Hilton Worldwide Holdings Inc. ("Hilton," "Hilton Worldwide" or
the "Company") (NYSE: HLT) today reported its second quarter 2015
results and raised its full year 2015 outlook. Highlights
include:
- EPS, adjusted for special items, for
the second quarter was $0.25, a 19 percent increase from the same
period in 2014; without adjustments, EPS was $0.16
- Net income attributable to Hilton
stockholders for the second quarter was $161 million
- Adjusted EBITDA for the second
quarter increased 15 percent from the same period in 2014 to $777
million, and Adjusted EBITDA margin increased 320 basis
points
- System-wide comparable RevPAR
increased 5.2 percent for the second quarter on a currency neutral
basis from the same period in 2014
- Management and franchise fees for
the second quarter increased 17 percent from the same period in
2014 to $434 million
- Net unit growth was over 11,000
rooms in the second quarter, a 56 percent increase from the same
period in 2014
- Approved 24,000 new rooms for
development during the second quarter, growing Hilton's development
pipeline to 1,510 hotels, consisting of more than 250,000 rooms, as
of June 30, 2015
- Reduced long-term debt by $175
million during the second quarter; additional $350 million
prepayment on senior secured loan facility borrowings in July 2015,
for a total reduction of $750 million through July 2015
- Initiated regular quarterly cash
dividend with the announcement on July 29, 2015 of a dividend of
$0.07 per share to be paid on or before September 25,
2015
- Increased outlook for full year
Adjusted EBITDA to between $2,820 million and $2,870 million, an
increase of $20 million at the midpoint adjusting for the sale of
the Hilton Sydney
Overview
For the three months ended June 30, 2015, earnings per share
("EPS") was $0.16 compared to $0.21 for the three months ended June
30, 2014, and EPS, adjusted for special items, was $0.25 for the
three months ended June 30, 2015 compared to $0.21 for the three
months ended June 30, 2014. Adjusted EBITDA increased 15 percent to
$777 million for the three months ended June 30, 2015, compared to
$674 million for the three months ended June 30, 2014, and net
income attributable to Hilton stockholders was $161 million for the
three months ended June 30, 2015 compared to $209 million for the
three months ended June 30, 2014.
For the six months ended June 30, 2015, EPS was $0.31 compared
to $0.34 for the six months ended June 30, 2014, and EPS, adjusted
for special items, was $0.37 for the six months ended June 30, 2015
compared to $0.35 for the six months ended June 30, 2014. Adjusted
EBITDA increased 16 percent to $1,376 million for the six months
ended June 30, 2015, compared to $1,182 million for the six months
ended June 30, 2014, and net income attributable to Hilton
stockholders was $311 million for the six months ended June 30,
2015 compared to $332 million for the six months ended June 30,
2014.
Christopher J. Nassetta, President & Chief Executive Officer
of Hilton Worldwide, said, "We are pleased that strong business
fundamentals and execution resulted in Adjusted EBITDA and EPS
exceeding the high end of guidance. We remain confident in
delivering strong performance going forward and are pleased to
commence returning capital to stockholders with our announcement
this morning of a quarterly dividend."
Nassetta added, “We continue to lead the industry in organic
growth with the largest rooms pipeline and largest share of rooms
under construction. Including rooms signed this month, we also
reached the milestone of having one million rooms open or under
development.”
Segment Highlights
Management and Franchise
Management and franchise fees were $434 million in the second
quarter of 2015, an increase of 17 percent compared to the same
period in 2014. RevPAR at comparable managed and franchised hotels
in the second quarter of 2015 increased 5.2 percent on a currency
neutral basis (a 3.4 percent increase in actual dollars) compared
to the same period in 2014. The increase in RevPAR at comparable
managed and franchised hotels and addition of new units have
yielded continued strong fee growth during the second quarter of
2015.
Ownership
Revenues from the ownership segment were $1,141 million in the
second quarter of 2015, and ownership segment Adjusted EBITDA was
$318 million, an increase of 9 percent from the same period in
2014. Adjusted EBITDA margin(1) increased 200 basis points. RevPAR
at comparable hotels in the ownership segment increased 5.2 percent
on a currency neutral basis (a 1.0 percent decrease in actual
dollars) in the second quarter of 2015 compared to the same period
in 2014, with an increase in RevPAR of 6.5 percent at comparable
ownership segment hotels in the United States. Outside of the
United States, RevPAR at comparable ownership segment hotels
increased by 3.4 percent on a currency neutral basis (a 10.5
percent decrease in actual dollars).
____________
(1)
Calculated as ownership segment Adjusted
EBITDA divided by ownership segment revenues.
Timeshare
Timeshare segment revenue for the second quarter of 2015 was
$319 million, an increase of 16 percent from the same period in
2014, and timeshare Adjusted EBITDA was $86 million, an increase of
21 percent. Commissions recognized from the sale of third-party
developed timeshare intervals increased $24 million during the
second quarter of 2015 from the same period in 2014, and sales
revenue on owned inventory increased $14 million.
In the second quarter of 2015, 59 percent of intervals sold were
developed by third parties. Hilton Worldwide's overall supply of
timeshare intervals as of June 30, 2015 was approximately 124,000
intervals. With the addition of a recently signed condo-hotel
conversion in Orlando, Hilton Worldwide increased its timeshare
supply to nearly 136,000 intervals, or about six years of sales at
current pace, with over 83 percent developed by third parties.
Development
Hilton Worldwide opened 82 hotels and achieved net unit growth
of over 11,000 rooms during the second quarter of 2015. In July
2015, Hilton Worldwide entered two new countries with the openings
of the Hilton Aruba Caribbean Resort & Casino and the Hilton
Garden Inn Guatemala City, increasing Hilton Worldwide's global
presence to 97 countries and territories.
As of June 30, 2015, Hilton Worldwide had the largest rooms
pipeline in the lodging industry(2), with more than 250,000 rooms
at 1,510 hotels throughout 85 countries and territories, including
32 countries and territories where Hilton Worldwide does not
currently have any open hotels. Approximately 136,000 rooms, or 54
percent of the pipeline, were located outside of the United States.
All of the development pipeline is in the capital light management
and franchise segment, and over half, or approximately 128,000
rooms, were under construction. At nearly 20 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 nearly 265,000 rooms.
____________
(2)
Source: Smith Travel Research, Inc.
("STR") Global New Development Pipeline (June 2015).
Balance Sheet and
Liquidity
During the second quarter of 2015, Hilton made voluntary
prepayments of $175 million on its senior secured term loan
facility. In July 2015, Hilton made an additional $350 million
prepayment on its senior secured term loan facility using net
proceeds from the sale of the Hilton Sydney.
As of June 30, 2015, Hilton had $10.4 billion of
outstanding indebtedness with a weighted average interest rate of
4.2 percent, excluding $780 million of non-recourse debt.
Total cash and cash equivalents were $759 million as of
June 30, 2015, including $248 million of restricted cash and
cash equivalents. No borrowings were outstanding under the $1.0
billion revolving credit facility as of June 30, 2015.
Hilton Worldwide initiated a regular quarterly cash dividend
with the announcement on July 29, 2015 of a dividend of $0.07 per
share on shares of its common stock to be paid on or before
September 25, 2015 to stockholders of record of its common
stock as of the close of business on August 14, 2015.
Outlook
Full Year 2015
- System-wide RevPAR is expected to
increase between 5.0 percent and 7.0 percent on a comparable and
currency neutral basis, with ownership segment RevPAR expected to
increase between 4.0 percent and 6.0 percent on a comparable and
currency neutral basis as compared to 2014.
- Adjusted EBITDA is projected to be
between $2,820 million and $2,870 million, an increase of $20
million at the midpoint adjusting for the sale of the Hilton
Sydney.
- Management and franchise fees are
projected to increase approximately 11 percent to 13 percent.
- Timeshare segment Adjusted EBITDA is
projected to be between $335 million and $350 million.
- Corporate expense and other is
projected to remain flat to prior year.
- Diluted EPS, adjusted for special
items, is projected to be between $0.80 and $0.84.
- Capital expenditures, excluding
timeshare inventory, are expected to be between $350 million and
$400 million.
- Net unit growth is expected to be
approximately 40,000 rooms to 45,000 rooms.
- Expect cash available for debt
prepayments or capital return to stockholders to be between $1.1
billion and $1.3 billion, which includes two expected dividend
payments.
Third Quarter 2015
- System-wide RevPAR is expected to
increase between 4.5 percent and 6.5 percent on a comparable and
currency neutral basis compared to the third quarter of 2014.
- Adjusted EBITDA is expected to be
between $730 million and $750 million.
- Management and franchise fees are
expected to increase approximately 10 percent to 12 percent.
- Diluted EPS, adjusted for special
items, is projected to be between $0.21 and $0.23.
Conference Call
Hilton Worldwide will host a conference call to discuss second
quarter 2015 results on July 29, 2015 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/investors/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/investors/financial-reporting/quarterly-results.
Alternatively, participants may listen to the live call by
dialing 1-877-201-0168 in the United States or 1-647-788-4901
internationally. Please use the conference ID 74328196.
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 1-855-859-2056
or 1-404-537-3406 using the Conference ID 74328196.
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 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," "approximately,"
"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 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,
2014, filed with the Securities and Exchange Commission ("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, Adjusted EBITDA margins and Net
Debt. Please see the schedules to the press release and
"Definitions" for additional information and reconciliations of
such non-GAAP financial measures.
About Hilton Worldwide
Hilton Worldwide (NYSE: HLT) is a leading global hospitality
company, spanning the lodging sector from luxury and full-service
hotels and resorts to extended-stay suites and focused-service
hotels. For 96 years, Hilton Worldwide has been dedicated to
continuing its tradition of providing exceptional guest
experiences. The Company’s portfolio of twelve world-class global
brands is comprised of more than 4,440 managed, franchised, owned
and leased hotels and timeshare properties, with more than 730,000
rooms in 97 countries and territories, including 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, Homewood Suites by Hilton, Home2 Suites by
Hilton and Hilton Grand Vacations. The Company also manages an
award-winning customer loyalty program, Hilton HHonors®. 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 and www.linkedin.com/company/hilton-worldwide.
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, 2015
2014 2015 2014 Revenues Owned
and leased hotels $ 1,135 $ 1,117 $ 2,092 $ 2,062 Management and
franchise fees and other 407 354 778 666 Timeshare 319 276
640 555 1,861 1,747 3,510 3,283 Other revenues
from managed and franchised properties 1,061 920
2,011 1,747 Total revenues 2,922 2,667 5,521 5,030
Expenses Owned and leased hotels 817 833 1,585 1,604
Timeshare 220 188 454 365 Depreciation and amortization 173 158 348
311 General, administrative and other 221 133 348
230 1,431 1,312 2,735 2,510 Other expenses from
managed and franchised properties 1,061 920 2,011
1,747 Total expenses 2,492 2,232 4,746 4,257
Gain (loss) on sales of assets, net (3 ) — 142 —
Operating income 427 435 917 773 Interest income 2 5
8 6 Interest expense (149 ) (158 ) (293 ) (311 ) Equity in earnings
from unconsolidated affiliates 9 8 13 12 Gain (loss) on foreign
currency transactions 5 32 (13 ) 46 Other gain (loss), net 18
11 (7 ) 14
Income before income
taxes 312 333 625 540 Income tax expense (145 ) (121 )
(308 ) (204 )
Net income 167 212 317 336
Net
income attributable to noncontrolling interests (6 ) (3 ) (6 )
(4 )
Net income attributable to Hilton stockholders $ 161
$ 209 $ 311 $ 332
Weighted
average shares outstanding Basic 987 985 986
985 Diluted 989 985 989 985
Earnings per share Basic $ 0.16 $ 0.21
$ 0.32 $ 0.34 Diluted $ 0.16 $ 0.21
$ 0.31 $ 0.34
HILTON
WORLDWIDE HOLDINGS INC. SEGMENT ADJUSTED EBITDA
(unaudited, in millions) Three Months Ended
Six Months Ended June 30, June 30, 2015
2014(1) 2015
2014(1) Management and franchise(2) $ 434 $ 371 $ 825
$ 702 Ownership(2)(3)(4)(5) 318 292 508 467 Timeshare(2)(3) 86 71
160 153 Corporate and other(4) (61 ) (60 ) (117 ) (140 )
Adjusted EBITDA(6) $ 777 $ 674 $ 1,376
$ 1,182 ____________ (1) To facilitate
comparison with the Company's competitors, beginning in the first
quarter of 2015, Adjusted EBITDA excluded all share-based
compensation expense. Historical results have been revised to
reflect this change in the definition to allow for comparability.
(2) Includes management, royalty and intellectual property fees of
$36 million and $29 million for the three months ended June 30,
2015 and 2014, respectively, and $66 million and $56 million for
the six months ended June 30, 2015 and 2014, respectively. These
fees are charged to consolidated owned and leased properties and
were eliminated in the condensed consolidated financial statements.
Also includes a licensing fee of $11 million for the three months
ended June 30, 2015 and 2014, and $20 million and $22 million for
the six months ended June 30, 2015 and 2014, respectively, which is
charged to the timeshare segment by the management and franchise
segment and was eliminated in the condensed consolidated financial
statements. While the net effect is zero, the measure of Adjusted
EBITDA includes these fees as a benefit to the management and
franchise segment and a cost to the ownership and timeshare
segments. (3) Includes charges to timeshare operations for rental
fees and fees for other amenities, which were eliminated in the
condensed consolidated financial statements. These charges totaled
$5 million and $8 million for the three months ended June 30, 2015
and 2014, respectively, and $11 million and $14 million for the six
months ended June 30, 2015 and 2014, respectively. While the net
effect is zero, the measure of Adjusted EBITDA includes these fees
as a benefit to the ownership segment and a cost to the timeshare
segment. (4) Includes charges to consolidated owned and leased
properties for services provided by Hilton's wholly owned laundry
business of $1 million and $2 million for the three months ended
June 30, 2015 and 2014, respectively, and $3 million and $4 million
for the six months ended June 30, 2015 and 2014, respectively. Also
includes other intercompany charges of $1 million for the three
months ended June 30, 2015 and 2014, and $2 million for the six
months ended June 30, 2015 and 2014. These charges were eliminated
in the condensed consolidated financial statements. (5) Includes
unconsolidated affiliate Adjusted EBITDA. (6) See "Non-GAAP
Financial Measures Reconciliations—Adjusted EBITDA and Adjusted
EBITDA Margin" for a reconciliation of net income attributable to
Hilton stockholders to Adjusted EBITDA.
HILTON
WORLDWIDE HOLDINGS INC. COMPARABLE AND CURRENCY NEUTRAL
SYSTEM-WIDE HOTEL OPERATING STATISTICS BY REGION
(unaudited) Three Months Ended June 30,
Occupancy ADR RevPAR 2015
vs. 2014 2015 vs. 2014
2015 vs. 2014 Americas 80.1 %
0.9
%pts.
$ 141.25 3.9 % $ 113.17 5.1 % Europe 80.5 1.6 158.03 2.6 127.22 4.6
Middle East & Africa 67.8 4.4 139.21 (4.2 ) 94.42 2.5 Asia
Pacific 67.6 6.1 140.54 (0.6 ) 95.02 9.4 System-wide 79.2 1.3
142.48 3.4 112.82 5.2
Six Months Ended June
30, Occupancy ADR RevPAR 2015
vs. 2014 2015 vs. 2014 2015 vs.
2014 Americas 76.1 %
1.3
%pts.
$ 139.16 3.9 % $ 105.87 5.7 % Europe 74.3 2.2 150.61 1.9 111.84 5.0
Middle East & Africa 66.6 3.5 151.92 (1.5 ) 101.20 4.0 Asia
Pacific 66.8 6.4 143.50 (0.4 ) 95.86 10.1 System-wide 75.2 1.7
140.54 3.4 105.70 5.8
HILTON WORLDWIDE HOLDINGS
INC. COMPARABLE AND CURRENCY NEUTRAL SYSTEM-WIDE HOTEL
OPERATING STATISTICS BY BRAND (unaudited)
Three Months Ended June 30, Occupancy
ADR RevPAR 2015 vs. 2014
2015 vs. 2014 2015 vs.
2014 Waldorf Astoria Hotels & Resorts 69.7 %
4.2
%pts.
$ 265.51 (0.1 )% $ 185.14 6.2 % Conrad Hotels & Resorts 71.0
4.7 244.55 (2.4 ) 173.55 4.5 Hilton Hotels & Resorts 78.9 1.7
166.48 2.9 131.32 5.2 DoubleTree by Hilton 77.9 1.3 137.41 3.8
107.00 5.5 Embassy Suites by Hilton 81.3 (0.1 ) 158.01 5.1 128.40
5.0 Hilton Garden Inn 80.6 0.9 132.40 3.6 106.65 4.8 Hampton by
Hilton 78.8 1.5 120.16 3.3 94.73 5.2 Homewood Suites by Hilton 83.2
0.4 132.80 4.5 110.49 5.0 Home2 Suites by Hilton 83.1 2.8 119.28
5.5 99.10 9.2 System-wide 79.2 1.3 142.48 3.4 112.82 5.2
Six Months Ended June 30, Occupancy ADR
RevPAR 2015 vs. 2014 2015 vs.
2014 2015 vs. 2014 Waldorf Astoria Hotels &
Resorts 69.6 %
3.1
%pts.
$ 286.91 1.8 % $ 199.80 6.5 % Conrad Hotels & Resorts 69.1 6.1
247.40 (3.1 ) 170.99 6.2 Hilton Hotels & Resorts 75.5 1.9
164.55 2.8 124.18 5.4 DoubleTree by Hilton 74.0 1.6 134.20 4.2
99.34 6.4 Embassy Suites by Hilton 78.4 0.5 155.80 5.1 122.17 5.7
Hilton Garden Inn 76.4 1.4 129.43 3.5 98.86 5.5 Hampton by Hilton
73.9 2.0 117.73 3.3 87.02 6.2 Homewood Suites by Hilton 79.6 0.7
131.18 4.7 104.41 5.6 Home2 Suites by Hilton 79.1 4.7 114.60 4.2
90.67 10.8 System-wide 75.2 1.7 140.54 3.4 105.70 5.8
HILTON WORLDWIDE HOLDINGS INC. COMPARABLE AND CURRENCY
NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS BY
SEGMENT (unaudited) Three Months Ended June
30, Occupancy ADR RevPAR
2015 vs. 2014 2015 vs.
2014 2015 vs. 2014
Ownership(1) 82.5 % 2.3% pts. $ 189.12 2.3 % $ 156.04
5.2 % U.S. 86.2 2.1 203.46 3.9 175.44 6.5 International (non-U.S.)
78.2 2.6 171.00 —
133.79
3.4
Management and franchise 78.9 1.2 137.81 3.5
108.68 5.2 U.S. 80.1 0.8 137.85 3.9 110.35 4.9 International
(non-U.S.) 73.3 3.4 137.63 1.7 100.90 6.7
System-wide
79.2 1.3 142.48 3.4 112.82 5.2 U.S. 80.4 0.8 141.96 3.9 114.16 5.0
International (non-U.S.) 74.3 3.2 144.71 1.2 107.53 5.8
Six Months Ended June 30, Occupancy ADR
RevPAR 2015 vs. 2014 2015 vs.
2014 2015 vs. 2014 Ownership(1)
78.1 % 2.1% pts. $ 184.24 2.0 % $ 143.85 4.8 % U.S. 82.2 1.7 197.11
3.2 161.98 5.4 International (non-U.S.) 73.4 2.6 167.72 0.4 123.05
4.0
Management and franchise 74.9 1.7 136.18 3.6
102.05 6.0 U.S. 75.9 1.3 135.75 4.0 103.03 5.7 International
(non-U.S.) 70.4 3.6 138.35 1.7 97.46 7.2
System-wide
75.2 1.7 140.54 3.4 105.70 5.8 U.S. 76.3 1.3 139.61 3.9 106.48 5.7
International (non-U.S.) 71.0 3.4 144.47 1.3 102.62 6.4
____________ (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)
2015 2014 $ % Management
fees: Base fees(1) $ 89 $ 88 1 1.1 Incentive fees(2) 36
31 5 16.1 Total base and incentive fees
125 119 6 5.0 Other management fees(3) 9 5
4 80.0 Total management fees 134 124 10 8.1 Franchise
fees(4) 300 247 53 21.5 Total
management and franchise fees 434 371 63 17.0 Other revenues(5) 21
25 (4 ) (16.0 ) Intersegment fees elimination(1)(2)(4)(5)
(48 ) (42 ) (6 ) 14.3
Management and franchise fees and
other revenues $ 407 $ 354 53 15.0
Six Months Ended June 30, Increase /
(Decrease) 2015 2014 $ % Management
fees: Base fees(1) $ 170 $ 167 3 1.8 Incentive fees(2) 73
65 8 12.3 Total base and incentive fees
243 232 11 4.7 Other management fees(3) 17 12
5 41.7 Total management fees 260 244 16 6.6 Franchise
fees(4) 565 458 107 23.4 Total
management and franchise fees 825 702 123 17.5 Other revenues(5) 42
46 (4 ) (8.7 ) Intersegment fees elimination(1)(2)(4)(5) (89
)
(82
)
(7 ) 8.5
Management and franchise fees and other revenues $
778 $ 666 112 16.8 ____________ (1)
Includes management, royalty and intellectual property fees
of $32 million and $29 million for the three months ended June 30,
2015 and 2014, respectively, and $58 million and $52 million for
the six months ended June 30, 2015 and 2014, 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
$4 million for the three months ended June 30, 2015 and $8 million
and $4 million for the six months ended June 30, 2015 and 2014,
respectively. Management, royalty and intellectual property fees
for the three months ended June 30, 2014 were less than $1 million.
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 the three months ended June 30, 2015 and 2014 and $20 million
and $22 million for the six months ended June 30, 2015 and 2014,
respectively. (5) Includes charges to consolidated owned and leased
properties for services provided by a wholly owned laundry business
of $1 million and $2 million for the three months ended June 30,
2015 and 2014, respectively, and $3 million and $4 million for the
six months ended June 30, 2015 and 2014, respectively.
HILTON WORLDWIDE HOLDINGS INC. TIMESHARE
REVENUES AND OPERATING EXPENSES (unaudited, dollars in
millions) Three Months Ended June 30,
Increase / (Decrease) 2015 2014
$ % Revenues Timeshare sales $ 233 $
195 38 19.5 Resort operations 51 48 3 6.3 Financing and other
35 33 2 6.1 $ 319 $ 276 43 15.6
Operating
Expenses Timeshare sales $ 172 $ 142 30 21.1 Resort operations
32 32 — — Financing and other 16 14 2 14.3 $ 220 $
188 32 17.0
Six Months Ended June 30,
Increase / (Decrease) 2015 2014 $
% Revenues Timeshare sales $ 470 $ 394 76 19.3 Resort
operations 101 97 4 4.1 Financing and other 69 64 5
7.8 $ 640 $ 555 85 15.3
Operating Expenses Timeshare
sales $ 360 $ 277 83 30.0 Resort operations 63 62 1 1.6 Financing
and other 31 26 5 19.2 $ 454 $ 365 89 24.4
HILTON
WORLDWIDE HOLDINGS INC. HOTEL AND TIMESHARE PROPERTY
SUMMARY As of June 30, 2015 Owned /
Leased(1) Managed Franchised Total
Hotels Rooms Hotels
Rooms Hotels Rooms
Hotels Rooms Waldorf Astoria Hotels
& Resorts U.S. 4 1,148 8 5,555 — — 12 6,703 Americas
(excluding U.S.) — — 1 153 1 984 2 1,137 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. — — 4 1,341
— — 4 1,341 Americas (excluding U.S.) — — — — 1 294 1 294 Europe 1
191 2 707 1 256 4 1,154 Middle East & Africa 1 614 2 641 — — 3
1,255 Asia Pacific — — 11 3,419 1 636 12 4,055
Hilton Hotels
& Resorts U.S. 25 23,142 40 23,416 173 52,665 238 99,223
Americas (excluding U.S.) 3 1,836 23 7,687 19 5,889 45 15,412
Europe 71 18,423 54 15,847 27 7,587 152 41,857 Middle East &
Africa 6 2,276 43 13,807 1 410 50 16,493 Asia Pacific 8 3,959 59
21,966 8 2,980 75 28,905
Curio - A Collection by Hilton U.S.
1 224 1 998 7 2,527 9 3,749
DoubleTree by Hilton U.S. 11
4,268 29 8,521 263 63,602 303 76,391 Americas (excluding U.S.) — —
3 637 14 2,647 17 3,284 Europe — — 12 3,608 46 8,073 58 11,681
Middle East & Africa — — 8 1,687 4 488 12 2,175 Asia Pacific —
— 35 10,001 2 965 37 10,966
Embassy Suites by Hilton U.S. 10
2,523 35 9,415 170 38,992 215 50,930 Americas (excluding U.S.) — —
3 623 5 1,282 8 1,905
Hilton Garden Inn U.S. 2 290 4 430 554
75,841 560 76,561 Americas (excluding U.S.) — — 5 639 26 3,967 31
4,606 Europe — — 16 2,940 24 3,902 40 6,842 Middle East &
Africa — — 1 180 — — 1 180 Asia Pacific — — 7 1,123 — — 7 1,123
Hampton by Hilton U.S. 1 130 50 6,178 1,889 183,251 1,940
189,559 Americas (excluding U.S.) — — 7 935 71 8,542 78 9,477
Europe — — 8 1,211 27 4,091 35 5,302 Asia Pacific — — — — 1 72 1 72
Homewood Suites by Hilton U.S. — — 27 2,921 326 36,458 353
39,379 Americas (excluding U.S.) — — 2 224 15 1,699 17 1,923
Home2 Suites by Hilton U.S. — — — — 55 5,759 55 5,759
Americas (excluding U.S.) — — 1 97 1 127 2 224
Other 3 1,272
3 957 2 302 8 2,531 Lodging 149 60,759 513 149,896 3,734 514,288
4,396 724,943
Hilton Grand Vacations — — 44 6,908 — — 44
6,908 Total 149 60,759 557 156,804 3,734 514,288 4,440 731,851
____________ (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 EndedJune
30,
Increase / (Decrease) 2015 2014
$ % Hotel property and equipment $ 66 $ 64 2
3.1 Timeshare property and equipment 3 1 2 NM(1) Corporate and
other property and equipment 2 2 —
— Total capital expenditures for property and equipment 71
67 4 6.0 Software capitalization costs 15 17 (2 ) (11.8 ) Contract
acquisition costs 8 5 3 60.0 Expenditures for timeshare inventory
net of costs of sales(2) (1 ) (26 ) 25 (96.2 )
Total capital expenditures $ 93 $ 63 30
47.6
Six Months EndedJune 30, Increase /
(Decrease) 2015 2014 $ % Hotel
property and equipment $ 148 $ 106 42 39.6 Timeshare property and
equipment 5 1 4 NM(1) Corporate and other property and equipment
6 3 3 100.0 Total capital
expenditures for property and equipment 159 110 49 44.5 Software
capitalization costs 23 32 (9 ) (28.1 ) Contract acquisition costs
19 21 (2 ) (9.5 ) Expenditures for timeshare inventory net of costs
of sales(2) 14 (26 ) 40 NM(1)
Total
capital expenditures $ 215 $ 137 78 56.9
____________
(1)
Fluctuation in terms of percentage change is not meaningful.
(2)
Timeshare capital expenditures for inventory additions were $35
million and $8 million for the three months ended June 30, 2015 and
2014, respectively, and $76 million and $44 million for the six
months ended June 30, 2015 and 2014, respectively, and timeshare
costs of sales were $36 million and $34 million for the three
months ended June 30, 2015 and 2014, respectively, and $62 million
and $70 million for the six months ended June 30, 2015 and 2014,
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 EndedJune 30, 2015
2014 Net income attributable to Hilton stockholders,
as reported $ 161 $ 209 Diluted EPS, as reported $ 0.16 $ 0.21
Special items: Share-based compensation expense(1) $ 64 $ 6
Net loss (gain) on asset acquisitions and dispositions(2) 51 (11 )
Gain on capital lease amendment(3) (24 ) — Secondary offering
expenses(4) 2 6 Total special items before tax 93 1
Income tax expense on special items (8 ) (1 ) Total special items
after tax $ 85 $ —
Net income, adjusted for
special items $ 246 $ 209
Diluted EPS,
adjusted for special items $ 0.25 $ 0.21
Six Months EndedJune 30, 2015 2014 Net
income attributable to Hilton stockholders, as reported $ 311 $ 332
Diluted EPS, as reported $ 0.32 $ 0.34 Special items:
Share-based compensation expense(1) $ 66 $ 19 Net gain on asset
acquisitions and dispositions(2) (43 ) (11 ) Gain on capital lease
amendment(3) (24 ) — Secondary offering expenses(4) 2 6 Foreign
deferred tax adjustment(5) 4 — Total special items
before tax 5 14 Income tax benefit (expense) on special items 45
(1 ) Total special items after tax $ 50 $ 13
Net income, adjusted for special items $ 361 $
345
Diluted EPS, adjusted for special items $ 0.37
$ 0.35 ____________
(1)
This amount includes expense that was recognized in general,
administrative and other expenses related to the share-based
compensation prior to and in connection with the initial public
offering. Amount excludes share-based compensation expense related
to awards issued under the Hilton Worldwide Holdings Inc. 2013
Omnibus Incentive Plan (the "Stock Plan").
(2)
The amount for the three and six months ended June 30, 2015
includes $3 million of loss for transaction costs incurred in
connection with sales of assets and $142 million of net gain on
sales of assets, respectively, relating primarily to the sale of
the Waldorf Astoria New York, as well as the following items
recognized related to the sale of the Waldorf Astoria New York and
properties acquired from the proceeds of that sale:
• $6 million of expense for the six months
ended June 30, 2015 from the reduction of the remaining unamortized
deferred issuance costs resulting from the repayment of the
mortgage loan secured by the Waldorf Astoria New York property (the
"Waldorf Astoria Loan");
• $6 million and $26 million of
acquisition related transaction costs for the three and six months
ended June 30, 2015, respectively;
• $13 million of expense for the six
months ended June 30, 2015 from the reduction of the remaining
unamortized management contract intangible asset related to
properties that were managed by Hilton prior to the acquisition;
and
• $41 million and $54 million of severance
costs for the three and six months ended June 30, 2015,
respectively, recognized in general, administrative and other.
(3)
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.
(4)
Expense was recognized in general, administrative and other
expenses during the three and six months ended June 30, 2015 and
2014 related to costs incurred in connection with secondary equity
offerings by certain selling stockholders.
(5)
On March 31, 2015, a foreign jurisdiction, where the Company had
deferred tax assets, reduced the statutory rate 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 EndedJune 30,
Six Months EndedJune 30, 2015
2014(1) 2015 2014(1)
Net income attributable to Hilton stockholders $ 161 $ 209 $
311 $ 332 Interest expense 149 158 293 311 Interest expense
included in equity in earnings from unconsolidated affiliates 2 3 4
6 Income tax expense 145 121 308 204 Depreciation and amortization
173 158 348 311 Depreciation and amortization included in equity in
earnings from unconsolidated affiliates 5 7 10
15
EBITDA 635 656 1,274 1,179 Net income attributable
to noncontrolling interests 6 3 6 4 Loss (gain) on sales of assets,
net 3 — (142 ) — Loss (gain) on foreign currency transactions (5 )
(32 ) 13 (46 ) FF&E replacement reserve 14 12 27 23 Share-based
and other compensation expense 92 29 122 6 Other loss (gain),
net(2) (18 ) (11 ) 7 (14 ) Other adjustment items(3) 50 17
69 30
Adjusted EBITDA $ 777 $
674 $ 1,376 $ 1,182 ____________
(1)
To facilitate comparison with the Company's competitors,
beginning in the first quarter of 2015, Adjusted EBITDA excluded
all share-based compensation expense. Historical results have been
revised to reflect this change in the definition to allow for
comparability.
(2)
Represents gains and losses on the acquisitions and dispositions of
property and equipment and investments in affiliates.
(3)
Represents adjustments for reorganization costs, severance,
offering costs and other items.
Three Months
EndedJune 30, Six Months EndedJune
30, 2015 2014(1) 2015
2014(1) Total revenues, as reported $ 2,922 $ 2,667 $
5,521 $ 5,030 Less: other revenues from managed and franchised
properties (1,061 ) (920 ) (2,011 ) (1,747 ) Total revenues,
excluding other revenues from managed and franchised properties $
1,861 $ 1,747 $ 3,510 $ 3,283
Adjusted EBITDA $ 777 $ 674 $ 1,376 $ 1,182
Adjusted
EBITDA margin 41.8 % 38.6 % 39.2 % 36.0 % ____________
(1)
To facilitate comparison with the Company's competitors,
beginning in the first quarter of 2015, Adjusted EBITDA excluded
all share-based compensation expense. Historical results have been
revised to reflect this change in the definition to allow for
comparability.
HILTON WORLDWIDE HOLDINGS INC.
NON-GAAP FINANCIAL MEASURES
RECONCILIATIONS
NET DEBT
(unaudited, in millions)
June 30,2015 December
31,2014 Long-term debt, including current maturities $
10,410 $ 10,813 Non-recourse debt, including current maturities(1)
216 248 Total long-term debt and non-recourse debt
10,626 11,061 Add: Hilton's share of unconsolidated affiliate debt
219 221 Less: cash and cash equivalents (511 ) (566 ) Less:
restricted cash and cash equivalents (248 ) (202 )
Net debt
$ 10,086 $ 10,514 ____________
(1)
Excludes the non-recourse timeshare financing receivables
credit facility and the notes related to the securitization
transactions.
HILTON WORLDWIDE HOLDINGS INC.
NON-GAAP FINANCIAL MEASURES
RECONCILIATIONS
OUTLOOK: ADJUSTED EBITDA
FORECASTED 2015
(in millions)
Three Months EndingSeptember 30,
2015
Revised Actual Low Case High
Case Q3 2014(1) Net income attributable to
Hilton stockholders $ 217 $ 229 $ 183 Interest expense 140 140
156 Interest expense included in equity in earnings (losses) from
unconsolidated affiliates 2 2 2 Income tax expense 146 154 127
Depreciation and amortization 172 172 159 Depreciation and
amortization included in equity in earnings (losses) from
unconsolidated affiliates 7 7 7
EBITDA
684 704 634 Net income attributable to noncontrolling interests 5 5
4 Loss on foreign currency transactions — — 5 FF&E replacement
reserve 11 11 9 Share-based and other compensation expense 24 24 30
Other gain, net(2) — — (24 ) Other adjustment items(3) 6 6
11
Adjusted EBITDA $ 730 $ 750 $
669
Year EndingDecember 31,
2015
Revised Actual Low Case High Case Full Year
2014(1) Net income attributable to Hilton
stockholders $ 741 $ 771 $ 673 Interest expense 572 572 618
Interest expense included in equity in earnings (losses) from
unconsolidated affiliates 8 8 10 Income tax expense 598 618 465
Depreciation and amortization 692 692 628 Depreciation and
amortization included in equity in earnings (losses) from
unconsolidated affiliates 24 24 27
EBITDA 2,635 2,685 2,421 Net income attributable to
noncontrolling interests 16 16 9 Gain on sales of assets, net (142
) (142 ) — Loss (gain) on foreign currency transactions 13 13 (26 )
FF&E replacement reserve 51 51 46 Share-based and other
compensation expense 167 167 74 Other loss (gain), net(2) 7 7 (37 )
Other adjustment items(3) 73 73 63
Adjusted
EBITDA $ 2,820 $ 2,870 $ 2,550
____________
(1)
To facilitate comparison with the Company's competitors,
beginning in the first quarter of 2015, Adjusted EBITDA excluded
all share-based compensation expense. Historical results have been
revised to reflect this change in the definition to allow for
comparability.
(2)
Represents gains and losses on the acquisition of a controlling
financial interest in certain hotels and dispositions of property
and equipment and investments in affiliates in 2014.
(3)
Represents adjustments for reorganization costs, severance,
offering costs and other items.
HILTON WORLDWIDE HOLDINGS INC.
NON-GAAP FINANCIAL MEASURES
RECONCILIATIONS
OUTLOOK: NET INCOME AND EPS, ADJUSTED
FOR SPECIAL ITEMS
FORECASTED 2015
(in millions, except per share
data)
Three Months EndingSeptember 30,
2015
Low Case High Case Net income attributable to
Hilton stockholders, before special items $ 217 $ 229 Diluted EPS,
before special items $ 0.21 $ 0.23
Net income, adjusted
for special items $ 217 $ 229
Diluted EPS,
adjusted for special items $ 0.21 $ 0.23
Year EndingDecember 31,
2015
Low Case High Case Net income attributable to Hilton
stockholders, before special items $ 741 $ 771 Diluted EPS, before
special items $ 0.74 $ 0.78 Special items: Share-based
compensation expense(1) $ 66 $ 66 Net gain on asset acquisitions
and dispositions(2) (43 ) (43 ) Gain on capital lease amendment(3)
(24 ) (24 ) Secondary offering expenses(4) 2 2 Foreign deferred tax
adjustment(5) 4 4 Total special items before tax 5 5
Income tax benefit on special items 45 45 Total
special items after tax $ 50 $ 50
Net
income, adjusted for special items $ 791 $ 821
Diluted EPS, adjusted for special items $ 0.80 $ 0.84
____________
(1)
This amount includes expense that was recognized in general,
administrative and other expenses related to the share-based
compensation prior to and in connection with the initial public
offering. Amount excludes share-based compensation expense related
to awards issued under the Stock Plan.
(2)
This amount includes $142 million of net gain on sales of assets
relating primarily to the sale of the Waldorf Astoria New York, as
well as the following items recognized related to the sale of the
Waldorf Astoria New York and properties acquired from the proceeds
of that sale:
• $6 million of expense from the reduction
of the remaining unamortized deferred issuance costs resulting from
the repayment of the Waldorf Astoria Loan;
• $26 million of acquisition related
transaction costs;
• $13 million of expense from the
reduction of the remaining unamortized management contract
intangible asset related to properties that were managed by Hilton
prior to the acquisition; and
• $54 million of severance costs
recognized in general, administrative and other.
(3)
This amount relates to a gain recognized when one of Hilton's
consolidated properties modified the terms of its lease agreement,
resulting in a reduction in the capital lease obligation.
(4)
This expense was recognized in general, administrative and other
expenses related to costs incurred in connection with secondary
equity offerings by certain selling stockholders.
(5)
On March 31, 2015, a foreign jurisdiction, where the Company had
deferred tax assets, reduced the statutory rate 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.
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
attributable to Hilton stockholders, 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 and certain other compensation expenses; (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;
(ii) non-recourse debt, including current maturities and excluding
amounts secured by timeshare financing receivables; (iii) the
Company's share of investments in affiliate debt; 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.
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 4,396
hotels in the Company's system as of June 30, 2015, 3,741 were
classified as comparable hotels. The 655 non-comparable hotels
included 76 properties, or approximately two 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
("ADR") levels as demand for hotel rooms increases or decreases.
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.
RevPAR
The Company calculates Revenue per Available Room ("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 Hilton
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.
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Investor ContactChristian Charnaux+1 703 883
5205orMedia ContactChris Brooks+1 703 883 5808
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