Hilton Worldwide Holdings Inc. ("Hilton," "the Company," "we,"
"us" or "our") (NYSE: HLT) today reported its third quarter 2024
results. Highlights include:
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- Diluted EPS was $1.38 for the third quarter, and diluted
EPS, adjusted for special items, was $1.92
- Net income was $344 million for the third quarter
- Adjusted EBITDA was $904 million for the third
quarter
- System-wide comparable RevPAR increased 1.4 percent, on a
currency neutral basis, for the third quarter compared to the same
period in 2023
- Approved 27,500 new rooms for development during the third
quarter, bringing our development pipeline to 492,400 rooms as of
September 30, 2024, representing growth of 8 percent from September
30, 2023
- Added a record 36,600 rooms to our system in the third
quarter, resulting in 33,600 net additional rooms for the third
quarter, contributing to a record net unit growth of 7.8 percent
from September 30, 2023
- Repurchased 3.3 million shares of Hilton common stock during
the third quarter; bringing total capital return, including
dividends, to $764 million for the quarter and $2,422 million year
to date through October
- Issued $1.0 billion aggregate principal amount of 5.875%
Senior Notes due 2033 in September 2024
- Full year 2024 system-wide RevPAR is projected to increase
between 2.0 percent and 2.5 percent on a comparable and currency
neutral basis compared to 2023; full year net income is projected
to be between $1,405 million and $1,429 million; full year Adjusted
EBITDA is projected to be between $3,375 million and $3,405
million
- Full year 2024 capital return is projected to be
approximately $3.0 billion
- Net unit growth for 2025 is expected to be between 6.0
percent and 7.0 percent
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
- System-wide comparable RevPAR, on a currency neutral basis, is
projected to increase between 2.0 percent and 2.5 percent compared
to 2023.
- Diluted EPS is projected to be between $5.58 and $5.68.
- Diluted EPS, adjusted for special items, is projected to be
between $6.93 and $7.03.
- Net income is projected to be between $1,405 million and $1,429
million.
- Adjusted EBITDA is projected to be between $3,375 million and
$3,405 million.
- Contract acquisition costs and capital expenditures, excluding
amounts reimbursed by third parties, are projected to be between
$200 million and $250 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 7.0 percent and 7.5
percent.
Fourth Quarter 2024
- System-wide comparable RevPAR, on a currency neutral basis, is
projected to increase between 1.0 percent and 2.0 percent compared
to the fourth quarter of 2023.
- Diluted EPS is projected to be between $1.49 and $1.59.
- Diluted EPS, adjusted for special items, is projected to be
between $1.57 and $1.67.
- Net income is projected to be between $371 million and $395
million.
- Adjusted EBITDA is projected to be between $804 million and
$834 million.
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/
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Hilton Worldwide (NYSE:HLT)
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Hilton Worldwide (NYSE:HLT)
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From Dec 2023 to Dec 2024
