT TO ADJUSTED EBITDA RATIO (unaudited, dollars in millions)
| June 30, | December 31, | ||||||
| 2022 | 2021 | ||||||
| Long-term debt, including current maturities | $ | 8,743 | $ | 8,766 | |||
| Add: unamortized deferred financing costs and discount | 80 | 87 | |||||
| Long-term debt, including current maturities and excluding the deduction for unamortized deferred financing costs and discount | 8,823 | 8,853 | |||||
| Less: cash and cash equivalents | (1,175 | ) | (1,427 | ) | |||
| Less: restricted cash and cash equivalents | (79 | ) | (85 | ) | |||
| Net debt | $ | 7,569 | $ | 7,341 | |||
| Six Months Ended | Year Ended | TTM Ended | |||||||||||||
| June 30, | December 31, | June 30, | |||||||||||||
| 2022 | 2021 | 2021 | 2022 | ||||||||||||
| Net income | $ | 578 | $ | 19 | $ | 407 | $ | 966 | |||||||
| Interest expense | 189 | 204 | 397 | 382 | |||||||||||
| Income tax expense (benefit) | 226 | (36 | ) | 153 | 415 | ||||||||||
| Depreciation and amortization expenses | 84 | 97 | 188 | 175 | |||||||||||
| EBITDA | 1,077 | 284 | 1,145 | 1,938 | |||||||||||
| Loss on sale of assets, net | — | — | 7 | 7 | |||||||||||
| Loss (gain) on foreign currency transactions | (4 | ) | (1 | ) | 7 | 4 | |||||||||
| Loss on debt extinguishment | — | 69 | 69 | — | |||||||||||
| FF&E replacement reserves | 27 | 15 | 48 | 60 | |||||||||||
| Share-based compensation expense | 84 | 92 | 193 | 185 | |||||||||||
| Amortization of contract acquisition costs | 18 | 14 | 32 | 36 | |||||||||||
| Net other expenses (revenues) from managed and franchised properties | (66 | ) | 119 | 110 | (75 | ) | |||||||||
| Other adjustments(1) | (9 | ) | 6 | 18 | 3 | ||||||||||
| Adjusted EBITDA | $ | 1,127 | $ | 598 | $ | 1,629 | $ | 2,158 | |||||||
| Net debt | $ | 7,569 | |||||||||||||
| Net debt to Adjusted EBITDA ratio | 3.5 | ||||||||||||||
| ____________ | |
| (1) | Amounts for all periods include severance and other items. Amount for the six months ended June 30, 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 (unaudited, in millions, except per share data)
| Three Months Ending | |||||||
| September 30, 2022 | |||||||
| Low Case | High Case | ||||||
| Net income attributable to Hilton stockholders | $ | 302 | $ | 323 | |||
| Diluted EPS(1) | $ | 1.09 | $ | 1.16 | |||
| Special items(2): | |||||||
| Purchase accounting amortization | $ | 11 | $ | 11 | |||
| FF&E replacement reserves | 15 | 15 | |||||
| Total special items before tax | 26 | 26 | |||||
| Income tax expense on special items | (6 | ) | (6 | ) | |||
| Total special items after tax | $ | 20 | $ | 20 | |||
| Net income, adjusted for special items | $ | 322 | $ | 343 | |||
| Diluted EPS, adjusted for special items(1) | $ | 1.16 | $ | 1.24 | |||
| Year Ending | |||||||
| December 31, 2022 | |||||||
| Low Case | High Case | ||||||
| Net income attributable to Hilton stockholders | $ | 1,146 | $ | 1,216 | |||
| Diluted EPS(1) | $ | 4.11 | $ | 4.36 | |||
| Special items(2): | |||||||
| Net other revenues from managed and franchised properties | $ | (66 | ) | $ | (66 | ) | |
| Purchase accounting amortization | 46 | 46 | |||||
| FF&E replacement reserves | 61 | 61 | |||||
| Other adjustment items | (10 | ) | (10 | ) | |||
| Total special items before tax | 31 | 31 | |||||
| Income tax expense on special items | (4 | ) | (4 | ) | |||
| Total special items after tax | $ | 27 | $ | 27 | |||
| Net income, adjusted for special items | $ | 1,173 | $ | 1,243 | |||
| Diluted EPS, adjusted for special items(1) | $ | 4.21 | $ | 4.46 | |||
| ____________ | |
| (1) | Does not include the effect of potential share repurchases. |
| (2) | See "—Net Income 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 (unaudited, in millions)
| Three Months Ending | |||||||
| September 30, 2022 | |||||||
| Low Case | High Case | ||||||
| Net income | $ | 303 | $ | 324 | |||
| Interest expense | 111 | 111 | |||||
| Income tax expense | 131 | 140 | |||||
| Depreciation and amortization expenses | 42 | 42 | |||||
| EBITDA | 587 | 617 | |||||
| FF&E replacement reserves | 15 | 15 | |||||
| Share-based compensation expense | 41 | 41 | |||||
| Amortization of contract acquisition costs | 11 | 11 | |||||
| Other adjustments(1) | 6 | 6 | |||||
| Adjusted EBITDA | $ | 660 | $ | 690 | |||
| Year Ending | |||||||
| December 31, 2022 | |||||||
| Low Case | High Case | ||||||
| Net income | $ | 1,146 | $ | 1,216 | |||
| Interest expense | 415 | 415 | |||||
| Income tax expense | 481 | 511 | |||||
| Depreciation and amortization expenses | 167 | 167 | |||||
| EBITDA | 2,209 | 2,309 | |||||
| Gain on foreign currency transactions | (4 | ) | (4 | ) | |||
| FF&E replacement reserves | 61 | 61 | |||||
| Share-based compensation expense | 157 | 157 | |||||
| Amortization of contract acquisition costs | 41 | 41 | |||||
| Net other revenues from managed and franchised properties | (66 | ) | (66 | ) | |||
| Other adjustments(1) | 2 | 2 | |||||
| Adjusted EBITDA | $ | 2,400 | $ | 2,500 | |||
| ____________ | |
| (1) | Includes adjustments for severance and other items. See "—Adjusted EBITDA and Adjusted EBITDA Margin" for details of these adjustments. |