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Hilton Reports First Quarter Results
MCLEAN, VA (April 24, 2024) - Hilton Worldwide Holdings Inc. ("Hilton," "the Company," "we," "us" or "our") (NYSE: HLT) today
reported its first quarter 2024 results. Highlights include:
• Diluted EPS was $1.04 for the first quarter, and diluted EPS, adjusted for special items, was $1.53
• Net income was $268 million for the first quarter
• Adjusted EBITDA was $750 million for the first quarter
• System-wide comparable RevPAR increased 2.0 percent, on a currency neutral basis, for the first quarter
compared to the same period in 2023
• Approved 29,800 new rooms for development during the first quarter, bringing Hilton's development pipeline to
a record 472,300 rooms as of March 31, 2024, representing growth of 10 percent from March 31, 2023
• Added 16,800 rooms to Hilton's system in the first quarter, resulting in 14,200 net additional rooms for the first
quarter, contributing to net unit growth of 5.6 percent from March 31, 2023
• Repurchased 3.4 million shares of Hilton common stock during the first quarter; total capital return, including
dividends, was $701 million for the quarter and $908 million year to date through April
• Announced the planned acquisition of the Graduate Hotels brand, including the expected addition of
approximately 35 franchised hotels to our portfolio in the second quarter
• In April 2024, acquired a controlling financial interest in the Sydell Group, which owns the NoMad brand,
marking Hilton's debut in the luxury lifestyle space and providing further luxury expansion opportunities
• In March 2024, issued $1.0 billion of senior notes consisting of: (i) $550 million aggregate principal amount of
5.875% Senior Notes due 2029 and (ii) $450 million aggregate principal amount of 6.125% Senior Notes due
2032
• Full year 2024 system-wide RevPAR is projected to increase between 2.0 percent and 4.0 percent on a
comparable and currency neutral basis compared to 2023; full year net income is projected to be between
$1,586 million and $1,621 million; full year Adjusted EBITDA is projected to be between $3,375 million and
$3,425 million
• Full year 2024 capital return is projected to be approximately $3.0 billion
1
Overview
Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, "We are pleased to report a strong first quarter with
bottom line results meaningfully exceeding our expectations, further demonstrating the power of our resilient, fee-based business
model and strong development story. During the first quarter, system-wide RevPAR increased 2.0 percent as renovations,
inclement weather and unfavorable holiday shifts weighed on performance more than anticipated. On the development side, we
continued to see great momentum across signings, starts and openings. As a result of our record pipeline and the growth pace
we've seen to-date, we expect net unit growth of 6.0 percent to 6.5 percent for the full year, excluding the planned acquisition of
the Graduate Hotels brand."
For the three months ended March 31, 2024, system-wide comparable RevPAR increased 2.0 percent compared to the same
period in 2023 due to increases in both occupancy and ADR, and management and franchise fee revenues increased 14.4
percent compared to the same period in 2023.
For the three months ended March 31, 2024, diluted EPS was $1.04 and diluted EPS, adjusted for special items, was $1.53
compared to $0.77 and $1.24, respectively, for the three months ended March 31, 2023. Net income and Adjusted EBITDA were
$268 million and $750 million, respectively, for the three months ended March 31, 2024, compared to $209 million and $641
million, respectively, for the three months ended March 31, 2023.
Development
In the first quarter of 2024, Hilton opened 106 hotels, totaling 16,800 rooms, resulting in 14,200 net room additions. During the
quarter, Hilton celebrated a number of significant luxury and lifestyle openings including: the grand opening of the Conrad
Orlando in Florida, the debut of LXR Hotels & Resorts in Hawaii and the introduction of the Waldorf Astoria and Canopy by Hilton
brands to the Seychelles. Furthermore, Hilton debuted the Curio Collection by Hilton brand in Kenya and Motto by Hilton brand in
Peru and entered into partnerships with AutoCamp and Small Luxury Hotels of the World ("SLH"), which will provide new
elevated lodging experiences to Hilton guests. Hilton also announced the Waldorf Astoria Residences Dubai Downtown, which
will be the Company's first standalone residential property outside of the United States. Additionally, during the quarter, Hampton
by Hilton celebrated the opening of its 3,000th hotel globally, kicking off a year of milestones and achievements for the brand
including its 40th anniversary, entry into its 40th country and its expected groundbreaking entry into its fifth continent, Africa, later
this year.
Hilton added 29,800 rooms to the development pipeline during the first quarter, and, as of March 31, 2024, Hilton's development
pipeline totaled approximately 3,380 hotels representing 472,300 rooms throughout 119 countries and territories, including 31
countries and territories where Hilton had no existing hotels. Additionally, of the rooms in the development pipeline, 229,700 were
under construction and 267,900 were located outside of the U.S.
Balance Sheet and Liquidity
As of March 31, 2024, Hilton had $10.3 billion of long-term debt outstanding, excluding the deduction for deferred financing costs
and discounts, with a weighted average interest rate of 4.89 percent. Excluding all finance lease liabilities and other debt of
Hilton's consolidated variable interest entities, Hilton had $10.1 billion of long-term debt outstanding with a weighted average
interest rate of 4.88 percent and no scheduled maturities until May 2025. As of March 31, 2024, no debt amounts were
outstanding under Hilton's $2.0 billion senior secured revolving credit facility (the "Revolving Credit Facility"), which had an
available borrowing capacity of $1,913 million after considering $87 million of outstanding letters of credit. Total cash and cash
equivalents were $1,420 million as of March 31, 2024, including $74 million of restricted cash and cash equivalents.
In March 2024, Hilton issued $550 million aggregate principal amount of 5.875% Senior Notes due 2029 and $450 million
aggregate principal amount of 6.125% Senior Notes due 2032 and used a portion of the net proceeds from the issuances to
repay $200 million borrowed under the Revolving Credit Facility earlier in the first quarter. The remaining proceeds will be used
for general corporate purposes, which may include investments and acquisitions.
In March 2024, Hilton paid a quarterly cash dividend of $0.15 per share of common stock, bringing total dividend payments for
the quarter to $39 million. In April 2024, Hilton's board of directors authorized a regular quarterly cash dividend of $0.15 per
share of common stock to be paid on June 28, 2024 to holders of record of its common stock as of the close of business on
May 17, 2024.
During the three months ended March 31, 2024, Hilton repurchased 3.4 million shares of its common stock at an average price
per share of $196.17, for a total of $662 million, returning $701 million of capital to shareholders during the quarter including
dividends. The number of shares outstanding as of April 19, 2024 was 250.0 million.
2
Outlook
Share-based metrics in Hilton's outlook include actual share repurchases through the first quarter, but do not include the effect of
potential share repurchases thereafter. Additionally, Hilton's outlook does not include the effect of the planned acquisition of
Graduate Hotels.
Full Year 2024
• System-wide comparable RevPAR, on a currency neutral basis, is projected to increase between 2.0 percent and 4.0
percent compared to 2023.
• Diluted EPS is projected to be between $6.21 and $6.35.
• Diluted EPS, adjusted for special items, is projected to be between $6.89 and $7.03.
• Net income is projected to be between $1,586 million and $1,621 million.
• Adjusted EBITDA is projected to be between $3,375 million and $3,425 million.
• Contract acquisition costs and capital expenditures, excluding amounts reimbursed by third parties, are projected to be
between $250 million and $300 million.
• Capital return is projected to be approximately $3.0 billion.
• General and administrative expenses are projected to be between $415 million and $430 million.
• Net unit growth, excluding the effect of the planned acquisition of the Graduate Hotels brand, is projected to be between
6.0 percent and 6.5 percent.
Second Quarter 2024
• System-wide comparable RevPAR, on a currency neutral basis, is projected to increase between 2.0 percent and 4.0
percent compared to the second quarter of 2023.
• Diluted EPS is projected to be between $1.74 and $1.80.
• Diluted EPS, adjusted for special items, is projected to be between $1.80 and $1.86.
• Net income is projected to be between $443 million and $457 million.
• Adjusted EBITDA is projected to be between $890 million and $910 million.
Conference Call
Hilton will host a conference call to discuss first quarter of 2024 results on April 24, 2024 at 9:00 a.m. Eastern Time. Participants
may listen to the live webcast by logging on to the Hilton Investor Relations website at https://ir.hilton.com/events-and-
presentations. A replay and transcript of the webcast will be available within 24 hours after the live event at https://ir.hilton.com/
financial-reporting.
Alternatively, participants may listen to the live call by dialing 1-888-317-6003 in the United States ("U.S.") or 1-412-317-6061
internationally using the conference ID 7619875. Participants are encouraged to dial into the call or link to the webcast at least
fifteen minutes prior to the scheduled start time. A telephone replay will be available for seven days following the call. To access
the telephone replay, dial 1-877-344-7529 in the U.S. or 1-412-317-0088 internationally using the conference ID 2963787.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited
to, statements related to our expectations regarding the performance of our business, future financial results, liquidity and capital
resources and other non-historical statements. In some cases, you can identify these forward-looking statements by the use of
words such as "outlook," "believes," "expects," "forecasts," "potential," "continues," "may," "will," "should," "could," "seeks,"
"projects," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable
words. Such forward-looking statements are subject to various risks and uncertainties including, among others, risks inherent to
the hospitality industry; macroeconomic factors beyond our control, such as inflation, changes in interest rates, challenges due to
labor shortages or disputes and supply chain disruptions; competition for hotel guests and management and franchise contracts;
risks related to doing business with third-party hotel owners; performance of our information technology systems; growth of
reservation channels outside of our system; risks of doing business outside of the U.S.; risks associated with conflicts in Eastern
3
Europe and the Middle East and other geopolitical events; and our indebtedness. Additional factors that could cause Hilton's
results to differ materially from those described in the forward-looking statements can be found under the section entitled "Part I
—Item 1A. Risk Factors" of Hilton's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which is filed with
the Securities and Exchange Commission (the "SEC") and is accessible on the SEC's website at www.sec.gov. Accordingly,
there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these
statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary
statements that are included in this press release and in our filings with the SEC. We undertake no obligation to publicly update
or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as
required by law.
Definitions
See the "Definitions" section for the definition of certain terms used within this press release, including within the schedules.
Non-GAAP Financial Measures
The Company refers to certain financial measures that are not recognized under U.S. generally accepted accounting principles
("GAAP") in this press release, including: net income, adjusted for special items; diluted EPS, adjusted for special items;
EBITDA; Adjusted EBITDA; Adjusted EBITDA margin; net debt; and net debt to Adjusted EBITDA ratio. See the schedules to this
press release, including the "Definitions" section, for additional information and reconciliations of such non-GAAP financial
measures, as well as the most comparable GAAP financial measures.
About Hilton
Hilton (NYSE: HLT) is a leading global hospitality company with a portfolio of 23 world-class brands comprising more than 7,600
properties and nearly 1.2 million rooms, in 126 countries and territories. Dedicated to fulfilling its founding vision to fill the earth
with the light and warmth of hospitality, Hilton has welcomed over 3 billion guests in its more than 100-year history, was named
the No.1 World's Best Workplace by Great Place to Work and Fortune and has been recognized as a global leader on the Dow
Jones Sustainability Indices for seven consecutive years. Hilton has introduced industry-leading technology enhancements to
improve the guest experience, including Digital Key Share, automated complimentary room upgrades and the ability to book
confirmed connecting rooms. Through the award-winning guest loyalty program Hilton Honors, the nearly 190 million members
who book directly with Hilton can earn Points for hotel stays and experiences money can't buy. With the free Hilton Honors app,
guests can book their stay, select their room, check in, unlock their door with a Digital Key and check out, all from their
smartphone. Visit stories.hilton.com for more information, and connect with Hilton on facebook.com/hiltonnewsroom, twitter.com/
hiltonnewsroom, linkedin.com/company/hilton, instagram.com/hiltonnewsroom and youtube.com/hiltonnewsroom.
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HILTON WORLDWIDE HOLDINGS INC.
EARNINGS RELEASE SCHEDULES
TABLE OF CONTENTS
Page
Condensed Consolidated Statements of Operations 6
Comparable and Currency Neutral System-Wide Hotel Operating Statistics 7
Property Summary 8
Capital Expenditures and Contract Acquisition Costs 9
Reconciliations of Non-GAAP Financial Measures 10
Definitions 15
5
HILTON WORLDWIDE HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)
Three Months Ended
March 31,
2024 2023
Revenues
Franchise and licensing fees $ 571 $ 508
Base and other management fees 106 80
Incentive management fees 70 65
Owned and leased hotels 255 248
Other revenues 50 35
1,052 936
Other revenues from managed and franchised properties 1,521 1,357
Total revenues 2,573 2,293
Expenses
Owned and leased hotels 247 251
Depreciation and amortization 36 37
General and administrative 104 91
Other expenses 30 21
417 400
Other expenses from managed and franchised properties 1,630 1,395
Total expenses 2,047 1,795
Gain on sales of assets, net 7 —
Operating income 533 498
Interest expense (131) (116)
Loss on foreign currency transactions (1) —
Loss on investments in unconsolidated affiliate — (92)
Other non-operating income (loss), net (36) 12
Income before income taxes 365 302
Income tax expense (97) (93)
Net income 268 209
Net income attributable to noncontrolling interests (3) (3)
Net income attributable to Hilton stockholders $ 265 $ 206
Weighted average shares outstanding:
Basic 252 266
Diluted 255 269
Earnings per share:
Basic $ 1.05 $ 0.77
Diluted $ 1.04 $ 0.77
Cash dividends declared per share $ 0.15 $ 0.15
6
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
2024 vs. 2023 2024 vs. 2023 2024 vs. 2023
System-wide 67.2 % 0.2 % pts. $ 154.91 1.7 % $ 104.16 2.0 %
Region
U.S. 67.7 % (0.6) % pts. $ 161.67 0.5 % $ 109.53 (0.4) %
Americas (excluding U.S.) 65.8 1.4 157.60 5.0 103.67 7.3
Europe 64.9 3.1 141.99 4.5 92.14 9.7
Middle East & Africa 73.6 2.4 193.22 11.0 142.23 14.8
Asia Pacific 65.2 1.3 114.90 5.7 74.95 7.9
Brand
Waldorf Astoria Hotels & Resorts 63.9 % 3.2 % pts. $ 556.56 (2.1) % $ 355.44 3.0 %
Conrad Hotels & Resorts 71.4 4.8 286.62 6.9 204.67 14.6
LXR Hotels & Resorts 56.5 5.1 636.76 (1.0) 359.54 8.8
Canopy by Hilton 66.7 2.0 213.41 0.1 142.28 3.2
Hilton Hotels & Resorts 66.3 1.9 189.18 3.4 125.40 6.4
Curio Collection by Hilton 66.3 3.3 233.92 (0.1) 155.01 5.1
DoubleTree by Hilton 64.1 1.2 138.10 1.1 88.48 3.1
Tapestry Collection by Hilton 61.8 1.4 170.63 0.1 105.48 2.4
Embassy Suites by Hilton 70.9 1.4 180.04 0.2 127.65 2.2
Motto by Hilton 76.8 5.5 167.64 (3.5) 128.69 4.0
Hilton Garden Inn 66.2 (0.3) 138.08 (0.3) 91.39 (0.7)
Hampton by Hilton 66.1 (1.6) 123.94 0.7 81.93 (1.7)
Tru by Hilton 66.6 (0.6) 123.13 (0.3) 81.97 (1.2)
Homewood Suites by Hilton 75.5 (1.0) 151.57 0.4 114.37 (1.0)
Home2 Suites by Hilton 74.2 (0.9) 135.01 0.1 100.22 (1.1)
Segment
Management and franchise 67.2 % 0.1 % pts. $ 154.36 1.6 % $ 103.78 1.8 %
Ownership
(1)
67.5 3.7 198.05 7.7 133.64 14.0
____________
(1)
Includes hotels owned or leased by entities in which Hilton owns a noncontrolling financial interest.
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HILTON WORLDWIDE HOLDINGS INC.
PROPERTY SUMMARY
As of March 31, 2024
Owned / Leased
(1)
Managed Franchised / Licensed Total
Properties Rooms Properties Rooms Properties Rooms Properties Rooms
Waldorf Astoria Hotels & Resorts 2 463 34 9,432 — — 36 9,895
Conrad Hotels & Resorts 2 779 43 14,207 4 2,496 49 17,482
LXR Hotels & Resorts — — 5 935 9 1,301 14 2,236
Signia by Hilton — — 3 2,526 — — 3 2,526
Canopy by Hilton — — 9 1,328 32 5,732 41 7,060
Hilton Hotels & Resorts 47 16,250 291 125,754 272 83,807 610 225,811
Curio Collection by Hilton — — 30 7,856 135 23,618 165 31,474
DoubleTree by Hilton — — 162 44,702 522 111,560 684 156,262
Tapestry Collection by Hilton
—
— 5 694 123 14,488 128 15,182
Embassy Suites by Hilton — — 39 10,447 228 51,314 267 61,761
Tempo by Hilton — — 1 661 1 306 2 967
Motto by Hilton — — — — 7 1,552 7 1,552
Hilton Garden Inn — — 118 23,247 898 126,653 1,016 149,900
Hampton by Hilton — — 53 8,501 2,952 323,996 3,005 332,497
Tru by Hilton — — — — 258 25,215 258 25,215
Spark by Hilton — — — — 19 1,936 19 1,936
Homewood Suites by Hilton — — 11 1,405 529 60,466 540 61,871
Home2 Suites by Hilton — — 2 210 667 72,246 669 72,456
Other
(2)
— — 3 1,414 16 3,503 19 4,917
Total hotels 51 17,492 809 253,319 6,672 910,189 7,532 1,181,000
Hilton Grand Vacations
(3)
— — — — 94 16,329 94 16,329
Total system 51 17,492 809 253,319 6,766 926,518 7,626 1,197,329
Owned / Leased
(1)
Managed Franchised / Licensed Total
Properties Rooms Properties Rooms Properties Rooms Properties Rooms
U.S. — — 196 85,661 5,446 708,165 5,642 793,826
Americas (excluding U.S.) 1 405 74 18,366 325 49,978 400 68,749
Europe 39 11,604 106 27,159 409 69,663 554 108,426
Middle East & Africa 5 2,320 108 30,622 24 5,309 137 38,251
Asia Pacific 6 3,163 325 91,511 468 77,074 799 171,748
Total hotels 51 17,492 809 253,319 6,672 910,189 7,532 1,181,000
Hilton Grand Vacations
(3)
— — — — 94 16,329 94 16,329
Total system 51 17,492 809 253,319 6,766 926,518 7,626 1,197,329
____________
(1)
Includes hotels owned or leased by entities in which Hilton owns a noncontrolling financial interest.
(2)
Includes other hotels in our system that are not distinguished by a specific Hilton brand.
(3)
Includes properties under our timeshare brands including Hilton Club, Hilton Grand Vacations Club and Hilton Vacation Club.
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HILTON WORLDWIDE HOLDINGS INC.
CAPITAL EXPENDITURES AND CONTRACT ACQUISITION COSTS
(dollars in millions)
(unaudited)
Three Months Ended
March 31, Increase / (Decrease)
2024 2023 $ %
Capital expenditures for property and equipment
(1)
$ 16 $ 44 (28) (63.6)
Capitalized software costs
(2)
18 19 (1) (5.3)
Total capital expenditures 34 63 (29) (46.0)
Contract acquisition costs, net of refunds
(3)
37 105 (68) (64.8)
Total capital expenditures and contract acquisition costs $ 71 $ 168 (97) (57.7)
____________
(1)
Represents expenditures for hotels, corporate and other property and equipment, which include amounts reimbursed by third parties of $8
million and $2 million for the three months ended March 31, 2024 and 2023, respectively. Excludes expenditures for FF&E replacement
reserves of $11 million and $8 million for the three months ended March 31, 2024 and 2023, respectively. The decreases during the periods
were primarily due to the timing of certain corporate and hotel capital expenditure projects.
(2)
Includes $17 million and $18 million of expenditures that were reimbursed to us by third parties for the three months ended March 31, 2024
and 2023, respectively.
(3)
The decrease during the period was primarily due to the timing of certain strategic hotel developments supporting Hilton's growth resulting in
higher contract acquisition costs during the three months ended March 31, 2023.
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HILTON WORLDWIDE HOLDINGS INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
NET INCOME AND DILUTED EPS, ADJUSTED FOR SPECIAL ITEMS
(in millions, except per share data)
(unaudited)
Three Months Ended
March 31,
2024 2023
Net income attributable to Hilton stockholders, as reported
$ 265 $ 206
Diluted EPS, as reported $ 1.04 $ 0.77
Special items:
Net other expenses from managed and franchised properties
$ 109 $ 38
Purchase accounting amortization
(1)
1 11
Loss on investments in unconsolidated affiliate
(2)
— 92
Loss on debt guarantees
(3)
47 —
FF&E replacement reserves 11 8
Gain on sales of assets, net (7) —
Other adjustments
(4)
4 5
Total special items before taxes 165 154
Income tax expense on special items
(40) (27)
Total special items after taxes $ 125 $ 127
Net income, adjusted for special items $ 390 $ 333
Diluted EPS, adjusted for special items
$ 1.53 $ 1.24
____________
(1)
Amounts represent the amortization expense 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 the related assets were fully amortized as of
December 31, 2023, some of which became fully amortized during the three months ended December 31, 2023.
(2)
Amount for the three months ended March 31, 2023 includes losses recognized related to equity and debt financing that Hilton had
previously provided to an unconsolidated affiliate with underlying investments in certain hotels that Hilton currently manages or franchises.
(3)
Amount includes losses on debt guarantees for certain hotels that Hilton manages, which were recognized in other non-operating loss, net.
(4)
Amount for the three months ended March 31, 2024 primarily relates to transaction costs incurred for acquisitions, which were recognized in
general and administrative expenses. Amounts for both periods include net losses (gains) related to certain of Hilton's investments in
unconsolidated affiliates, other than the loss included separately in "loss on investments in unconsolidated affiliate," which were recognized
in other non-operating income (loss), net.
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HILTON WORLDWIDE HOLDINGS INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
NET INCOME MARGIN AND
ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN
(dollars in millions)
(unaudited)
Three Months Ended
March 31,
2024 2023
Net income $ 268 $ 209
Interest expense 131 116
Income tax expense 97 93
Depreciation and amortization expenses 36 37
EBITDA 532 455
Gain on sales of assets, net (7) —
Loss on foreign currency transactions 1 —
Loss on investments in unconsolidated affiliate
(1)
— 92
Loss on debt guarantees
(2)
47 —
FF&E replacement reserves 11 8
Share-based compensation expense 41 33
Amortization of contract acquisition costs 12 10
Net other expenses from managed and franchised properties 109 38
Other adjustments
(3)
4 5
Adjusted EBITDA $ 750 $ 641
____________
(1)
Amount includes losses recognized related to equity and debt financing that Hilton had previously provided to an unconsolidated affiliate
with underlying investments in certain hotels that Hilton manages or franchises.
(2)
Amount includes losses on debt guarantees for certain hotels that Hilton manages, which were recognized in other non-operating loss, net.
(3)
Amount for the three months ended March 31, 2024 primarily relates to transaction costs incurred for acquisitions. Amounts for both periods
include net losses (gains) related to certain of Hilton's investments in unconsolidated affiliates, other than the loss included separately in
"loss on investments in unconsolidated affiliate," severance and other items.
Three Months Ended
March 31,
2024 2023
Total revenues, as reported $ 2,573 $ 2,293
Add: amortization of contract acquisition costs 12 10
Less: other revenues from managed and franchised properties
(1,521) (1,357)
Total revenues, as adjusted $ 1,064 $ 946
Net income $ 268 $ 209
Net income margin 10.4 % 9.1 %
Adjusted EBITDA $ 750 $ 641
Adjusted EBITDA margin 70.4 % 67.8 %
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HILTON WORLDWIDE HOLDINGS INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
LONG-TERM DEBT TO NET INCOME RATIO AND
NET DEBT AND NET DEBT TO ADJUSTED EBITDA RATIO
(dollars in millions)
(unaudited)
March 31, December 31,
2024 2023
Long-term debt, including current maturities $ 10,173 $ 9,196
Add: unamortized deferred financing costs and discounts 83 71
Long-term debt, including current maturities and excluding the deduction for unamortized
deferred financing costs and discounts 10,256 9,267
Less: cash and cash equivalents (1,346) (800)
Less: restricted cash and cash equivalents (74) (75)
Net debt $ 8,836 $ 8,392
Three Months Ended Year Ended TTM Ended
March 31, December 31, March 31,
2024 2023 2023 2024
Net income $ 268 $ 209 $ 1,151 $ 1,210
Interest expense 131 116 464 479
Income tax expense 97 93 541 545
Depreciation and amortization expenses 36 37 147 146
EBITDA 532 455 2,303 2,380
Gain on sales of assets, net (7) — — (7)
Loss on foreign currency transactions 1 — 16 17
Loss on investments in unconsolidated affiliate
(1)
— 92 92 —
Loss on debt guarantees
(2)
47 — — 47
FF&E replacement reserves 11 8 63 66
Share-based compensation expense 41 33 169 177
Impairment losses
(3)
— — 38 38
Amortization of contract acquisition costs 12 10 43 45
Net other expenses from managed and franchised
properties 109 38 337 408
Other adjustments
(4)
4 5 28 27
Adjusted EBITDA $ 750 $ 641 $ 3,089 $ 3,198
Long-term debt $ 10,173
Long-term debt to net income ratio 8.4
Net debt $ 8,836
Net debt to Adjusted EBITDA ratio 2.8
____________
(1)
Amount includes losses recognized related to equity and debt financing that Hilton had previously provided to an unconsolidated affiliate
with underlying investments in certain hotels that Hilton manages or franchises.
(2)
Amount includes losses on debt guarantees for certain hotels that Hilton manages, which were recognized in other non-operating loss, net.
(3)
Amounts for the year ended December 31, 2023 are related to certain hotel properties under operating leases and are for the impairment of
a lease intangible asset, operating lease ROU assets and property and equipment.
(4)
Amount for the three months ended March 31, 2024 primarily relates to transaction costs incurred for acquisitions. Amounts for all periods
include net losses (gains) related to certain of Hilton's investments in unconsolidated affiliates, other than the loss included separately in
"loss on investments in unconsolidated affiliate," severance and other items. Amount for the year ended December 31, 2023 also includes
expenses recognized in connection with the amendment of our Term Loans.
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HILTON WORLDWIDE HOLDINGS INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
OUTLOOK: NET INCOME AND DILUTED EPS, ADJUSTED FOR SPECIAL ITEMS
(1)
(in millions, except per share data)
(unaudited)
Three Months Ending
June 30, 2024
Low Case High Case
Net income attributable to Hilton stockholders $ 441 $ 455
Diluted EPS
(2)
$ 1.74 $ 1.80
Special items
(3)
:
FF&E replacement reserves $ 18 $ 18
Purchase accounting amortization 1 1
Total special items before taxes 19 19
Income tax expense on special items (3) (3)
Total special items after taxes $ 16 $ 16
Net income, adjusted for special items $ 457 $ 471
Diluted EPS, adjusted for special items
(2)
$ 1.80 $ 1.86
Year Ending
December 31, 2024
Low Case High Case
Net income attributable to Hilton stockholders $ 1,577 $ 1,612
Diluted EPS
(2)
$ 6.21 $ 6.35
Special items
(3)
:
Net other expenses from managed and franchised properties $ 109 $ 109
Purchase accounting amortization 5 5
Loss on debt guarantees 47 47
FF&E replacement reserves 65 65
Gain on sales of assets, net (7) (7)
Other adjustments 4 4
Total special items before taxes 223 223
Income tax expense on special items (50) (50)
Total special items after taxes $ 173 $ 173
Net income, adjusted for special items $ 1,750 $ 1,785
Diluted EPS, adjusted for special items
(2)
$ 6.89 $ 7.03
____________
(1)
Outlook does not include the effect of the planned acquisition of Graduate Hotels.
(2)
Does not include the effect of potential share repurchases.
(3)
See "—Net Income and Diluted EPS, Adjusted for Special Items" for details of these special items.
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HILTON WORLDWIDE HOLDINGS INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
OUTLOOK: ADJUSTED EBITDA
(1)
(in millions)
(unaudited)
Three Months Ending
June 30, 2024
Low Case High Case
Net income $ 443 $ 457
Interest expense 141 141
Income tax expense 191 197
Depreciation and amortization expenses 30 30
EBITDA 805 825
FF&E replacement reserves 18 18
Share-based compensation expense 53 53
Amortization of contract acquisition costs 12 12
Other adjustments
(2)
2 2
Adjusted EBITDA $ 890 $ 910
Year Ending
December 31, 2024
Low Case High Case
Net income $ 1,586 $ 1,621
Interest expense 554 554
Income tax expense 663 678
Depreciation and amortization expenses 125 125
EBITDA 2,928 2,978
Gain on sales of assets, net (7) (7)
Loss on foreign currency transactions 1 1
Loss on debt guarantees 47 47
FF&E replacement reserves 65 65
Share-based compensation expense 172 172
Amortization of contract acquisition costs 51 51
Net other expenses from managed and franchised properties 109 109
Other adjustments
(2)
9 9
Adjusted EBITDA $ 3,375 $ 3,425
____________
(1)
Outlook does not include the effect of the planned acquisition of Graduate Hotels.
(2)
See "—Net Income Margin and Adjusted EBITDA and Adjusted EBITDA Margin" for details of these adjustments.
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HILTON WORLDWIDE HOLDINGS INC.
DEFINITIONS
Trailing Twelve Month Financial Information
This press release includes certain unaudited financial information for the trailing twelve months ("TTM") ended March 31, 2024,
which is calculated as the three months ended March 31, 2024 plus the year ended December 31, 2023 less the three months
ended March 31, 2023. This presentation is not in accordance with GAAP. However, the Company believes that this presentation
provides useful information to investors regarding its recent financial performance, and it views this presentation of the four most
recently completed fiscal quarters as a key measurement period for investors to assess its historical results. In addition, the
Company's management uses TTM information to evaluate the Company's financial performance for ongoing planning purposes.
Net Income (Loss), Adjusted for Special Items, and Diluted EPS, Adjusted for Special Items
Net income (loss), adjusted for special items, and diluted earnings (loss) per share ("EPS"), adjusted for special items, are not
recognized terms under GAAP and should not be considered as alternatives to net income (loss), diluted EPS or other measures
of financial performance or liquidity derived in accordance with GAAP. In addition, the Company's definition of net income (loss),
adjusted for special items, and diluted EPS, adjusted for special items, may not be comparable to similarly titled measures of
other companies.
Net income (loss), adjusted for special items, and diluted EPS, adjusted for special items, are included to assist investors in
performing meaningful comparisons of past, present and future operating results and as a means of highlighting the results of the
Company's ongoing operations.
EBITDA, Adjusted EBITDA, Net Income (Loss) Margin and Adjusted EBITDA Margin
EBITDA reflects net income (loss), excluding interest expense, a provision for income tax benefit (expense) and depreciation and
amortization expenses. Adjusted EBITDA is calculated as EBITDA, as previously defined, further adjusted to exclude certain
items, including gains, losses, revenues and expenses in connection with: (i) asset dispositions for both consolidated and
unconsolidated investments; (ii) foreign currency transactions; (iii) debt restructurings and retirements; (iv) furniture, fixtures and
equipment ("FF&E") replacement reserves required under certain lease agreements; (v) share-based compensation;
(vi) reorganization, severance, relocation and other expenses; (vii) non-cash impairment; (viii) amortization of contract acquisition
costs; (ix) the net effect of our cost reimbursement revenues and expenses included in other revenues and other expenses from
managed and franchised properties; and (x) other items.
Net income (loss) margin represents net income (loss) as a percentage of total revenues. Adjusted EBITDA margin represents
Adjusted EBITDA as a percentage of total revenues, adjusted to exclude the amortization of contract acquisition costs and other
revenues from managed and franchised properties.
We believe that EBITDA and Adjusted EBITDA provide useful information to investors about us and our financial condition and
results of operations for the following reasons: (i) these measures are among the measures used by our management team to
evaluate our operating performance and make day-to-day operating decisions and (ii) these measures are frequently used by
securities analysts, investors and other interested parties as a common performance measure to compare results or estimate
valuations across companies in our industry. Additionally, these measures exclude certain items that can vary widely across
different industries and among competitors within our industry. For instance, interest expense and income taxes are dependent
on company specifics, including, among other things, capital structure and operating jurisdictions, respectively, and, therefore,
could vary significantly across companies. Depreciation and amortization expenses, as well as amortization of contract
acquisition costs, are dependent upon company policies, including the method of acquiring and depreciating assets and the
useful lives that are assigned to those depreciating or amortizing assets for accounting purposes. For Adjusted EBITDA, we also
exclude items such as: (i) FF&E replacement reserves for leased hotels to be consistent with the treatment of capital
expenditures for property and equipment, where depreciation of such capitalized assets is reported within depreciation and
amortization expenses; (ii) share-based compensation, as this could vary widely among companies due to the different plans in
place and the usage of them; and (iii) other items that are not reflective of our operating performance, such as amounts related to
debt restructurings and debt retirements and reorganization and related severance costs, to enhance period-over-period
comparisons of our ongoing operations. Further, Adjusted EBITDA excludes the net effect of our cost reimbursement revenues
and expenses, as we contractually do not operate the related programs to generate a profit over the terms of the respective
contracts. The direct reimbursements from hotel owners are typically reimbursed as the costs are incurred and have no net effect
on net income (loss). The fees we recognize related to the indirect reimbursements may be recognized before or after the related
expenses are incurred, causing timing differences between the costs incurred and the related reimbursement from hotel owners,
with the net effect impacting net income (loss) in the reporting period. However, the expenses incurred related to the indirect
reimbursements are expected to equal the revenues earned from the indirect reimbursements over time, and, therefore, the net
effect of our cost reimbursement revenues and expenses is not used by our management team to evaluate our operating
performance or make day-to-day operating decisions.
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EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are not recognized terms under GAAP and should not be considered as
alternatives, either in isolation or as a substitute, for net income (loss), net income (loss) margin or other measures of financial
performance or liquidity, including cash flows, derived in accordance with GAAP. Further, EBITDA, Adjusted EBITDA and
Adjusted EBITDA margin have limitations as analytical tools, may not be comparable to similarly titled measures of other
companies and should not be considered as other methods of analyzing the Company's results as reported under GAAP.
Net Debt, Long-Term Debt to Net Income Ratio and Net Debt to Adjusted EBITDA Ratio
Long-term debt to net income ratio is calculated as the ratio of Hilton's long-term debt, including current maturities, to net income.
Net debt is calculated as: long-term debt, including current maturities and excluding the deduction for unamortized deferred
financing costs and discounts; reduced by: (i) cash and cash equivalents and (ii) restricted cash and cash equivalents. Net debt
to Adjusted EBITDA ratio is calculated as the ratio of Hilton's net debt to Adjusted EBITDA. Net debt and net debt to Adjusted
EBITDA ratio, presented herein, are non-GAAP financial measures that the Company uses to evaluate its financial leverage.
Net debt should not be considered as a substitute to debt presented in accordance with GAAP, and net debt to Adjusted EBITDA
ratio should not be considered as an alternative to measures of financial condition derived in accordance with GAAP. Net debt
and net debt to Adjusted EBITDA ratio may not be comparable to similarly titled measures of other companies. The Company
believes net debt and net debt to Adjusted EBITDA ratio provide useful information about its indebtedness to investors as they
are frequently used by securities analysts, investors and other interested parties to compare the indebtedness between
companies.
Comparable Hotels
We define our comparable hotels as those that: (i) were active and operating in our system for at least one full calendar year as
of the end of the current period, and open January 1st of the previous year; (ii) have not undergone a change in brand or
ownership type during the current or comparable periods reported; and (iii) have not undergone large-scale capital projects,
sustained substantial property damage, encountered business interruption or for which comparable results were not available. Of
the 7,532 hotels in our system as of March 31, 2024, 6,347 hotels were classified as comparable hotels. Our 1,185 non-
comparable hotels as of March 31, 2024 included 421 hotels, or less than six percent of the total hotels in our system, that were
removed from the comparable group during the last twelve months because they underwent large-scale capital projects,
sustained substantial property damage, encountered business interruption or comparable results were otherwise not available.
Occupancy
Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel or
group of hotels for a given period. Occupancy measures the utilization of available capacity at a hotel or group of hotels.
Management uses occupancy to gauge demand at a specific hotel or group of hotels in a given period. Occupancy levels also
help management determine achievable Average Daily Rate ("ADR") pricing levels as demand for hotel rooms increases or
decreases.
ADR
ADR represents hotel room revenue divided by the total number of room nights sold for a given period. ADR measures the
average room price attained by a hotel, and ADR trends provide useful information concerning the pricing environment and the
nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in the industry, and we
use ADR to assess pricing levels that we are able to generate by type of customer, as changes in rates charged to customers
have different effects on overall revenues and incremental profitability than changes in occupancy, as described above.
Revenue per Available Room ("RevPAR")
RevPAR is calculated by dividing hotel room revenue by the total number of room nights available to guests for a given period.
We consider RevPAR to be a meaningful indicator of our performance as it provides a metric correlated to two primary and key
drivers of operations at a hotel or group of hotels, as previously described: occupancy and ADR. RevPAR is also a useful
indicator in measuring performance over comparable periods for comparable hotels.
References to occupancy, ADR and RevPAR are presented on a comparable basis, based on the comparable hotels as of
March 31, 2024, and references to ADR and RevPAR are presented on a currency neutral basis, unless otherwise noted. As
such, comparisons of these hotel operating statistics for the three months ended March 31, 2024 and 2023 use the foreign
currency exchange rates used to translate the results of the Company's foreign operations within its unaudited condensed
consolidated financial statements for the three months ended March 31, 2024.
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