Hilton Worldwide Holdings Inc. (NYSE:HLT) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
| (4) | Earnings before interest expense, taxes and depreciation and amortization (“EBITDA”), reflects net income excluding interest expense, a provision for income taxes and depreciation and amortization. Adjusted EBITDA is calculated as EBITDA, as previously defined, further adjusted to exclude certain items, including gains, losses and expenses in connection with: (i)asset dispositions for both consolidated and unconsolidated investments; (ii)foreign currency transactions; (iii)debt restructurings and retirements; (iv)furniture, fixtures and equipment (“FF&E”) replacement reserves required under certain lease agreements; (v)reorganization costs; (vi)share-based compensation expense; (vii)non-cash impairment losses; (viii)severance, relocation and other expenses; (ix)amortization of contract acquisition costs; (x)the net effect of reimbursable costs included in other revenues and expenses from managed and franchised properties; and (xi)other items. |
The Company believes that EBITDA and Adjusted EBITDA provide useful information to investors about the Company and its financial condition and results of operations for the following reasons: (i)these measures 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)these measures 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. Additionally, these measures exclude certain items that can vary widely across different industries and among competitors within the Company’s industry. For instance, interest expense and the provision for income taxes are dependent on company specifics, including, among other things, the company’s capital structure and operating jurisdictions, respectively, and, therefore could vary significantly across companies. Depreciation and amortization, as well as amortization of contract acquisition costs, are dependent upon company policies, including the method of acquiring and depreciating assets and the useful lives that are used. For Adjusted EBITDA, the Company also excludes items such as: (i)FF&E replacement reserve to be consistent with the treatment of FF&E for its owned and leased hotels where it is capitalized and depreciated over the life of the FF&E; (ii)share-based compensation expense, as this could vary widely among companies due to the different plans in place and the usage of them; (iii)the net effect of the Company’s indirect reimbursable revenues and related expenses, as the Company does not operate these programs to generate a profit over the terms of management and franchise contracts; and (iv)other items that are not core to the Company’s operations and are not reflective of the Company’s performance.
EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be considered as alternatives, in isolation or as a substitute, to net income (loss) or other measures of financial performance or liquidity derived in accordance with GAAP. EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered as alternatives, either in isolation or as a substitute, for net income (loss), cash flow or other methods of analyzing the Company’s results as reported under GAAP. Some of these limitations are:
| • | EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, the Company’s working capital needs; |
| • | EBITDA and Adjusted EBITDA do not reflect the Company’s interest expense, or the cash requirements necessary to service interest or principal payments, on the Company’s indebtedness; |
| • | EBITDA and Adjusted EBITDA do not reflect a provision for income taxes or the cash requirements to pay the Company’s taxes; |
| • | EBITDA and Adjusted EBITDA do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; |
| • | EBITDA and Adjusted EBITDA do not reflect the effect on earnings or changes resulting from matters that we consider not to be indicative of the Company’s future operations; |
| • | although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; and |
| • | other companies in industry may calculate EBITDA and Adjusted EBITDA differently, limiting their usefulness as comparative measures. |
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Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as discretionary cash available to the Company to reinvest in the growth of its business or as measures of cash that will be available to the Company to meet its obligations. The following table presents net income reconciled to EBITDA and Adjusted EBITDA:
| ThreeMonthsEndedMarch31, | ||||||
| LowCase | HighCase | |||||
| (in millions) | ||||||
|
Net income |
$ | $ | $ | |||
|
Interest expense |
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|
Income tax expense |
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|
Depreciation and amortization |
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|
EBITDA |
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|
Loss (gain) on foreign currency transactions |
(4 | ) | (4 | ) | ||
|
Loss on debt extinguishment |
— | — | ||||
|
FF&E replacement reserve |
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|
Share-based compensation expense |
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|
Amortization of contract acquisition costs |
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|
Other revenues from managed and franchised properties, less other expenses from managed and franchised properties |
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|
Other adjustment items(a) |
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|
Adjusted EBITDA |
$ | $ | $ | |||
| (a) | Includes adjustments for severance and other items. |
The information in this Item 1.01 is being furnished and shall not be deemed to be “filed” for purposes of Section18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. This Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy any securities.
| Item 1.01 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensator Arrangements of Certain Officers. |
On April9, 2018, Zhang Ling, a director designee of HNA to the Stockholders Agreement, resigned, effective upon the closing of the underwritten public secondary offering of shares by HNA described in Item 1.01.
| Item 1.01 | Financial Statements and Exhibits. |
(d) Exhibits.
CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS
Information set forth in this Current Report on Form 8-K contains forward-looking statements within the meaning of Section27A of the Securities Act and Section21E of the Exchange Act. 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. In some cases, 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
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hotel guests and management and franchise contracts, risks related to doing business with third-party hotel owners, 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 of America (“U.S.”) 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 Hilton’s Annual Report on Form 10-K for the fiscal year ended December31, 2017, 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 press 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.
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Hilton Worldwide Holdings Inc. ExhibitEX-10.1 2 d565365dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 MASTER AMENDMENT AND OPTION AGREEMENT THIS MASTER AMENDMENT AND OPTION AGREEMENT (this “Agreement”),…To view the full exhibit click here
About Hilton Worldwide Holdings Inc. (NYSE:HLT)
Hilton Worldwide Holdings Inc. is a hospitality company. The Company is engaged in owning, leasing, managing, developing and franchising hotels, resorts and timeshare properties. The Company operates through three segments: ownership, management and franchise, and timeshare. The Company’s ownership segment consisted of 146 hotels with 59,463 rooms at December 31, 2015. Through management and franchise segment, the Company had 4,419 hotels with 691,887 rooms at December 31, 2015. As of December 31, 2015, through the timeshare segment, the Company had 45 properties comprising 7,152 units. It markets and sells timeshare intervals; operates timeshare resorts and a timeshare membership club, and provides consumer financing. Its brand portfolio includes its luxury and lifestyle hotel brands, such as Waldorf Astoria Hotels & Resorts, Embassy Suites by Hilton, Hilton Garden Inn, Hampton by Hilton, Homewood Suites by Hilton and Home2 Suites by Hilton and Tru by Hilton.
