MCLEAN, Va.–(BUSINESS WIRE)–Hilton Worldwide Holdings Inc. (“Hilton” or the “Company”) (NYSE: HLT) today reported its first quarter 2022 results. Highlights include:
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
2,003
Motto by Hilton
U.S.
—
—
—
—
3
871
3
871
Hilton Garden Inn
U.S.
—
—
4
425
730
100,857
734
101,282
Americas (excluding U.S.)
—
—
12
1,757
51
7,664
63
9,421
Europe
—
—
18
3,499
59
9,515
77
13,014
Middle East & Africa
—
—
17
3,555
3
474
20
4,029
Asia Pacific
—
—
49
10,771
1
177
50
10,948
Hampton by Hilton
U.S.
—
—
26
3,366
2,282
225,332
2,308
228,698
Americas (excluding U.S.)
—
—
13
1,644
109
13,305
122
14,949
Europe
—
—
16
2,697
101
15,769
117
18,466
Middle East & Africa
—
—
4
1,238
—
—
4
1,238
Asia Pacific
—
—
—
—
236
38,195
236
38,195
Tru by Hilton
U.S.
—
—
—
—
213
20,736
213
20,736
Americas (excluding U.S.)
—
—
—
—
2
179
2
179
Homewood Suites by Hilton
U.S.
—
—
10
1,172
493
56,282
503
57,454
Americas (excluding U.S.)
—
—
3
406
24
2,688
27
3,094
Home2 Suites by Hilton
U.S.
—
—
2
210
522
54,829
524
55,039
Americas (excluding U.S.)
—
—
—
—
7
753
7
753
Asia Pacific
—
—
—
—
5
783
5
783
Other
—
—
3
1,343
10
2,317
13
3,660
Total hotels
54
18,151
740
232,316
6,038
822,772
6,832
1,073,239
Hilton Grand Vacations
—
—
—
—
60
9,489
60
9,489
Total system
54
18,151
740
232,316
6,098
832,261
6,892
1,082,728
____________
(1)
Includes hotels owned or leased by entities in which Hilton owns a noncontrolling financial interest.
HILTON WORLDWIDE HOLDINGS INC.
CAPITAL EXPENDITURES AND CONTRACT ACQUISITION COSTS
(unaudited, dollars in millions)
Three Months Ended
March 31,
Increase / (Decrease)
2022
2021
$
%
Capital expenditures for property and equipment(1)
$
4
$
3
1
33.3
Capitalized software costs(2)
10
8
2
25.0
Total capital expenditures
14
11
3
27.3
Contract acquisition costs
15
43
(28
)
(65.1
)
Total capital expenditures and contract acquisition costs
$
29
$
54
(25
)
(46.3
)
____________
(1)
Represents expenditures for hotels, corporate and other property and equipment, which include amounts indirectly reimbursed by hotel owners of less than $1 million for both the three months ended March 31, 2022 and 2021. Excludes expenditures for FF&E replacement reserves of $12 million and $4 million for the three months ended March 31, 2022 and 2021, respectively.
(2)
Includes $9 million and $7 million of expenditures that were indirectly reimbursed by hotel owners for the three months ended March 31, 2022 and 2021, respectively.
HILTON WORLDWIDE HOLDINGS INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
NET INCOME (LOSS) AND DILUTED EPS, ADJUSTED FOR SPECIAL ITEMS
(unaudited, in millions, except per share data)
Three Months Ended
March 31,
2022
2021
Net income (loss) attributable to Hilton stockholders, as reported
$
212
$
(108
)
Diluted EPS, as reported
$
0.75
$
(0.39
)
Special items:
Net other (revenues) expenses from managed and franchised properties
$
(30
)
$
64
Purchase accounting amortization(1)
12
12
FF&E replacement reserves
12
4
Loss on debt extinguishment(2)
—
69
Other adjustment items(3)
(10
)
3
Total special items before taxes
(16
)
152
Income tax benefit (expense) on special items
5
(38
)
Total special items after taxes
$
(11
)
$
114
Net income, adjusted for special items
$
201
$
6
Diluted EPS, adjusted for special items
$
0.71
$
0.02
____________
(1)
Amounts represent the amortization expenses 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 these assets will be fully amortized during 2023.
(2)
The amount relates to the redemption of senior unsecured notes and includes a redemption premium of $55 million and the accelerated recognition of unamortized deferred financing costs related to those senior unsecured notes of $14 million.
(3)
The amount for the three months ended March 31, 2022 primarily includes a gain related to Hilton’s investments in unconsolidated affiliates, which was recognized in other non-operating income, net.
Contacts
Investors
Jill Slattery
+1 703 883 5476
Media Contact
Kent Landers
+1 703 883 3246
