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MCLEAN, Va.--April 27, 2016--Hilton Worldwide Holdings Inc. ("Hilton," "Hilton Worldwide" or the "Company") (NYSE: HLT) today reported its first quarter 2016 results. Highlights include:

  • EPS, adjusted for special items, for the first quarter was $0.17, a 42 percent increase from the same period in 2015; without adjustments, EPS was $0.31
  • Net income attributable to Hilton stockholders for the first quarter was $309 million, an increase of $159 million from the same period in 2015
  • Adjusted EBITDA for the first quarter increased 9 percent from the same period in 2015 to $653 million, and Adjusted EBITDA margin increased 260 basis points
  • System-wide comparable RevPAR increased 2.1 percent for the first quarter on a currency neutral basis from the same period in 2015
  • Management and franchise fees for the first quarter increased 5 percent from the same period in 2015 to $409 million
  • Net unit growth was 6,500 rooms in the first quarter, a 16 percent increase from the same period in 2015
  • Approved 26,000 new rooms for development during the first quarter, a 14 percent increase from the same period in 2015, growing Hilton's development pipeline to 1,729 hotels, consisting of 281,000 rooms
  • As previously disclosed, registration statements for planned spin-offs of real estate and timeshare businesses expected to be filed during the second quarter
  • Announced CEO and CFO appointments for planned REIT in separate press release this morning

Overview

For the three months ended March 31, 2016, EPS was $0.31 compared to $0.15 for the three months ended March 31, 2015, and EPS, adjusted for special items, was $0.17 for the three months ended March 31, 2016 compared to $0.12 for the three months ended March 31, 2015. Special items in the first quarter of 2016 were primarily related to a $153 million net change in unrecognized tax benefits. Adjusted EBITDA increased 9 percent to $653 million for the three months ended March 31, 2016, compared to $599 million for the three months ended March 31, 2015, and net income attributable to Hilton stockholders was $309 million for the three months ended March 31, 2016 compared to $150 million for the three months ended March 31, 2015.

Christopher J. Nassetta, President & Chief Executive Officer of Hilton Worldwide, said, "We are pleased with our start to the year with Adjusted EBITDA exceeding the high end of guidance. We continue to organically expand the global presence of our 13 distinct, market-leading brands, with over 9,200 new rooms opening in the quarter, including openings in two new countries, resulting in net unit growth that was 16 percent higher than the first quarter of last year. Construction started on the first Tru by Hilton in the quarter and we now have 48 in the pipeline and 170 more committed or in progress, representing the fastest growth of a new brand in Company history."

Segment Highlights

Management and Franchise

Management and franchise fees were $409 million in the first quarter of 2016, an increase of 5 percent compared to the same period in 2015. RevPAR at comparable managed and franchised hotels in the first quarter of 2016 increased 1.9 percent on a currency neutral basis (a 0.9 percent increase in actual dollars) compared to the same period in 2015. The increase in RevPAR at comparable managed and franchised hotels and addition of new units have yielded continued fee growth during the first quarter of 2016.

Ownership

Revenues from the ownership segment were $974 million in the first quarter of 2016, and ownership segment Adjusted EBITDA was $207 million, an increase of 13 percent(1) from the same period in 2015. Adjusted EBITDA margin(1)(2) increased 187 basis points. RevPAR at comparable hotels in the ownership segment increased 3.1 percent on a currency neutral basis (a 1.4 percent increase in actual dollars) in the first quarter of 2016 compared to the same period in 2015.

____________
(1)  

Excluding $7 million of Adjusted EBITDA in the first quarter of 2015 related to the Hilton Sydney.

(2)  

Calculated as ownership segment Adjusted EBITDA divided by ownership segment revenues. Excluding $20 million of revenues in the first quarter of 2015 related to the Hilton Sydney.

     

Timeshare

Timeshare segment revenues for the first quarter of 2016 were $326 million and timeshare Adjusted EBITDA was $95 million, an increase of 28 percent, compared to the same period in 2015. Sales revenue on owned inventory increased $23 million during the first quarter of 2016 from the same period in 2015, while commissions recognized from the sale of third-party developed timeshare intervals decreased $25 million during the first quarter of 2016 from the same period in 2015, resulting from a successful launch of a new third-party developed product in December 2014.

During the three months ended March 31, 2016, 64 percent of intervals sold were developed by third parties. Hilton Worldwide's overall supply of timeshare intervals as of March 31, 2016 was approximately 130,000 intervals, or over six years of sales at current pace, of which 110,000, or 85 percent, were developed by third parties.

Development

Hilton Worldwide opened 67 hotels consisting of over 9,200 rooms, of which nearly 25 percent were conversions from non-Hilton brands, and achieved net unit growth of 6,500 rooms during the first quarter of 2016. During the first quarter of 2016, Hilton Worldwide grew its global footprint to 102 countries and territories with the openings of the Hilton Garden Inn Tanger City Center in Tangier, Morocco and the DoubleTree by Hilton Yerevan City Centre in Yerevan, Armenia.

As of March 31, 2016, Hilton Worldwide had the largest rooms pipeline in the lodging industry(3), with approximately 281,000 rooms at 1,729 hotels throughout 81 countries and territories, including 25 countries and territories where Hilton Worldwide does not currently have any open hotels. Over 145,000 rooms, or more than half of the pipeline, were located outside of the United States. Additionally, over 139,000 rooms, or approximately half of the pipeline, were under construction. At over 19 percent, Hilton Worldwide also has the largest share of rooms under construction globally(3). Including all agreements approved but not signed, Hilton Worldwide's pipeline totaled nearly 300,000 rooms, which will be almost entirely funded by third-party owner investment.

____________
(3)  

Source: STR Global New Development Pipeline (March 2016).

     

Balance Sheet and Liquidity

Total cash and cash equivalents were $973 million as of March 31, 2016, including $281 million of restricted cash and cash equivalents. As of March 31, 2016, Hilton had $10.0 billion of long-term debt with a weighted average interest rate of 4.3 percent. No borrowings were outstanding under the $1.0 billion revolving credit facility as of March 31, 2016.

In March 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. Hilton Worldwide announced a regular quarterly cash dividend of $0.07 per share of common stock to be paid on or before June 17, 2016 to stockholders of record of its common stock as of the close of business on May 20, 2016.

Outlook

Hilton Worldwide will disclose financial and other details of the planned spin-offs of the real estate and timeshare businesses in filings with the Securities and Exchange Commission ("SEC"), which are expected to be filed during the second quarter. 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 shareholder 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 following outlook does not include the effects of the spin-offs, including potential transaction costs.

Full Year 2016

  • System-wide RevPAR is expected to increase between 3.0 percent and 5.0 percent on a comparable and currency neutral basis, with ownership segment RevPAR expected to increase between 3.0 percent and 5.0 percent on a comparable and currency neutral basis, as compared to 2015.
  • Adjusted EBITDA is projected to be between $3,020 million and $3,100 million.
  • Management and franchise fees are projected to increase approximately 7 percent to 9 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, adjusted for special items, is projected to be between $0.92 and $0.98.
  • 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.
  • Cash available for debt reduction and capital return is expected to be between $800 million and $1 billion.

Second Quarter 2016

  • System-wide RevPAR is expected to increase between 3.0 percent and 5.0 percent on a comparable and currency neutral basis compared to the second quarter of 2015.
  • Adjusted EBITDA is expected to be between $790 million and $810 million.
  • Management and franchise fees are expected to increase approximately 7 percent to 9 percent.
  • Diluted EPS, adjusted for special items, is projected to be between $0.25 and $0.27. 

To view full financial results and tables click on PDF icon or visit:

http://news.hiltonworldwide.com/assets/HWW/docs/2016/2016Q1EarningsRelease.pdf

About Hilton Worldwide

Hilton Worldwide (NYSE: HLT) is a leading global hospitality company, comprised of more than 4,660 managed, franchised, owned and leased hotels and timeshare properties, with nearly 765,000 rooms in 102 countries and territories. For 96 years, Hilton Worldwide 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 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 

Contact: Investors: Christian Charnaux

+1 703 883 5205

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