Hilton Reports First Quarter Results

Hilton Worldwide Holdings Inc. (NYSE: HLT) today reported its first quarter 2021 results. The following results reflect the material impact that the novel coronavirus pandemic has had on Hilton’s business. Highlights include:

  • Diluted EPS was $(0.39) for the first quarter, and diluted EPS, adjusted for special items, was $0.02
  • Net loss was $109 million for the first quarter
  • Adjusted EBITDA was $198 million for the first quarter
  • System-wide comparable RevPAR decreased 38.4 percent on a currency neutral basis for the first quarter from the same period in 2020
  • Approved 21,900 new rooms for development during the first quarter, bringing Hilton’s development pipeline to 399,000 rooms as of March 31, 2021
  • Added 16,500 rooms to Hilton’s system in the first quarter, contributing to 13,100 net additional rooms during the period and approximately 5.8 percent annualized net unit growth from March 31, 2020
  • As of April 28, 2021, 97 percent of Hilton’s system-wide hotels were open
  • In March 2021, repaid $250 million of the outstanding debt balance under the Revolving Credit Facility, for a total of $500 million repaid in the first quarter

Overview

Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, “We are pleased with our first quarter results. While rising COVID-19 cases and tightened travel restrictions, particularly across Europe and our Asia Pacific region, weighed on demand in January and February, we saw meaningful improvement in March and April. We expect this positive momentum to continue as vaccines are more widely distributed and our customers feel safe traveling again. We continue to grow our portfolio of hotels in exciting destinations throughout the world, giving our guests more options than ever before to make a Hilton hotel a part of their plans as travel resumes.”

The COVID-19 pandemic adversely affected the Asia Pacific region beginning in January 2020 before spanning to the Americas and Europe, Middle East and Africa regions in mid-March 2020. Therefore, the results for the three months ended March 31, 2021 are not comparable to the results for the three months ended March 31, 2020. The operations of approximately 275 properties, which are primarily located in the United States (“U.S.”) and Europe, were suspended for some period of time during the three months ended March 31, 2021, as compared to approximately 730 properties during the three months ended March 31, 2020.

For the three months ended March 31, 2021, system-wide comparable RevPAR decreased 38.4 percent compared to the same period in 2020 due to both occupancy and ADR decreases. Additionally, as a result of the pandemic, fee revenues decreased 34 percent during the three months ended March 31, 2021 compared to the same period in 2020.

For the three months ended March 31, 2021, diluted EPS was $(0.39) and diluted EPS, adjusted for special items, was $0.02 compared to $0.06 and $0.74, respectively, for the three months ended March 31, 2020. Net income (loss) and Adjusted EBITDA were $(109) million and $198 million, respectively, for the three months ended March 31, 2021, compared to $18 million and $363 million, respectively, for the three months ended March 31, 2020.

Development

In the first quarter of 2021, Hilton opened 105 new hotels totaling 16,500 rooms and achieved net unit growth of 13,100 rooms. Since the beginning of the year, Hilton has opened its 100th Curio Collection by Hilton, the 1,500-room Virgin Hotels Las Vegas, and its 50th Tapestry Collection by Hilton, demonstrating the strength of its newer, conversion-friendly brands, and executed a management agreement for the first Signia by Hilton, a 975-room new construction project in Atlanta. Additionally, during the quarter, Hilton added over 5,000 rooms to its development pipeline in connection with the exclusive management license agreement with Country Garden to introduce and develop Home2 Suites by Hilton branded properties in China.

As of March 31, 2021, Hilton’s development pipeline totaled over 2,570 hotels consisting of nearly 399,000 rooms throughout 114 countries and territories, including 31 countries and territories where Hilton does not currently have any existing hotels. Additionally, of the rooms in the development pipeline, 241,000 rooms were located outside the U.S., and 204,000 rooms were under construction.

Balance Sheet and Liquidity

As of March 31, 2021, Hilton had $10.1 billion of long-term debt outstanding, excluding deferred financing costs and discount, with a weighted average interest rate of 3.66 percent. Excluding finance lease liabilities and other debt of Hilton’s consolidated variable interest entities, Hilton had $9.8 billion of long-term debt outstanding with a weighted average interest rate of 3.61 percent and no scheduled maturities until 2024. During the three months ended March 31, 2021, Hilton repaid $500 million of the outstanding debt balance under its $1.75 billion senior secured revolving credit facility (the “Revolving Credit Facility”), resulting in an available borrowing capacity of $500 million. Total cash and cash equivalents were $2,447 million as of March 31, 2021, including $45 million of restricted cash and cash equivalents.

About Hilton

Hilton (NYSE: HLT) is a leading global hospitality company with a portfolio of 18 brands comprising more than 6,500 properties and more than one million rooms in 119 countries and territories.

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,

 

2021

2020

Revenues

 

Franchise and licensing fees

 

$

242

$

339

Base and other management fees

 

25

60

Incentive management fees

 

13

23

Owned and leased hotels

 

56

210

Other revenues

 

17

23

 

353

655

Other revenues from managed and franchised properties

 

521

1,265

Total revenues

 

874

1,920

 

Expenses

 

Owned and leased hotels

 

110

239

Depreciation and amortization

 

51

91

General and administrative

 

97

60

Impairment losses

 

112

Other expenses

 

10

14

 

268

516

Other expenses from managed and franchised properties

 

585

1,336

Total expenses

 

853

1,852

 

Operating income

 

21

68

 

Interest expense

 

(103

)

(94

)

Gain on foreign currency transactions

 

2

9

Loss on debt extinguishment

 

(69

)

Other non-operating income, net

 

5

 

Loss before income taxes

 

(144

)

(17

)

 

Income tax benefit

 

35

35

 

Net income (loss)

 

(109

)

18

Net loss attributable to noncontrolling interests

 

1

Net income (loss) attributable to Hilton stockholders

 

$

(108

)

$

18

 

Weighted average shares outstanding:

 

Basic

 

278

277

Diluted

 

278

280

 

Earnings (loss) per share:

 

Basic

 

$

(0.39

)

$

0.06

Diluted

 

$

(0.39

)

$

0.06

 

Cash dividends declared per share

 

$

$

0.15

                 
                           

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

 

2021

 

vs. 2020

 

2021

 

vs. 2020

 

2021

 

vs. 2020

U.S.

 

47.7

%

 

(9.9

)%

pts.

 

$

107.23

 

(23.4

)%

 

$

51.10

 

(36.6

)%

Americas (excluding U.S.)

 

30.3

 

(21.3

)

 

94.43

 

(22.7

)

 

28.64

 

(54.6

)

Europe

 

19.3

 

(32.7

)

 

81.59

 

(35.0

)

 

15.74

 

(75.9

)

Middle East & Africa

 

42.6

 

(15.7

)

 

124.56

 

(6.9

)

 

53.12

 

(31.9

)

Asia Pacific

 

43.7

 

6.5

 

97.60

 

(20.5

)

 

42.65

 

(6.6

)

System-wide

 

43.9

 

(11.0

)

 

105.38

 

(23.0

)

 

46.23

 

(38.4

)

     
 

Three Months Ended March 31,

 

Occupancy

 

ADR

 

RevPAR

 

2021

 

vs. 2020

 

2021

 

vs. 2020

 

2021

 

vs. 2020

Waldorf Astoria Hotels & Resorts

 

32.0

%

 

(21.5

)%

pts.

 

$

573.77

 

26.0

%

 

$

183.51

 

(24.6

)%

Conrad Hotels & Resorts

 

31.6

 

(11.9

)

 

182.93

 

(25.2

)

 

57.81

 

(45.6

)

Canopy by Hilton

 

29.7

 

(9.4

)

 

116.77

 

(29.3

)

 

34.73

 

(46.3

)

Hilton Hotels & Resorts

 

30.1

 

(22.8

)

 

125.83

 

(25.2

)

 

37.90

 

(57.4

)

Curio Collection by Hilton

 

34.8

 

(15.5

)

 

172.34

 

(10.1

)

 

59.99

 

(37.8

)

DoubleTree by Hilton

 

36.1

 

(15.7

)

 

96.58

 

(24.5

)

 

34.89

 

(47.3

)

Tapestry Collection by Hilton

 

37.5

 

(9.4

)

 

112.46

 

(16.8

)

 

42.13

 

(33.5

)

Embassy Suites by Hilton

 

43.3

 

(15.9

)

 

119.98

 

(23.7

)

 

51.91

 

(44.2

)

Hilton Garden Inn

 

45.9

 

(9.7

)

 

92.66

 

(24.4

)

 

42.51

 

(37.6

)

Hampton by Hilton

 

50.2

 

(4.4

)

 

92.47

 

(17.9

)

 

46.38

 

(24.5

)

Tru by Hilton

 

53.5

 

5.2

 

83.84

 

(13.0

)

 

44.83

 

(3.6

)

Homewood Suites by Hilton

 

64.2

 

(1.0

)

 

105.82

 

(20.3

)

 

67.94

 

(21.5

)

Home2 Suites by Hilton

 

64.6

 

3.6

 

96.63

 

(13.9

)

 

62.38

 

(8.8

)

System-wide

 

43.9

 

(11.0

)

 

105.38

 

(23.0

)

 

46.23

 

(38.4

)

     
 

Three Months Ended March 31,

 

Occupancy

 

ADR

 

RevPAR

 

2021

 

vs. 2020

 

2021

 

vs. 2020

 

2021

 

vs. 2020

Management and franchise

 

44.3

%  

(10.6

)% pts.   $

105.22

 

(22.7

)%   $

46.66

 

(37.6

)%

Ownership(1)

 

14.5

   

(37.0

)      

134.90

 

(25.8

)    

19.62

 

(79.1

)

System-wide

 

43.9

   

(11.0

)      

105.38

 

(23.0

)    

46.23

 

(38.4

)

____________

(1)

 

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

                 

HILTON WORLDWIDE HOLDINGS INC.

PROPERTY SUMMARY

As of March 31, 2021

                 
 

Owned / Leased(1)

 

Managed

 

Franchised

 

Total

 

Properties

 

Rooms

 

Properties

 

Rooms

 

Properties

 

Rooms

 

Properties

 

Rooms

Waldorf Astoria Hotels & Resorts

               

U.S.

 

 

13

 

5,266

 

2

 

1,047

 

15

 

6,313

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.

 

 

 

 

1

 

70

 

1

 

70

Americas (excluding U.S.)

 

 

 

 

1

 

76

 

1

 

76

Europe

 

 

2

 

383

 

 

 

2

 

383

Middle East & Africa

 

 

 

 

1

 

234

 

1

 

234

Conrad Hotels & Resorts

             

U.S.

 

 

6

 

2,211

 

1

 

223

 

7

 

2,434

Americas (excluding U.S.)

 

 

2

 

438

 

 

 

2

 

438

Europe

 

 

4

 

1,155

 

 

 

4

 

1,155

Middle East & Africa

 

1

614

 

3

 

1,569

 

 

 

4

 

2,183

Asia Pacific

 

1

164

 

20

 

6,057

 

1

 

659

 

22

 

6,880

Canopy by Hilton

             

U.S.

 

 

 

 

20

 

3,363

 

20

 

3,363

Americas (excluding U.S.)

 

 

2

 

272

 

 

 

2

 

272

Europe

 

 

 

 

2

 

263

 

2

 

263

Middle East & Africa

 

 

1

 

200

 

 

 

1

 

200

Asia Pacific

 

 

3

 

489

 

 

 

3

 

489

Hilton Hotels & Resorts

             

U.S.

 

 

62

 

45,765

 

180

 

55,451

 

242

 

101,216

Americas (excluding U.S.)

 

1

405

 

25

 

9,323

 

25

 

7,683

 

51

 

17,411

Europe

 

46

12,757

 

45

 

15,253

 

39

 

10,454

 

130

 

38,464

Middle East & Africa

 

5

1,998

 

39

 

12,923

 

2

 

1,415

 

46

 

16,336

Asia Pacific

 

5

2,999

 

105

 

37,089

 

5

 

2,071

 

115

 

42,159

Curio Collection by Hilton

             

U.S.

 

 

6

 

2,987

 

52

 

10,912

 

58

 

13,899

Americas (excluding U.S.)

 

 

2

 

99

 

10

 

1,177

 

12

 

1,276

Europe

 

 

5

 

520

 

15

 

1,846

 

20

 

2,366

Middle East & Africa

 

 

4

 

685

 

1

 

356

 

5

 

1,041

Asia Pacific

 

 

4

 

773

 

2

 

248

 

6

 

1,021

DoubleTree by Hilton

             

U.S.

 

 

32

 

10,878

 

340

 

77,878

 

372

 

88,756

Americas (excluding U.S.)

 

 

3

 

587

 

36

 

7,047

 

39

 

7,634

Europe

 

 

14

 

3,524

 

101

 

17,473

 

115

 

20,997

Middle East & Africa

 

 

14

 

3,854

 

5

 

568

 

19

 

4,422

Asia Pacific

 

 

70

 

18,918

 

5

 

1,395

 

75

 

20,313

Tapestry Collection by Hilton

             

U.S.

 

 

 

 

54

 

6,510

 

54

 

6,510

Americas (excluding U.S.)

 

 

 

 

2

 

190

 

2

 

190

Asia Pacific

 

 

 

 

1

 

175

 

1

 

175

Embassy Suites by Hilton

             

U.S.

 

 

42

 

11,101

 

209

 

46,891

 

251

 

57,992

Americas (excluding U.S.)

 

 

3

 

667

 

5

 

1,336

 

8

 

2,003

Motto by Hilton

             

U.S.

 

 

 

 

1

 

245

 

1

 

245

Hilton Garden Inn

             

U.S.

 

 

4

 

425

 

711

 

98,209

 

715

 

98,634

Americas (excluding U.S.)

 

 

12

 

1,723

 

46

 

6,961

 

58

 

8,684

Europe

 

 

20

 

3,763

 

55

 

9,124

 

75

 

12,887

Middle East & Africa

 

 

15

 

3,272

 

3

 

474

 

18

 

3,746

Asia Pacific

 

 

40

 

8,734

 

 

 

40

 

8,734

Hampton by Hilton

             

U.S.

 

 

27

 

3,396

 

2,256

 

222,380

 

2,283

 

225,776

Americas (excluding U.S.)

 

 

12

 

1,540

 

107

 

12,964

 

119

 

14,504

Europe

 

 

17

 

2,808

 

81

 

12,627

 

98

 

15,435

Middle East & Africa

 

 

3

 

723

 

 

 

3

 

723

Asia Pacific

 

 

 

 

179

 

29,454

 

179

 

29,454

Tru by Hilton

             

U.S.

 

 

 

 

190

 

18,658

 

190

 

18,658

Americas (excluding U.S.)

 

 

 

 

2

 

179

 

2

 

179

Homewood Suites by Hilton

             

U.S.

 

 

9

 

1,008

 

482

 

55,019

 

491

 

56,027

Americas (excluding U.S.)

 

 

3

 

406

 

22

 

2,457

 

25

 

2,863

Home2 Suites by Hilton

             

U.S.

 

 

3

 

313

 

468

 

49,148

 

471

 

49,461

Americas (excluding U.S.)

 

 

 

 

7

 

753

 

7

 

753

Other

 

 

4

 

2,164

 

5

 

1,395

 

9

 

3,559

Hotels

 

61

19,400

 

717

 

226,903

 

5,733

 

777,058

 

6,511

 

1,023,361

Hilton Grand Vacations

 

 

 

 

56

 

9,051

 

56

 

9,051

Total

 

61

19,400

 

717

 

226,903

 

5,789

 

786,109

 

6,567

 

1,032,412

                                 
____________________
(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)

 

2021

2020

$

%

Capital expenditures for property and equipment(1)

 

$

3

$

12

(9

)

(75.0

)

Capitalized software costs(2)

 

8

17

(9

)

(52.9

)

Total capital expenditures

 

11

29

(18

)

(62.1

)

Contract acquisition costs

 

43

11

32

NM

(3)

Total capital expenditures and contract acquisition costs

 

$

54

$

40

14

35.0

 
____________

(1)

Includes expenditures for hotel, corporate and other property and equipment, which for the three months ended March 31, 2020, included $3 million that were indirectly reimbursed by hotel owners. Excludes expenditures for furniture, fixtures and equipment (“FF&E”) replacement reserves of $4 million and $14 million for the three months ended March 31, 2021 and 2020, respectively.

(2)

Includes $7 million and $14 million of expenditures that were indirectly reimbursed by hotel owners for the three months ended March 31, 2021 and 2020, respectively.

(3)

Fluctuation in terms of percentage change is not meaningful.

     
 

HILTON WORLDWIDE HOLDINGS INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

NET INCOME AND DILUTED EPS, ADJUSTED FOR SPECIAL ITEMS

(unaudited, in millions, except per share data)

 
 

Three Months Ended

 

March 31,

 

2021

2020

Net income (loss) attributable to Hilton stockholders, as reported

 

$

(108

)

$

18

Diluted EPS, as reported

 

$

(0.39

)

$

0.06

Special items:

 

Net other expenses from managed and franchised properties

 

$

64

$

71

Purchase accounting amortization(1)

 

12

49

FF&E replacement reserves

 

4

14

Impairment losses

 

112

Loss on debt extinguishment(2)

 

69

Other adjustments

 

3

3

Total special items before taxes

 

152

249

Income tax expense on special items

 

(38

)

(59

)

Total special items after taxes

 

$

114

$

190

 

Net income, adjusted for special items

 

$

6

$

208

Diluted EPS, adjusted for special items

 

$

0.02

$

0.74

____________
(1)  

Represents the amortization of intangible assets that were recorded at fair value in October 2007 when the Company became a wholly owned subsidiary of affiliates of The Blackstone Group Inc. Certain of these assets became fully amortized during the year ended December 31, 2020, and the majority of the remaining finite-lived intangible assets will be fully amortized during 2023.

(2)  

Relates to the redemption of the 5.125% Senior Notes due 2026, which included a redemption premium of $55 million and the accelerated recognition of unamortized deferred financing costs of $14 million.

     
 

HILTON WORLDWIDE HOLDINGS INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN

(unaudited, dollars in millions)

 
 

Three Months Ended

 

March 31,

 

2021

2020

Net income (loss)

 

$

(109

)

$

18

Interest expense

 

103

94

Income tax benefit

 

(35

)

(35

)

Depreciation and amortization

 

51

91

EBITDA

 

10

168

Gain on foreign currency transactions

 

(2

)

(9

)

Loss on debt extinguishment

 

69

FF&E replacement reserves

 

4

14

Share-based compensation expense (benefit)

 

39

(12

)

Impairment losses

 

112

Amortization of contract acquisition costs

 

7

8

Net other expenses from managed and franchised properties

 

64

71

Other adjustments(1)

 

7

11

Adjusted EBITDA

 

$

198

$

363

         

____________

       

(1) Includes severance and other items.

         
 

Three Months Ended

 

March 31,

 

2021

2020

Total revenues, as reported

 

$

874

$

1,920

Add: amortization of contract acquisition costs

 

7

8

Less: other revenues from managed and franchised properties

 

(521

)

(1,265

)

Total revenues, as adjusted

 

$

360

$

663

 

Adjusted EBITDA

 

$

198

$

363

 

Adjusted EBITDA margin

 

55.0

%

54.8

%

                 
 

HILTON WORLDWIDE HOLDINGS INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

NET DEBT AND NET DEBT TO ADJUSTED EBITDA RATIO

(unaudited, dollars in millions)

 
         

March 31,

December 31,

         

2021

2020

Long-term debt, including current maturities

         

$

9,956

 

$

10,487

Add: unamortized deferred financing costs and discount

         

97

 

93

Long-term debt, including current maturities and excluding unamortized deferred financing costs and discount

         

10,053

 

10,580

Add: Hilton’s share of unconsolidated affiliate debt

         

8

 

8

Less: cash and cash equivalents

         

(2,402

)

 

(3,218

)

Less: restricted cash and cash equivalents

         

(45

)

 

(45

)

Net debt

         

$

7,614

 

$

7,325

                 
 

Three Months Ended

Year Ended

TTM(1) Ended

 

March 31,

December 31,

March 31,

 

2021

2020

2020

2021

Net income (loss)

 

$

(109

)

 

$

18

 

$

(720

)

 

$

(847

)

Interest expense

 

103

 

94

 

429

 

438

Income tax benefit

 

(35

)

 

(35

)

 

(204

)

 

(204

)

Depreciation and amortization

 

51

 

91

 

331

 

291

EBITDA

 

10

 

168

 

(164

)

 

(322

)

Loss (gain) on foreign currency transactions

 

(2

)

 

(9

)

 

27

 

34

Loss on debt extinguishments

 

69

 

 

48

 

117

FF&E replacement reserves

 

4

 

14

 

57

 

47

Share-based compensation expense (benefit)

 

39

 

(12

)

 

97

 

148

Reorganization costs

 

 

 

41

 

41

Impairment losses

 

 

112

 

258

 

146

Amortization of contract acquisition costs

 

7

 

8

 

29

 

28

Net other expenses from managed and franchised properties

 

64

 

71

 

397

 

390

Other adjustments(2)

 

7

 

11

 

52

 

48

Adjusted EBITDA

 

$

198

 

$

363

 

$

842

 

$

677

       

Net debt

       

$

7,614

       

Net debt to Adjusted EBITDA ratio

       

11.2

____________

(1)

Trailing twelve months (“TTM”) for the period ended March 31, 2021 is calculated as the three months ended March 31, 2021 plus the year ended December 31, 2020 less the three months ended March 31, 2020.

(2)

Includes severance not related to the 2020 reorganization and other items. The year ended December 31, 2020 also includes costs recognized for the settlement of a dispute with an owner of a managed hotel, losses related to the disposal of an investment and a loan guarantee for a franchised hotel and a gain related to the reimbursement by a third party for taxes owed resulting from the sale of a hotel in a prior period.