Hilton Reports Second Quarter Results
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240807429589/en/
-
Diluted EPS was
$1.67 for the second quarter, and diluted EPS, adjusted for special items, was$1.91 -
Net income was
$422 million for the second quarter -
Adjusted EBITDA was
$917 million for the second quarter - System-wide comparable RevPAR increased 3.5 percent, on a currency neutral basis, for the second quarter compared to the same period in 2023
-
Approved 62,700 new rooms for development during the second quarter, bringing our development pipeline to a record 508,300 rooms as of
June 30, 2024 , representing growth of 15 percent fromJune 30, 2023 -
Added 22,400 rooms to our system in the second quarter, resulting in 18,000 net additional rooms for the second quarter, contributing to net unit growth of 6.2 percent from
June 30, 2023 - Completed the acquisition of the Graduate Hotels brand in May, which expands our lifestyle portfolio
-
Announced that nearly 400 hotels have agreed to join our system under our strategic partnership with
Small Luxury Hotels of the World ("SLH"), beginning in July, adding an expected 18,000 rooms to our portfolio -
Repurchased 3.5 million shares of Hilton common stock during the second quarter; bringing total capital return, including dividends, to
$761 million for the quarter and$1,774 million year to date through August -
Full year 2024 system-wide RevPAR is projected to increase between 2.0 percent and 3.0 percent on a comparable and currency neutral basis compared to 2023; full year net income is projected to be between
$1,532 million and$1,555 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
Overview
For the three months ended
For the six months ended
For the three months ended
For the six months ended
Development
In the second quarter of 2024, we opened 165 hotels, totaling 22,400 rooms, resulting in 18,000 net room additions. During the quarter, we continued to expand our lifestyle portfolio through our acquisition of the Graduate brand and added 32 hotels to our system with another four hotels added to our pipeline. Our first NoMad hotel joined our portfolio in the quarter, the NoMad London, which is ranked on the "World's 50 Best Hotels" list. We debuted three stunning Portuguese properties, the
In July, we launched our partnership with SLH, enabling guests to book rooms at nearly 400 SLH hotels that are joining our system.
We added 62,700 rooms to the development pipeline during the second quarter, and, as of
_______________ |
|
(1) |
Excluding hotels from our strategic partner arrangements, we added 44,500 rooms to the development pipeline during the second quarter, and, as of |
Balance Sheet and Liquidity
In
As of
In
During the three months ended
The number of shares outstanding as of
Outlook
Share-based metrics in Hilton's outlook include actual share repurchases through the second 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 toincrease between 2.0 percent and 3.0 percent compared to 2023.
-
Diluted EPS is projected to be between
$6.06 and$6.15 . -
Diluted EPS, adjusted for special items, is projected to be between
$6.93 and$7.03 . -
Net income is projected to be between
$1,532 million and$1,555 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
$250 million and$300 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.
Third Quarter 2024
- System-wide comparable RevPAR, on a currency neutral basis, is projected to increase between 2.0 percent and 3.0 percent compared to the third quarter of 2023.
-
Diluted EPS is projected to be between
$1.74 and$1.79 . -
Diluted EPS, adjusted for special items, is projected to be between
$1.80 and$1.85 . -
Net income is projected to be between
$435 million and$448 million . -
Adjusted EBITDA is projected to be between
$875 million and$890 million .
Conference Call
Hilton will host a conference call to discuss second quarter of 2024 results on
Alternatively, participants may listen to the live call by dialing 1-888-317-6003 in
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; 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
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
About Hilton
Hilton (NYSE: HLT) is a leading global hospitality company with a portfolio of 24 world-class brands comprising nearly 7,800 properties and more than 1.2 million rooms, in 126 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
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EARNINGS RELEASE SCHEDULES |
TABLE OF CONTENTS |
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Condensed Consolidated Statements of Operations |
Comparable and |
Property Summary |
Capital Expenditures and Contract Acquisition Costs |
Reconciliations of Non-GAAP Financial Measures |
Definitions |
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|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
(in millions, except per share data) |
|||||||||||||||
(unaudited) |
|||||||||||||||
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|||||||||||||||
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Three Months Ended |
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Six Months Ended |
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2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues |
|
|
|
|
|
|
|
||||||||
Franchise and licensing fees |
$ |
689 |
|
|
$ |
618 |
|
|
$ |
1,260 |
|
|
$ |
1,126 |
|
Base and other management fees |
|
93 |
|
|
|
86 |
|
|
|
199 |
|
|
|
166 |
|
Incentive management fees |
|
68 |
|
|
|
69 |
|
|
|
138 |
|
|
|
134 |
|
Owned and leased hotels |
|
337 |
|
|
|
341 |
|
|
|
592 |
|
|
|
589 |
|
Other revenues |
|
71 |
|
|
|
46 |
|
|
|
121 |
|
|
|
81 |
|
|
|
1,258 |
|
|
|
1,160 |
|
|
|
2,310 |
|
|
|
2,096 |
|
Other revenues from managed and franchised properties |
|
1,693 |
|
|
|
1,500 |
|
|
|
3,214 |
|
|
|
2,857 |
|
Total revenues |
|
2,951 |
|
|
|
2,660 |
|
|
|
5,524 |
|
|
|
4,953 |
|
|
|
|
|
|
|
|
|
||||||||
Expenses |
|
|
|
|
|
|
|
||||||||
Owned and leased hotels |
|
298 |
|
|
|
297 |
|
|
|
545 |
|
|
|
548 |
|
Depreciation and amortization |
|
34 |
|
|
|
37 |
|
|
|
70 |
|
|
|
74 |
|
General and administrative |
|
113 |
|
|
|
111 |
|
|
|
217 |
|
|
|
202 |
|
Other expenses |
|
37 |
|
|
|
33 |
|
|
|
67 |
|
|
|
54 |
|
|
|
482 |
|
|
|
478 |
|
|
|
899 |
|
|
|
878 |
|
Other expenses from managed and franchised properties |
|
1,744 |
|
|
|
1,508 |
|
|
|
3,374 |
|
|
|
2,903 |
|
Total expenses |
|
2,226 |
|
|
|
1,986 |
|
|
|
4,273 |
|
|
|
3,781 |
|
|
|
|
|
|
|
|
|
||||||||
Gain on sales of assets, net |
|
— |
|
|
|
— |
|
|
|
7 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
||||||||
Operating income |
|
725 |
|
|
|
674 |
|
|
|
1,258 |
|
|
|
1,172 |
|
|
|
|
|
|
|
|
|
||||||||
Interest expense |
|
(141 |
) |
|
|
(111 |
) |
|
|
(272 |
) |
|
|
(227 |
) |
Loss on foreign currency transactions |
|
(1 |
) |
|
|
(6 |
) |
|
|
(2 |
) |
|
|
(6 |
) |
Loss on investments in unconsolidated affiliate |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(92 |
) |
Other non-operating income (loss), net |
|
8 |
|
|
|
11 |
|
|
|
(28 |
) |
|
|
23 |
|
|
|
|
|
|
|
|
|
||||||||
Income before income taxes |
|
591 |
|
|
|
568 |
|
|
|
956 |
|
|
|
870 |
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense |
|
(169 |
) |
|
|
(155 |
) |
|
|
(266 |
) |
|
|
(248 |
) |
|
|
|
|
|
|
|
|
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Net income |
|
422 |
|
|
|
413 |
|
|
|
690 |
|
|
|
622 |
|
Net income attributable to redeemable and nonredeemable noncontrolling interests |
|
(1 |
) |
|
|
(2 |
) |
|
|
(4 |
) |
|
|
(5 |
) |
Net income attributable to Hilton stockholders |
$ |
421 |
|
|
$ |
411 |
|
|
$ |
686 |
|
|
$ |
617 |
|
|
|
|
|
|
|
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|
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Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
249 |
|
|
|
264 |
|
|
|
251 |
|
|
|
265 |
|
Diluted |
|
252 |
|
|
|
266 |
|
|
|
253 |
|
|
|
267 |
|
|
|
|
|
|
|
|
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Earnings per share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
1.69 |
|
|
$ |
1.56 |
|
|
$ |
2.74 |
|
|
$ |
2.33 |
|
Diluted |
$ |
1.67 |
|
|
$ |
1.55 |
|
|
$ |
2.71 |
|
|
$ |
2.31 |
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per share |
$ |
0.15 |
|
|
$ |
0.15 |
|
|
$ |
0.30 |
|
|
$ |
0.30 |
|
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COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS |
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BY REGION, BRAND AND SEGMENT |
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(unaudited) |
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Three Months Ended |
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Occupancy |
|
ADR |
|
RevPAR |
|||||||||||||
|
2024 |
|
vs. 2023 |
|
2024 |
|
vs. 2023 |
|
2024 |
|
vs. 2023 |
|||||||
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|
|
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|
||||||
System-wide |
75.3 |
% |
|
1.3 |
% |
pts. |
|
$ |
163.70 |
|
1.7 |
% |
|
$ |
123.30 |
|
3.5 |
% |
|
|
|
|
|
|
|
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|
|
|
|
|
||||||
Region |
|
|
|
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|
|
|
|
|
|
|
|
||||||
|
76.8 |
% |
|
1.1 |
% |
pts. |
|
$ |
172.36 |
|
1.4 |
% |
|
$ |
132.33 |
|
2.9 |
% |
|
71.2 |
|
|
1.7 |
|
|
|
|
154.34 |
|
4.0 |
|
|
|
109.94 |
|
6.5 |
|
|
77.4 |
|
|
2.4 |
|
|
|
|
173.38 |
|
3.4 |
|
|
|
134.12 |
|
6.7 |
|
|
68.3 |
|
|
2.4 |
|
|
|
|
185.55 |
|
6.8 |
|
|
|
126.68 |
|
10.7 |
|
|
69.5 |
|
|
0.8 |
|
|
|
|
105.20 |
|
(0.2 |
) |
|
|
73.08 |
|
0.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Brand |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
65.6 |
% |
|
4.3 |
% |
pts. |
|
$ |
498.27 |
|
0.5 |
% |
|
$ |
326.90 |
|
7.5 |
% |
|
74.9 |
|
|
4.3 |
|
|
|
|
274.57 |
|
2.5 |
|
|
|
205.72 |
|
8.7 |
|
|
67.0 |
|
|
8.8 |
|
|
|
|
551.75 |
|
(6.8 |
) |
|
|
369.73 |
|
7.3 |
|
Canopy by Hilton |
76.4 |
|
|
4.1 |
|
|
|
|
235.15 |
|
1.4 |
|
|
|
179.56 |
|
7.1 |
|
|
73.1 |
|
|
1.7 |
|
|
|
|
193.50 |
|
2.0 |
|
|
|
141.50 |
|
4.4 |
|
Curio Collection by Hilton |
73.0 |
|
|
3.2 |
|
|
|
|
244.26 |
|
0.1 |
|
|
|
178.22 |
|
4.7 |
|
|
71.8 |
|
|
1.7 |
|
|
|
|
147.41 |
|
1.8 |
|
|
|
105.90 |
|
4.3 |
|
Tapestry Collection by Hilton |
71.8 |
|
|
2.0 |
|
|
|
|
188.97 |
|
0.7 |
|
|
|
135.60 |
|
3.5 |
|
|
78.5 |
|
|
2.2 |
|
|
|
|
191.80 |
|
1.2 |
|
|
|
150.53 |
|
4.2 |
|
Motto by Hilton |
82.2 |
|
|
1.0 |
|
|
|
|
240.24 |
|
1.7 |
|
|
|
197.47 |
|
3.0 |
|
|
75.0 |
|
|
1.5 |
|
|
|
|
151.16 |
|
0.5 |
|
|
|
113.39 |
|
2.6 |
|
|
75.5 |
|
|
0.1 |
|
|
|
|
136.18 |
|
1.7 |
|
|
|
102.85 |
|
1.8 |
|
Tru by Hilton |
76.5 |
|
|
1.6 |
|
|
|
|
135.63 |
|
2.0 |
|
|
|
103.79 |
|
4.2 |
|
Homewood Suites by Hilton |
82.3 |
|
|
0.7 |
|
|
|
|
164.69 |
|
1.1 |
|
|
|
135.55 |
|
1.9 |
|
Home2 Suites by Hilton |
81.6 |
|
|
1.2 |
|
|
|
|
144.97 |
|
1.7 |
|
|
|
118.27 |
|
3.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Segment |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Management and franchise |
75.3 |
% |
|
1.2 |
% |
pts. |
|
$ |
162.92 |
|
1.7 |
% |
|
$ |
122.61 |
|
3.4 |
% |
Ownership(1) |
80.0 |
|
|
2.8 |
|
|
|
|
221.92 |
|
4.2 |
|
|
|
177.54 |
|
8.0 |
|
|
||||||||||||||||||
COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS |
||||||||||||||||||
BY REGION, BRAND AND SEGMENT |
||||||||||||||||||
(unaudited) |
||||||||||||||||||
|
||||||||||||||||||
|
Six Months Ended |
|||||||||||||||||
|
Occupancy |
|
ADR |
|
RevPAR |
|||||||||||||
|
2024 |
|
vs. 2023 |
|
2024 |
|
vs. 2023 |
|
2024 |
|
vs. 2023 |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
System-wide |
71.3 |
% |
|
0.7 |
% |
pts. |
|
$ |
159.37 |
|
1.7 |
% |
|
$ |
113.65 |
|
2.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Region |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
72.3 |
% |
|
0.3 |
% |
pts. |
|
$ |
167.11 |
|
1.0 |
% |
|
$ |
120.84 |
|
1.4 |
% |
|
68.6 |
|
|
1.5 |
|
|
|
|
155.54 |
|
4.6 |
|
|
|
106.64 |
|
6.9 |
|
|
71.2 |
|
|
2.7 |
|
|
|
|
159.07 |
|
3.7 |
|
|
|
113.18 |
|
7.9 |
|
|
70.8 |
|
|
2.4 |
|
|
|
|
190.27 |
|
8.9 |
|
|
|
134.76 |
|
12.8 |
|
|
67.3 |
|
|
1.1 |
|
|
|
|
109.93 |
|
2.7 |
|
|
|
74.03 |
|
4.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Brand |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
64.1 |
% |
|
4.0 |
% |
pts. |
|
$ |
530.62 |
|
(0.4 |
)% |
|
$ |
340.15 |
|
6.2 |
% |
|
73.1 |
|
|
4.4 |
|
|
|
|
277.29 |
|
4.8 |
|
|
|
202.83 |
|
11.5 |
|
|
61.7 |
|
|
6.9 |
|
|
|
|
590.62 |
|
(4.1 |
) |
|
|
364.64 |
|
8.0 |
|
Canopy by Hilton |
71.5 |
|
|
3.0 |
|
|
|
|
225.01 |
|
0.8 |
|
|
|
160.92 |
|
5.2 |
|
|
69.8 |
|
|
1.8 |
|
|
|
|
191.46 |
|
2.6 |
|
|
|
133.58 |
|
5.3 |
|
Curio Collection by Hilton |
69.7 |
|
|
3.2 |
|
|
|
|
239.54 |
|
0.1 |
|
|
|
166.91 |
|
4.8 |
|
|
68.0 |
|
|
1.5 |
|
|
|
|
142.96 |
|
1.5 |
|
|
|
97.20 |
|
3.7 |
|
Tapestry Collection by Hilton |
66.8 |
|
|
1.6 |
|
|
|
|
180.48 |
|
0.4 |
|
|
|
120.54 |
|
2.9 |
|
|
74.7 |
|
|
1.8 |
|
|
|
|
186.22 |
|
0.7 |
|
|
|
139.09 |
|
3.2 |
|
Motto by Hilton |
79.5 |
|
|
3.3 |
|
|
|
|
205.18 |
|
(1.0 |
) |
|
|
163.08 |
|
3.3 |
|
|
70.6 |
|
|
0.6 |
|
|
|
|
145.08 |
|
0.2 |
|
|
|
102.38 |
|
1.0 |
|
|
70.9 |
|
|
(0.7 |
) |
|
|
|
130.49 |
|
1.3 |
|
|
|
92.49 |
|
0.2 |
|
Tru by Hilton |
71.5 |
|
|
0.5 |
|
|
|
|
129.81 |
|
1.0 |
|
|
|
92.88 |
|
1.7 |
|
Homewood Suites by Hilton |
78.9 |
|
|
(0.2 |
) |
|
|
|
158.44 |
|
0.8 |
|
|
|
125.04 |
|
0.6 |
|
Home2 Suites by Hilton |
77.9 |
|
|
0.1 |
|
|
|
|
140.18 |
|
1.0 |
|
|
|
109.19 |
|
1.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Segment |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Management and franchise |
71.3 |
% |
|
0.7 |
% |
pts. |
|
$ |
158.69 |
|
1.7 |
% |
|
$ |
113.11 |
|
2.6 |
% |
Ownership(1) |
73.9 |
|
|
3.3 |
|
|
|
|
211.08 |
|
5.6 |
|
|
|
155.92 |
|
10.6 |
|
_______________ | |
(1) |
Includes hotels owned or leased by entities in which we own a noncontrolling financial interest. |
|
|||||||||||||||
PROPERTY SUMMARY |
|||||||||||||||
As of |
|||||||||||||||
|
|||||||||||||||
|
Owned / Leased(1) |
|
Managed |
|
Franchised / Licensed |
|
Total |
||||||||
|
Properties |
|
Rooms |
|
Properties |
|
Rooms |
|
Properties |
|
Rooms |
|
Properties |
|
Rooms |
|
2 |
|
463 |
|
32 |
|
8,345 |
|
— |
|
— |
|
34 |
|
8,808 |
|
2 |
|
779 |
|
43 |
|
13,920 |
|
4 |
|
2,496 |
|
49 |
|
17,195 |
|
— |
|
— |
|
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 |
— |
|
— |
|
9 |
|
1,326 |
|
32 |
|
5,731 |
|
41 |
|
7,057 |
|
47 |
|
16,250 |
|
295 |
|
126,647 |
|
271 |
|
83,504 |
|
613 |
|
226,401 |
Curio Collection by Hilton |
— |
|
— |
|
30 |
|
6,424 |
|
144 |
|
26,262 |
|
174 |
|
32,686 |
Graduate by Hilton |
— |
|
— |
|
— |
|
— |
|
32 |
|
5,429 |
|
32 |
|
5,429 |
|
— |
|
— |
|
167 |
|
46,099 |
|
521 |
|
110,010 |
|
688 |
|
156,109 |
Tapestry Collection by Hilton |
— |
|
— |
|
5 |
|
694 |
|
130 |
|
15,526 |
|
135 |
|
16,220 |
|
— |
|
— |
|
39 |
|
10,447 |
|
230 |
|
51,698 |
|
269 |
|
62,145 |
Tempo by Hilton |
— |
|
— |
|
1 |
|
661 |
|
2 |
|
436 |
|
3 |
|
1,097 |
Motto by Hilton |
— |
|
— |
|
— |
|
— |
|
7 |
|
1,552 |
|
7 |
|
1,552 |
|
— |
|
— |
|
118 |
|
23,283 |
|
906 |
|
127,639 |
|
1,024 |
|
150,922 |
|
— |
|
— |
|
52 |
|
8,331 |
|
2,975 |
|
327,225 |
|
3,027 |
|
335,556 |
Tru by Hilton |
— |
|
— |
|
— |
|
— |
|
261 |
|
25,489 |
|
261 |
|
25,489 |
Spark by Hilton |
— |
|
— |
|
— |
|
— |
|
46 |
|
4,401 |
|
46 |
|
4,401 |
Homewood Suites by Hilton |
— |
|
— |
|
10 |
|
1,281 |
|
532 |
|
60,858 |
|
542 |
|
62,139 |
Home2 Suites by Hilton |
— |
|
— |
|
2 |
|
210 |
|
692 |
|
75,097 |
|
694 |
|
75,307 |
Strategic partner hotels(2) |
— |
|
— |
|
— |
|
— |
|
6 |
|
469 |
|
6 |
|
469 |
Other(3) |
— |
|
— |
|
3 |
|
1,414 |
|
17 |
|
3,609 |
|
20 |
|
5,023 |
Total hotels |
51 |
|
17,492 |
|
815 |
|
252,634 |
|
6,816 |
|
928,894 |
|
7,682 |
|
1,199,020 |
Hilton Grand Vacations(4) |
— |
|
— |
|
— |
|
— |
|
98 |
|
17,288 |
|
98 |
|
17,288 |
Total system |
51 |
|
17,492 |
|
815 |
|
252,634 |
|
6,914 |
|
946,182 |
|
7,780 |
|
1,216,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owned / Leased(1) |
|
Managed |
|
Franchised / Licensed |
|
Total |
||||||||
|
Properties |
|
Rooms |
|
Properties |
|
Rooms |
|
Properties |
|
Rooms |
|
Properties |
|
Rooms |
|
— |
|
— |
|
191 |
|
82,606 |
|
5,548 |
|
721,663 |
|
5,739 |
|
804,269 |
|
1 |
|
405 |
|
74 |
|
18,335 |
|
328 |
|
50,082 |
|
403 |
|
68,822 |
|
39 |
|
11,604 |
|
108 |
|
27,530 |
|
420 |
|
70,796 |
|
567 |
|
109,930 |
|
5 |
|
2,320 |
|
110 |
|
31,030 |
|
23 |
|
5,075 |
|
138 |
|
38,425 |
|
6 |
|
3,163 |
|
332 |
|
93,133 |
|
497 |
|
81,278 |
|
835 |
|
177,574 |
Total hotels |
51 |
|
17,492 |
|
815 |
|
252,634 |
|
6,816 |
|
928,894 |
|
7,682 |
|
1,199,020 |
Hilton Grand Vacations(4) |
— |
|
— |
|
— |
|
— |
|
98 |
|
17,288 |
|
98 |
|
17,288 |
Total system |
51 |
|
17,492 |
|
815 |
|
252,634 |
|
6,914 |
|
946,182 |
|
7,780 |
|
1,216,308 |
_______________ | |
(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 portfolio, which are included in our booking channels and participate in the |
(3) |
Includes other hotels in our system that are not distinguished by a specific Hilton brand. |
(4) |
Includes properties under our timeshare brands including |
|
||||||||||
CAPITAL EXPENDITURES AND CONTRACT ACQUISITION COSTS |
||||||||||
(dollars in millions) |
||||||||||
(unaudited) |
||||||||||
|
||||||||||
|
Three Months Ended |
|
|
|||||||
|
|
|
Increase / (Decrease) |
|||||||
|
2024 |
|
2023 |
|
$ |
|
% |
|||
Capital expenditures for property and equipment(1) |
$ |
15 |
|
$ |
30 |
|
(15 |
) |
|
(50.0) |
Capitalized software costs(2) |
|
23 |
|
|
23 |
|
— |
|
|
— |
Total capital expenditures |
|
38 |
|
|
53 |
|
(15 |
) |
|
(28.3) |
Contract acquisition costs, net of refunds |
|
40 |
|
|
34 |
|
6 |
|
|
17.6 |
Total capital expenditures and contract acquisition costs |
$ |
78 |
|
$ |
87 |
|
(9 |
) |
|
(10.3) |
|
Six Months Ended |
|
|
|||||||
|
|
|
Increase / (Decrease) |
|||||||
|
2024 |
|
2023 |
|
$ |
|
% |
|||
Capital expenditures for property and equipment(1) |
$ |
31 |
|
$ |
74 |
|
(43 |
) |
|
(58.1) |
Capitalized software costs(2) |
|
41 |
|
|
42 |
|
(1 |
) |
|
(2.4) |
Total capital expenditures |
|
72 |
|
|
116 |
|
(44 |
) |
|
(37.9) |
Contract acquisition costs, net of refunds(3) |
|
77 |
|
|
139 |
|
(62 |
) |
|
(44.6) |
Total capital expenditures and contract acquisition costs |
$ |
149 |
|
$ |
255 |
|
(106 |
) |
|
(41.6) |
_______________ | |
(1) |
Represents expenditures for hotels, corporate and other property and equipment, which include amounts reimbursed by third parties of |
(2) |
Includes |
(3) |
The decrease during the six months ended |
|
|||||||||||||||
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 |
|
Six Months Ended |
||||||||||||
|
|
|
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income attributable to Hilton stockholders, as reported |
$ |
421 |
|
|
$ |
411 |
|
|
$ |
686 |
|
|
$ |
617 |
|
Diluted EPS, as reported |
$ |
1.67 |
|
|
$ |
1.55 |
|
|
$ |
2.71 |
|
|
$ |
2.31 |
|
Special items: |
|
|
|
|
|
|
|
||||||||
Net other expenses from managed and franchised properties |
$ |
51 |
|
|
$ |
8 |
|
|
$ |
160 |
|
|
$ |
46 |
|
Purchase accounting amortization(1) |
|
2 |
|
|
|
11 |
|
|
|
3 |
|
|
|
22 |
|
Loss on investments in unconsolidated affiliate(2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
92 |
|
Loss on debt guarantees(3) |
|
3 |
|
|
|
— |
|
|
|
50 |
|
|
|
— |
|
FF&E replacement reserves |
|
13 |
|
|
|
15 |
|
|
|
24 |
|
|
|
23 |
|
Gain on sales of assets, net |
|
— |
|
|
|
— |
|
|
|
(7 |
) |
|
|
— |
|
Tax-related adjustments(4) |
|
(4 |
) |
|
|
(8 |
) |
|
|
(4 |
) |
|
|
(8 |
) |
Other adjustments(5) |
|
13 |
|
|
|
4 |
|
|
|
17 |
|
|
|
9 |
|
Total special items before taxes |
|
78 |
|
|
|
30 |
|
|
|
243 |
|
|
|
184 |
|
Income tax expense on special items |
|
(18 |
) |
|
|
(9 |
) |
|
|
(58 |
) |
|
|
(36 |
) |
Total special items after taxes |
$ |
60 |
|
|
$ |
21 |
|
|
$ |
185 |
|
|
$ |
148 |
|
|
|
|
|
|
|
|
|
||||||||
Net income, adjusted for special items |
$ |
481 |
|
|
$ |
432 |
|
|
$ |
871 |
|
|
$ |
765 |
|
Diluted EPS, adjusted for special items |
$ |
1.91 |
|
|
$ |
1.63 |
|
|
$ |
3.44 |
|
|
$ |
2.86 |
|
_______________ | |
(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 |
(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) | Amounts include 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) |
Amounts for the three and six months ended |
|
|||||||||||||||
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES |
|||||||||||||||
NET INCOME MARGIN AND |
|||||||||||||||
ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN |
|||||||||||||||
(dollars in millions) |
|||||||||||||||
(unaudited) |
|||||||||||||||
|
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net income |
$ |
422 |
|
$ |
413 |
|
$ |
690 |
|
|
$ |
622 |
|||
Interest expense |
|
141 |
|
|
111 |
|
|
272 |
|
|
|
227 |
|||
Income tax expense |
|
169 |
|
|
155 |
|
|
266 |
|
|
|
248 |
|||
Depreciation and amortization expenses |
|
34 |
|
|
37 |
|
|
70 |
|
|
|
74 |
|||
EBITDA |
|
766 |
|
|
716 |
|
|
1,298 |
|
|
|
1,171 |
|||
Gain on sales of assets, net |
|
— |
|
|
— |
|
|
(7 |
) |
|
|
— |
|||
Loss on foreign currency transactions |
|
1 |
|
|
6 |
|
|
2 |
|
|
|
6 |
|||
Loss on investments in unconsolidated affiliate(1) |
|
— |
|
|
— |
|
|
— |
|
|
|
92 |
|||
Loss on debt guarantees(2) |
|
3 |
|
|
— |
|
|
50 |
|
|
|
— |
|||
FF&E replacement reserves |
|
13 |
|
|
15 |
|
|
24 |
|
|
|
23 |
|||
Share-based compensation expense |
|
55 |
|
|
52 |
|
|
96 |
|
|
|
85 |
|||
Amortization of contract acquisition costs |
|
13 |
|
|
11 |
|
|
25 |
|
|
|
21 |
|||
Net other expenses from managed and franchised properties |
|
51 |
|
|
8 |
|
|
160 |
|
|
|
46 |
|||
Other adjustments(3) |
|
15 |
|
|
3 |
|
|
19 |
|
|
|
8 |
|||
Adjusted EBITDA |
$ |
917 |
|
$ |
811 |
|
$ |
1,667 |
|
|
$ |
1,452 |
_______________ | |
(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) |
Amounts include losses on debt guarantees for certain hotels that we manage, which were recognized in other non-operating income (loss), net. |
(3) |
Amounts for the three and six months ended |
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Total revenues, as reported |
$ |
2,951 |
|
|
$ |
2,660 |
|
|
$ |
5,524 |
|
|
$ |
4,953 |
|
Add: amortization of contract acquisition costs |
|
13 |
|
|
|
11 |
|
|
|
25 |
|
|
|
21 |
|
Less: other revenues from managed and franchised properties |
|
(1,693 |
) |
|
|
(1,500 |
) |
|
|
(3,214 |
) |
|
|
(2,857 |
) |
Total revenues, as adjusted |
$ |
1,271 |
|
|
$ |
1,171 |
|
|
$ |
2,335 |
|
|
$ |
2,117 |
|
|
|
|
|
|
|
|
|
||||||||
Net income |
$ |
422 |
|
|
$ |
413 |
|
|
$ |
690 |
|
|
$ |
622 |
|
Net income margin |
|
14.3 |
% |
|
|
15.5 |
% |
|
|
12.5 |
% |
|
|
12.6 |
% |
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA |
$ |
917 |
|
|
$ |
811 |
|
|
$ |
1,667 |
|
|
$ |
1,452 |
|
Adjusted EBITDA margin |
|
72.2 |
% |
|
|
69.3 |
% |
|
|
71.4 |
% |
|
|
68.6 |
% |
|
|||||||
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) |
|||||||
|
|||||||
|
|
|
|
||||
|
2024 |
|
2023 |
||||
Long-term debt, including current maturities |
$ |
10,172 |
|
|
$ |
9,196 |
|
Add: unamortized deferred financing costs and discounts |
|
79 |
|
|
|
71 |
|
Long-term debt, including current maturities and excluding the deduction for unamortized deferred financing costs and discounts |
|
10,251 |
|
|
|
9,267 |
|
Less: cash and cash equivalents |
|
(731 |
) |
|
|
(800 |
) |
Less: restricted cash and cash equivalents |
|
(71 |
) |
|
|
(75 |
) |
Net debt |
$ |
9,449 |
|
|
$ |
8,392 |
|
|
Six Months Ended |
|
Year Ended |
|
TTM Ended |
||||||||||
|
|
|
|
|
|
||||||||||
|
2024 |
|
2023 |
|
2023 |
|
2024 |
||||||||
Net income |
$ |
690 |
|
|
$ |
622 |
|
$ |
1,151 |
|
$ |
1,219 |
|
||
Interest expense |
|
272 |
|
|
|
227 |
|
|
464 |
|
|
509 |
|
||
Income tax expense |
|
266 |
|
|
|
248 |
|
|
541 |
|
|
559 |
|
||
Depreciation and amortization expenses |
|
70 |
|
|
|
74 |
|
|
147 |
|
|
143 |
|
||
EBITDA |
|
1,298 |
|
|
|
1,171 |
|
|
2,303 |
|
|
2,430 |
|
||
Gain on sales of assets, net |
|
(7 |
) |
|
|
— |
|
|
— |
|
|
(7 |
) |
||
Loss on foreign currency transactions |
|
2 |
|
|
|
6 |
|
|
16 |
|
|
12 |
|
||
Loss on investments in unconsolidated affiliate(1) |
|
— |
|
|
|
92 |
|
|
92 |
|
|
— |
|
||
Loss on debt guarantees(2) |
|
50 |
|
|
|
— |
|
|
— |
|
|
50 |
|
||
FF&E replacement reserves |
|
24 |
|
|
|
23 |
|
|
63 |
|
|
64 |
|
||
Share-based compensation expense |
|
96 |
|
|
|
85 |
|
|
169 |
|
|
180 |
|
||
Impairment losses(3) |
|
— |
|
|
|
— |
|
|
38 |
|
|
38 |
|
||
Amortization of contract acquisition costs |
|
25 |
|
|
|
21 |
|
|
43 |
|
|
47 |
|
||
Net other expenses from managed and franchised properties |
|
160 |
|
|
|
46 |
|
|
337 |
|
|
451 |
|
||
Other adjustments(4) |
|
19 |
|
|
|
8 |
|
|
28 |
|
|
39 |
|
||
Adjusted EBITDA |
$ |
1,667 |
|
|
$ |
1,452 |
|
$ |
3,089 |
|
$ |
3,304 |
|
||
|
|
|
|
|
|
|
|
||||||||
Long-term debt |
|
|
|
|
|
|
$ |
10,172 |
|
||||||
Long-term debt to net income ratio |
|
|
|
|
|
|
|
8.3 |
|
||||||
|
|
|
|
|
|
|
|
||||||||
Net debt |
|
|
|
|
|
|
$ |
9,449 |
|
||||||
Net debt to Adjusted EBITDA ratio |
|
|
|
|
|
|
|
2.9 |
|
_______________ | |
(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) |
Amounts include 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 |
(4) |
Amounts for the six months ended |
|
|||||||
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 |
||||||
|
|
||||||
|
Low Case |
|
High Case |
||||
Net income attributable to Hilton stockholders |
$ |
434 |
|
|
$ |
447 |
|
Diluted EPS(1) |
$ |
1.74 |
|
|
$ |
1.79 |
|
Special items(2): |
|
|
|
||||
FF&E replacement reserves |
$ |
17 |
|
|
$ |
17 |
|
Purchase accounting amortization |
|
1 |
|
|
|
1 |
|
Total special items before taxes |
|
18 |
|
|
|
18 |
|
Income tax expense on special items |
|
(3 |
) |
|
|
(3 |
) |
Total special items after taxes |
$ |
15 |
|
|
$ |
15 |
|
|
|
|
|
||||
Net income, adjusted for special items |
$ |
449 |
|
|
$ |
462 |
|
Diluted EPS, adjusted for special items(1) |
$ |
1.80 |
|
|
$ |
1.85 |
|
|
Year Ending |
||||||
|
|
||||||
|
Low Case |
|
High Case |
||||
Net income attributable to Hilton stockholders |
$ |
1,524 |
|
|
$ |
1,547 |
|
Diluted EPS(1) |
$ |
6.06 |
|
|
$ |
6.15 |
|
Special items(2): |
|
|
|
||||
Net other expenses from managed and franchised properties |
$ |
160 |
|
|
$ |
160 |
|
Purchase accounting amortization |
|
5 |
|
|
|
5 |
|
Loss on debt guarantees |
|
50 |
|
|
|
50 |
|
FF&E replacement reserves |
|
63 |
|
|
|
63 |
|
Gain on sales of assets, net |
|
(7 |
) |
|
|
(7 |
) |
Tax related adjustments |
|
(4 |
) |
|
|
(4 |
) |
Other adjustments |
|
20 |
|
|
|
20 |
|
Total special items before taxes |
|
287 |
|
|
|
287 |
|
Income tax expense on special items |
|
(66 |
) |
|
|
(66 |
) |
Total special items after taxes |
$ |
221 |
|
|
$ |
221 |
|
|
|
|
|
||||
Net income, adjusted for special items |
$ |
1,745 |
|
|
$ |
1,768 |
|
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. |
|
|||||||
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES |
|||||||
OUTLOOK: ADJUSTED EBITDA |
|||||||
(in millions) |
|||||||
(unaudited) |
|||||||
|
|||||||
|
Three Months Ending |
||||||
|
|
||||||
|
Low Case |
|
High Case |
||||
Net income |
$ |
435 |
|
$ |
448 |
||
Interest expense |
|
138 |
|
|
138 |
||
Income tax expense |
|
187 |
|
|
192 |
||
Depreciation and amortization expenses |
|
36 |
|
|
36 |
||
EBITDA |
|
796 |
|
|
814 |
||
FF&E replacement reserves |
|
17 |
|
|
17 |
||
Share-based compensation expense |
|
46 |
|
|
46 |
||
Amortization of contract acquisition costs |
|
13 |
|
|
13 |
||
Other adjustments(1) |
|
3 |
|
|
— |
||
Adjusted EBITDA |
$ |
875 |
|
$ |
890 |
|
Year Ending |
||||||
|
|
||||||
|
Low Case |
|
High Case |
||||
Net income |
$ |
1,532 |
|
|
$ |
1,555 |
|
Interest expense |
|
552 |
|
|
|
552 |
|
Income tax expense |
|
628 |
|
|
|
637 |
|
Depreciation and amortization expenses |
|
140 |
|
|
|
140 |
|
EBITDA |
|
2,852 |
|
|
|
2,884 |
|
Gain on sales of assets, net |
|
(7 |
) |
|
|
(7 |
) |
Loss on foreign currency transactions |
|
2 |
|
|
|
2 |
|
Loss on debt guarantees |
|
50 |
|
|
|
50 |
|
FF&E replacement reserves |
|
63 |
|
|
|
63 |
|
Share-based compensation expense |
|
175 |
|
|
|
175 |
|
Amortization of contract acquisition costs |
|
51 |
|
|
|
51 |
|
Net other expenses from managed and franchised properties |
|
160 |
|
|
|
160 |
|
Other adjustments(1) |
|
29 |
|
|
|
27 |
|
Adjusted EBITDA |
$ |
3,375 |
|
|
$ |
3,405 |
|
______________ | |
(1) |
See "—Net Income Margin and Adjusted EBITDA and Adjusted EBITDA Margin" for details of these adjustments. |
DEFINITIONS
Trailing Twelve Month Financial Information
This press release includes certain unaudited financial information for the trailing twelve months ("TTM") ended
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 and Adjusted EBITDA 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.
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
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
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
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/20240807429589/en/
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