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Hilton Reports Third Quarter Results

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MCLEAN, Va., October 27, 2021--(BUSINESS WIRE)--Hilton Worldwide Holdings Inc. ("Hilton" or the "Company") (NYSE: HLT) today reported its third quarter 2021 results. The following results reflect the material impact that the novel coronavirus ("COVID-19") pandemic has had on Hilton's business. Highlights include:

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20211027005212/en/

Hilton Reports Q3 2021 Results (Graphic: Business Wire)

  • Diluted EPS was $0.86 for the third quarter, and diluted EPS, adjusted for special items, was $0.78

  • Net income was $240 million for the third quarter

  • Adjusted EBITDA was $519 million for the third quarter

  • System-wide comparable RevPAR increased 98.7 percent on a currency neutral basis for the third quarter from the same period in 2020

  • System-wide comparable RevPAR decreased 18.8 percent on a currency neutral basis for the third quarter from the same period in 2019

  • Approved 23,600 new rooms for development during the third quarter, bringing Hilton's development pipeline to 404,000 rooms as of September 30, 2021

  • Added 14,700 rooms to Hilton's system in the third quarter, contributing to 11,200 net additional rooms during the period and approximately 6.6 percent annualized net unit growth from September 30, 2020

  • Full year 2021 net unit growth is expected to be between 5.0 percent and 5.5 percent

Overview

Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, "We are pleased with our third quarter results which continue to reflect recovery from the adverse impact of the COVID-19 pandemic. Leisure travel remained strong and business travel continued to pick up during the quarter. We continue to expand our global footprint driven by the power of our industry-leading brand portfolio. Overall, we remain confident in a strong recovery in global tourism in the months and years ahead, as well as our positioning within the industry, which will enable us to continue to differentiate ourselves and deliver exceptional performance for all of our stakeholders.

During the three and nine months ended September 30, 2021, the COVID-19 pandemic continued to negatively impact Hilton's business and hotel operating statistics; however, Hilton experienced significant improvement in its results as compared to the same periods in 2020, due to an upward trend in travel and tourism. As a result of the pandemic, certain hotels suspended operations at various times throughout 2020, but the majority of those hotels were reopened by 2021. In line with the recovery, although some hotels did suspend operations during the nine months ended September 30, 2021, reopenings significantly outpaced suspensions. As such, the operations of only approximately 335 hotels, or 5 percent, of Hilton's system-wide properties as of September 30, 2021, which were primarily located in the U.S. and Europe, were suspended for some period of time during the nine months ended September 30, 2021, as compared to approximately 1,270 hotels during the nine months ended September 30, 2020. As of September 30, 2021, all but 88, or approximately 1 percent, of Hilton's system-wide hotels were open and Hilton expects nearly all of its system-wide hotels to be open by the end of 2021.

For the three and nine months ended September 30, 2021, system-wide comparable RevPAR increased 98.7 percent and 47.6 percent, respectively, compared to the same periods in 2020, due to increases in both occupancy and ADR, and the three months ended September 30, 2021 was down 18.8 percent compared to the three months ended September 30, 2019. For the three and nine months ended September 30, 2021, fee revenues increased 93 percent and 49 percent, respectively, compared to the same periods in 2020.

For the three months ended September 30, 2021, diluted EPS was $0.86 and diluted EPS, adjusted for special items, was $0.78 compared to $(0.29) and $0.06, respectively, for the three months ended September 30, 2020. Net income (loss) and Adjusted EBITDA were $240 million and $519 million, respectively, for the three months ended September 30, 2021, compared to $(81) million and $224 million, respectively, for the three months ended September 30, 2020.

For the nine months ended September 30, 2021, diluted EPS was $0.94 and diluted EPS, adjusted for special items, was $1.36 compared to $(1.77) and $0.20, respectively, for the nine months ended September 30, 2020. Net income (loss) and Adjusted EBITDA were $259 million and $1,117 million, respectively, for the nine months ended September 30, 2021, compared to $(495) million and $638 million, respectively, for the nine months ended September 30, 2020.

Development

In the third quarter of 2021, Hilton opened 96 new hotels totaling approximately 14,700 rooms and achieved net unit growth of 11,200 rooms. During the quarter, Hilton opened three new hotels under LXR Hotels & Resorts, including the brand's first property in the Asia Pacific region. Additionally, Hilton celebrated the opening of the 500th hotel under its Home2 Suites by Hilton brand only ten years after the brand was introduced, making it one of the fastest growing hotel brands in industry history.

As of September 30, 2021, Hilton's development pipeline totaled more than 2,620 hotels representing 404,000 rooms throughout 114 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, 249,000 rooms were located outside the U.S., and 204,000 rooms were under construction.

Balance Sheet and Liquidity

As of September 30, 2021, Hilton had $8.9 billion of long-term debt outstanding, excluding deferred financing costs and discount, with a weighted average interest rate of 3.99 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 3.95 percent and no scheduled maturities until 2025. No amounts were outstanding under Hilton's $1.75 billion senior secured revolving credit facility as of September 30, 2021, 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 $1,387 million as of September 30, 2021, including $99 million of restricted cash and cash equivalents.

Conference Call

Hilton will host a conference call to discuss third quarter 2021 results on October 27, 2021 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/quarterly-results/2021.

Alternatively, participants may listen to the live call by dialing 1-888-317-6003 in the U.S. or 1-412-317-6061 internationally using the conference ID 1317541. 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 10160550.

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 COVID-19 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 COVID-19 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. 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, 2020, 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, 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 more than 6,700 properties and more than 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 the 2021 World's Best Workplaces list and was named the 2020 Global Industry Leader on the Dow Jones Sustainability Indices. In 2020, Hilton CleanStay was introduced, bringing an industry-defining standard of cleanliness to hotels worldwide. Through the award-winning guest loyalty program Hilton Honors, the nearly 123 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

Nine Months Ended

September 30,

September 30,

2021

2020

2021

2020

Revenues

Franchise and licensing fees

$

451

$

241

$

1,062

$

712

Base and other management fees

49

24

116

92

Incentive management fees

26

7

60

25

Owned and leased hotels

199

94

376

335

Other revenues

18

19

56

52

743

385

1,670

1,216

Other revenues from managed and franchised properties

1,006

548

2,282

2,201

Total revenues

1,749

933

3,952

3,417

Expenses

Owned and leased hotels

200

144

452

478

Depreciation and amortization

46

90

143

269

General and administrative

107

66

302

189

Reorganization costs

38

Impairment losses

9

136

Other expenses

12

21

31

48

365

330

928

1,158

Other expenses from managed and franchised properties

944

592

2,339

2,482

Total expenses

1,309

922

3,267

3,640

Loss on sale of assets, net

(8

)

(8

)

Operating income (loss)

432

11

677

(223

)

Interest expense

(98

)

(116

)

(302

)

(316

)

Gain (loss) on foreign currency transactions

(12

)

1

(16

)

Loss on debt extinguishment

(69

)

Other non-operating income (loss), net

6

3

16

(20

)

Income (loss) before income taxes

340

(114

)

323

(575

)

Income tax benefit (expense)

(100

)

33

(64

)

80

Net income (loss)

240

(81

)

259

(495

)

Net loss attributable to noncontrolling interests

1

2

4

4

Net income (loss) attributable to Hilton stockholders

$

241

$

(79

)

$

263

$

(491

)

Weighted average shares outstanding:

Basic

279

277

278

277

Diluted(1)

281

277

281

277

Earnings (loss) per share:

Basic

$

0.86

$

(0.29

)

$

0.94

$

(1.77

)

Diluted(1)

$

0.86

$

(0.29

)

$

0.94

$

(1.77

)

Cash dividends declared per share

$

$

$

$

0.15

____________

(1)

The weighted average shares outstanding used in the calculation of diluted loss per share for the three and nine months ended September 30, 2020 were revised from the previously reported amounts. Refer to "Reconciliations of Non-GAAP Financial Measures – Net Income and Diluted EPS, Adjusted for Special Items" for additional information.

HILTON WORLDWIDE HOLDINGS INC.

COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS

BY REGION

(unaudited)

Three Months Ended September 30,

Occupancy

ADR

RevPAR

2021

vs. 2020

2021

vs. 2020

2021

vs. 2020

U.S.

67.9

%

23.4

%

pts.

$

146.89

34.2

%

$

99.71

104.9

%

Americas (excluding U.S.)

54.4

30.1

116.18

19.9

63.15

168.3

Europe

59.3

27.7

132.23

28.9

78.42

142.3

Middle East & Africa

52.9

27.8

120.92

(0.4

)

63.94

110.1

Asia Pacific

49.5

(4.8

)

102.67

15.4

50.86

5.2

System-wide

64.3

21.5

140.57

32.2

90.39

98.7

Nine Months Ended September 30,

Occupancy

ADR

RevPAR

2021

vs. 2020

2021

vs. 2020

2021

vs. 2020

U.S.

59.9

%

17.7

%

pts.

$

130.26

7.0

%

$

78.00

51.9

%

Americas (excluding U.S.)

40.7

12.1

108.63

(3.1

)

44.25

38.0

Europe

37.0

6.8

115.89

1.0

42.92

23.8

Middle East & Africa

48.1

15.0

125.50

60.40

45.2

Asia Pacific

49.8

9.5

99.95

3.1

49.81

27.5

System-wide

55.7

15.6

125.93

6.2

70.15

47.6

HILTON WORLDWIDE HOLDINGS INC.

COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS

BY BRAND

(unaudited)

Three Months Ended September 30,

Occupancy

ADR

RevPAR

2021

vs. 2020

2021

vs. 2020

2021

vs. 2020

Waldorf Astoria Hotels & Resorts

46.5

%

14.2

%

pts.

$

500.93

97.2

%

$

233.15

184.2

%

Conrad Hotels & Resorts

47.1

16.6

220.71

23.5

103.96

91.1

Canopy by Hilton

58.0

24.6

166.30

27.0

96.44

120.8

Hilton Hotels & Resorts

51.8

22.8

162.94

30.2

...

84.34

132.8

Curio Collection by Hilton

56.3

26.9

203.87

28.8

114.70

146.8

DoubleTree by Hilton

57.6

...

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