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CORRECTING and REPLACING Hilton Reports First Quarter Results - Yahoo Finance

Removing multimedia from press release.

The corrected release reads:

HILTON REPORTS FIRST QUARTER RESULTS

Hilton Worldwide Holdings Inc. ("Hilton" or the "Company") (NYSE: HLT) today reported its first quarter 2020 results. The following results reflect the material impact that the novel coronavirus ("COVID-19") pandemic had on Hilton's business, the effects of which were not significant until March 2020. Highlights include:

  • Diluted EPS was $0.06 for the first quarter, and diluted EPS, adjusted for special items, was $0.74
  • Net income was $18 million for the first quarter
  • Adjusted EBITDA was $363 million for the first quarter
  • System-wide comparable RevPAR decreased 22.6 percent on a currency neutral basis for the first quarter from the same period in 2019
  • Approved 29,500 new rooms for development during the first quarter, growing Hilton's development pipeline to 405,000 rooms as of March 31, 2020, representing 9 percent growth from March 31, 2019
  • Opened 8,800 rooms in the first quarter, contributing to 6,100 net additional rooms
  • In April 2020, pre-sold Hilton Honors points to American Express for $1.0 billion in cash
  • In April 2020, issued $1.0 billion of senior notes consisting of: (i) $500 million aggregate principal amount of 5.375% Senior Notes due 2025 and (ii) $500 million aggregate principal amount of 5.750% Senior Notes due 2028
  • Giving effect to the Hilton Honors pre-sale and issuance of senior notes, as of March 31, 2020, cash, restricted cash and cash equivalents would have been $3.8 billion

Overview

Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, "We are currently experiencing unprecedented times as a result of the COVID-19 pandemic, and our number one priority remains protecting the safety and security of our guests, team members and owners. We have also taken precautionary measures to protect our business, including securing our liquidity position. Given the strength of our system and dedication of our people, we believe we are well-positioned to navigate this crisis and ultimately recover stronger."

With the exception of the Asia Pacific region, Hilton's first quarter results were not significantly impacted by the COVID-19 pandemic until March 2020, with occupancy roughly flat through February in the Americas and Europe, Middle East and Africa ("EMEA") regions. As such, the results for the three months ended March 31, 2020 are not indicative of future results and the material negative impact that the COVID-19 pandemic is expected to have on Hilton's business for an indeterminate length of time.

For the three months ended March 31, 2020, system-wide comparable RevPAR decreased 22.6 percent primarily as a result of decreases in occupancy, and management and franchise fee revenues decreased 18 percent. The decreases were due to the COVID-19 pandemic and the related reduction in global travel and tourism, which required the complete and partial suspensions of hotel operations at many of Hilton's properties.

For the three months ended March 31, 2020, diluted EPS was $0.06 and diluted EPS, adjusted for special items, was $0.74 compared to $0.54 and $0.80, respectively, for the three months ended March 31, 2019. Net income and Adjusted EBITDA were $18 million and $363 million, respectively, for the three months ended March 31, 2020, compared to $159 million and $499 million, respectively, for the three months ended March 31, 2019.

Development

In the first quarter of 2020, Hilton opened 67 new hotels, totaling 8,800 rooms, and achieved net unit growth of over 6,100 rooms. Additionally, during the quarter, Hilton signed the largest multi-brand deal in company history with Resorts World Las Vegas for a 3,500 room resort uniting Hilton Hotels & Resorts, LXR Hotels and Resorts and Conrad Hotels and Resorts.

As of March 31, 2020, Hilton's development pipeline totaled nearly 2,670 hotels consisting of more than 405,000 rooms throughout 120 countries and territories, including 35 countries and territories where Hilton does not currently have any open hotels. Additionally, of the rooms in the development pipeline, 223,000 rooms were located outside the U.S., and 213,000 rooms were under construction.

Balance Sheet and Liquidity

As of March 31, 2020, Hilton had $9.6 billion of long-term debt outstanding, excluding deferred financing costs and discount, with a weighted average interest rate of 3.92 percent. Excluding finance lease liabilities and other debt of Hilton's consolidated variable interest entities, Hilton had $9.3 billion of long-term debt outstanding with a weighted average interest rate of 3.88 percent and no maturities until 2024.

Total cash and cash equivalents were $1,805 million as of March 31, 2020, including $71 million of restricted cash and cash equivalents. During the three months ended March 31, 2020, Hilton borrowed the remaining amount available under its $1.75 billion senior secured credit facility, as a precautionary measure in response to the COVID-19 pandemic. In April 2020, Hilton continued to take action to solidify its cash position, including the pre-sale of Hilton Honors points for $1.0 billion and the issuance of $1.0 billion aggregate principal amount of senior notes. Giving effect to these transactions, Hilton would have had $3.8 billion of cash, restricted cash and cash equivalents as of March 31, 2020.

During the first quarter of 2020, Hilton repurchased 2.6 million shares of its common stock at a cost of approximately $279 million and an average price per share of $107.26. Since the inception of Hilton's stock repurchase program in March 2017, Hilton has repurchased approximately 56.6 million shares of its common stock for approximately $4.4 billion at an average price per share of $78.40. In March 2020, Hilton's board of directors authorized an additional $2.0 billion for share repurchases under its stock repurchase program. The amount remaining under Hilton's current stock repurchase program is approximately $2.2 billion.

In March 2020, Hilton paid a quarterly cash dividend of $0.15 per share on shares of its common stock, for a total of $42 million. Hilton formally suspended share repurchases of its common stock and dividend payments on March 26, 2020, after the board of directors' additional share repurchase authorization, as a result of efforts to preserve capital and maintain liquidity. The stock repurchase program remains authorized by the board of directors, and Hilton may resume share repurchases in the future at any time, depending upon market conditions, capital needs and other factors. No share repurchases were made after March 5, 2020 through the date of this press release, and no new cash dividends have been declared subsequent to the payment of the previously declared cash dividend.

Conference Call

Hilton will host a conference call to discuss first quarter 2020 results on May 7, 2020 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/2020.

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 6012446. 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 10141216.

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 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 related to the potential impact of the COVID-19 outbreak, risks inherent to the hospitality industry, macroeconomic factors beyond Hilton's control, 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, 2019, filed with the Securities and Exchange Commission (the "SEC"), as supplemented in Hilton's Current Report on Form 8-K filed on April 16, 2020 and Hilton's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020, which is expected to be filed on or about the date of this press release, as such factors may be further 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.

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; 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.

Pro Forma Financial Information

This press release includes pro forma net debt and net debt to Adjusted EBITDA ratio for Hilton adjusted to reflect the transactions discussed in "Definitions" as if they had occurred on March 31, 2020.

About Hilton

Hilton (NYSE: HLT) is a leading global hospitality company, with a portfolio of 18 world-class brands comprising more than 6,100 properties with more than 977,000 rooms, in 118 countries and territories. Dedicated to fulfilling its mission to be the world's most hospitable company, Hilton welcomed more than 3 billion guests in its 100-year history, earned a top spot on the 2019 World's Best Workplaces list and was named the 2019 Global Industry Leader on the Dow Jones Sustainability Indices. Through the award-winning guest loyalty program Hilton Honors, more than 106 million members who book directly with Hilton can earn Points for hotel stays and experiences money can't buy, plus enjoy instant benefits, including digital check-in with room selection, Digital Key and Connected Room. 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

Non-GAAP Financial Measures Reconciliations

Definitions

HILTON WORLDWIDE HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in millions, except per share data)

 

 

Three Months Ended

 

March 31,

 

2020

 

2019

Revenues

 

 

 

Franchise and licensing fees

$

339

 

 

$

382

 

Base and other management fees

 

60

 

 

 

80

 

Incentive management fees

 

23

 

 

 

55

 

Owned and leased hotels

 

210

 

 

 

312

 

Other revenues

 

23

 

 

 

26

 

 

 

655

 

 

 

855

 

Other revenues from managed and franchised properties

 

1,265

 

 

 

1,349

 

Total revenues

 

1,920

 

 

 

2,204

 

 

 

 

 

Expenses

 

 

 

Owned and leased hotels

 

239

 

 

 

298

 

Depreciation and amortization

 

91

 

 

 

84

 

General and administrative

 

60

 

 

 

107

 

Impairment losses

 

112

 

 

Other expenses

 

14

 

 

 

20

 

 

 

516

 

 

 

509

 

Other expenses from managed and franchised properties

 

1,336

 

 

 

1,383

 

Total expenses

 

1,852

 

 

 

1,892

 

 

 

 

 

Operating income

 

68

 

 

 

312

 

 

 

 

 

Interest expense

 

(94

)

 

 

(98

)

Gain on foreign currency transactions

 

9

 

 

Other non-operating income, net

 

 

4

 

 

 

 

 

Income (loss) before income taxes

 

(17

)

 

 

218

 

 

 

 

 

Income tax benefit (expense)

 

35

 

 

 

(59

)

 

 

 

 

Net income

 

18

 

 

 

159

 

Net income attributable to noncontrolling interests

 

 

(1

)

Net income attributable to Hilton stockholders

$

18

 

 

$

158

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

Basic

 

277

 

 

 

293

 

Diluted

 

280

 

 

 

295

 

 

 

 

 

Earnings per share:

 

 

 

Basic

$

0.06

 

 

$

0.54

 

Diluted

$

0.06

 

 

$

0.54

 

 

 

 

 

Cash dividends declared per share

$

0.15

 

 

$

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

 

2020

 

vs. 2019

 

2020

 

vs. 2019

 

2020

 

vs. 2019

U.S.

58.5

%

 

(13.1

)% pts.

 

$

140.50

 

 

(3.4

)%

 

$

82.19

 

 

(21.1

)%

Americas (excluding U.S.)

53.8

 

 

(11.5

)

 

 

115.94

 

 

(3.0

)

 

 

62.43

 

 

(20.1

)

Europe

52.5

 

 

(14.2

)

 

 

118.94

 

 

(2.6

)

 

 

62.42

 

 

(23.4

)

Middle East & Africa

61.7

 

 

(9.6

)

 

 

135.19

 

 

(1.6

)

 

 

83.36

 

 

(14.8

)

Asia Pacific

38.1

 

 

(27.6

)

 

 

116.02

 

 

(3.7

)

 

 

44.26

 

 

(44.1

)

System-wide

56.0

 

 

(14.3

)

 

 

135.90

 

 

(3.0

)

 

 

76.16

 

 

(22.6

)

 

Three Months Ended March 31,

 

Occupancy

 

ADR

 

RevPAR

 

2020

 

vs. 2019

 

2020

 

vs. 2019

 

2020

 

vs. 2019

Waldorf Astoria Hotels & Resorts

53.0

%

 

(17.9

)% pts.

 

$

423.71

 

 

7.8

%

 

$

224.76

 

 

(19.4

)%

Conrad Hotels & Resorts

45.8

 

 

(27.3

)

 

 

230.99

 

 

(4.8

)

 

 

105.68

 

 

(40.4

)

Canopy by Hilton

51.0

 

 

(10.7

)

 

 

183.78

 

 

(8.8

)

 

 

93.72

 

 

(24.6

)

Hilton Hotels & Resorts

53.9

 

 

(17.4

)

 

 

164.17

 

 

(1.9

)

 

 

88.46

 

 

(25.9

)

Curio Collection by Hilton

51.8

 

 

(11.7

)

 

 

206.15

 

 

(1.0

)

 

 

106.71

 

 

(19.3

)

Tapestry Collection by Hilton

50.6

 

 

(9.8

)

 

 

127.86

 

 

(6.8

)

 

 

64.75

 

 

(21.9

)

DoubleTree by Hilton

52.8

 

 

(16.1

)

 

 

127.11

 

 

(0.7

)

 

 

67.08

 

 

(23.9

)

Embassy Suites by Hilton

60.0

 

 

(15.1

)

 

 

156.20

 

 

(3.4

)

 

 

93.67

 

 

(22.8

)

Hilton Garden Inn

56.7

 

 

(13.9

)

 

 

121.82

 

 

(3.5

)

 

 

69.02

 

 

(22.5

)

Hampton by Hilton

55.7

 

 

(12.5

)

 

 

113.25

 

 

(3.0

)

 

 

63.13

 

 

(20.7

)

Tru by Hilton

53.2

 

 

(4.4

)

 

 

95.16

 

 

(3.6

)

 

 

50.63

 

 

(10.9

)

Homewood Suites by Hilton

65.7

 

 

(10.4

)

 

 

131.70

 

 

(3.3

)

 

 

86.49

 

 

(16.5

)

Home2 Suites by Hilton

63.0

 

 

(8.0

)

 

 

110.84

 

 

(2.9

)

 

 

69.87

 

 

(13.8

)

System-wide

56.0

 

 

(14.3

)

 

 

135.90

 

 

(3.0

)

 

 

76.16

 

 

(22.6

)

 

Three Months Ended March 31,

 

Occupancy

 

ADR

 

RevPAR

 

2020

 

vs. 2019

 

2020

 

vs. 2019

 

2020

 

vs. 2019

Management and franchise

56.2

%

 

(14.2

)% pts.

 

$

135.35

 

 

(2.8

)%

 

$

76.00

 

 

(22.4

)%

Ownership(1)

50.8

 

 

(19.0

)

 

 

164.50

 

 

(6.9

)

 

 

83.64

 

 

(32.3

)

System-wide

56.0

 

 

(14.3

)

 

 

135.90

 

 

(3.0

)

 

 

76.16

 

 

(22.6

)

____________

(1)

Includes owned and 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, 2020

 

 

Owned / Leased(1)

 

Managed

 

Franchised

 

Total

 

Properties

 

Rooms

 

Properties

 

Rooms

 

Properties

 

Rooms

 

Properties

 

Rooms

Waldorf Astoria Hotels & Resorts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

14

 

 

5,965

 

 

 

 

 

 

14

 

 

5,965

 

Americas (excluding U.S.)

 

 

 

 

2

 

 

257

 

 

 

 

 

 

2

 

 

257

 

Europe

2

 

 

463

 

 

4

 

 

898

 

 

 

 

 

 

6

 

 

1,361

 

Middle East & Africa

 

 

 

 

5

 

 

1,224

 

 

 

 

 

 

5

 

 

1,224

 

Asia Pacific

 

 

 

 

5

 

 

1,014

 

 

 

 

 

 

5

 

 

1,014

 

LXR Hotels & Resorts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas (excluding U.S.)

 

 

 

 

 

 

 

 

1

 

 

76

 

 

1

 

 

76

 

Europe

 

 

 

 

1

 

 

307

 

 

 

 

 

 

1

 

 

307

 

Middle East & Africa

 

 

 

 

 

 

 

 

1

 

 

234

 

 

1

 

 

234

 

Conrad Hotels & Resorts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

6

 

 

2,211

 

 

1

 

 

228

 

 

7

 

 

2,439

 

Americas (excluding U.S.)

 

 

 

 

2

 

 

402

 

 

 

 

 

 

2

 

 

402

 

Europe

 

 

 

 

4

 

 

1,155

 

 

 

 

 

 

4

 

 

1,155

 

Middle East & Africa

1

 

 

614

 

 

2

 

 

993

 

 

 

 

 

 

3

 

 

1,607

 

Asia Pacific

1

 

 

164

 

 

21

 

 

6,138

 

 

1

 

 

659

 

 

23

 

 

6,961

 

Canopy by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

 

 

 

 

9

 

 

1,466

 

 

9

 

 

1,466

 

Americas (excluding U.S.)

 

 

 

 

1

 

 

174

 

 

 

 

 

 

1

 

 

174

 

Europe

 

 

 

 

 

 

 

 

2

 

 

263

 

 

2

 

 

263

 

Middle East & Africa

 

 

 

 

1

 

 

200

 

 

 

 

 

 

1

 

 

200

 

Asia Pacific

 

 

 

 

2

 

 

329

 

 

 

 

 

 

2

 

 

329

 

Hilton Hotels & Resorts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

65

 

 

47,449

 

 

176

 

 

54,085

 

 

241

 

 

101,534

 

Americas (excluding U.S.)

1

 

 

405

 

 

26

 

 

9,455

 

 

21

 

 

7,096

 

 

48

 

 

16,956

 

Europe

50

 

 

13,919

 

 

43

 

 

14,439

 

 

40

 

 

10,876

 

 

133

 

 

39,234

 

Middle East & Africa

5

 

 

1,998

 

 

42

 

 

13,482

 

 

2

 

 

1,415

 

 

49

 

 

16,895

 

Asia Pacific

5

 

 

2,999

 

 

98

 

 

35,450

 

 

6

 

 

2,203

 

 

109

 

 

40,652

 

Curio Collection by Hilton

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

 

 

6

 

 

2,485

 

 

44

 

 

8,805

 

 

50

 

 

11,290

 

Americas (excluding U.S.)

 

 

 

 

2

 

 

99

 

 

8

 

 

825

 

 

10

 

 

924

 

Europe

 

 

 

 

5

 

 

520

 

 

16

 

 

1,766

 

 

21

 

 

2,286

 

Middle East & Africa

 

 

 

 

3

 

 

445

 

 

1

 

 

356

 

 

4

 

 

801

 

Asia Pacific

 

 

 

 

4

 

 

773

 

 

2

 

 

248

 

 

6

 

 

1,021

 

DoubleTree by Hilton

 

 

 

 

 

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