Hilton Worldwide Holdings Inc. ("Hilton," "the Company," "we,"
"us" or "our") (NYSE: HLT) today reported its fourth quarter and
full year 2023 results. Highlights include:
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- Diluted EPS was $0.57 for the fourth quarter and $4.33 for
the full year
- Diluted EPS, adjusted for special items, was $1.68 for the
fourth quarter and $6.21 for the full year
- Net income was $150 million for the fourth quarter and
$1,151 million for the full year
- Adjusted EBITDA was $803 million for the fourth quarter and
$3,089 million for the full year
- System-wide comparable RevPAR increased 5.7 percent and 12.6
percent, on a currency neutral basis, for the fourth quarter and
full year, respectively, compared to the same periods in
2022
- System-wide comparable RevPAR increased 13.5 percent and
10.7 percent, on a currency neutral basis, for the fourth quarter
and full year, respectively, compared to the same periods in
2019
- Approved 33,800 new rooms for development during the fourth
quarter, bringing Hilton's development pipeline to a record 462,400
rooms as of December 31, 2023, representing growth of 11 percent
from December 31, 2022
- Added a record 24,000 rooms to Hilton's system in the fourth
quarter, resulting in 62,900 room openings for the full year,
contributing to net unit growth of 4.9 percent
- Repurchased 4.6 million shares of Hilton common stock during
the fourth quarter, bringing total capital return, including
dividends, to $784 million for the quarter and $2.5 billion for the
full year
- Today is announcing a new, exclusive partnership with Small
Luxury Hotels of the World ("SLH"), ramping up over the coming
months to expand our distribution of luxury hotels
- 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 $1,694 million and $1,729 million; full year Adjusted
EBITDA is projected to be between $3,330 million and $3,380
million
- Full year 2024 capital return is projected to be
approximately $3.0 billion
Overview
Christopher J. Nassetta, President & Chief Executive Officer
of Hilton, said, "We delivered another year of strong top- and
bottom-line results and continued to deliver on our robust
development story. Positive momentum in openings continued
throughout the year, with more openings in the fourth quarter than
any other quarter in the Company's history. We also achieved record
signings for the year, meaningfully ahead of pre-pandemic levels.
We expect this momentum to continue into 2024 and net unit growth
to accelerate to the high end of our guidance range of 5.5 percent
to 6.0 percent, with the opportunity for further upside of 25 to 50
basis points from our exclusive partnership with Small Luxury
Hotels of the World. Adding this extraordinary portfolio over the
coming months to our strong and growing luxury offerings will
further enhance our already powerful network effect and give all of
Hilton's customers, including our Hilton Honors members, even more
opportunities to dream, book and earn and redeem points. Powered by
an award-winning culture that was recently recognized as the No. 1
World’s Best Workplace, our Hilton team is well positioned to
continue driving innovation and growth in the year ahead."
For the three months ended December 31, 2023, system-wide
comparable RevPAR increased 5.7 percent compared to the same period
in 2022 due to increases in both occupancy and ADR, and management
and franchise fee revenues increased 12.2 percent compared to the
same period in 2022. For comparison to pre-pandemic results,
system-wide comparable RevPAR for the three months ended December
31, 2023 increased 13.5 percent compared to the same period in
2019, and management and franchise fee revenues increased 38.5
percent from the same period in 2019.
For the year ended December 31, 2023, system-wide comparable
RevPAR increased 12.6 percent compared to the same period in 2022
due to increases in both occupancy and ADR, and management and
franchise fee revenues increased 16.7 percent compared to the same
period in 2022. For comparison to pre-pandemic results, system-wide
comparable RevPAR for the year ended December 31, 2023 increased
10.7 percent compared to the same period in 2019, and management
and franchise fee revenues increased 33.1 percent from the same
period in 2019.
For the three months ended December 31, 2023, diluted EPS was
$0.57 and diluted EPS, adjusted for special items, was $1.68
compared to $1.21 and $1.59, respectively, for the three months
ended December 31, 2022. Net income and Adjusted EBITDA were $150
million and $803 million, respectively, for the three months ended
December 31, 2023, compared to $333 million and $740 million,
respectively, for the three months ended December 31, 2022.
For the year ended December 31, 2023, diluted EPS was $4.33 and
diluted EPS, adjusted for special items, was $6.21 compared to
$4.53 and $4.89, respectively, for the year ended December 31,
2022. Net income and Adjusted EBITDA were $1,151 million and $3,089
million, respectively, for the year ended December 31, 2023,
compared to $1,257 million and $2,599 million, respectively, for
the year ended December 31, 2022.
Development
In the fourth quarter of 2023, Hilton achieved a record number
of room openings, totaling 24,000 rooms, and achieved net unit
growth of 22,300 rooms. During the quarter, Hilton achieved several
growth milestones, opening the 150th Curio Collection by Hilton,
the 250th Tru by Hilton and the 1,000th Hilton Garden Inn.
Additionally, Hilton celebrated the openings of its 600th hotel in
Greater China, as well as the Signia by Hilton Atlanta, which
marked the brand's first new-build property.
Hilton added 33,800 rooms to the development pipeline during the
fourth quarter, contributing to 130,200 rooms added for the full
year, which was approximately a 45 percent increase from the prior
year. As of December 31, 2023, Hilton's development pipeline
totaled approximately 3,270 hotels representing 462,400 rooms
throughout 118 countries and territories, including 30 countries
and territories where Hilton had no existing hotels. Additionally,
of the rooms in the development pipeline, 216,600 were under
construction and 259,800 were located outside of the U.S.
Balance Sheet and
Liquidity
In November 2023, we amended the credit agreement governing our
senior secured term loan facilities (the "Term Loans") pursuant to
which $1.0 billion of outstanding Term Loans were converted into a
new tranche of Term Loans due June 2028 and $1.6 billion of
outstanding Term Loans were converted into a new tranche, which was
also increased by $500 million of aggregate principal amount, due
November 2030.
As of December 31, 2023, Hilton had $9.3 billion of long-term
debt outstanding, excluding the deduction for deferred financing
costs and discounts, with a weighted average interest rate of 4.78
percent. Excluding all finance lease liabilities and other debt of
Hilton's consolidated variable interest entities, Hilton had $9.1
billion of long-term debt outstanding with a weighted average
interest rate of 4.77 percent and no scheduled maturities until May
2025. As of December 31, 2023, no debt amounts were outstanding
under Hilton's $2.0 billion senior secured 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 $875 million as of
December 31, 2023, including $75 million of restricted cash and
cash equivalents.
During the fourth quarter of 2023, Hilton repurchased 4.6
million shares of its common stock at a cost of $746 million and an
average price per share of $163.45. During the full year 2023,
Hilton repurchased 15.6 million shares of its common stock at an
average price per share of $150.52, returning $2.3 billion of
capital to shareholders through share repurchases. In November
2023, Hilton's board of directors authorized an additional $3.0
billion for share repurchases under its stock repurchase
program.
In December 2023, Hilton paid a quarterly cash dividend of $0.15
per share of common stock, for a total of $38 million, bringing
total dividend payments for the year to $158 million and total
capital return for the year to $2.5 billion. In February 2024,
Hilton's board of directors authorized a regular quarterly cash
dividend of $0.15 per share of common stock to be paid on March 28,
2024 to holders of record of its common stock as of the close of
business on February 23, 2024.
Outlook
Share-based metrics in Hilton's outlook include actual share
repurchases through the fourth quarter, but do not include the
effect of potential share repurchases thereafter. Additionally, due
to the timing to close and integrate with participating SLH hotels,
our outlook does not include the effect of this partnership.
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 $6.57 and $6.71.
- Diluted EPS, adjusted for special items, is projected to be
between $6.80 and $6.94.
- Net income is projected to be between $1,694 million and $1,729
million.
- Adjusted EBITDA is projected to be between $3,330 million and
$3,380 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 is projected to be between 5.5 percent and 6.0
percent.
First 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 first quarter of 2023.
- Diluted EPS is projected to be between $1.32 and $1.40.
- Diluted EPS, adjusted for special items, is projected to be
between $1.36 and $1.44.
- Net income is projected to be between $340 million and $359
million.
- Adjusted EBITDA is projected to be between $690 million and
$710 million.
Conference Call
Hilton will host a conference call to discuss fourth quarter and
full year 2023 results on February 7, 2024 at 9:00 a.m. Eastern
Standard 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 1697630.
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
2995773.
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, our 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 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 Hilton's Annual Report on Form
10-K for the fiscal year ended December 31, 2022, which is filed
with the Securities and Exchange Commission (the "SEC") and is
accessible on the SEC's website at www.sec.gov. Such factors may be
updated from time to time in our periodic filings with the SEC,
including Hilton's Annual Report on Form 10-K for the fiscal year
ended December 31, 2023, which is expected to be filed with the SEC
on or about the date of this press release. 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 22 world-class brands comprising more than 7,500
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 more than 180 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.
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
Year Ended
December 31,
December 31,
2023
2022
2023
2022
Revenues
Franchise and licensing fees
$
601
$
537
$
2,370
$
2,068
Base and other management fees
95
88
342
294
Incentive management fees
77
64
274
196
Owned and leased hotels
320
349
1,244
1,076
Other revenues
52
31
178
102
1,145
1,069
4,408
3,736
Other revenues from managed and franchised
properties
1,464
1,375
5,827
5,037
Total revenues
2,609
2,444
10,235
8,773
Expenses
Owned and leased hotels
292
294
1,141
999
Depreciation and amortization
33
39
147
162
General and administrative
110
95
408
382
Impairment losses
38
—
38
—
Other expenses
32
25
112
60
505
453
1,846
1,603
Other expenses from managed and franchised
properties
1,704
1,487
6,164
5,076
Total expenses
2,209
1,940
8,010
6,679
Operating income
400
504
2,225
2,094
Interest expense
(124
)
(120
)
(464
)
(415
)
Gain (loss) on foreign currency
transactions
(3
)
1
(16
)
5
Loss on investments in unconsolidated
affiliate
—
—
(92
)
—
Other non-operating income, net
1
18
39
50
Income before income taxes
274
403
1,692
1,734
Income tax expense
(124
)
(70
)
(541
)
(477
)
Net income
150
333
1,151
1,257
Net income attributable to
noncontrolling interests
(3
)
(5
)
(10
)
(2
)
Net income attributable to Hilton
stockholders
$
147
$
328
$
1,141
$
1,255
Weighted average shares
outstanding:
Basic
256
270
262
275
Diluted
258
272
264
277
Earnings per share:
Basic
$
0.58
$
1.22
$
4.36
$
4.56
Diluted
$
0.57
$
1.21
$
4.33
$
4.53
Cash dividends declared per
share
$
0.15
$
0.15
$
0.60
$
0.45
HILTON WORLDWIDE HOLDINGS
INC.
COMPARABLE AND CURRENCY
NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS
BY REGION, BRAND AND
SEGMENT
(unaudited)
Three Months Ended December
31,
Occupancy
ADR
RevPAR
2023
vs. 2022
2023
vs. 2022
2023
vs. 2022
System-wide
69.0
%
2.0
%
pts.
$
156.07
2.7
%
$
107.69
5.7
%
Region
U.S.
68.2
%
(0.3
)%
pts.
$
162.19
2.2
%
$
110.64
1.8
%
Americas (excluding U.S.)
67.4
0.8
148.57
5.5
100.19
6.8
Europe
72.7
2.2
160.27
6.4
116.50
9.7
Middle East & Africa
76.3
1.6
187.21
9.5
142.78
11.9
Asia Pacific
70.2
16.1
113.45
9.1
79.60
41.6
Brand
Waldorf Astoria Hotels & Resorts
64.9
%
5.8
%
pts.
$
515.05
(1.0
)%
$
334.05
8.7
%
LXR Hotels & Resorts
49.3
(0.9
)
539.47
11.4
266.21
9.3
Conrad Hotels & Resorts
75.9
10.7
312.61
7.7
237.23
25.3
Canopy by Hilton
70.9
5.3
220.43
2.7
156.35
11.0
Hilton Hotels & Resorts
68.6
4.8
187.14
3.3
128.33
11.0
Curio Collection by Hilton
69.2
2.9
232.65
0.8
161.05
5.2
DoubleTree by Hilton
66.7
3.0
139.91
1.8
93.34
6.6
Tapestry Collection by Hilton
66.1
0.7
178.06
4.9
117.79
5.9
Embassy Suites by Hilton
69.5
1.3
175.16
1.1
121.75
3.0
Hilton Garden Inn
67.5
0.1
143.17
2.1
96.69
2.3
Hampton by Hilton
68.6
1.4
126.36
0.9
86.68
3.0
Tru by Hilton
66.4
(0.6
)
122.66
1.4
81.39
0.4
Homewood Suites by Hilton
75.1
(1.1
)
153.26
2.3
115.12
0.7
Home2 Suites by Hilton
74.0
(1.0
)
135.94
2.2
100.61
0.8
Segment
Management and franchise
68.9
%
1.9
%
pts.
$
154.98
2.5
%
$
106.79
5.5
%
Ownership(1)
75.3
3.8
224.07
9.1
168.61
15.0
HILTON WORLDWIDE HOLDINGS
INC.
COMPARABLE AND CURRENCY
NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS
BY REGION, BRAND AND
SEGMENT
(unaudited)
Year Ended December
31,
Occupancy
ADR
RevPAR
2023
vs. 2022
2023
vs. 2022
2023
vs. 2022
System-wide
71.8
%
4.6
%
pts.
$
158.62
5.4
%
$
113.90
12.6
%
Region
U.S.
72.2
%
2.1
%
pts.
$
165.16
4.1
%
$
119.22
7.2
%
Americas (excluding U.S.)
69.4
5.4
152.51
11.3
105.84
20.7
Europe
72.5
5.8
165.04
12.8
119.60
22.6
Middle East & Africa
72.3
5.7
171.38
13.3
123.87
22.9
Asia Pacific
70.1
18.2
113.54
17.5
79.61
58.7
Brand
Waldorf Astoria Hotels & Resorts
65.0
%
10.4
%
pts.
$
511.54
(3.9
)%
$
332.30
14.5
%
LXR Hotels & Resorts
48.0
0.8
519.05
10.6
249.34
12.5
Conrad Hotels & Resorts
73.6
14.3
293.81
12.1
216.15
39.1
Canopy by Hilton
70.3
8.7
219.07
5.1
154.04
20.0
Hilton Hotels & Resorts
69.7
8.3
189.13
6.6
131.74
21.0
Curio Collection by Hilton
69.8
6.9
229.69
1.8
160.42
12.9
DoubleTree by Hilton
68.7
5.1
142.36
5.0
97.84
13.5
Tapestry Collection by Hilton
68.5
3.5
178.64
6.3
122.39
12.1
Embassy Suites by Hilton
72.6
3.9
181.62
3.9
131.79
9.8
Hilton Garden Inn
70.9
3.0
146.35
4.6
103.80
9.3
Hampton by Hilton
72.4
3.7
131.21
3.1
95.04
8.7
Tru by Hilton
71.1
1.5
128.23
3.2
91.20
5.4
Homewood Suites by Hilton
79.1
0.4
157.60
5.0
124.62
5.5
Home2 Suites by Hilton
78.6
1.0
140.57
4.7
110.50
6.1
Segment
Management and franchise
71.8
%
4.5
%
pts.
$
157.66
5.1
%
$
113.18
12.1
%
Ownership(1)
73.4
12.9
222.14
15.4
163.11
39.9
_______________
(1)
Includes hotels owned or leased by
entities in which Hilton owns a noncontrolling financial
interest.
HILTON WORLDWIDE HOLDINGS
INC.
PROPERTY SUMMARY
As of December 31,
2023
Owned / Leased(1)
Managed
Franchised
Total
Properties
Rooms
Properties
Rooms
Properties
Rooms
Properties
Rooms
Waldorf Astoria Hotels &
Resorts
U.S.
—
—
12
4,598
—
—
12
4,598
Americas (excluding U.S.)
—
—
3
422
—
—
3
422
Europe
2
463
4
898
—
—
6
1,361
Middle East & Africa
—
—
8
2,200
—
—
8
2,200
Asia Pacific
—
—
6
1,259
—
—
6
1,259
LXR Hotels & Resorts
U.S.
—
—
—
—
3
522
3
522
Americas (excluding U.S.)
—
—
—
—
1
76
1
76
Europe
—
—
1
70
1
307
2
377
Middle East & Africa
—
—
2
331
3
282
5
613
Asia Pacific
—
—
1
72
1
114
2
186
Conrad Hotels & Resorts
U.S.
—
—
6
2,227
2
1,730
8
3,957
Americas (excluding U.S.)
—
—
3
787
—
—
3
787
Europe
—
—
4
1,155
1
107
5
1,262
Middle East & Africa
1
614
4
1,689
—
—
5
2,303
Asia Pacific
1
164
24
7,818
1
659
26
8,641
Canopy by Hilton
U.S.
—
—
—
—
26
4,490
26
4,490
Americas (excluding U.S.)
—
—
2
272
1
184
3
456
Europe
—
—
1
123
5
1,058
6
1,181
Middle East & Africa
—
—
1
200
—
—
1
200
Asia Pacific
—
—
4
613
—
—
4
613
Signia by Hilton
U.S.
—
—
3
1,700
—
—
3
1,700
Hilton Hotels & Resorts
U.S.
—
—
59
44,970
187
58,623
246
103,593
Americas (excluding U.S.)
1
405
31
11,749
25
7,238
57
19,392
Europe
37
11,141
43
14,792
46
11,984
126
37,917
Middle East & Africa
4
1,705
39
13,386
6
2,096
49
17,187
Asia Pacific
5
2,999
119
40,705
11
4,222
135
47,926
Curio Collection by Hilton
U.S.
—
—
11
4,984
68
13,683
79
18,667
Americas (excluding U.S.)
—
—
2
99
20
2,870
22
2,969
Europe
—
—
6
516
36
4,941
42
5,457
Middle East & Africa
—
—
5
1,104
3
912
8
2,016
Asia Pacific
—
—
6
1,153
4
738
10
1,891
DoubleTree by Hilton
U.S.
—
—
31
10,105
354
80,206
385
90,311
Americas (excluding U.S.)
—
—
3
587
38
7,695
41
8,282
Europe
—
—
17
4,211
109
19,161
126
23,372
Middle East & Africa
—
—
19
5,225
6
1,118
25
6,343
Asia Pacific
—
—
90
24,050
10
2,350
100
26,400
HILTON WORLDWIDE HOLDINGS
INC.
PROPERTY SUMMARY
(continued)
As of December 31,
2023
Owned / Leased(1)
Managed
Franchised
Total
Properties
Rooms
Properties
Rooms
Properties
Rooms
Properties
Rooms
Tapestry Collection by Hilton
U.S.
—
—
1
124
99
12,088
100
12,212
Americas (excluding U.S.)
—
—
1
138
9
1,122
10
1,260
Europe
—
—
—
—
11
640
11
640
Middle East & Africa
—
—
1
50
—
—
1
50
Asia Pacific
—
—
2
382
1
175
3
557
Embassy Suites by Hilton
U.S.
—
—
37
9,943
220
49,417
257
59,360
Americas (excluding U.S.)
—
—
2
504
7
1,829
9
2,333
Middle East & Africa
—
—
—
—
1
151
1
151
Tempo by Hilton
U.S.
—
—
1
661
—
—
1
661
Motto by Hilton
U.S.
—
—
—
—
4
1,271
4
1,271
Americas (excluding U.S.)
—
—
—
—
1
115
1
115
Europe
—
—
—
—
1
108
1
108
Hilton Garden Inn
U.S.
—
—
5
602
741
102,153
746
102,755
Americas (excluding U.S.)
—
—
13
1,968
56
8,506
69
10,474
Europe
—
—
13
2,533
74
11,598
87
14,131
Middle East & Africa
—
—
17
3,555
4
648
21
4,203
Asia Pacific
—
—
69
14,535
18
3,032
87
17,567
Hampton by Hilton
U.S.
—
—
17
2,296
2,343
232,636
2,360
234,932
Americas (excluding U.S.)
—
—
11
1,442
123
14,896
134
16,338
Europe
—
—
19
3,181
114
17,951
133
21,132
Middle East & Africa
—
—
5
1,459
—
—
5
1,459
Asia Pacific
—
—
—
—
339
53,829
339
53,829
Tru by Hilton
U.S.
—
—
—
—
248
24,181
248
24,181
Americas (excluding U.S.)
—
—
—
—
5
574
5
574
Spark by Hilton
U.S.
—
—
—
—
8
915
8
915
Homewood Suites by Hilton
U.S.
—
—
8
999
503
57,531
511
58,530
Americas (excluding U.S.)
—
—
3
406
24
2,688
27
3,094
Home2 Suites by Hilton
U.S.
—
—
2
210
593
62,269
595
62,479
Americas (excluding U.S.)
—
—
—
—
10
1,041
10
1,041
Asia Pacific
—
—
—
—
47
6,916
47
6,916
Other
—
—
3
1,414
15
3,219
18
4,633
Total hotels
51
17,491
800
250,472
6,587
898,865
7,438
1,166,828
Hilton Grand Vacations(2)
—
—
—
—
92
16,109
92
16,109
Total system
51
17,491
800
250,472
6,679
914,974
7,530
1,182,937
_______________
(1)
Includes hotels owned or leased by
entities in which Hilton owns a noncontrolling financial
interest.
(2)
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
December 31,
Increase / (Decrease)
2023
2022
$
%
Capital expenditures for property and
equipment(2)
$
42
$
20
22
NM(1)
Capitalized software costs(3)
28
20
8
40.0
Total capital expenditures
70
40
30
75.0
Contract acquisition costs, net of
refunds(4)
69
20
49
NM(1)
Total capital expenditures and contract
acquisition costs
$
139
$
60
79
NM(1)
Year Ended
December 31,
Increase / (Decrease)
2023
2022
$
%
Capital expenditures for property and
equipment(2)
$
151
$
39
112
NM(1)
Capitalized software costs(3)
96
63
33
52.4
Total capital expenditures
247
102
145
NM(1)
Contract acquisition costs, net of
refunds(4)
233
81
152
NM(1)
Total capital expenditures and contract
acquisition costs
$
480
$
183
297
NM(1)
____________
(1)
Fluctuation in terms of percentage change
is not meaningful.
(2)
Represents expenditures for hotels,
corporate and other property and equipment, which include amounts
reimbursed by third parties of $16 million and $6 million for the
three months ended December 31, 2023 and 2022, respectively, and
$30 million and $8 million for the year ended December 31, 2023 and
2022, respectively. Excludes expenditures for FF&E replacement
reserves of $23 million and $14 million for the three months ended
December 31, 2023 and 2022, respectively, and $63 million and $54
million for the year ended December 31, 2023 and 2022,
respectively. The increases during the periods were primarily due
to the timing of certain corporate and hotel capital expenditure
projects.
(3)
Includes $25 million and $19 million of
expenditures that were reimbursed to us by third parties for the
three months ended December 31, 2023 and 2022, respectively, and
$88 million and $59 million for the year ended December 31, 2023
and 2022, respectively.
(4)
The increases during the periods were
primarily due to the timing of certain strategic hotel developments
supporting Hilton's growth.
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
Year Ended
December 31,
December 31,
2023
2022
2023
2022
Net income attributable to Hilton
stockholders, as reported
$
147
$
328
$
1,141
$
1,255
Diluted EPS, as reported
$
0.57
$
1.21
$
4.33
$
4.53
Special items:
Net other expenses from managed and
franchised properties
$
240
$
112
$
337
$
39
Purchase accounting amortization(1)
3
11
37
45
Loss on investments in unconsolidated
affiliate(2)
—
—
92
—
FF&E replacement reserves
23
14
63
54
Impairment losses(3)
38
—
38
—
Financing transactions(4)
10
—
10
—
Tax-related adjustments(5)
41
—
35
—
Other adjustments(6)
9
5
15
(4
)
Total special items before taxes
364
142
627
134
Income tax expense on special items
(77
)
(36
)
(130
)
(32
)
Total special items after taxes
$
287
$
106
$
497
$
102
Net income, adjusted for special items
$
434
$
434
$
1,638
$
1,357
Diluted EPS, adjusted for special
items
$
1.68
$
1.59
$
6.21
$
4.89
_______________
(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 Hilton had previously provided to
an unconsolidated affiliate with underlying investments in certain
hotels that Hilton currently manages or franchises.
(3)
Amounts are related to certain hotel
properties under operating leases and are for the impairment of a
lease intangible asset, operating lease right-of-use ("ROU") assets
and property and equipment.
(4)
Amounts include expenses recognized in
connection with the amendment of our Term Loans that were
recognized in other non-operating income, net.
(5)
Amounts include income tax expenses
(benefits) related to changes in effective tax rates and certain
changes in unrecognized tax benefits.
(6)
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," and net
losses (gains) on asset dispositions. The year ended December 31,
2023 also includes expected future credit losses related to debt
guarantees for hotels that Hilton manages.
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
Year Ended
December 31,
December 31,
2023
2022
2023
2022
Net income
$
150
$
333
$
1,151
$
1,257
Interest expense
124
120
464
415
Income tax expense
124
70
541
477
Depreciation and amortization expenses
33
39
147
162
EBITDA
431
562
2,303
2,311
Loss (gain) on foreign currency
transactions
3
(1
)
16
(5
)
Loss on investments in unconsolidated
affiliate(1)
—
—
92
—
FF&E replacement reserves
23
14
63
54
Share-based compensation expense
36
36
169
162
Impairment losses(2)
38
—
38
—
Amortization of contract acquisition
costs
11
10
43
38
Net other expenses from managed and
franchised properties
240
112
337
39
Other adjustments(3)
21
7
28
—
Adjusted EBITDA
$
803
$
740
$
3,089
$
2,599
_______________
(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 currently manages or franchises.
(2)
Amounts 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.
(3)
Amount for the year ended December 31,
2022 was less than $1 million. Amounts for the three months and
year ended December 31, 2023 include expenses recognized in
connection with the amendment of our Term Loans, and the year ended
December 31, 2023 also includes expected future credit losses
related to debt guarantees for hotels that Hilton manages. 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," net losses (gains) on asset dispositions, severance and
other items.
Three Months Ended
Year Ended
December 31,
December 31,
2023
2022
2023
2022
Total revenues, as reported
$
2,609
$
2,444
$
10,235
$
8,773
Add: amortization of contract acquisition
costs
11
10
43
38
Less: other revenues from managed and
franchised properties
(1,464
)
(1,375
)
(5,827
)
(5,037
)
Total revenues, as adjusted
$
1,156
$
1,079
$
4,451
$
3,774
Net income
$
150
$
333
$
1,151
$
1,257
Net income margin
5.7
%
13.6
%
11.2
%
14.3
%
Adjusted EBITDA
$
803
$
740
$
3,089
$
2,599
Adjusted EBITDA margin
69.3
%
68.6
%
69.4
%
68.9
%
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)
December 31,
2023
2022
Long-term debt, including current
maturities
$
9,196
$
8,747
Add: unamortized deferred financing costs
and discounts
71
73
Long-term debt, including current
maturities and excluding the deduction for unamortized deferred
financing costs and discounts
9,267
8,820
Less: cash and cash equivalents
(800
)
(1,209
)
Less: restricted cash and cash
equivalents
(75
)
(77
)
Net debt
$
8,392
$
7,534
Net income
$
1,151
$
1,257
Long-term debt to net income ratio
8.0
7.0
Adjusted EBITDA
$
3,089
$
2,599
Net debt to Adjusted EBITDA ratio
2.7
2.9
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
March 31, 2024
Low Case
High Case
Net income attributable to Hilton
stockholders
$
338
$
358
Diluted EPS(1)
$
1.32
$
1.40
Special items(2):
FF&E replacement reserves
$
12
$
12
Purchase accounting amortization
1
1
Total special items before taxes
13
13
Income tax expense on special items
(2
)
(2
)
Total special items after taxes
$
11
$
11
Net income, adjusted for special items
$
349
$
369
Diluted EPS, adjusted for special
items(1)
$
1.36
$
1.44
Year Ending
December 31, 2024
Low Case
High Case
Net income attributable to Hilton
stockholders
$
1,686
$
1,721
Diluted EPS(1)
$
6.57
$
6.71
Special items(2):
FF&E replacement reserves
$
63
$
63
Purchase accounting amortization
5
5
Total special items before taxes
68
68
Income tax expense on special items
(10
)
(10
)
Total special items after taxes
$
58
$
58
Net income, adjusted for special items
$
1,744
$
1,779
Diluted EPS, adjusted for special
items(1)
$
6.80
$
6.94
_______________
(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
March 31, 2024
Low Case
High Case
Net income
$
340
$
359
Interest expense
124
124
Income tax expense
137
144
Depreciation and amortization expenses
29
29
EBITDA
630
656
FF&E replacement reserves
12
12
Share-based compensation expense
34
34
Amortization of contract acquisition
costs
13
13
Other adjustments(1)
1
(5
)
Adjusted EBITDA
$
690
$
710
Year Ending
December 31, 2024
Low Case
High Case
Net income
$
1,694
$
1,729
Interest expense
534
534
Income tax expense
709
724
Depreciation and amortization expenses
114
114
EBITDA
3,051
3,101
FF&E replacement reserves
63
63
Share-based compensation expense
162
162
Amortization of contract acquisition
costs
53
53
Other adjustments(1)
1
1
Adjusted EBITDA
$
3,330
$
3,380
______________
(1)
See "—Net Income Margin and Adjusted
EBITDA and Adjusted EBITDA Margin" for details of these
adjustments.
HILTON WORLDWIDE HOLDINGS INC.
DEFINITIONS
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.
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 7,438 hotels in our system as of December 31, 2023, 5,906
hotels were classified as comparable hotels. Our 1,532
non-comparable hotels as of December 31, 2023 included 359 hotels,
or less than five 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 December 31,
2023, 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 and years
ended December 31, 2023 and 2022 use the foreign currency exchange
rates used to translate the results of the Company's foreign
operations within its condensed consolidated financial statements
for the three months and year ended December 31, 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240207299128/en/
Investor Contact Jill Chapman +1 703 883 1000 Media
Contact Kent Landers +1 703 883 3246
Hilton Worldwide (NYSE:HLT)
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