Hilton Reports Fourth Quarter and Full Year Results

Hilton Worldwide Holdings Inc. ("Hilton," "the Company," "we," "us" or "our") (NYSE:HLT) today reported its fourth quarter and full year 2023 results. Highlights include:

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• Diluted EPS was $0.57 for the fourth quarter and $4.33 for the full year

• Diluted EPS, adjusted for special items, was $1.68 for the fourth quarter and $6.21 for the full year

• Net income was $150 million for the fourth quarter and $1,151 million for the full year

• Adjusted EBITDA was $803 million for the fourth quarter and $3,089 million for the full year

• System-wide comparable RevPAR increased 5.7 percent and 12.6 percent, on a currency neutral basis, for the fourth quarter and full year, respectively, compared to the same periods in 2022

• System-wide comparable RevPAR increased 13.5 percent and 10.7 percent, on a currency neutral basis, for the fourth quarter and full year, respectively, compared to the same periods in 2019

• Approved 33,800 new rooms for development during the fourth quarter, bringing Hilton's development pipeline to a record 462,400 rooms as of December 31, 2023, representing growth of 11 percent from December 31, 2022

• Added a record 24,000 rooms to Hilton's system in the fourth quarter, resulting in 62,900 room openings for the full year, contributing to net unit growth of 4.9 percent

• Repurchased 4.6 million shares of Hilton common stock during the fourth quarter, bringing total capital return, including dividends, to $784 million for the quarter and $2.5 billion for the full year

• Today is announcing a new, exclusive partnership with Small Luxury Hotels of the World ("SLH"), ramping up over the coming months to expand our distribution of luxury hotels

• Full year 2024 system-wide RevPAR is projected to increase between 2.0 percent and 4.0 percent on a comparable and currency neutral basis compared to 2023; full year net income is projected to be between $1,694 million and $1,729 million; full year Adjusted EBITDA is projected to be between $3,330 million and $3,380 million

• Full year 2024 capital return is projected to be approximately $3.0 billion

Overview

Christopher J. Nassetta, President & Chief Executive Officer of Hilton, said, "We delivered another year of strong top- and bottom-line results and continued to deliver on our robust development story. Positive momentum in openings continued throughout the year, with more openings in the fourth quarter than any other quarter in the Company's history. We also achieved record signings for the year, meaningfully ahead of pre-pandemic levels. We expect this momentum to continue into 2024 and net unit growth to accelerate to the high end of our guidance range of 5.5 percent to 6.0 percent, with the opportunity for further upside of 25 to 50 basis points from our exclusive partnership with Small Luxury Hotels of the World. Adding this extraordinary portfolio over the coming months to our strong and growing luxury offerings will further enhance our already powerful network effect and give all of Hilton's customers, including our Hilton Honors members, even more opportunities to dream, book and earn and redeem points. Powered by an award-winning culture that was recently recognized as the No. 1 World's Best Workplace, our Hilton team is well positioned to continue driving innovation and growth in the year ahead."

For the three months ended December 31, 2023, system-wide comparable RevPAR increased 5.7 percent compared to the same period in 2022 due to increases in both occupancy and ADR, and management and franchise fee revenues increased 12.2 percent compared to the same period in 2022. For comparison to pre-pandemic results, system-wide comparable RevPAR for the three months ended December 31, 2023 increased 13.5 percent compared to the same period in 2019, and management and franchise fee revenues increased 38.5 percent from the same period in 2019.

For the year ended December 31, 2023, system-wide comparable RevPAR increased 12.6 percent compared to the same period in 2022 due to increases in both occupancy and ADR, and management and franchise fee revenues increased 16.7 percent compared to the same period in 2022. For comparison to pre-pandemic results, system-wide comparable RevPAR for the year ended December 31, 2023 increased 10.7 percent compared to the same period in 2019, and management and franchise fee revenues increased 33.1 percent from the same period in 2019.

For the three months ended December 31, 2023, diluted EPS was $0.57 and diluted EPS, adjusted for special items, was $1.68 compared to $1.21 and $1.59, respectively, for the three months ended December 31, 2022. Net income and Adjusted EBITDA were $150 million and $803 million, respectively, for the three months ended December 31, 2023, compared to $333 million and $740 million, respectively, for the three months ended December 31, 2022.

For the year ended December 31, 2023, diluted EPS was $4.33 and diluted EPS, adjusted for special items, was $6.21 compared to $4.53 and $4.89, respectively, for the year ended December 31, 2022. Net income and Adjusted EBITDA were $1,151 million and $3,089 million, respectively, for the year ended December 31, 2023, compared to $1,257 million and $2,599 million, respectively, for the year ended December 31, 2022.

Development

In the fourth quarter of 2023, Hilton achieved a record number of room openings, totaling 24,000 rooms, and achieved net unit growth of 22,300 rooms. During the quarter, Hilton achieved several growth milestones, opening the 150th Curio Collection by Hilton, the 250th Tru by Hilton and the 1,000th Hilton Garden Inn. Additionally, Hilton celebrated the openings of its 600th hotel in Greater China, as well as the Signia by Hilton Atlanta, which marked the brand's first new-build property.

Hilton added 33,800 rooms to the development pipeline during the fourth quarter, contributing to 130,200 rooms added for the full year, which was approximately a 45 percent increase from the prior year. As of December 31, 2023, Hilton's development pipeline totaled approximately 3,270 hotels representing 462,400 rooms throughout 118 countries and territories, including 30 countries and territories where Hilton had no existing hotels. Additionally, of the rooms in the development pipeline, 216,600 were under construction and 259,800 were located outside of the U.S.

Balance Sheet and Liquidity

In November 2023, we amended the credit agreement governing our senior secured term loan facilities (the "Term Loans") pursuant to which $1.0 billion of outstanding Term Loans were converted into a new tranche of Term Loans due June 2028 and $1.6 billion of outstanding Term Loans were converted into a new tranche, which was also increased by $500 million of aggregate principal amount, due November 2030.

As of December 31, 2023, Hilton had $9.3 billion of long-term debt outstanding, excluding the deduction for deferred financing costs and discounts, with a weighted average interest rate of 4.78 percent. Excluding all finance lease liabilities and other debt of Hilton's consolidated variable interest entities, Hilton had $9.1 billion of long-term debt outstanding with a weighted average interest rate of 4.77 percent and no scheduled maturities until May 2025. As of December 31, 2023, no debt amounts were outstanding under Hilton's $2.0 billion senior secured revolving credit facility, which had an available borrowing capacity of $1,913 million after considering $87 million of outstanding letters of credit. Total cash and cash equivalents were $875 million as of December 31, 2023, including $75 million of restricted cash and cash equivalents.

During the fourth quarter of 2023, Hilton repurchased 4.6 million shares of its common stock at a cost of $746 million and an average price per share of $163.45. During the full year 2023, Hilton repurchased 15.6 million shares of its common stock at an average price per share of $150.52, returning $2.3 billion of capital to shareholders through share repurchases. In November 2023, Hilton's board of directors authorized an additional $3.0 billion for share repurchases under its stock repurchase program.

In December 2023, Hilton paid a quarterly cash dividend of $0.15 per share of common stock, for a total of $38 million, bringing total dividend payments for the year to $158 million and total capital return for the year to $2.5 billion. In February 2024, Hilton's board of directors authorized a regular quarterly cash dividend of $0.15 per share of common stock to be paid on March 28, 2024 to holders of record of its common stock as of the close of business on February 23, 2024.

Outlook

Share-based metrics in Hilton's outlook include actual share repurchases through the fourth quarter, but do not include the effect of potential share repurchases thereafter. Additionally, due to the timing to close and integrate with participating SLH hotels, our outlook does not include the effect of this partnership.

Full Year 2024

• System-wide comparable RevPAR, on a currency neutral basis, is projected to increase between 2.0 percent and 4.0 percent compared to 2023.

• Diluted EPS is projected to be between $6.57 and $6.71.

• Diluted EPS, adjusted for special items, is projected to be between $6.80 and $6.94.

• Net income is projected to be between $1,694 million and $1,729 million.

• Adjusted EBITDA is projected to be between $3,330 million and $3,380 million.

• Contract acquisition costs and capital expenditures, excluding amounts reimbursed by third parties, are projected to be between $250 million and $300 million.

• Capital return is projected to be approximately $3.0 billion.

• General and administrative expenses are projected to be between $415 million and $430 million.

• Net unit growth is projected to be between 5.5 percent and 6.0 percent.

First Quarter 2024

• System-wide comparable RevPAR, on a currency neutral basis, is projected to increase between 2.0 percent and 4.0 percent compared to the first quarter of 2023.

• Diluted EPS is projected to be between $1.32 and $1.40.

• Diluted EPS, adjusted for special items, is projected to be between $1.36 and $1.44.

• Net income is projected to be between $340 million and $359 million.

• Adjusted EBITDA is projected to be between $690 million and $710 million.

Conference Call

Hilton will host a conference call to discuss fourth quarter and full year 2023 results on February 7, 2024 at 9:00 a.m. Eastern Standard Time. Participants may listen to the live webcast by logging on to the Hilton Investor Relations website at https://ir.hilton.com/events-and-presentations. A replay and transcript of the webcast will be available within 24 hours after the live event at https://ir.hilton.com/financial-reporting.

Alternatively, participants may listen to the live call by dialing 1-888-317-6003 in the United States ("U.S.") or 1-412-317-6061 internationally using the conference ID 1697630. Participants are encouraged to dial into the call or link to the webcast at least fifteen minutes prior to the scheduled start time. A telephone replay will be available for seven days following the call. To access the telephone replay, dial 1-877-344-7529 in the U.S. or 1-412-317-0088 internationally using the conference ID 2995773.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our future financial results, liquidity and capital resources and other non-historical statements. In some cases, you can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "forecasts," "potential," "continues," "may," "will," "should," "could," "seeks," "projects," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties including, among others, risks inherent to the hospitality industry; macroeconomic factors beyond our control, such as inflation, changes in interest rates, challenges due to labor shortages or disputes and supply chain disruptions; competition for hotel guests and management and franchise contracts; risks related to doing business with third-party hotel owners; performance of our information technology systems; growth of reservation channels outside of our system; risks of doing business outside of the U.S.; risks associated with conflicts in Eastern Europe and the Middle East and other geopolitical events; and our indebtedness. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found under the section entitled "Part I—Item 1A. Risk Factors" of Hilton's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which is filed with the Securities and Exchange Commission (the "SEC") and is accessible on the SEC's website at www.sec.gov. Such factors may be updated from time to time in our periodic filings with the SEC, including Hilton's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which is expected to be filed with the SEC on or about the date of this press release. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in our filings with the SEC. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Definitions

See the "Definitions" section for the definition of certain terms used within this press release, including within the schedules.

Non-GAAP Financial Measures

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

About Hilton

Hilton (NYSE:HLT) is a leading global hospitality company with a portfolio of 22 world-class brands comprising more than 7,500 properties and nearly 1.2 million rooms, in 126 countries and territories. Dedicated to fulfilling its founding vision to fill the earth with the light and warmth of hospitality, Hilton has welcomed over 3 billion guests in its more than 100-year history, was named the No.1 World's Best Workplace by Great Place to Work and Fortune and has been recognized as a global leader on the Dow Jones Sustainability Indices for seven consecutive years. Hilton has introduced industry-leading technology enhancements to improve the guest experience, including Digital Key Share, automated complimentary room upgrades and the ability to book confirmed connecting rooms. Through the award-winning guest loyalty program Hilton Honors, the more than 180 million members who book directly with Hilton can earn Points for hotel stays and experiences money can't buy. With the free Hilton Honors app, guests can book their stay, select their room, check in, unlock their door with a Digital Key and check out, all from their smartphone. Visit stories.hilton.com for more information, and connect with Hilton on facebook.com/hiltonnewsroom, twitter.com/hiltonnewsroom, linkedin.com/company/hilton, instagram.com/hiltonnewsroom and youtube.com/hiltonnewsroom.

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