10-QPeriod: Q1 FY2015

Hilton Worldwide Holdings Inc. Quarterly Report for Q1 Ended Mar 31, 2015

Filed April 29, 2015For Securities:HLT

Summary

Hilton Worldwide Holdings Inc. reported its first quarter 2015 financial results, showing solid revenue growth driven by increases in both owned/leased and management/franchise segments. Total revenues increased by 10% year-over-year to $2.6 billion. Net income attributable to Hilton stockholders rose to $150 million, or $0.15 per diluted share, compared to $123 million, or $0.12 per diluted share, in the prior year's first quarter. The company also benefited from a significant gain on the sale of the Waldorf Astoria New York property, which contributed $146 million to its results. Key operational highlights include strong RevPAR (Revenue per Available Room) growth across all segments and regions, indicating healthy demand and pricing power. The company continues to expand its development pipeline, with a substantial number of rooms under construction or approved for development globally. While facing some headwinds from foreign currency fluctuations impacting international owned and leased hotel revenues, overall performance demonstrates a positive trend, supported by strategic property acquisitions and a focus on managing and franchising its brands. The balance sheet remains robust, with manageable debt levels and sufficient liquidity for ongoing operations and investments.

Financial Highlights

48 data points
Beta

Revenue

$2.60B

Net Income

$150.00M

5.8% Net Margin

EPS (Diluted)

$0.46

Total Assets

$25.91B

Cash & Equivalents

$547.00M

Free Cash Flow

$198.00M

Financial Statements
Beta
Revenue$2.60B
Operating Expenses$2.25B
Operating Income$490.00M
Interest Expense$144.00M
Net Income$150.00M
EPS (Basic)$0.46
EPS (Diluted)$0.46
Shares Outstanding (Basic)986.00M
Shares Outstanding (Diluted)988.00M

Key Highlights

  • 1Total revenues increased by 10.0% to $2.6 billion in Q1 2015 compared to Q1 2014.
  • 2Net income attributable to Hilton stockholders increased to $150 million ($0.15 per diluted share) from $123 million ($0.12 per diluted share) year-over-year.
  • 3Reported a significant gain of $146 million from the sale of the Waldorf Astoria New York property.
  • 4System-wide RevPAR (Revenue per Available Room) increased by 6.6% on a comparable basis, with strong growth across all segments and regions.
  • 5The company added 10 managed properties and 202 franchised properties net of closures in the past year, expanding its global footprint.
  • 6Acquired four key properties in February 2015 for $1.76 billion, funded in part by proceeds from the Waldorf Astoria New York sale.
  • 7Total debt decreased to $11.5 billion as of March 31, 2015, from $11.7 billion at the end of 2014, supported by debt prepayments and asset sales.

Frequently Asked Questions

Hilton's revenue growth in Q1 2015 was primarily driven by a 10% increase in total revenues to $2.6 billion. This was fueled by a 1.3% increase in 'Owned and leased hotels' revenue, a substantial 18.1% increase in 'Management and franchise fees and other' revenue, and a 15.1% rise in 'Timeshare' revenue. Stronger RevPAR performance across comparable hotels, along with the net addition of managed and franchised properties, also contributed significantly.

The sale of the Waldorf Astoria New York in February 2015 resulted in a significant gain of $146 million, which was recognized in 'gain on sales of assets, net' for the three months ended March 31, 2015. This gain positively impacted net income. The company also used the proceeds from the sale to repay a $525 million loan associated with the property.

Hilton continues to focus on expanding its global presence through management and franchise agreements, with 1,432 hotels (approximately 240,000 rooms) in its development pipeline as of March 31, 2015. The company also strategically acquires properties, as demonstrated by the $1.76 billion acquisition of four properties in February 2015, utilizing proceeds from asset sales to fund these growth initiatives.

Hilton has been actively managing its debt. Total debt stood at approximately $11.5 billion as of March 31, 2015. During the quarter, the company made a voluntary prepayment of $150 million on its Term Loans and also repaid the $525 million Waldorf Astoria Loan. These actions, along with proceeds from asset sales, indicate a focus on deleveraging and managing its financial obligations.