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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Hilton Worldwide Holdings Inc New | NYSE:HLT | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| -3.26 | -1.29% | 249.745 | 252.65 | 249.715 | 250.96 | 396,467 | 18:53:14 |
From Sep 2024 to Nov 2024
Hilton Worldwide Holdings Inc. ("Hilton," "the Company," "we," "us" or "our") (NYSE: HLT) today reported its third quarter 2024 results. Highlights include:
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20241023756181/en/
Overview
Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, "We were pleased to deliver continued strong bottom line results that exceeded our guidance, despite slower top line growth which was driven by modestly slower macro trends, weather impacts and unfavorable calendar shifts. We continued to demonstrate the strength of our model, opening more rooms than any other quarter in our history, surpassing 8,000 hotels and achieving net unit growth of 7.8 percent."
For the three months ended September 30, 2024, system-wide comparable RevPAR increased 1.4 percent compared to the same period in 2023 due to increases in both occupancy and ADR, and management and franchise fee revenues increased 8.3 percent compared to the same period in 2023.
For the nine months ended September 30, 2024, system-wide comparable RevPAR increased 2.4 percent compared to the same period in 2023 due to increases in both occupancy and ADR, and management and franchise fee revenues increased 10.7 percent compared to the same period in 2023.
For the three months ended September 30, 2024, diluted EPS was $1.38 and diluted EPS, adjusted for special items, was $1.92 compared to $1.44 and $1.67, respectively, for the three months ended September 30, 2023. Net income and Adjusted EBITDA were $344 million and $904 million, respectively, for the three months ended September 30, 2024, compared to $379 million and $834 million, respectively, for the three months ended September 30, 2023.
For the nine months ended September 30, 2024, diluted EPS was $4.09 and diluted EPS, adjusted for special items, was $5.36 compared to $3.74 and $4.53, respectively, for the nine months ended September 30, 2023. Net income and Adjusted EBITDA were $1,034 million and $2,571 million, respectively, for the nine months ended September 30, 2024, compared to $1,001 million and $2,286 million, respectively, for the nine months ended September 30, 2023.
Development
In the third quarter of 2024, we opened 531 hotels, totaling 36,600 rooms, resulting in 33,600 net room additions.(1) During the quarter, NoMad, Graduate by Hilton and Small Luxury Hotels of the World ("SLH") became available for reservations on our booking channels. The addition of SLH hotels brings our hotel portfolio to ten additional countries and territories, allowing our guests to book, earn and redeem Honors points in more sought after destinations. We continued to expand our portfolio in the Asia Pacific market, surpassing 900 hotels in the region and opening our 700th hotel in China. Additionally, our Spark by Hilton brand continues to grow, with more than 20 hotels opening during the third quarter, including the debut of the first Spark hotel in Canada.
We added 27,500 rooms to the development pipeline during the third quarter, and, as of September 30, 2024, our development pipeline totaled 3,525 hotels representing 492,400 rooms throughout 120 countries and territories, including 28 countries and territories where Hilton had no existing hotels.(2) Additionally, of the rooms in the development pipeline, 235,400 were under construction and 280,700 were located outside of the U.S.
____________
(1)
Excluding hotels from our strategic partner arrangements, we added 18,300 rooms to our system during the third quarter, and, as of September 30, 2024, our hotel system would have totaled 7,800 hotels representing 1,213,800 rooms, growing 6.1% from September 30, 2023 and 1.3% from the prior quarter.
(2)
Excluding hotels from our strategic partner arrangements, we added 26,400 rooms to the development pipeline during the third quarter, and, as of September 30, 2024, our development pipeline would have totaled 3,514 hotels and 491,900 rooms, representing 8% growth from September 30, 2023 and consistent with total development pipeline rooms excluding hotels from our strategic partner arrangements as of June 30, 2024.
Balance Sheet and Liquidity
As of September 30, 2024, we had $11.3 billion of debt outstanding, excluding the deduction for deferred financing costs and discounts, with a weighted average interest rate of 4.84 percent. Excluding all finance lease liabilities and other debt of our consolidated variable interest entities, we had $11.1 billion of debt outstanding with a weighted average interest rate of 4.83 percent and no scheduled maturities until 2027, other than $500 million of outstanding Senior Notes due May 2025. We believe that we have sufficient sources of liquidity and access to debt financing to address the Senior Notes due May 2025 at or prior to their maturity date. As of September 30, 2024, no debt amounts were outstanding under our $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 $1,655 million as of September 30, 2024, including $75 million of restricted cash and cash equivalents.
In September 2024, we issued $1 billion aggregate principal amount of 5.875% Senior Notes due 2033. We intend to use the net proceeds from the issuance for general corporate purposes.
In September 2024, we paid a quarterly cash dividend of $0.15 per share of common stock, for a total of $37 million, bringing total dividend payments for the year to $113 million. In October 2024, our board of directors authorized a regular quarterly cash dividend of $0.15 per share of common stock to be paid on December 27, 2024 to holders of record of our common stock as of the close of business on November 15, 2024.
During the three months ended September 30, 2024, we repurchased 3.3 million shares of Hilton common stock at an average price per share of $217.15, for a total of $727 million. For the nine months ended September 30, 2024, we repurchased 10.2 million shares of Hilton common stock at an average price per share of $206.29, returning $2,226 million of capital to shareholders, including dividends. Total capital return to shareholders including dividends year-to-date through October was $2,422 million.
The number of shares outstanding as of October 18, 2024 was 243.8 million.
Outlook
Share-based metrics in Hilton's outlook include actual share repurchases through the third quarter but do not include the effect of potential share repurchases thereafter.
Full Year 2024
Fourth Quarter 2024
Conference Call
Hilton will host a conference call to discuss third quarter of 2024 results on October 23, 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 6226859. 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 6850988.
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; the loss of key senior management personnel; 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 Europe and the Middle East and other geopolitical events; and our indebtedness. Additional factors that could cause our 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 our 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
We refer 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 24 world-class brands comprising more than 8,300 properties and over 1.25 million rooms, in 138 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 more than 200 million Hilton Honors 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, x.com/hiltonnewsroom, linkedin.com/company/hilton, instagram.com/hiltonnewsroom and youtube.com/hiltonnewsroom.
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
(in millions, except per share data)
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Revenues
Franchise and licensing fees
$
698
$
643
$
1,958
$
1,769
Base and other management fees
88
81
287
247
Incentive management fees
66
63
204
197
Owned and leased hotels
330
335
922
924
Other revenues
58
45
179
126
1,240
1,167
3,550
3,263
Other revenues from managed and franchised properties
1,627
1,506
4,841
4,363
Total revenues
2,867
2,673
8,391
7,626
Expenses
Owned and leased hotels
288
301
833
849
Depreciation and amortization
37
40
107
114
General and administrative
101
96
318
298
Other expenses
26
26
93
80
452
463
1,351
1,341
Other expenses from managed and franchised properties
1,790
1,557
5,164
4,460
Total expenses
2,242
2,020
6,515
5,801
Gain (loss) on sales of assets, net
(2
)
—
5
—
Operating income
623
653
1,881
1,825
Interest expense
(140
)
(113
)
(412
)
(340
)
Loss on foreign currency transactions
(3
)
(7
)
(5
)
(13
)
Loss on investments in unconsolidated affiliate
—
—
—
(92
)
Other non-operating income (loss), net
11
15
(17
)
38
Income before income taxes
491
548
1,447
1,418
Income tax expense
(147
)
(169
)
(413
)
(417
)
Net income
344
379
1,034
1,001
Net income attributable to redeemable and nonredeemable noncontrolling interests
—
(2
)
(4
)
(7
)
Net income attributable to Hilton stockholders
$
344
$
377
$
1,030
$
994
Weighted average shares outstanding:
Basic
246
260
249
264
Diluted
249
262
252
266
Earnings per share:
Basic
$
1.40
$
1.45
$
4.13
$
3.77
Diluted
$
1.38
$
1.44
$
4.09
$
3.74
Cash dividends declared per share
$
0.15
$
0.15
$
0.45
$
0.45
HILTON WORLDWIDE HOLDINGS INC.
COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS
BY REGION, BRAND AND SEGMENT
(unaudited)
Three Months Ended September 30,
Occupancy
ADR
RevPAR
2024
vs. 2023
2024
vs. 2023
2024
vs. 2023
System-wide
75.3
%
0.3
%
pts.
$
161.18
1.0
%
$
121.40
1.4
%
Region
U.S.
75.4
%
0.2
%
pts.
$
169.59
0.8
%
$
127.83
1.0
%
Americas (excluding U.S.)
72.7
0.4
155.80
3.9
113.22
4.4
Europe
81.3
2.3
179.46
4.3
145.89
7.3
Middle East & Africa
70.5
2.3
143.94
(0.1
)
101.48
3.3
Asia Pacific
73.2
(0.5
)
107.81
(2.8
)
78.97
(3.4
)
Brand
Waldorf Astoria Hotels & Resorts
62.5
%
1.9
%
pts.
$
457.66
2.2
%
$
285.89
5.3
%
Conrad Hotels & Resorts
75.6
1.5
257.53
1.1
194.63
3.2
LXR Hotels & Resorts
63.8
1.2
596.79
(6.8
)
380.49
(5.0
)
Canopy by Hilton
73.0
1.3
227.44
1.3
166.14
3.2
Hilton Hotels & Resorts
73.8
0.7
190.33
1.2
140.44
2.2
Curio Collection by Hilton
74.3
2.9
231.13
0.1
171.77
4.1
DoubleTree by Hilton
72.2
0.2
145.63
0.7
105.19
1.0
Tapestry Collection by Hilton
71.9
1.0
189.79
1.5
136.47
2.9
Embassy Suites by Hilton
76.4
0.8
186.47
0.5
142.45
1.7
Motto by Hilton
80.6
0.4
212.37
1.0
171.14
1.5
Hilton Garden Inn
74.7
0.8
148.96
0.3
111.28
1.4
Hampton by Hilton
75.8
(0.6
)
136.47
1.0
103.38
0.3
Tru by Hilton
74.9
0.7
133.72
0.5
100.14
1.5
Homewood Suites by Hilton
82.2
—
163.52
0.5
134.40
0.6
Home2 Suites by Hilton
81.0
0.6
141.89
1.2
114.92
1.9
Segment
Management and franchise
75.2
%
0.3
%
pts.
$
160.32
0.9
%
$
120.61
1.3
%
Ownership(1)
82.3
2.7
224.27
3.0
184.52
6.5
HILTON WORLDWIDE HOLDINGS INC.
COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS
BY REGION, BRAND AND SEGMENT
(unaudited)
Nine Months Ended September 30,
Occupancy
ADR
RevPAR
2024
vs. 2023
2024
vs. 2023
2024
vs. 2023
System-wide
72.8
%
0.7
%
pts.
$
159.92
1.5
%
$
116.37
2.4
%
Region
U.S.
73.5
%
0.3
%
pts.
$
167.83
0.9
%
$
123.27
1.4
%
Americas (excluding U.S.)
69.9
1.1
156.53
4.2
109.46
5.9
Europe
74.7
2.6
166.42
3.9
124.34
7.7
Middle East & Africa
70.9
2.5
176.25
6.3
125.03
10.2
Asia Pacific
69.5
0.6
108.98
0.6
75.69
1.5
Brand
Waldorf Astoria Hotels & Resorts
63.6
%
3.3
%
pts.
$
506.54
0.5
%
$
321.93
5.9
%
Conrad Hotels & Resorts
74.0
3.5
270.50
3.6
200.08
8.6
LXR Hotels & Resorts
62.4
5.0
592.74
(5.1
)
369.96
3.1
Canopy by Hilton
72.0
2.4
225.84
1.0
162.67
4.5
Hilton Hotels & Resorts
71.2
1.5
191.47
2.1
136.29
4.3
Curio Collection by Hilton
71.4
3.5
231.15
0.4
164.97
5.5
DoubleTree by Hilton
69.7
1.1
144.11
1.2
100.50
2.8
Tapestry Collection by Hilton
68.5
1.4
183.76
0.8
125.89
2.9
Embassy Suites by Hilton
75.2
1.5
186.06
0.7
139.91
2.7
Motto by Hilton
79.9
2.3
207.62
(0.3
)
165.79
2.6
Hilton Garden Inn
72.1
0.8
146.31
0.2
105.47
1.3
Hampton by Hilton
72.6
(0.6
)
132.56
1.2
96.25
0.4
Tru by Hilton
72.7
0.6
131.19
0.8
95.41
1.6
Homewood Suites by Hilton
80.2
—
160.18
0.7
128.49
0.8
Home2 Suites by Hilton
78.9
0.4
140.73
1.0
111.07
1.5
Segment
Management and franchise
72.7
%
0.6
%
pts.
$
159.17
1.4
%
$
115.75
2.3
%
Ownership(1)
77.0
3.1
216.81
4.7
166.88
9.2
____________
(1)
Includes hotels owned or leased by entities in which we own a noncontrolling financial interest.
HILTON WORLDWIDE HOLDINGS INC.
PROPERTY SUMMARY
As of September 30, 2024
Owned / Leased(1)
Managed
Franchised / Licensed
Total
Properties
Rooms
Properties
Rooms
Properties
Rooms
Properties
Rooms
Waldorf Astoria Hotels & Resorts
2
463
32
8,345
—
—
34
8,808
Conrad Hotels & Resorts
2
779
43
13,920
4
2,496
49
17,195
LXR Hotels & Resorts
—
—
5
935
8
1,463
13
2,398
NoMad
—
—
1
91
—
—
1
91
Signia by Hilton
—
—
3
2,526
—
—
3
2,526
Canopy by Hilton
—
—
10
1,634
32
5,731
42
7,365
Hilton Hotels & Resorts
46
15,921
294
125,978
273
84,122
613
226,021
Curio Collection by Hilton
—
—
29
6,275
146
26,508
175
32,783
Graduate by Hilton
—
—
—
—
34
5,788
34
5,788
DoubleTree by Hilton
—
—
168
46,036
526
110,793
694
156,829
Tapestry Collection by Hilton
—
—
5
694
134
16,012
139
16,706
Embassy Suites by Hilton
—
—
40
10,551
230
51,700
270
62,251
Tempo by Hilton
—
—
1
661
2
436
3
1,097
Motto by Hilton
—
—
—
—
8
1,727
8
1,727
Hilton Garden Inn
—
—
122
24,102
918
129,317
1,040
153,419
Hampton by Hilton
—
—
53
8,526
3,008
332,341
3,061
340,867
Tru by Hilton
—
—
—
—
274
26,779
274
26,779
Spark by Hilton
—
—
—
—
67
6,073
67
6,073
Homewood Suites by Hilton
—
—
9
1,142
533
60,935
542
62,077
Home2 Suites by Hilton
—
—
2
210
721
78,413
723
78,623
Strategic partner hotels(2)
—
—
—
—
400
18,825
400
18,825
Other(3)
—
—
3
1,414
12
2,916
15
4,330
Total hotels
50
17,163
820
253,040
7,330
962,375
8,200
1,232,578
Hilton Grand Vacations(4)
—
—
—
—
101
17,928
101
17,928
Total system
50
17,163
820
253,040
7,431
980,303
8,301
1,250,506
Owned / Leased(1)
Managed
Franchised / Licensed
Total
Properties
Rooms
Properties
Rooms
Properties
Rooms
Properties
Rooms
U.S.
—
—
188
81,924
5,628
728,192
5,816
810,116
Americas (excluding U.S.)
1
405
72
18,067
380
52,677
453
71,149
Europe
39
11,604
109
27,513
652
82,266
800
121,383
Middle East & Africa
4
1,991
110
30,478
36
6,021
150
38,490
Asia Pacific
6
3,163
341
95,058
634
93,219
981
191,440
Total hotels
50
17,163
820
253,040
7,330
962,375
8,200
1,232,578
Hilton Grand Vacations(4)
—
—
—
—
101
17,928
101
17,928
Total system
50
17,163
820
253,040
7,431
980,303
8,301
1,250,506
____________
(1)
Includes hotels owned or leased by entities in which we own a noncontrolling financial interest.
(2)
Includes hotels that are part of the AutoCamp and Small Luxury Hotels of the World portfolios, which are included in our booking channels and participate in the Hilton Honors guest loyalty program through strategic partnership arrangements.
(3)
Includes other hotels in our system that are not distinguished by a specific Hilton brand.
(4)
Includes properties under our timeshare brands including Hilton Club, Hilton Grand Vacations Club and Hilton Vacation Club.
HILTON WORLDWIDE HOLDINGS INC.
CAPITAL EXPENDITURES AND CONTRACT ACQUISITION COSTS
(dollars in millions)
(unaudited)
Three Months Ended
September 30,
Increase / (Decrease)
2024
2023
$
%
Capital expenditures for property and equipment(1)
$
17
$
35
(18
)
(51.4)
Capitalized software costs(2)
30
26
4
15.4
Total capital expenditures
47
61
(14
)
(23.0)
Contract acquisition costs, net of refunds
10
25
(15
)
(60.0)
Total capital expenditures and contract acquisition costs
$
57
$
86
(29
)
(33.7)
Nine Months Ended
September 30,
Increase / (Decrease)
2024
2023
$
%
Capital expenditures for property and equipment(1)
$
48
$
109
(61
)
(56.0)
Capitalized software costs(2)
71
68
3
4.4
Total capital expenditures
119
177
(58
)
(32.8)
Contract acquisition costs, net of refunds(3)
87
164
(77
)
(47.0)
Total capital expenditures and contract acquisition costs
$
206
$
341
(135
)
(39.6)
____________
(1)
Represents expenditures for hotels, corporate and other property and equipment, which include amounts reimbursed by third parties of $8 million and $10 million for the three months ended September 30, 2024 and 2023, respectively, and $21 million and $14 million for the nine months ended September 30, 2024 and 2023, respectively. Excludes expenditures for FF&E replacement reserves of $14 million and $17 million for the three months ended September 30, 2024 and 2023, respectively, and $38 million and $40 million for the nine months ended September 30, 2024 and 2023, respectively.
(2)
Includes $28 million and $24 million of expenditures that were reimbursed to us by third parties for the three months ended September 30, 2024 and 2023, respectively, and $66 million and $63 million for the nine months ended September 30, 2024 and 2023, respectively.
(3)
The decrease during the nine months ended September 30, 2024 was primarily due to the timing of certain strategic hotel developments supporting our growth resulting in higher contract acquisition costs during the prior period.
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
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Net income attributable to Hilton stockholders, as reported
$
344
$
377
$
1,030
$
994
Diluted EPS, as reported
$
1.38
$
1.44
$
4.09
$
3.74
Special items:
Net other expenses from managed and franchised properties
$
163
$
51
$
323
$
97
Purchase accounting amortization(1)
1
12
4
34
Loss on investments in unconsolidated affiliate(2)
—
—
—
92
Loss on debt guarantees(3)
—
—
50
—
FF&E replacement reserves
14
17
38
40
Loss (gain) on sales of assets, net
2
—
(5
)
—
Tax-related adjustments(4)
—
2
(4
)
(6
)
Other adjustments(5)
(4
)
(3
)
13
6
Total special items before taxes
176
79
419
263
Income tax expense on special items
(43
)
(17
)
(101
)
(53
)
Total special items after taxes
$
133
$
62
$
318
$
210
Net income, adjusted for special items
$
477
$
439
$
1,348
$
1,204
Diluted EPS, adjusted for special items
$
1.92
$
1.67
$
5.36
$
4.53
____________
(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 includes losses recognized related to equity and debt financing that we had previously provided to an unconsolidated affiliate with underlying investments in certain hotels that we currently manage or franchise.
(3)
Amount includes losses on debt guarantees for certain hotels that we manage, which were recognized in other non-operating income (loss), net.
(4)
Amounts include income tax expenses (benefits) related to the enactment of new tax laws and certain changes in unrecognized tax benefits.
(5)
Amount for the nine months ended September 30, 2024 primarily relates to restructuring costs related to one of our leased properties, which was recognized in owned and leased hotels expenses, transaction costs incurred for acquisitions, which were recognized in general and administrative expenses, and transaction costs incurred for the amendment of our senior secured term loan facility (the "Term Loans"), which were recognized in other non-operating income (loss), net. Amounts for all periods include net losses (gains) related to certain of our 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.
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
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Net income
$
344
$
379
$
1,034
$
1,001
Interest expense
140
113
412
340
Income tax expense
147
169
413
417
Depreciation and amortization expenses
37
40
107
114
EBITDA
668
701
1,966
1,872
Loss (gain) on sales of assets, net
2
—
(5
)
—
Loss on foreign currency transactions
3
7
5
13
Loss on investments in unconsolidated affiliate(1)
—
—
—
92
Loss on debt guarantees(2)
—
—
50
—
FF&E replacement reserves
14
17
38
40
Share-based compensation expense
44
48
140
133
Amortization of contract acquisition costs
12
11
37
32
Net other expenses from managed and franchised properties
163
51
323
97
Other adjustments(3)
(2
)
(1
)
17
7
Adjusted EBITDA
$
904
$
834
$
2,571
$
2,286
____________
(1)
Amount includes losses recognized related to equity and debt financing that we had previously provided to an unconsolidated affiliate with underlying investments in certain hotels that we manage or franchise.
(2)
Amount includes losses on debt guarantees for certain hotels that we manage, which were recognized in other non-operating income (loss), net.
(3)
Amount for the nine months ended September 30, 2024 primarily relates to restructuring costs related to one of our leased properties as well as transaction costs resulting from the amendment of our Term Loans and transaction costs incurred for acquisitions. Amounts for all periods include net losses (gains) related to certain of our investments in unconsolidated affiliates, other than the loss included separately in "loss on investments in unconsolidated affiliate," severance and other items.
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Total revenues, as reported
$
2,867
$
2,673
$
8,391
$
7,626
Add: amortization of contract acquisition costs
12
11
37
32
Less: other revenues from managed and franchised properties
(1,627
)
(1,506
)
(4,841
)
(4,363
)
Total revenues, as adjusted
$
1,252
$
1,178
$
3,587
$
3,295
Net income
$
344
$
379
$
1,034
$
1,001
Net income margin
12.0
%
14.2
%
12.3
%
13.1
%
Adjusted EBITDA
$
904
$
834
$
2,571
$
2,286
Adjusted EBITDA margin
72.2
%
70.8
%
71.7
%
69.4
%
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)
September 30,
December 31,
2024
2023
Long-term debt, including current maturities
$
11,164
$
9,196
Add: unamortized deferred financing costs and discounts
90
71
Long-term debt, including current maturities and excluding the deduction for unamortized deferred financing costs and discounts
11,254
9,267
Less: cash and cash equivalents
(1,580
)
(800
)
Less: restricted cash and cash equivalents
(75
)
(75
)
Net debt
$
9,599
$
8,392
Nine Months Ended
Year Ended
TTM Ended
September 30,
December 31,
September 30,
2024
2023
2023
2024
Net income
$
1,034
$
1,001
$
1,151
$
1,184
Interest expense
412
340
464
536
Income tax expense
413
417
541
537
Depreciation and amortization expenses
107
114
147
140
EBITDA
1,966
1,872
2,303
2,397
Gain on sales of assets, net
(5
)
—
—
(5
)
Loss on foreign currency transactions
5
13
16
8
Loss on investments in unconsolidated affiliate(1)
—
92
92
—
Loss on debt guarantees(2)
50
—
—
50
FF&E replacement reserves
38
40
63
61
Share-based compensation expense
140
133
169
176
Impairment losses(3)
—
—
38
38
Amortization of contract acquisition costs
37
32
43
48
Net other expenses from managed and franchised properties
323
97
337
563
Other adjustments(4)
17
7
28
38
Adjusted EBITDA
$
2,571
$
2,286
$
3,089
$
3,374
Long-term debt
$
11,164
Long-term debt to net income ratio
9.4
Net debt
$
9,599
Net debt to Adjusted EBITDA ratio
2.8
____________
(1)
Amount includes losses recognized related to equity and debt financing that we had previously provided to an unconsolidated affiliate with underlying investments in certain hotels that we manage or franchise.
(2)
Amount includes losses on debt guarantees for certain hotels that we manage, which were recognized in other non-operating income (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)
Amounts for the nine months ended September 30, 2024 and the year ended December 31, 2023 include expenses resulting from the amendments of our Term Loans in June 2024 and November 2023, respectively. Amount for the nine months ended September 30, 2024 also includes transaction costs incurred for acquisitions and restructuring costs related to one of our leased properties. Amounts for all periods include net losses (gains) related to certain of our investments in unconsolidated affiliates, other than the loss included separately in "loss on investments in unconsolidated affiliate," severance and other items.
HILTON WORLDWIDE HOLDINGS INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
OUTLOOK: NET INCOME AND DILUTED EPS, ADJUSTED FOR SPECIAL ITEMS
(in millions, except per share data)
(unaudited)
Three Months Ending
December 31, 2024
Low Case
High Case
Net income attributable to Hilton stockholders
$
368
$
392
Diluted EPS(1)
$
1.49
$
1.59
Special items(2):
FF&E replacement reserves
$
20
$
20
Purchase accounting amortization
1
1
Other adjustments
4
4
Total special items before taxes
25
25
Income tax expense on special items
(5
)
(5
)
Total special items after taxes
$
20
$
20
Net income, adjusted for special items
$
388
$
412
Diluted EPS, adjusted for special items(1)
$
1.57
$
1.67
Year Ending
December 31, 2024
Low Case
High Case
Net income attributable to Hilton stockholders
$
1,398
$
1,422
Diluted EPS(1)
$
5.58
$
5.68
Special items(2):
Net other expenses from managed and franchised properties
$
323
$
323
Purchase accounting amortization
5
5
Loss on debt guarantees
50
50
FF&E replacement reserves
58
58
Gain on sales of assets, net
(5
)
(5
)
Tax related adjustments
(4
)
(4
)
Other adjustments
17
17
Total special items before taxes
444
444
Income tax expense on special items
(106
)
(106
)
Total special items after taxes
$
338
$
338
Net income, adjusted for special items
$
1,736
$
1,760
Diluted EPS, adjusted for special items(1)
$
6.93
$
7.03
____________
(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
(in millions)
(unaudited)
Three Months Ending
December 31, 2024
Low Case
High Case
Net income
$
371
$
395
Interest expense
155
155
Income tax expense
164
175
Depreciation and amortization expenses
37
37
EBITDA
727
762
FF&E replacement reserves
20
20
Share-based compensation expense
34
34
Amortization of contract acquisition costs
13
13
Other adjustments(1)
10
5
Adjusted EBITDA
$
804
$
834
Year Ending
December 31, 2024
Low Case
High Case
Net income
$
1,405
$
1,429
Interest expense
567
567
Income tax expense
577
588
Depreciation and amortization expenses
144
144
EBITDA
2,693
2,728
Gain on sales of assets, net
(5
)
(5
)
Loss on foreign currency transactions
5
5
Loss on debt guarantees
50
50
FF&E replacement reserves
58
58
Share-based compensation expense
174
174
Amortization of contract acquisition costs
50
50
Net other expenses from managed and franchised properties
323
323
Other adjustments(1)
27
22
Adjusted EBITDA
$
3,375
$
3,405
____________
(1)
See "—Net Income Margin and Adjusted EBITDA and Adjusted EBITDA Margin" for details of these adjustments.
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 September 30, 2024, which is calculated as the nine months ended September 30, 2024 plus the year ended December 31, 2023 less the nine months ended September 30, 2023. This presentation is not in accordance with GAAP. However, we believe that this presentation provides useful information to investors regarding our recent financial performance, and we view this presentation of the four most recently completed fiscal quarters as a key measurement period for investors to assess our historical results. In addition, our management uses TTM information to evaluate our 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, our 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 our 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, Adjusted EBITDA and Adjusted EBITDA margin 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, classified in other revenues from managed and franchised properties and other expenses from managed and franchised properties, respectively, as we contractually do not operate the related programs to generate a profit or loss over the life of these programs. The direct reimbursements from hotel owners are billable and reimbursable 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 recognition of 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 management to evaluate our operating performance or make operating decisions.
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 our 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. We believe net debt and net debt to Adjusted EBITDA ratio provide useful information about our 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, have not undergone a change in brand or ownership type during the current or comparable periods and were open January 1st of the previous year; and (ii) have not undergone large-scale capital projects, sustained substantial property damage, encountered business interruption or for which comparable results were not available. We exclude strategic partner hotels from our comparable hotels. Of the 8,200 hotels in our system as of September 30, 2024, 400 hotels were strategic partner hotels and 6,150 hotels were classified as comparable hotels. Our 1,650 non-comparable hotels as of September 30, 2024 included (i) 844 hotels that were added to our system after January 1, 2023 or that have undergone a change in brand or ownership type during the current or comparable periods reported and (ii) 806 hotels that were removed from the comparable group for the current or comparable periods reported because they underwent or are undergoing 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 September 30, 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 and nine months ended September 30, 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 and nine months ended September 30, 2024, respectively.
Pipeline
Rooms under construction include rooms for hotels under construction or in the process of conversion to our system.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241023756181/en/
Investor Contact Jill Chapman +1 703 883 1000
Media Contact Kent Landers +1 703 883 3246
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