Hilton Reports Second Quarter Results

Hilton Worldwide Holdings Inc. ("Hilton," "the Company," "we," "us" or "our") HLT today reported its second quarter 2024 results. Highlights include:

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• 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 from June 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

Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, "We are pleased to report a solid second quarter, with an increase in RevPAR of 3.5%, driven by growth in all segments, with particularly strong group performance. On the development side, we ended the quarter with a record development pipeline, up 15% from the prior year and up 8% sequentially from the first quarter, including strategic partner hotels. Looking forward to the rest of the year, with the continued growth of our existing brands, as well as the addition of our new brands and strategic partner hotels, we expect net unit growth of 7.0 percent to 7.5 percent for the full year."

For the three months ended June 30, 2024, system-wide comparable RevPAR increased 3.5 percent compared to the same period in 2023 due to increases in both occupancy and ADR, and management and franchise fee revenues increased 10.0 percent compared to the same period in 2023.

For the six months ended June 30, 2024, system-wide comparable RevPAR increased 2.8 percent compared to the same period in 2023 due to increases in both occupancy and ADR, and management and franchise fee revenues increased 12.0 percent compared to the same period in 2023.

For the three months ended June 30, 2024, diluted EPS was $1.67 and diluted EPS, adjusted for special items, was $1.91 compared to $1.55 and $1.63, respectively, for the three months ended June 30, 2023. Net income and Adjusted EBITDA were $422 million and $917 million, respectively, for the three months ended June 30, 2024, compared to $413 million and $811 million, respectively, for the three months ended June 30, 2023.

For the six months ended June 30, 2024, diluted EPS was $2.71 and diluted EPS, adjusted for special items, was $3.44 compared to $2.31 and $2.86, respectively, for the six months ended June 30, 2023. Net income and Adjusted EBITDA were $690 million and $1,667 million, respectively, for the six months ended June 30, 2024, compared to $622 million and $1,452 million, respectively, for the six months ended June 30, 2023.

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 DUO Hotel Lisbon, Curio Collection by Hilton, the DoubleTree by Hilton Lagoa Azores and the Legacy Hotel Cascais, Curio Collection by Hilton. We opened 27 Spark by Hilton hotels during the quarter, including our first Spark hotel in the United Kingdom, and expect this momentum will continue into the second half of the year.

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 June 30, 2024, our development pipeline totaled 3,870 hotels representing 508,300 rooms, growing 15% from June 30, 2023 and 8% from the prior quarter. These pipeline hotels were located in 136 countries and territories, including 39 countries and territories where we had no existing hotels, with 251,800 rooms under construction and 298,800 rooms located outside of the U.S.⁽¹⁾

Balance Sheet and Liquidity

In June 2024, we amended the credit agreement governing our senior secured term loan facilities (the "Term Loans") pursuant to which $1.0 billion of outstanding Term Loans due June 2028 were replaced with $1.0 billion of Term Loans due November 2030, aligning their maturity with the outstanding $2.1 billion tranche of Term Loans due November 2030. Additionally, the entire balance of the Term Loans was repriced with a reduced interest rate of the Secured Overnight Financing Rate plus 1.75 percent.

As of June 30, 2024, we had $10.3 billion of debt outstanding, excluding the deduction for deferred financing costs and discounts, with a weighted average interest rate of 4.81 percent. Excluding all finance lease liabilities and other debt of our consolidated variable interest entities, we had $10.1 billion of debt outstanding with a weighted average interest rate of 4.80 percent and no scheduled maturities until May 2025. $500 million of outstanding debt is due in May 2025, and we believe that we have sufficient sources of liquidity and access to debt financing to address such debt at or prior to its maturity date. As of June 30, 2024, no debt amounts were outstanding under our $2.0 billion senior secured revolving credit facility (the "Revolving Credit Facility"), which had an available borrowing capacity of $1,913 million after considering $87 million of outstanding letters of credit. Total cash and cash equivalents were $802 million as of June 30, 2024, including $71 million of restricted cash and cash equivalents.

In June 2024, we paid a quarterly cash dividend of $0.15 per share of common stock, for a total of $37 million, bringing total dividend payments for the year to $76 million. In August 2024, our board of directors authorized a regular quarterly cash dividend of $0.15 per share of common stock to be paid on September 27, 2024 to holders of record of our common stock as of the close of business on August 23, 2024.

During the three months ended June 30, 2024, we repurchased 3.5 million shares of Hilton common stock at an average price per share of $205.68, for a total of $724 million. For the six months ended June 30, 2024, we repurchased 6.9 million shares of Hilton common stock at an average price per share of $201.02, returning $1,462 million of capital to shareholders, including dividends. Total capital return to shareholders including dividends year-to-date through August was $1,774 million.

The number of shares outstanding as of August 2, 2024 was 246.4 million.

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 to increase 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 August 7, 2024 at 9:00 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.

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 4909030. 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 9296050.

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 U.S.; risks associated with conflicts in Eastern Europe and the Middle East and other geopolitical events; and our indebtedness. Additional factors that could cause our 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 our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which is filed with the Securities and Exchange Commission (the "SEC") and is 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 our filings with the SEC. We undertake 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

We refer to certain financial measures that are not recognized under U.S. generally accepted accounting principles ("GAAP") in this press release, including: net income, adjusted for special items; diluted EPS, adjusted for special items; EBITDA; Adjusted EBITDA; Adjusted EBITDA margin; net debt; and net debt to Adjusted EBITDA ratio. See the schedules to this press release, including the "Definitions" section, for additional information and reconciliations of such non-GAAP financial measures, as well as the most comparable GAAP financial measures.

About Hilton

Hilton 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 Great Place to Work and Fortune and has been recognized as a global leader on the Dow Jones Sustainability Indices for seven consecutive years. Hilton has introduced industry-leading technology enhancements to improve the guest experience, including Digital Key Share, automated complimentary room upgrades and the ability to book confirmed connecting rooms. Through the award-winning guest loyalty program Hilton Honors, the more than 195 million Hilton Honors members who book directly with Hilton can earn Points for hotel stays and experiences money can't buy. With the free Hilton Honors app, guests can book their stay, select their room, check in, unlock their door with a Digital Key and check out, all from their smartphone. Visit stories.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.