MCLEAN, VA (November 4, 2020) - Hilton Worldwide Holdings Inc. ("Hilton" or the "Company") (NYSE: HLT) today reported its third quarter 2020 results. The following results reflect the material impact that the novel coronavirus ("COVID-19") pandemic has had on Hilton's business. Highlights include:
• Diluted EPS was $(0.28) for the third quarter, and diluted EPS, adjusted for special items, was $0.06
• Net loss was $81 million for the third quarter
• Adjusted EBITDA was $224 million for the third quarter
• System-wide comparable RevPAR decreased 59.9 percent on a currency neutral basis for the third quarter from the same period in 2019
• Approved 17,400 new rooms for development during the third quarter, bringing Hilton's development pipeline to 408,000 rooms as of September 30, 2020, representing 8 percent growth from September 30, 2019
• Opened 17,100 rooms in the third quarter, contributing to 14,800 net additional rooms in Hilton's system, representing 4.7 percent net unit growth from September 30, 2019, with full year net unit growth expected to be between 4.5 percent and 5.0 percent
• As of November 2, 2020, 97 percent of Hilton's system-wide hotels were open 1 Overview Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, "Our third quarter results show meaningful improvement over the second quarter.
The vast majority of our properties around the world are now open and have gradually begun to recover from the limitations that the COVID-19 pandemic has imposed on the travel industry, with occupancy increasing more than 20 percentage points from the second quarter.
While a full recovery will take time, we are well positioned to capture rising demand and execute on growth opportunities." On a global level, the pervasive impact of the COVID-19 pandemic began in March, with its most significant adverse impact on occupancy and RevPAR in April.
Since April, system-wide occupancy has increased month over month, with the most notable recoveries in Asia Pacific, the U.S. and Europe, with comparable hotel occupancy levels up approximately 32 percentage points, 32 percentage points and 31 percentage points, respectively, from April to September.
For the three and nine months ended September 30, 2020, system-wide comparable RevPAR decreased 59.9 percent and 55.9 percent, respectively, compared to the prior year periods, due to both occupancy and ADR decreases. Additionally, management fee and franchise and licensing fee revenues decreased 53 percent and 51 percent during the three and nine months ended September 30, 2020, respectively, compared to the prior year periods.
The decreases were due to the COVID-19 pandemic and the related reduction in global travel and tourism, which required the complete or partial suspensions of hotel operations at approximately 20 percent of Hilton's properties at some point during the nine months ended September 30, 2020. As of November 2, 2020, 97 percent of Hilton's system-wide properties were open.
For the three months ended September 30, 2020, diluted EPS was $(0.28) and diluted EPS, adjusted for special items, was $0.06 compared to $1.00 and $1.05, respectively, for the three months ended September 30, 2019.
Net income (loss) and Adjusted EBITDA were $(81) million and $224 million, respectively, for the three months ended September 30, 2020, compared to $290 million and $605 million, respectively, for the three months ended September 30, 2019. For the nine months ended September 30, 2020, diluted EPS was $(1.76) and diluted EPS, adjusted for special items, was $0.20 compared to $2.42 and $2.90, respectively, for the nine months ended September 30, 2019. Net income (loss) and Adjusted EBITDA were $(495) million and $638 million, respectively, for the nine months ended September 30, 2020, compared to $710 million and $1,722 million, respectively, for the nine months ended September 30, 2019.
Development In the third quarter of 2020, Hilton opened 133 new hotels totaling 17,100 rooms, and achieved net unit growth of over 14,800 rooms. Notable openings in the quarter included the Conrad Punta de Mita in Mexico and the Hilton Beijing Tongzhou in China, as well as the Motto by Hilton Washington DC City Center, the first hotel under the Motto by Hilton brand.
Notable additions to Hilton's development pipeline during the quarter included the Conrad Rabat Arzana in Morocco and the Waldorf Astoria Monarch Beach Resort & Club in California. As of September 30, 2020, Hilton's development pipeline totaled approximately 2,640 hotels consisting of more than 408,000 rooms throughout 120 countries and territories, including 33 countries and territories where Hilton does not currently have any open hotels.
Additionally, of the rooms in the development pipeline, 237,000 rooms were located outside the U.S., and 217,000 rooms were under construction. Balance Sheet and Liquidity As of September 30, 2020, Hilton had $10.6 billion of long-term debt outstanding, excluding deferred financing costs and discount, with a weighted average interest rate of 3.86 percent.
Excluding finance lease liabilities and other debt of Hilton's consolidated variable interest entities, Hilton had $10.3 billion of long-term debt outstanding with a weighted average interest rate of 3.81 percent and no maturities until 2024.
Total cash and cash equivalents were $3,468 million as of September 30, 2020, including $63 million of restricted cash and cash equivalents. In March 2020, Hilton suspended share repurchases and the payment of dividends to preserve capital and maintain liquidity. No share repurchases have been made since March 5, 2020, and no dividends have been declared or paid since March 31, 2020.
The stock repurchase program remains authorized by the board of directors, and the amount remaining under Hilton's stock repurchase program is approximately $2.2 billion. 2 Conference Call Hilton will host a conference call to discuss third quarter 2020 results on November 4, 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/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/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 3909291. 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 10148747. 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 impact of the COVID-19 pandemic, 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 and "Part II —Item 1A.
Risk Factors" of Hilton's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020, filed with the Securities and Exchange Commission (the "SEC"), as supplemented in Hilton's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 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.
Tags: Hilton Third Quarter Results
