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Hilton Reports First Quarter Results; Resumes Capital Return to Shareholders

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MCLEAN, Va., May 03, 2022--(BUSINESS WIRE)--Hilton Worldwide Holdings Inc. ("Hilton" or the "Company") (NYSE: HLT) today reported its first quarter 2022 results. Highlights include:

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220503005151/en/

Hilton Reports Q1 2022 Earnings

  • Diluted EPS was $0.75 for the first quarter, and diluted EPS, adjusted for special items, was $0.71

  • Net income was $211 million for the first quarter

  • Adjusted EBITDA was $448 million for the first quarter

  • System-wide comparable RevPAR increased 80.5 percent, on a currency neutral basis, for the first quarter compared to the same period in 2021

  • System-wide comparable RevPAR was down 17.0 percent, on a currency neutral basis, for the first quarter compared to the same period in 2019

  • Approved 22,200 new rooms for development during the first quarter, bringing Hilton's development pipeline to more than 410,000 rooms as of March 31, 2022

  • Added 13,200 rooms to Hilton's system in the first quarter, contributing to 7,800 net additional rooms in Hilton's system during the period, which represented 5.0 percent net unit growth from March 31, 2021

  • Resumed share repurchases in March 2022 and repurchased 907,000 shares of Hilton common stock for approximately $130 million in the first quarter and 1.8 million shares for approximately $265 million through April

  • Declared a $0.15 per share quarterly cash dividend in May 2022

  • Full year 2022 system-wide comparable RevPAR is expected to increase between 32.0 percent and 38.0 percent on a currency neutral basis compared to 2021; full year net income is projected to be between $1,001 million and $1,071 million; full year Adjusted EBITDA is projected to be between $2,250 million and $2,350 million

  • Full year 2022 capital return is projected to be between $1.4 billion and $1.8 billion

Overview

Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, "We are happy to report solid first quarter results, with all segments driving better than expected top line performance in March. Our results in the quarter, coupled with our confidence in continued recovery throughout the year, enabled us to begin returning capital to shareholders earlier than we had anticipated. In March, we resumed our share repurchase program and, in the second quarter, we declared a quarterly cash dividend. Our team members worked hard to effectively navigate the pandemic and position the Company for the future, and we are excited for the growth opportunities that lie ahead."

For the three months ended March 31, 2022, system-wide comparable RevPAR increased 80.5 percent compared to the same period in 2021, due to increases in both occupancy and ADR, and fee revenues increased 79 percent compared to the same period in 2021. For comparison to pre-pandemic results, system-wide comparable RevPAR for the three months ended March 31, 2022 was down 17.0 percent compared to the three months ended March 31, 2019.

For the three months ended March 31, 2022, diluted EPS was $0.75 and diluted EPS, adjusted for special items, was $0.71 compared to $(0.39) and $0.02, respectively, for the three months ended March 31, 2021. Net income (loss) and Adjusted EBITDA were $211 million and $448 million, respectively, for the three months ended March 31, 2022, compared to $(109) million and $198 million, respectively, for the three months ended March 31, 2021.

Development

In the first quarter of 2022, Hilton opened 76 new hotels contributing to 13,200 additional rooms and achieved net unit growth of 7,800 rooms. During the quarter, Hilton celebrated the opening of the 500th Homewood Suites in the U.S., as well as other notable openings including the Hilton Singapore Orchard, Hilton's largest hotel in the Asia Pacific region, and two new lifestyle hotels in destination cities under its Canopy by Hilton brand, the Canopy by Hilton Boston Downtown and the Canopy by Hilton New Orleans Downtown.

As of March 31, 2022, Hilton's development pipeline totaled 2,730 hotels representing more than 410,000 rooms throughout 113 countries and territories, including 27 countries and territories where Hilton does not currently have any existing hotels. Additionally, of the rooms in the development pipeline, nearly 200,000 of the rooms were under construction and over 245,000 of the rooms were located outside the U.S. Adding to Hilton's development pipeline during the quarter were two notable international deals under its Curio Collection by Hilton brand, the Royal Palm Galapagos in Ecuador and the Palacio Bellas Artes San Sebastian in Spain.

Balance Sheet and Liquidity

As of March 31, 2022, Hilton had $8.8 billion of long-term debt outstanding, excluding deferred financing costs and discount, with a weighted average interest rate of 4.00 percent. Excluding finance lease liabilities and other debt of Hilton's consolidated variable interest entities, Hilton had $8.6 billion of long-term debt outstanding with a weighted average interest rate of 3.97 percent and no scheduled maturities until 2025. No debt amounts were outstanding under Hilton's $1.75 billion senior secured revolving credit facility as of March 31, 2022, which had an available borrowing capacity of $1,690 million after considering $60 million of outstanding letters of credit. Total cash and cash equivalents were $1,510 million as of March 31, 2022, including $78 million of restricted cash and cash equivalents.

In March 2022, the Company resumed share repurchases, which, along with dividend payments, had been suspended to preserve cash during the pandemic. The Company repurchased 0.9 million shares of its common stock in March 2022 at a cost of approximately $130 million and an average price per share of $143.89, and, in 2022, through April 29th, the Company had repurchased 1.8 million shares at a cost of approximately $265 million and an average price per share of $148.29.

In May 2022, Hilton's board of directors authorized a quarterly cash dividend of $0.15 per share of common stock, which will be paid on or before June 24, 2022 to holders of record of its common stock as of the close of business on May 27, 2022.

Outlook

Share-based metrics in Hilton's outlook include actual share repurchases to date, but do not include the effect of potential share repurchases hereafter.

Full Year 2022

  • System-wide comparable RevPAR, on a currency neutral basis, is expected to increase between 32.0 percent and 38.0 percent compared to 2021, and to be down between 5.0 percent to 9.0 percent from 2019.

  • Diluted EPS, before special items, is projected to be between $3.56 and $3.81.

  • Diluted EPS, adjusted for special items, is projected to be between $3.77 and $4.02.

  • Net income is projected to be between $1,001 million and $1,071 million.

  • Adjusted EBITDA is projected to be between $2,250 million and $2,350 million.

  • Contract acquisition costs and capital expenditures, excluding amounts indirectly reimbursed by hotel owners, are expected to be between $250 million and $275 million.

  • Capital return is projected to be between $1.4 billion and $1.8 billion.

  • General and administrative expenses are projected to be between $410 million and $430 million.

  • Net unit growth is expected to be approximately 5.0 percent.

Second Quarter 2022

  • System-wide comparable RevPAR, on a currency neutral basis, is expected to increase between 45.0 percent and 50.0 percent compared to the second quarter of 2021, and to be down between 5.0 percent to 10.0 percent from the second quarter of 2019.

  • Diluted EPS, before special items, is projected to be between $0.89 and $0.94.

  • Diluted EPS, adjusted for special items, is projected to be between $0.98 and $1.03.

  • Net income is projected to be between $250 million and $264 million.

  • Adjusted EBITDA is projected to be between $590 million and $610 million.

Conference Call

Hilton will host a conference call to discuss first quarter 2022 results on May 3, 2022 at 10:00 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 3306232. 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 2469261.

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 the expectations regarding the impact of and recovery from the coronavirus ("COVID-19") pandemic (the "pandemic"), the performance of Hilton's business, financial results, liquidity and capital resources and other non-historical statements. In some cases, these forward-looking statements can be identified by the use of words such as "outlook," "believes," "expects," "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 Hilton's control, such as challenges due to labor shortages and supply chain disruptions, risks related to the impact of the pandemic, including as a result of new strains or variants of the virus and uncertainty of acceptance of the COVID-19 vaccines and their effectiveness, competition for hotel guests and management and franchise contracts, risks related to doing business with third-party hotel owners, performance of Hilton's information technology systems, growth of reservation channels outside of Hilton's system, risks of doing business outside of the U.S., risks associated with the Russian invasion of Ukraine and Hilton's indebtedness. Additional factors that could cause Hilton's results to differ materially from those described in the forward-looking statements can be found under the section entitled "Part I—Item 1A. Risk Factors" of Hilton's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the Securities and Exchange Commission (the "SEC"), as such factors may be updated from time to time in Hilton's periodic filings with the SEC, which are 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 Hilton's filings with the SEC. The Company undertakes 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 (loss), 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.

About Hilton

Hilton (NYSE: HLT) is a leading global hospitality company with a portfolio of 18 world-class brands comprising nearly 6,900 properties and nearly 1.1 million rooms, in 122 countries and territories. Dedicated to fulfilling its founding vision to fill the earth with the light and warmth of hospitality, Hilton has welcomed more than 3 billion guests in its more than 100-year history, earned a top spot on Fortune's 100 Best Companies to Work For list and been recognized as a global leader on the Dow Jones Sustainability Indices for five consecutive years. Hilton has introduced several 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 133 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 newsroom.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
(unaudited, in millions, except per share data)

Three Months Ended

March 31,

2022

2021

Revenues

Franchise and licensing fees

$

413

$

242

Base and other management fees

55

25

Incentive management fees

34

13

Owned and leased hotels

150

56

Other revenues

18

17

670

353

Other revenues from managed and franchised properties

1,051

521

Total revenues

1,721

874

Expenses

Owned and leased hotels

185

110

Depreciation and amortization

44

51

General and administrative

91

97

Other expenses

11

10

331

268

Other expenses from managed and franchised properties

1,021

585

Total expenses

1,352

853

Operating income

369

21

Interest expense

(90

)

(103

)

Gain (loss) on foreign currency transactions

(4

)

2

Loss on debt extinguishment

(69

)

Other non-operating income, net

16

5

Income (loss) before income taxes

291

(144

)

Income tax benefit (expense)

(80

)

35

Net income (loss)

211

(109

)

Net loss attributable to noncontrolling interests

1

1

Net income (loss) attributable to Hilton stockholders

$

212

$

(108

)

Weighted average shares outstanding:

Basic

279

278

Diluted

282

278

Earnings (loss) per share:

Basic

$

0.76

$

(0.39

)

Diluted

$

0.75

$

(0.39

)

HILTON WORLDWIDE HOLDINGS INC.
COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS
BY REGION, BRAND AND SEGMENT
(unaudited)

Three Months Ended March 31,

Occupancy

ADR

RevPAR

2022

vs. 2021

2022

vs. 2021

2022

vs. 2021

By Region:

U.S.

61.8

%

14.1

%

pts.

$

144.32

36.4

%

$

89.12

76.8

%

Americas (excluding U.S.)

50.7

21.7

126.05

35.7

63.92

137.0

Europe

47.9

29.2

120.70

74.8

57.77

348.8

Middle East & Africa

66.2

26.0

159.07

34.6

105.28

121.4

Asia Pacific

42.5

(0.4

)

104.13

12.0

44.28

11.0

By Brand:

Waldorf Astoria Hotels & Resorts

47.7

%

23.6

%

pts.

$

599.50

7.5

%

$

286.03

113.0

%

Conrad Hotels & Resorts

45.8

15.6

229.69

33.4

105.21

102.1

Canopy by Hilton

53.4

23.1

186.89

34.7

99.89

137.2

Hilton Hotels & Resorts

49.6

20.1

169.18

38.2

83.85

132.9

Curio Collection by Hilton

52.6

19.0

214.50

27.7

112.83

100.1

DoubleTree by Hilton

52.9

17.5

127.02

32.9

67.24

98.5

Tapestry Collection by Hilton

53.8

18.1

145.89

28.3

78.48

93.2

Embassy Suites by Hilton

59.6

16.2

161.99

36.8

96.52

87.8

Hilton Garden Inn

59.0

13.8

124.60

34.8

73.56

75.8

Hampton by Hilton

60.5

10.8

118.90

30.3

71.98

58.4

Tru by Hilton

63.1

12.3

112.29

35.4

70.86

68.3

Homewood Suites by Hilton

73.6

9.5

135.97

28.6

100.09

47.8

Home2 Suites by Hilton

73.7

10.2

123.65

27.2

91.16

47.5

By Segment:

Management and franchise

58.4

%

14.4

%

pts.

$

138.77

35.0

%

$

81.08

79.2

%

Ownership(1)

38.0

25.0

176.04

31.1

66.82

283.5

System-wide

58.1

%

14.6

%

pts.

$

139.17

35.2

%

$

80.84

80.5

%

____________

(1)

Includes hotels owned or leased by entities in which Hilton owns a noncontrolling financial interest.

HILTON WORLDWIDE HOLDINGS INC.
PROPERTY SUMMARY
As of March 31, 2022

Owned / Leased(1)

Managed

Franchised

Total

Properties

Rooms

Properties

Rooms

Properties

Rooms

Properties

Rooms

Waldorf Astoria Hotels & Resorts

U.S.

11

4,224

11

4,224

Americas (excluding U.S.)

2

261

2

261

Europe

2

463

4

898

6

1,361

Middle East & Africa

5

1,224

5

1,224

Asia Pacific

6

1,259

6

1,259

LXR Hotels & Resorts

U.S.

3

426

3

426

Americas (excluding U.S.)

1

76

1

76

Europe

2

383

2

383

Middle East & Africa

1

41

1

234

2

275

Asia Pacific

1

114

1

114

Conrad Hotels & Resorts

U.S.

5

1,922

1

1,496

6

3,418

Americas (excluding U.S.)

3

787

3

787

Europe

4

1,155

4

1,155

Middle East & Africa

1

614

3

1,569

4

2,183

Asia Pacific

1

164

22

7,074

1

659

24

7,897

Canopy by Hilton

U.S.

25

4,296

25

4,296

Americas (excluding U.S.)

2

272

2

272

Europe

1

123

4

917

5

1,040

Middle East & Africa

1

200

1

200

Asia Pacific

4

614

4

614

Signia by Hilton

U.S.

1

1,009

1

1,009

Hilton Hotels & Resorts

U.S.

57

43,212

188

59,118

245

102,330

Americas (excluding U.S.)

1

405

28

10,562

26

7,826

55

18,793

Europe

39

11,514

44

14,888

43

11,268

126

37,670

Middle East & Africa

5

1,992

36

12,555

3

1,565

44

16,112

Asia Pacific

5

2,999

112

39,294

8

3,247

125

45,540

Curio Collection by Hilton

U.S.

8

3,593

60

12,915

68

16,508

Americas (excluding U.S.)

2

99

12

1,750

14

1,849

Europe

4

360

21

2,894

25

3,254

Middle East & Africa

4

741

2

557

6

1,298

Asia Pacific

4

773

2

248

6

1,021

DoubleTree by Hilton

U.S.

32

10,605

341

77,510

373

88,115

Americas (excluding U.S.)

3

587

35

7,085

38

7,672

Europe

13

3,418

109

18,419

122

21,837

Middle East & Africa

18

4,710

5

568

23

5,278

Asia Pacific

77

20,478

5

1,395

82

21,873

HILTON WORLDWIDE HOLDINGS INC.
PROPERTY SUMMARY (continued)
As of March 31, 2022

Owned / Leased(1)

Managed

Franchised

Total

Properties

Rooms

Properties

Rooms

Properties

Rooms

Properties

Rooms

Tapestry Collection by Hilton

U.S.

63

7,545

63

7,545

Americas (excluding U.S.)

1

138

5

479

6

617

Europe

4

238

4

238

Asia Pacific

1

266

1

175

2

441

Embassy Suites by Hilton

U.S.

40

10,585

211

47,377

251

57,962

Americas (excluding U.S.)

2

354

6

1,649

8

...