Hilton Worldwide Holdings Inc. (“Hilton” or the “Company”) (NYSE: HLT) today reported its third quarter 2022 results. Highlights include:
• Diluted EPS was $1.26 for the third quarter, and diluted EPS, adjusted for special items, was $1.31
• Net income was $346 million for the third quarter, exceeding the high end of guidance
• Adjusted EBITDA was $732 million for the third quarter, exceeding the high end of guidance
• System-wide comparable RevPAR increased 29.9 percent, on a currency neutral basis, for the third quarter
compared to the same period in 2021
• System-wide comparable RevPAR increased 5.0 percent, on a currency neutral basis, for the third quarter
compared to the same period in 2019
• Approved 19,900 new rooms for development during the third quarter, bringing Hilton’s development pipeline
to 416,000 rooms as of September 30, 2022
• Added 12,900 rooms to Hilton’s system in the third quarter, contributing to 12,100 net additional rooms in
Hilton’s system during the period
• Repurchased 4.0 million shares of Hilton common stock during the third quarter, bringing total capital return,
including dividends, to $538 million for the quarter and $1,324 million year to date through October
• Full year 2022 system-wide comparable RevPAR is expected to increase between 40 percent and 43 percent, on
a currency neutral basis, compared to 2021; full year net income is projected to be between $1,219 million and
$1,240 million; full year Adjusted EBITDA is projected to be between $2,500 million and $2,530 million
• Full year 2022 capital return is projected to be between $1.5 billion and $1.9 billion
Overview
Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, “The third quarter marked an important milestone in
our recovery as system-wide RevPAR exceeded the same period in 2019 for the first time since the pandemic began. Our diluted
EPS, adjusted for special items and Adjusted EBITDA exceeded the high end of our guidance. Improved performance reflected
the continued strength in leisure travel, as well as recovering business transient and group demand. We expect these strong
trends to continue throughout the fourth quarter with system-wide RevPAR once again exceeding prior peaks.”
For the three months ended September 30, 2022, system-wide comparable RevPAR increased 29.9 percent compared to the
same period in 2021, due to increases in both occupancy and ADR, and fee revenues increased 33 percent. For comparison to
pre-pandemic results, system-wide comparable RevPAR for the three months ended September 30, 2022 was up 5.0 percent
compared to the same period in 2019.
For the nine months ended September 30, 2022, system-wide comparable RevPAR increased 49.6 percent compared to the
same period in 2021, due to increases in both occupancy and ADR, and fee revenues increased 51 percent. For comparison to
pre-pandemic results, system-wide comparable RevPAR for the nine months ended September 30, 2022 was down 4.0 percent
compared to the same period in 2019.
For the three months ended September 30, 2022, diluted EPS was $1.26 and diluted EPS, adjusted for special items, was $1.31
compared to $0.86 and $0.78, respectively, for the three months ended September 30, 2021. Net income and Adjusted EBITDA
were $346 million and $732 million, respectively, for the three months ended September 30, 2022, compared to $240 million and
$519 million, respectively, for the three months ended September 30, 2021.
For the nine months ended September 30, 2022, diluted EPS was $3.32 and diluted EPS, adjusted for special items, was $3.31
compared to $0.94 and $1.36, respectively, for the nine months ended September 30, 2021. Net income and Adjusted EBITDA
were $924 million and $1,859 million, respectively, for the nine months ended September 30, 2022, compared to $259 million
and $1,117 million, respectively, for the nine months ended September 30, 2021.
Development
In the third quarter of 2022, Hilton opened 80 new hotels contributing 12,900 additional rooms to Hilton’s system and achieved
net unit growth of 12,100 rooms. During the quarter, Hilton opened the 25,000th room under the Curio Collection by Hilton brand
and the 600th Hilton Hotels & Resorts property. Further, Hilton continued to expand its luxury portfolio with the opening of the
Waldorf Astoria Kuwait, the brand’s first property in the country.
As of September 30, 2022, Hilton’s development pipeline totaled more than 2,810 hotels representing nearly 416,000 rooms
throughout 112 countries and territories, including 29 countries and territories where Hilton does not currently have any existing
hotels. Additionally, of the rooms in the development pipeline, 204,200 of the rooms were under construction and 242,600 of the
rooms were located outside the U.S.
Balance Sheet and Liquidity
As of September 30, 2022, Hilton had $8.8 billion of long-term debt outstanding, excluding the deduction for deferred financing
costs and discount, with a weighted average interest rate of 4.29 percent. Further 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 4.28 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 September 30, 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 $1,362 million
as of September 30, 2022, including $80 million of restricted cash and cash equivalents.
During the third quarter of 2022, Hilton repurchased 4.0 million shares of its common stock at a cost of $497 million and an
average price per share of $124.85. During the nine months ended September 30, 2022, Hilton repurchased 8.5 million shares of
its common stock at a cost of $1,107 million and an average price per share of $130.47. Year-to-date through October 2022,
Hilton repurchased 9.6 million shares of its common stock for $1,242 million and the amount remaining under Hilton’s stock
repurchase program was $994 million.
In September 2022, Hilton paid a quarterly cash dividend of $0.15 per share of common stock, for a total of $41 million. In
October 2022, Hilton’s board of directors authorized a regular quarterly cash dividend of $0.15 per share of common stock to be
paid on or before December 30, 2022 to holders of record of its common stock as of the close of business on November 10,
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 40 percent and 43
percent compared to 2021, and to be down between 1 percent and 3 percent from 2019.
• Diluted EPS is projected to be between $4.40 and $4.48.
• Diluted EPS, adjusted for special items, is projected to be between $4.46 and $4.54.
• Net income is projected to be between $1,219 million and $1,240 million.
• Adjusted EBITDA is projected to be between $2,500 million and $2,530 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 $1.5 billion and $1.9 billion.
• General and administrative expenses are projected to be between $380 million and $400 million.
• Net unit growth is expected to be approximately 5.0 percent.
Fourth Quarter 2022
• System-wide comparable RevPAR, on a currency neutral basis, is expected to increase between 19 percent and 23
percent compared to the fourth quarter of 2021, and to increase between 2 percent and 6 percent from the fourth
quarter of 2019.
• Diluted EPS is projected to be between $1.08 and $1.15.
• Diluted EPS, adjusted for special items, is projected to be between $1.15 and $1.23.
• Net income is projected to be between $295 million and $316 million.
• Adjusted EBITDA is projected to be between $641 million and $671 million.
Conference Call
Hilton will host a conference call to discuss third quarter 2022 results on October 26, 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/eventsand-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 1181552. 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 1320953.
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 recovery of the travel and hospitality industry 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 forwardlooking 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 inflation, changes in interest rates and 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 the acceptance and continued effectiveness of the COVID-19 vaccines, 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 and “Part II —Item 1A. Risk Factors” of Hilton’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022, 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.
