Hilton Worldwide Holdings Inc. ("Hilton," "Hilton Worldwide" or
the "Company") (NYSE: HLT) today reported its second quarter 2016
results. Highlights include:
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Hilton Reports Second Quarter Results
(Graphic: Business Wire)
- EPS, adjusted for special items, was
$0.25 for the second quarter; without adjustments, EPS was
$0.24
- Net income for the second quarter
was $244 million, an increase of $77 million from the same period
in 2015
- Adjusted EBITDA for the second
quarter was $806 million, an increase of 4 percent from the same
period in 2015, and Adjusted EBITDA margin increased 100 basis
points
- System-wide comparable RevPAR
increased 2.9 percent for the second quarter on a currency neutral
basis from the same period in 2015
- Management and franchise fees for
the second quarter increased 9 percent from the same period in 2015
to $471 million
- Net unit growth was 10,400 rooms in
the second quarter contributing to a 7 percent growth in managed
and franchised rooms from 2015
- Approved 24,000 new rooms for
development during the second quarter, growing Hilton's development
pipeline to 1,822 hotels, consisting of 288,000 rooms
- Filed registration statements for
planned spin-offs of Park Hotels & Resorts and Hilton Grand
Vacations and announced management teams for both companies;
remains on track to complete spin transactions by year end
Overview
For the three months ended June 30, 2016, EPS was $0.24 compared
to $0.16 for the three months ended June 30, 2015, and EPS,
adjusted for special items, was $0.25 for both the three months
ended June 30, 2016 and 2015. Net income was $244 million for the
three months ended June 30, 2016 compared to $167 million for the
three months ended June 30, 2015, and Adjusted EBITDA increased 4
percent to $806 million for the three months ended June 30, 2016,
compared to $777 million for the three months ended June 30,
2015.
For the six months ended June 30, 2016, EPS was $0.55 compared
to $0.31 for the six months ended June 30, 2015, and EPS, adjusted
for special items, was $0.43 for the six months ended June 30, 2016
compared to $0.37 for the six months ended June 30, 2015. Special
items in the first six months of 2016 were primarily related to a
$153 million net change in unrecognized tax benefits. Net income
was $554 million for the six months ended June 30, 2016 compared to
$317 million for the six months ended June 30, 2015, and Adjusted
EBITDA increased 6 percent to $1,459 million for the six months
ended June 30, 2016, compared to $1,376 million for the six months
ended June 30, 2015.
Christopher J. Nassetta, President & Chief Executive Officer
of Hilton Worldwide, said, "We had solid results this quarter, with
EPS and Adjusted EBITDA in line with our expectations, and our
share of global development activity increasing. Our newest brand,
Tru by Hilton, has nearly doubled its pipeline during the quarter
to 93 hotels. Additionally, we opened over 12,200 new rooms in the
quarter, and are thrilled about the opening of the first Canopy by
Hilton in Reykjavik, Iceland earlier this month."
Segment Highlights
Management and Franchise
Management and franchise fees were $471 million in the second
quarter of 2016, an increase of 9 percent compared to the same
period in 2015. RevPAR at comparable managed and franchised hotels
in the second quarter of 2016 increased 3.2 percent on a currency
neutral basis (a 2.5 percent increase in actual dollars) compared
to the same period in 2015. The increase in RevPAR at comparable
managed and franchised hotels, addition of new units and rising
effective franchise fee rates have yielded continued fee growth
during the second quarter of 2016.
Ownership
Revenues from the ownership segment were $1,114 million in the
second quarter of 2016, and ownership segment Adjusted EBITDA was
$299 million. RevPAR at comparable hotels in the ownership segment
increased 0.7 percent on a currency neutral basis (a 0.2 percent
increase in actual dollars) in the second quarter of 2016 compared
to the same period in 2015. Modest growth in ownership segment
RevPAR in the second quarter of 2016 was primarily attributable to
weaker performance in New York and Chicago. For the first half of
the year, ownership segment Adjusted EBITDA margin(1) increased 10
basis points.
____________
(1)
Calculated as ownership segment Adjusted
EBITDA divided by ownership segment revenues.
Timeshare
Timeshare segment revenues for the second quarter of 2016 were
$336 million and timeshare Adjusted EBITDA was $98 million, an
increase of 14 percent compared to the same period in 2015. Revenue
from resort operations increased $9 million during the second
quarter of 2016 from the same period in 2015. Overall timeshare
sales volume increased 13 percent in the second quarter of 2016,
compared to the same period in 2015, as a result of increased tour
flow and net volume per guest of 6 percent each. Commissions
recognized from the sale of third-party developed timeshare
intervals increased $30 million during the second quarter of 2016
from the same period in 2015, while sales revenue on owned
inventory decreased $24 million during the second quarter of 2016
from the same period in 2015.
During the three months ended June 30, 2016, 61 percent of
intervals sold were developed by third parties. Hilton Worldwide's
overall supply of timeshare intervals as of June 30, 2016 was
approximately 132,000 intervals, or nearly six years of sales at
current pace, of which 107,000, or 81 percent, are third-party
developed.
Development
Hilton Worldwide opened 76 hotels consisting of over 12,200
rooms, of which over 20 percent were conversions from non-Hilton
brands, and achieved net unit growth of nearly 10,400 rooms during
the second quarter of 2016. Additionally, Hilton Worldwide grew its
global footprint to 104 countries and territories with the openings
of the Hilton Tallinn Park in Estonia and the Conrad Manila in the
Philippines.
As of June 30, 2016, Hilton Worldwide had the largest rooms
pipeline in the lodging industry(2), with approximately 288,000
rooms at 1,822 hotels throughout 91 countries and territories,
including 32 countries and territories where Hilton Worldwide does
not currently have any open hotels. Over 144,000 rooms, or more
than half of the pipeline, were located outside of the United
States. Additionally, approximately 143,000 rooms, or approximately
half of the pipeline, were under construction. At nearly 21
percent, Hilton Worldwide also has the largest share of rooms under
construction globally(2). Including all agreements approved but not
signed, Hilton Worldwide's pipeline totaled over 300,000 rooms,
which will be almost entirely funded by third-party owner
investment.
____________
(2)
Source: STR Global New Development
Pipeline (June 2016).
Balance Sheet and
Liquidity
Total cash and cash equivalents were $1,081 million as of
June 30, 2016, including $271 million of restricted cash and
cash equivalents. As of June 30, 2016, Hilton had $10.0
billion of long-term debt outstanding with a weighted average
interest rate of 4.3 percent. No borrowings were outstanding under
the $1.0 billion revolving credit facility as of June 30,
2016.
In June 2016, Hilton Worldwide paid a quarterly cash dividend of
$0.07 per share on shares of its common stock, for a total of $69
million bringing total cash dividends paid in 2016 to $138 million.
Hilton's board of directors has authorized a regular quarterly cash
dividend of $0.07 per share of common stock to be paid on or before
September 16, 2016 to holders of record of its common stock as
of the close of business on August 19, 2016.
Outlook
Hilton Worldwide disclosed financial and other details of the
planned spin-offs of Park Hotels & Resorts Inc. and Hilton
Grand Vacations Inc. in filings with the Securities and Exchange
Commission ("SEC"). The transactions are subject to execution
of intercompany agreements, arrangement of adequate financing
facilities, the effectiveness of the registration statements, final
approval by Hilton's board of directors and other customary
conditions. The spin-off transactions will not require a
stockholder vote. The spin-offs are expected to be completed by
year end, but there can be no assurance regarding the ultimate
timing of the spin-offs or that either or both of the spin-offs
will ultimately occur. The Full Year 2016 and Third Quarter
2016 outlooks do not include the effects of the spin-offs,
including potential transaction costs.
Full Year 2016
- System-wide RevPAR is expected to
increase between 2.0 percent and 4.0 percent on a comparable and
currency neutral basis, with ownership segment RevPAR expected to
increase between 1.0 percent and 3.0 percent on a comparable and
currency neutral basis, as compared to 2015.
- Net income is projected to be between
$1,015 million and $1,051 million.
- Adjusted EBITDA is projected to be
between $2,980 million and $3,040 million.
- Management and franchise fees are
projected to increase approximately 6 percent to 8 percent.
- Timeshare segment Adjusted EBITDA is
projected to be between $370 million and $390 million.
- Corporate expense and other is
projected to be between $240 million and $250 million.
- Diluted EPS, before special items, is
projected to be between $1.00 and $1.04.
- Diluted EPS, adjusted for special
items, is projected to be between $0.87 and $0.91.
- Capital expenditures, excluding
timeshare inventory, are expected to be between $400 million and
$450 million.
- Net unit growth is expected to be
approximately 45,000 rooms to 50,000 rooms.
Third Quarter 2016
- System-wide RevPAR is expected to
increase between 2.0 percent and 4.0 percent on a comparable and
currency neutral basis compared to the third quarter of 2015.
- Net income is projected to be between
$223 million and $235 million.
- Adjusted EBITDA is projected to be
between $760 million and $780 million.
- Management and franchise fees are
projected to increase approximately 7 percent to 9 percent.
- Diluted EPS, before special items, is
projected to be between $0.21 and $0.23.
- Diluted EPS, adjusted for special
items, is projected to be between $0.21 and $0.23.
Outlook for Post-spin Companies
Upon the completion of the proposed spin-off transactions,
Hilton Worldwide will be separated into three independent, publicly
traded companies: Hilton Worldwide Holdings Inc., Park Hotels &
Resorts Inc. and Hilton Grand Vacations Inc. Full year 2016 outlook
on a pro forma(3) basis for these companies is as follows:
- Hilton's pro forma Adjusted EBITDA is
expected to be between $1,750 million and $1,800 million.
- Park Hotels & Resorts Inc.'s pro
forma Adjusted EBITDA is expected to be between $770 million and
$800 million.
- Hilton Grand Vacations Inc.'s pro forma
Adjusted EBITDA is expected to be between $370 million and $390
million.
____________
(3)
Pro forma information gives effect to the
spin-off transactions as if they occurred on January 1, 2016. Refer
to the respective Form 10 Registration Statements of Park Hotels
& Resorts Inc. and Hilton Grand Vacations Inc. and the press
release on these filings for additional information.
Conference Call
Hilton Worldwide will host a conference call to discuss second
quarter 2016 results on July 27, 2016 at 10:00 a.m. Eastern Time.
Participants may listen to the live webcast by logging onto the
Hilton Worldwide Investor Relations website at
http://ir.hiltonworldwide.com/events-and-presentations. A replay
and transcript of the webcast will be available within 24 hours
after the live event at
http://ir.hiltonworldwide.com/financial-reporting/quarterly-results/2016.
Alternatively, participants may listen to the live call by
dialing 1-888-317-6003 in the United States or 1-412-317-6061
internationally. Please use the conference ID 1471720. 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
United States or 1-412-317-0088 internationally using the
conference ID 10088325.
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 performance of
Hilton's business, financial results, liquidity and capital
resources, the planned spin-offs and other non-historical
statements, including the statements in the "Outlook" section of
this press release. You can identify these forward-looking
statements 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 inherent to the hospitality industry, macroeconomic
factors beyond Hilton's control, competition for hotel guests,
management and franchise agreements and timeshare sales, risks
related to doing business with third-party hotel owners, Hilton's
significant investments in owned and leased real estate,
performance of Hilton's information technology systems, growth of
reservation channels outside of Hilton's system, risks of doing
business outside of the United States, risks related to Hilton's
proposed spin-offs 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 the Annual
Report on Form 10-K for the fiscal year ended December 31, 2015,
filed with 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 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 non-GAAP financial measures in
this press release, including net income and EPS, adjusted for
special items, Adjusted EBITDA and Adjusted EBITDA margin, Net debt
and Net debt to Adjusted EBITDA ratio. Please see the schedules to
this press release including the "Definitions" section for
additional information and reconciliations of such non-GAAP
financial measures.
In addition, this press release includes projected pro forma
Adjusted EBITDA for the year ending December 31, 2016 for each of
Hilton, Park Hotels & Resorts Inc. and Hilton Grand Vacations
Inc. A reconciliation of projected pro forma Adjusted EBITDA to a
measure calculated in accordance with GAAP is not available without
unreasonable effort due to the unavailability of certain
information needed to calculate certain reconciling items,
including interest expense and income tax expense. For the same
reasons, we are unable to address the probable significance of the
unavailable information, which could be material to future
results.
About Hilton
Hilton (NYSE: HLT) is a leading global hospitality company,
comprising more than 4,700 managed, franchised, owned and leased
hotels and timeshare properties with over 775,000 rooms in 104
countries and territories. For 97 years, Hilton has been dedicated
to continuing its tradition of providing exceptional guest
experiences. The Company’s portfolio of 13 world-class global
brands includes Hilton Hotels & Resorts, Waldorf Astoria Hotels
& Resorts, Conrad Hotels & Resorts, Canopy by Hilton, Curio
- A Collection by Hilton, DoubleTree by Hilton, Embassy Suites by
Hilton, Hilton Garden Inn, Hampton by Hilton, Tru by Hilton,
Homewood Suites by Hilton, Home2 Suites by Hilton and Hilton Grand
Vacations. The Company also manages an award-winning customer
loyalty program, Hilton HHonors®. Hilton HHonors members who book
directly through preferred Hilton channels have access to benefits
including exclusive member rates, free standard Wi-Fi, as well as
digital amenities that are available exclusively through the
industry-leading Hilton HHonors app, where HHonors members can
check-in, choose their room and access their room using a Digital
Key. Visit news.hiltonworldwide.com for more information and
connect with Hilton Worldwide at www.facebook.com/hiltonworldwide,
www.twitter.com/hiltonworldwide, www.youtube.com/hiltonworldwide,
www.flickr.com/hiltonworldwide,
www.linkedin.com/company/hilton-worldwide and
www.instagram.com/hiltonworldwide.
HILTON WORLDWIDE HOLDINGS INC.
EARNINGS RELEASE SCHEDULES
TABLE OF CONTENTS
Condensed Consolidated Statements of Operations Segment
Adjusted EBITDA Comparable and Currency Neutral System-wide Hotel
Operating Statistics Management and Franchise Fees and Other
Revenues Timeshare Revenues and Operating Expenses Hotel and
Timeshare Property Summary Capital Expenditures Non-GAAP Financial
Measures Reconciliations Definitions
HILTON WORLDWIDE HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(in millions, except per share
data)
(unaudited)
Three Months Ended Six Months
Ended June 30, June 30, 2016
2015 2016 2015 Revenues Owned
and leased hotels $ 1,105 $ 1,135 $ 2,072 $ 2,092 Management and
franchise fees and other 444 407 830 778 Timeshare 336
319 662 640 1,885
1,861 3,564 3,510
Other revenues from managed and franchised
properties
1,166 1,061 2,237
2,011 Total revenues 3,051 2,922 5,801 5,521
Expenses Owned and leased hotels 808 817 1,564 1,585
Timeshare 223 220 440 454 Depreciation and amortization 171 173 340
348 Impairment loss — — 15 — General, administrative and other
132 221 245 348
1,334 1,431 2,604 2,735 Other expenses from managed and
franchised properties 1,166 1,061
2,237 2,011 Total expenses 2,500 2,492
4,841 4,746 Gain (loss) on sales of assets, net 2 (3 ) 2 142
Operating income 553 427 962 917 Interest
income 4 2 7 8 Interest expense (147 ) (149 ) (286 ) (293 ) Equity
in earnings from unconsolidated affiliates 8 9 11 13 Gain (loss) on
foreign currency transactions (13 ) 5 (25 ) (13 ) Other gain
(loss), net (5 ) 18 (5 ) (7 )
Income before income taxes 400 312 664 625
Income tax expense (156 ) (145 ) (110 )
(308 )
Net income 244 167 554 317
Net income
attributable to noncontrolling interests (5 ) (6
) (6 ) (6 )
Net income attributable to Hilton
stockholders $ 239 $ 161 $ 548 $ 311
Weighted average shares outstanding Basic
988 987 988 986
Diluted 991 989 990
989
Earnings per share Basic $
0.24 $ 0.16 $ 0.56 $ 0.32 Diluted $
0.24 $ 0.16 $ 0.55 $ 0.31
Cash dividends declared per share $ 0.07 $ — $
0.14 $ —
HILTON WORLDWIDE HOLDINGS INC.
SEGMENT ADJUSTED EBITDA
(unaudited, in millions)
Three Months Ended Six Months
Ended June 30, June 30, 2016
2015 2016 2015 Management and franchise
$ 471 $ 434 $ 880 $ 825 Ownership(1) 299 318 506 508 Timeshare 98
86 193 160 Corporate and other (62 ) (61 )
(120 ) (117 ) Adjusted EBITDA(2)(3) $ 806 $ 777
$ 1,459 $ 1,376 ____________
(1)
Includes unconsolidated affiliate Adjusted
EBITDA.
(2)
See "Non-GAAP Financial Measures
Reconciliations—Adjusted EBITDA and Adjusted EBITDA Margin" for a
reconciliation of net income to Adjusted EBITDA.
(3)
Adjusted EBITDA included the following
intercompany charges that were eliminated in the condensed
consolidated financial statements:
Three Months Ended Six Months
Ended June 30, June 30, 2016
2015 2016 2015 Rental and other fees(a)
$ 7 $ 5 $ 13 $ 11 Management, royalty and intellectual property
fees(b) 38 36 71 66 Licensing fee(c) 11 11 21 20 Laundry
services(d) 1 1 3 3 Other(e) 2 1 3 2
Intersegment fees elimination $ 59 $ 54 $ 111 $ 102
____________
(a)
Represents charges to the timeshare
segment by the ownership segment.
(b)
Represents fees charged to the ownership
segment by the management and franchise segment.
(c)
Represents fees charged to the timeshare
segment by the management and franchise segment.
(d)
Represents charges to the ownership
segment for services provided by Hilton Worldwide's wholly owned
laundry business. Revenues from the laundry business are included
in other revenues.
(e)
Represents other intercompany charges,
which are a benefit to the ownership segment and a cost to
corporate and other.
HILTON WORLDWIDE HOLDINGS INC.
COMPARABLE AND CURRENCY NEUTRAL
SYSTEM-WIDE HOTEL OPERATING STATISTICS
BY REGION
(unaudited)
Three Months Ended June 30, Occupancy
ADR RevPAR 2016 vs.
2015 2016 vs. 2015 2016
vs. 2015 Americas 80.6 % 0.4 %pts. $ 145.02 2.3 % $ 116.85
2.8 % Europe 76.1 (2.0 ) 157.29 3.9 119.76 1.3 Middle East &
Africa 60.4 (7.2 ) 172.36 21.1 104.04 8.1 Asia Pacific 69.0 3.7
142.33 (1.9 ) 98.25 3.6 System-wide 78.9 0.1 146.52 2.7 115.66 2.9
Six Months Ended June 30, Occupancy ADR
RevPAR 2016 vs. 2015 2016 vs.
2015 2016 vs. 2015 Americas 75.9 % (0.1 )%pts. $
142.76 2.5 % $ 108.34 2.4 % Europe 70.4 (1.1 ) 148.21 3.4 104.32
1.9 Middle East & Africa 62.1 (4.9 ) 171.30 9.2 106.29 1.1 Asia
Pacific 68.1 3.8 145.44 (0.4 ) 99.12 5.4 System-wide 74.6 (0.1 )
144.04 2.6 107.40 2.5
HILTON WORLDWIDE HOLDINGS
INC. COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL
OPERATING STATISTICS BY BRAND (unaudited)
Three Months Ended June 30, Occupancy
ADR RevPAR 2016 vs. 2015
2016 vs. 2015 2016 vs.
2015 Waldorf Astoria Hotels & Resorts 66.1 % (2.0 )%
pts. $ 293.70 7.9 % $ 194.27 4.7 % Conrad Hotels & Resorts 65.3
(2.2 ) 245.71 (1.9 ) 160.54 (5.2 ) Hilton Hotels & Resorts 76.9
(0.7 ) 171.43 3.7 131.88 2.8 Curio - A Collection by Hilton 79.2
0.1 195.33 10.1 154.72 10.3 DoubleTree by Hilton 78.1 0.8 138.61
2.8 108.24 3.8 Embassy Suites by Hilton 83.6 1.2 164.78 3.0 137.70
4.5 Hilton Garden Inn 80.5 0.3 136.56 2.2 109.90 2.6 Hampton by
Hilton 79.4 0.3 123.26 2.0 97.81 2.5 Homewood Suites by Hilton 83.5
0.5 137.12 2.2 114.55 2.8 Home2 Suites by Hilton 84.0 4.2 119.88
2.0 100.68 7.3 System-wide 78.9 0.1 146.52 2.7 115.66 2.9
Six Months Ended June 30, Occupancy ADR
RevPAR 2016 vs. 2015 2016 vs.
2015 2016 vs. 2015 Waldorf Astoria Hotels &
Resorts 66.6 % (1.5 )% pts. $ 310.82 5.7 % $ 206.94 3.4 % Conrad
Hotels & Resorts 64.7 0.1 255.16 (3.0 ) 165.09 (2.9 ) Hilton
Hotels & Resorts 73.4 (0.7 ) 168.06 3.5 123.41 2.5 Curio - A
Collection by Hilton 70.0 (1.3 ) 189.30 7.6 132.52 5.7 DoubleTree
by Hilton 74.1 0.8 135.75 2.8 100.59 3.9 Embassy Suites by Hilton
79.9 0.6 162.58 3.0 129.93 3.8 Hilton Garden Inn 75.7 — 132.45 2.2
100.28 2.2 Hampton by Hilton 73.7 (0.1 ) 120.24 1.9 88.61 1.7
Homewood Suites by Hilton 79.0 (0.1 ) 135.03 2.2 106.70 2.1 Home2
Suites by Hilton 79.1 3.9 114.93 1.5 90.92 6.8 System-wide 74.6
(0.1 ) 144.04 2.6 107.40 2.5
HILTON WORLDWIDE
HOLDINGS INC. COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE
HOTEL OPERATING STATISTICS BY SEGMENT (unaudited)
Three Months Ended June 30, Occupancy
ADR RevPAR 2016 vs. 2015
2016 vs. 2015 2016 vs.
2015 Ownership(1) 81.6 % (1.3 )% pts. $
192.24 2.3 % $ 156.82 0.7 % U.S. 85.4 (1.1 ) 202.94 1.7 173.23 0.4
International (non-U.S.) 77.2 (1.5 ) 178.67 3.2 137.97 1.2
Management and franchise 78.7 0.3 142.12 2.8 111.83 3.2 U.S.
80.8 0.5 142.50 2.4 115.07 3.1 International (non-U.S.) 70.5 (0.7 )
140.37 4.4 98.95 3.3
System-wide 78.9 0.1 146.52 2.7
115.66 2.9 U.S. 81.0 0.4 146.23 2.3 118.48 2.9 International
(non-U.S.) 71.7 (0.9 ) 147.69 4.1 105.88 2.8
Six Months
Ended June 30, Occupancy ADR RevPAR
2016 vs. 2015 2016 vs. 2015 2016
vs. 2015 Ownership(1) 77.5 % (1.0 )% pts. $
187.79 3.1 % $ 145.58 1.7 % U.S. 81.9 (0.7 ) 200.33 3.1 164.11 2.2
International (non-U.S.) 72.5 (1.4 ) 171.53 3.0 124.32 1.1
Management and franchise 74.3 — 139.79 2.6 103.84 2.6 U.S.
75.9 — 140.00 2.4 106.20 2.4 International (non-U.S.) 68.0 0.1
138.86 3.3 94.47 3.4
System-wide 74.6 (0.1 ) 144.04
2.6 107.40 2.5 U.S. 76.2 — 143.80 2.4 109.59 2.4 International
(non-U.S.) 68.8 (0.1 ) 144.97 3.1 99.77 2.9 ____________ (1)
Includes owned and leased hotels, as well
as hotels owned or leased by entities in which Hilton owns a
noncontrolling interest.
HILTON
WORLDWIDE HOLDINGS INC. MANAGEMENT AND FRANCHISE FEES AND
OTHER REVENUES (unaudited, dollars in millions)
Three Months Ended June 30, Increase /
(Decrease) 2016 2015 $ % Management
fees: Base fees(1) $ 93 $ 89 4 4.5 Incentive fees(2) 36
36 — — Total base and incentive fees
129 125 4 3.2 Other management fees(3) 10 9
1 11.1
Total management fees
139 134 5 3.7 Franchise fees(4) 332 300
32 10.7 Total management and franchise fees 471 434 37 8.5
Other revenues(5) 23 21 2 9.5 Intersegment fees
elimination(1)(2)(4)(5) (50 ) (48 ) (2 ) 4.2
Management and franchise fees and other revenues $ 444 $ 407
37 9.1
Six Months Ended June
30, Increase / (Decrease) 2016 2015
$ % Management fees: Base fees(1) $ 178 $ 170 8 4.7
Incentive fees(2) 78 73 5 6.8
Total base and incentive fees 256 243 13 5.3 Other management
fees(3) 19 17 2 11.8 Total
management fees 275 260 15 5.8 Franchise fees(4) 605
565 40 7.1 Total management and franchise fees
880 825 55 6.7 Other revenues(5) 45 42 3 7.1 Intersegment fees
elimination(1)(2)(4)(5) (95 ) (89 ) (6 ) 6.7
Management and franchise fees and other revenues $ 830 $ 778
52 6.7
____________
(1)
Includes management, royalty and
intellectual property fees of $35 million and $32 million for the
three months ended June 30, 2016 and 2015, respectively, and $62
million and $58 million for the six months ended June 30, 2016 and
2015, respectively. These fees are charged to consolidated owned
and leased properties and were eliminated in the condensed
consolidated financial statements.
(2)
Includes management, royalty and
intellectual property fees of $3 million and $4 million for the
three months ended June 30, 2016 and 2015, respectively, and $9
million and $8 million for the six months ended June 30, 2016 and
2015, respectively. These fees are charged to consolidated owned
and leased properties and were eliminated in the condensed
consolidated financial statements.
(3)
Includes timeshare homeowners'
association, early termination, product improvement plan and other
fees.
(4)
Includes a licensing fee earned from the
timeshare segment of $11 million for each of the three months ended
June 30, 2016 and 2015, and $21 million and $20 million for the six
months ended June 30, 2016 and 2015, respectively.
(5)
Includes charges to consolidated owned and
leased properties for services provided by a wholly owned laundry
business of $1 million for each of the three months ended June 30,
2016 and 2015, and $3 million for each of the six months ended June
30, 2016 and 2015.
HILTON WORLDWIDE HOLDINGS INC.
TIMESHARE REVENUES AND OPERATING
EXPENSES
(unaudited, dollars in
millions)
Three Months Ended June 30, Increase /
(Decrease) 2016 2015 $ %
Revenues Timeshare sales $ 239 $ 233 6 2.6 Resort operations
60 51 9 17.6 Financing and other 37 35 2 5.7 $
336 $ 319 17 5.3
Operating Expenses Timeshare
sales $ 170 $ 172 (2
)
(1.2 ) Resort operations 34 32 2 6.3 Financing and other 19
16 3 18.8 $ 223 $ 220 3 1.4
Six Months Ended
June 30,
Increase / (Decrease) 2016 2015 $
% Revenues Timeshare sales $ 474 $ 470 4 0.9 Resort
operations 115 101 14 13.9 Financing and other 73 69
4 5.8 $ 662 $ 640 22 3.4
Operating
Expenses Timeshare sales $ 340 $ 360 (20 ) (5.6 ) Resort
operations 64 63 1 1.6 Financing and other 36 31
5 16.1 $ 440 $ 454 (14 ) (3.1 )
HILTON WORLDWIDE
HOLDINGS INC. HOTEL AND TIMESHARE PROPERTY SUMMARY As
of June 30, 2016 Owned / Leased(1)
Managed Franchised Total Properties
Rooms Properties Rooms Properties
Rooms Properties Rooms Waldorf Astoria
Hotels & Resorts U.S. 4 1,174 9 5,420 — — 13 6,594 Americas
(excluding U.S.) — — 1 146 1 984 2 1,130 Europe 2 463 4 898 — — 6
1,361 Middle East & Africa — — 3 703 — — 3 703 Asia Pacific — —
2 431 — — 2 431
Conrad Hotels & Resorts U.S. — — 3 1,029
— — 3 1,029 Americas (excluding U.S.) — — — — 1 294 1 294 Europe 1
191 2 707 1 256 4 1,154 Middle East & Africa 1 614 3 1,079 — —
4 1,693 Asia Pacific — — 13 4,074 1 654 14 4,728
Hilton Hotels
& Resorts U.S. 25 23,089 38 24,097 177 53,623 240 100,809
Americas (excluding U.S.) 3 1,668 22 7,428 19 6,015 44 15,111
Europe 68 17,691 44 14,907 38 9,429 150 42,027 Middle East &
Africa 6 2,276 45 13,966 1 410 52 16,652 Asia Pacific 7 3,391 70
26,397 8 2,948 85 32,736
Curio - A Collection by Hilton U.S.
1 224 1 998 17 3,741 19 4,963 Americas (excluding U.S.) — — — — 3
525 3 525 Europe — — — — 1 278 1 278
DoubleTree by Hilton
U.S. 11 4,264 26 7,690 280 67,074 317 79,028 Americas (excluding
U.S.) — — 5 1,011 17 3,275 22 4,286 Europe — — 11 3,456 61 10,590
72 14,046 Middle East & Africa — — 9 2,114 4 488 13 2,602 Asia
Pacific — — 40 11,394 2 965 42 12,359
Embassy Suites by
Hilton U.S. 10 2,402 33 8,931 177 40,384 220 51,717 Americas
(excluding U.S.) — — 3 623 5 1,282 8 1,905
Hilton Garden Inn
U.S. 2 290 4 430 586 80,796 592 81,516 Americas (excluding U.S.) —
— 8 1,071 28 4,491 36 5,562 Europe — — 18 3,306 30 5,006 48 8,312
Middle East & Africa — — 6 1,337 — — 6 1,337 Asia Pacific — —
11 2,130 — — 11 2,130
Hampton by Hilton U.S. 1 130 49 6,070
1,958 190,220 2,008 196,420 Americas (excluding U.S.) — — 11 1,416
81 9,601 92 11,017 Europe — — 12 1,928 33 4,879 45 6,807 Asia
Pacific — — — — 4 817 4 817
Homewood Suites by Hilton U.S. —
— 25 2,687 357 40,211 382 42,898 Americas (excluding U.S.) — — 2
224 15 1,699 17 1,923
Home2 Suites by Hilton
U.S.
— — — — 90 9,250 90 9,250 Americas (excluding U.S.) — — 1 97 2 227
3 324
Other 1 129 3 1,340 2 278 6 1,747 Lodging 143 57,996
537 159,535 4,000 550,690 4,680 768,221
Hilton Grand
Vacations — — 47 7,645 — — 47 7,645 Total 143 57,996 584
167,180 4,000 550,690 4,727 775,866
____________
(1)
Includes hotels owned or leased by
entities in which Hilton owns a noncontrolling interest.
HILTON WORLDWIDE HOLDINGS
INC. CAPITAL EXPENDITURES (unaudited, dollars in
millions) Three Months Ended June 30,
Increase / (Decrease) 2016 2015 $
% Hotel property and equipment $ 76 $ 66 10 15.2 Timeshare
property and equipment 8 3 5 NM(1) Corporate and other property and
equipment 1 2 (1 )
(50.0
)
Total capital expenditures for property and equipment 85 71 14 19.7
Software capitalization costs 24 15 9 60.0 Contract acquisition
costs 9 8 1 12.5 Expenditures for timeshare inventory net of costs
of sales(2) (14 ) (1 ) (13 ) NM(1) Total capital expenditures $ 104
$ 93 11 11.8
Six Months Ended
June 30, Increase / (Decrease) 2016
2015 $ % Hotel property and equipment
$
153
$
148 5 3.4 Timeshare property and equipment 11 5 6 NM(1) Corporate
and other property and equipment 5 6
(1
)
(16.7
)
Total capital expenditures for property and equipment 169 159 10
6.3 Software capitalization costs 35 23 12 52.2 Contract
acquisition costs 18 19 (1
)
(5.3
)
Expenditures for timeshare inventory net of costs of sales(2)
(11
)
14 (25
)
NM(1) Total capital expenditures
$
211
$
215 (4
)
(1.9
)
____________
(1)
Fluctuation in terms of percentage change
is not meaningful.
(2)
Timeshare capital expenditures for
inventory additions were $2 million and $35 million for the three
months ended June 30, 2016 and 2015, respectively, and $34 million
and $76 million for the six months ended June 30, 2016 and 2015,
respectively, and timeshare costs of sales were $16 million and $36
million for the three months ended June 30, 2016 and 2015,
respectively, and $45 million and $62 million for the six months
ended June 30, 2016 and 2015, respectively.
HILTON WORLDWIDE HOLDINGS INC. NON-GAAP
FINANCIAL MEASURES RECONCILIATIONS NET INCOME AND EPS,
ADJUSTED FOR SPECIAL ITEMS (unaudited, in millions, except
per share data) Three Months Ended Six Months
Ended June 30, June 30, 2016
2015 2016 2015 Net income attributable
to Hilton stockholders, as reported $ 239 $ 161 $ 548 $ 311 Diluted
EPS, as reported $ 0.24 $ 0.16 $ 0.55 $ 0.31 Special items:
Impairment loss $ — $ — $ 15 $ — Costs incurred for planned
spin-offs(1) 18 — 27 — Share-based compensation expense(2) — 64 —
66 Asset acquisitions and dispositions(3) 1 51 2 (43 ) Gain on
capital lease amendment(4) — (24 ) — (24 ) Secondary offering
expenses(5) — 2 — 2 Tax-related adjustments(6) — —
(153 ) 4 Total special items before tax 19 93 (109 ) 5
Income tax benefit (expense) on special items (7 ) (8 ) (17 ) 45
Total special items after tax $ 12 $ 85 $ (126
) $ 50 Net income, adjusted for special items $ 251
$ 246 $ 422 $ 361 Diluted EPS, adjusted
for special items $ 0.25 $ 0.25 $ 0.43 $ 0.37
____________
(1)
These amounts include expenses that were
recognized in general, administrative and other expenses related to
the planned spin-offs of the real estate and timeshare businesses
expected later this year.
(2)
These amounts include expenses that were
recognized in general, administrative and other expenses related to
the share-based compensation prior to and in connection with the
initial public offering. Amounts exclude share-based compensation
expense related to awards issued under the Hilton Worldwide
Holdings Inc. 2013 Omnibus Incentive Plan.
(3)
The amounts for the three and six months
ended June 30, 2016 relate to severance costs from the sale of the
Waldorf Astoria New York. The amounts for the three and six months
ended June 30, 2015 relate primarily to the net gain on the sale of
the Waldorf Astoria New York, as well as amounts recognized related
to the sale of the Waldorf Astoria New York and properties acquired
from the proceeds of that sale. The amounts are detailed as
follows:
Three Months Ended Six Months Ended
June 30, 2015 June 30, 2015 Loss (gain) on sale of
the Waldorf Astoria New York, net of transaction costs $ 3 $ (142 )
Severance costs 41 54 Transaction costs 7 26 Reduction of
unamortized management contract intangible asset related to
properties that were managed by Hilton prior to acquisition — 13
Reduction of remaining deferred issuance costs related to the
mortgage loan secured by the Waldorf Astoria New York — 6
$ 51 $ (43 )
(4)
In June 2015, one of Hilton's consolidated
properties modified the terms of its lease agreement, resulting in
a reduction in the capital lease obligation and recognition of a
gain.
(5)
Expense was recognized in general,
administrative and other expenses during the three and six months
ended June 30, 2015 related to costs incurred in connection with a
secondary equity offering by certain selling stockholders.
(6)
The amount for the six months ended June
30, 2016 relates to the net change in unrecognized tax benefits.
The amount for the six months ended June 30, 2015 includes the
effect of the reduction in the statutory tax rate on March 31, 2015
in a foreign jurisdiction where the Company had deferred tax
assets, resulting in a reduction to the deferred tax asset and a
corresponding recognition of income tax expense of $6 million,
including $2 million attributable to noncontrolling interests.
HILTON WORLDWIDE HOLDINGS INC. NON-GAAP
FINANCIAL MEASURES RECONCILIATIONS ADJUSTED EBITDA AND
ADJUSTED EBITDA MARGIN (unaudited, dollars in millions)
Three Months Ended Six Months Ended June
30, June 30, 2016 2015 2016
2015 Net income $ 244 $ 167 $ 554 $ 317 Interest
expense 147 149 286 293 Income tax expense 156 145 110 308
Depreciation and amortization 171 173 340 348 Interest expense,
income tax and depreciation and amortization included in equity in
earnings from unconsolidated affiliates 7 7 15
14 EBITDA 725 641 1,305 1,280 Loss (gain) on sales of
assets, net (2 ) 3 (2 ) (142 ) Loss (gain) on foreign currency
transactions 13 (5 ) 25 13 FF&E replacement reserve 16 14 29 27
Share-based compensation expense 26 92 44 122 Impairment loss — —
15 — Other loss (gain), net(1) 5 (18 ) 5 7 Other adjustment
items(2) 23 50 38 69 Adjusted EBITDA $
806 $ 777 $ 1,459 $ 1,376 ____________
(1)
Represents costs related primarily to the
acquisitions of property and equipment and a loss related to a
disposition of property and equipment.
(2)
Represents adjustments for reorganization
costs, severance and other items.
Three Months Ended Six Months Ended
June 30, June 30, 2016 2015
2016 2015 Total revenues, as reported $ 3,051
$ 2,922 $ 5,801 $ 5,521 Less: other revenues from managed and
franchised properties (1,166 ) (1,061 ) (2,237 ) (2,011 ) Total
revenues, excluding other revenues from managed and franchised
properties $ 1,885 $ 1,861 $ 3,564 $ 3,510
Adjusted EBITDA $ 806 $ 777 $ 1,459 $ 1,376
Adjusted EBITDA margin 42.8 % 41.8 % 40.9 % 39.2 %
HILTON WORLDWIDE HOLDINGS INC. NON-GAAP FINANCIAL
MEASURES RECONCILIATIONS NET DEBT AND NET DEBT TO ADJUSTED
EBITDA RATIO (unaudited, in millions)
June 30, December 31, 2016 2015
Long-term debt, including current maturities $ 9,998 $ 9,951 Add:
unamortized deferred financing costs 78 90 Long-term
debt, including current maturities and excluding unamortized
deferred financing costs 10,076 10,041 Add: Hilton's share of
unconsolidated affiliate debt, excluding unamortized deferred
financing costs 227 229 Less: cash and cash equivalents (810 ) (609
) Less: restricted cash and cash equivalents (271 ) (247 ) Net debt
$ 9,222 $ 9,414
Six Months Ended
Year Ended TTM(1) June 30, December
31, June 30, 2016 2015 2015
2016 Net income $ 554 $ 317 $ 1,416 $ 1,653 Interest expense
286 293 575 568 Income tax expense (benefit) 110 308 80 (118 )
Depreciation and amortization 340 348 692 684 Interest expense,
income tax and depreciation and amortization included in equity in
earnings from unconsolidated affiliates 15 14 32
33 EBITDA 1,305 1,280 2,795 2,820 Gain on sales of
assets, net (2 ) (142 ) (306 ) (166 ) Loss on foreign currency
transactions 25 13 41 53 FF&E replacement reserve 29 27 48 50
Share-based compensation expense 44 122 162 84 Impairment loss 15 —
9 24 Other loss (gain), net(2) 5 7 1 (1 ) Other adjustment items(3)
38 69 129 98 Adjusted EBITDA $ 1,459
$ 1,376 $ 2,879 $ 2,962 Net debt
$ 9,222 Net debt to Adjusted EBITDA ratio 3.1
____________ (1)
Trailing twelve months ("TTM") June 30,
2016 is calculated as six months ended June 30, 2016 plus year
ended December 31, 2015 less six months ended June 30, 2015.
(2)
Primarily represents gains and losses on
the acquisitions and dispositions of property and equipment and
lease restructuring transactions.
(3)
Represents adjustments for reorganization
costs, severance, offering costs and other items.
HILTON WORLDWIDE HOLDINGS INC. NON-GAAP
FINANCIAL MEASURES RECONCILIATIONS OUTLOOK: ADJUSTED
EBITDA FORECASTED 2016 (unaudited, in millions)
Three Months EndingSeptember 30,
2016
Low Case High Case Net income $ 223 $ 235
Interest expense 142 142 Income tax expense 160 168 Depreciation
and amortization 174 174 Interest expense, income tax and
depreciation and amortization included in equity in earnings from
unconsolidated affiliates 8 8 EBITDA 707 727 FF&E
replacement reserve 12 12 Share-based compensation expense 27 27
Other adjustment items(1) 14 14 Adjusted EBITDA $ 760
$ 780
Year EndingDecember 31,
2016
Low Case High Case Net income $ 1,015 $ 1,051
Interest expense 570 570 Income tax expense 427 451 Depreciation
and amortization 688 688 Interest expense, income tax and
depreciation and amortization included in equity in earnings from
unconsolidated affiliates 52 52 EBITDA 2,752 2,812 Loss on
foreign currency transactions 26 26 FF&E replacement reserve 52
52 Share-based compensation expense 95 95 Impairment loss 15 15
Other adjustment items(1) 40 40 Adjusted EBITDA $ 2,980
$ 3,040 ____________ (1)
Represents adjustments for reorganization
costs, severance and other items.
HILTON WORLDWIDE HOLDINGS INC. NON-GAAP
FINANCIAL MEASURES RECONCILIATIONS OUTLOOK: NET INCOME AND
DILUTED EPS, ADJUSTED FOR SPECIAL ITEMS FORECASTED 2016
(unaudited, in millions, except per share data)
Three Months EndingSeptember 30,
2016
Low Case High Case Net income attributable to
Hilton stockholders, before special items $ 218 $ 230 Diluted EPS,
before special items $ 0.21 $ 0.23 Net income attributable
to Hilton stockholders, adjusted for special items $ 218 $
230 Diluted EPS, adjusted for special items $ 0.21 $
0.23
Year EndingDecember 31,
2016
Low Case High Case Net income attributable to Hilton
stockholders, before special items $ 1,000 $ 1,036 Diluted EPS,
before special items $ 1.00 $ 1.04 Special items: Impairment loss
15 15 Costs incurred for planned spin-offs(1) 27 27 Asset
disposition(2) 2 2 Tax-related adjustment(3) (153 ) (153 ) Total
special items before tax (109 ) (109 ) Income tax expense on
special items (17 ) (17 ) Total special items after tax $ (126 ) $
(126 ) Net income attributable to Hilton stockholders,
adjusted for special items $ 874 $ 910 Diluted EPS,
adjusted for special items $ 0.87 $ 0.91 ____________
(1)
This amount includes expense that was
recognized in general, administrative and other expenses related to
the planned spin-offs of the real estate and timeshare businesses
expected later this year.
(2)
This amount relates to severance costs
from the sale of the Waldorf Astoria New York.
(3)
This amount relates to the net change in
unrecognized tax benefits.
HILTON WORLDWIDE HOLDINGS
INC.DEFINITIONS
EBITDA, Adjusted EBITDA and Adjusted
EBITDA Margin
Earnings before interest expense, taxes and depreciation and
amortization ("EBITDA"), presented herein, is a financial measure
not recognized under United States ("U.S.") generally accepted
accounting principles ("GAAP") that reflects net income, excluding
interest expense, a provision for income taxes and depreciation and
amortization. The Company considers EBITDA to be a useful measure
of operating performance, due to the significance of the Company's
long-lived assets and level of indebtedness.
Adjusted EBITDA, presented herein, is calculated as EBITDA, as
previously defined, further adjusted to exclude certain items,
including, but not limited to, gains, losses and expenses in
connection with: (i) asset dispositions for both consolidated and
unconsolidated investments; (ii) foreign currency transactions;
(iii) debt restructurings/retirements; (iv) non-cash impairment
losses; (v) furniture, fixtures and equipment ("FF&E")
replacement reserves required under certain lease agreements; (vi)
reorganization costs; (vii) share-based compensation expense;
(viii) severance, relocation and other expenses; and (ix) other
items.
Adjusted EBITDA margin represents Adjusted EBITDA as a
percentage of total revenues, excluding other revenues from managed
and franchised properties.
EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are not
recognized terms under U.S. GAAP and should not be considered as
alternatives to net income (loss) or other measures of financial
performance or liquidity derived in accordance with U.S. GAAP. In
addition, the Company's definitions of EBITDA, Adjusted EBITDA and
Adjusted EBITDA margin may not be comparable to similarly titled
measures of other companies.
The Company believes that EBITDA, Adjusted EBITDA and Adjusted
EBITDA margin provide useful information to investors about the
Company and its financial condition and results of operations for
the following reasons: (i) EBITDA, Adjusted EBITDA and Adjusted
EBITDA margin are among the measures used by the Company's
management team to evaluate its operating performance and make
day-to-day operating decisions; and (ii) EBITDA, Adjusted EBITDA
and Adjusted EBITDA margin 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 the industry.
EBITDA, Adjusted EBITDA and Adjusted EBITDA margin have
limitations as analytical tools and should not be considered either
in isolation or as a substitute for net income (loss), cash flow or
other methods of analyzing results as reported under U.S. GAAP.
Net Income and EPS, Adjusted for Special
Items
Net income and EPS, adjusted for special items, are not
recognized terms under U.S. GAAP and should not be considered as
alternatives to net income (loss) or other measures of financial
performance or liquidity derived in accordance with U.S. GAAP. In
addition, the Company's definition of Net income and EPS, adjusted
for special items, may not be comparable to similarly titled
measures of other companies.
Net income and 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 the Company's ongoing operations.
Net Debt
Net debt, presented herein, is a non-GAAP financial measure that
the Company uses to evaluate its financial leverage. Net debt
is calculated as (i) long-term debt, including current maturities
and excluding unamortized deferred financing costs; (ii) the
Company's share of investments in affiliate debt, excluding
unamortized deferred financing costs; reduced by (a) cash and cash
equivalents; and (b) restricted cash and cash equivalents.
The Company believes Net debt provides useful information about
its indebtedness to investors as it is frequently used by
securities analysts, investors and other interested parties to
compare the indebtedness of companies. Net debt should not be
considered as a substitute to debt presented in accordance with
U.S. GAAP. Net debt may not be comparable to a similarly titled
measure of other companies.
Net Debt to Adjusted EBITDA
Ratio
Net debt to Adjusted EBITDA ratio, presented herein, is a
non-GAAP financial measure and is included as it is frequently used
by securities analysts, investors and other interested parties to
compare the financial condition of companies. Net debt to Adjusted
EBITDA ratio should not be considered as an alternative to measures
of financial condition derived in accordance with U.S. GAAP and it
may not be comparable to a similarly titled measure of other
companies.
Comparable Hotels
The Company defines comparable hotels as those that: (i) were
active and operating in the Company's system for at least one full
calendar year as of the end of the current period, and open January
1st of the previous year; (ii) have not undergone a change in brand
or ownership during the current or comparable periods reported; and
(iii) have not sustained substantial property damage, business
interruption, undergone large-scale capital projects or for which
comparable results are not available.
Of the 4,680 hotels in the Company's system as of June 30, 2016,
3,795 were classified as comparable hotels. The 885 non-comparable
hotels included 196 properties, or approximately four percent of
the total hotels in the system, that were removed from the
comparable group during the last twelve months because they
sustained substantial property damage, business interruption,
underwent large-scale capital projects or comparable results were
not available.
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. Occupancy measures the utilization of the hotels'
available capacity. 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
levels as demand for hotel rooms increases or decreases.
Average Daily Rate ("ADR")
ADR represents hotel room revenue divided by total number of
room nights sold in a given period. ADR measures 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 management uses ADR to
assess pricing levels that the Company is able to generate by type
of customer, as changes in rates have a different effect on overall
revenues and incremental profitability than changes in occupancy,
as described above.
Revenue per Available Room
("RevPAR")
The Company calculates RevPAR by dividing hotel room revenue by
room nights available to guests for a given period. Management
considers RevPAR to be a meaningful indicator of the Company's
performance as it provides a metric correlated to two primary and
key drivers of operations at a hotel or group of hotels: occupancy
and ADR. RevPAR is also a useful indicator in measuring performance
over comparable periods for comparable hotels.
References to RevPAR, ADR and occupancy throughout this press
release are presented on a comparable basis and references to
RevPAR and ADR are presented on a currency neutral basis (all
periods use the same exchange rates), unless otherwise noted.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160727005390/en/
Investor ContactChristian Charnaux+1 703 883
5205orMedia ContactAaron Radelet+1 703 883 5804
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