Hilton Worldwide Holdings Inc. (NYSE:HLT)

Asset Turnover

The total asset turnover ratio experienced a significant decline from 0.63 in 2019 to a low of 0.26 in 2020, likely reflecting operational disruptions or reduced efficiency. This was followed by a gradual recovery, with the ratio increasing to 0.37 in 2021, 0.57 in 2022, and reaching 0.66 by 2023, surpassing the 2019 level. The adjusted figures show a similar pattern, reinforcing the trend of recovery and improving asset use efficiency over the period.

Current Ratio

The current ratio, indicating short-term liquidity, rose markedly from 0.73 in 2019 to 1.73 in 2020, suggesting an enhancement in the company's liquidity position during that year, possibly due to increased current assets or reduced liabilities. Subsequently, it declined steadily over the next three years, falling to 0.95 in 2021, 0.85 in 2022, and 0.70 in 2023. Adjusted current ratios are slightly higher but follow the same downward trend post-2020, implying a reduction in liquidity after an initial improvement.

Debt to Equity

The adjusted debt to equity ratio displayed considerable volatility, with a sharp increase from 6.43 in 2019 to an elevated 24.48 in 2020, indicating a significant rise in leverage or reduction in equity. It decreased substantially to 9.4 in 2021 and slightly increased to 10 in 2022. Data for 2023 is not provided, but the trend suggests the company managed to reduce leverage considerably after the peak in 2020.

Debt to Capital

The reported debt to capital ratio showed a steady upward trend over the years, increasing from 1.06 in 2019 to 1.35 in 2023, signaling growing reliance on debt financing relative to total capital. The adjusted debt to capital ratio followed a similar pattern but within lower values, rising from 0.87 in 2019 to 1.03 in 2023, which aligns with a gradual increase in financial leverage.

Financial Leverage

Adjusted financial leverage spiked dramatically from 10.45 in 2019 to 35.14 in 2020, consistent with the debt to equity increases and reflecting a substantial expansion in debt relative to equity. This was followed by a marked reduction to 14.76 in 2021 and a slight increase to 15.92 in 2022. The 2023 figure is absent, but the trend indicates attempts to moderate leverage after the peak year.

Net Profit Margin

Reported net profit margin declined from 9.32% in 2019 to -16.6% in 2020, showing a move into substantial losses during 2020. There was a recovery in subsequent years, with the margin increasing to 7.08% in 2021 and further to 14.31% in 2022, before slightly declining to 11.15% in 2023. Adjusted margins mirror this performance, albeit with slightly different magnitudes, highlighting considerable profitability challenges in 2020 and a strong rebound afterward.

Return on Equity (ROE)

The adjusted ROE reflects extreme volatility, plunging from 55.61% in 2019 to a large negative value of -141.47% in 2020, indicative of heavy losses or equity erosion. It then rebounded sharply to 33.85% in 2021 and surged to 157.69% in 2022, demonstrating exceptional returns in later years. The lack of 2023 data prevents a full trend analysis.

Return on Assets (ROA)

The return on assets declined from 5.89% in 2019 to -4.27% in 2020, consistent with the loss experienced during that year. Thereafter, it improved steadily to 2.66% in 2021 and peaked at 8.09% in 2022, slightly falling to 7.41% in 2023. Adjusted ROA follows the same trajectory with a lower trough in 2020 and a stronger peak in 2022, reflecting enhanced asset profitability following the downturn.

Revenue Trends

Revenues demonstrated a significant decline from 2019 to 2020, dropping from $9,452 million to $4,307 million, reflecting a major contraction. Following this sharp decrease, a consistent recovery trend is observed with revenues increasing to $5,788 million in 2021, $8,773 million in 2022, and reaching $10,235 million in 2023, surpassing the pre-2020 level.

Total Assets Analysis

Total assets increased from $14,957 million in 2019 to a peak of $16,755 million in 2020. Subsequently, total assets declined slightly, reaching $15,441 million in 2021, remaining relatively stable around $15,512 million in 2022, and slightly decreasing to $15,401 million in 2023. This indicates limited asset growth beyond the 2020 peak, with a gradual normalization over the later periods.

Asset Turnover Ratio Trends

The reported total asset turnover ratio fell sharply from 0.63 in 2019 to 0.26 in 2020, consistent with the revenue drop and asset peak in 2020. Post-2020, there is a recovery in asset turnover, increasing to 0.37 in 2021, 0.57 in 2022, and 0.66 in 2023, indicating improved efficiency in generating revenues from assets over time, eventually exceeding the initial 2019 figure.

Adjusted Figures

Adjusted revenues follow a pattern similar to reported revenues, with values declining from $9,435 million in 2019 to $4,522 million in 2020 and then recovering to $10,450 million by 2023, slightly higher than reported revenues for the same year. Adjusted total assets mirror the total asset trend closely, peaking in 2020 and stabilizing thereafter. Adjusted total asset turnover also reflects the recovery pattern seen in the reported ratio, rising from 0.27 in 2020 to 0.68 in 2023, surpassing the 2019 level of 0.63.

Overall Insights

The data reveals a significant disruption occurring in 2020, impacting revenues and asset turnover, likely linked to external factors. Following this disruption, there is a clear and consistent recovery through to 2023, with revenues surpassing pre-disruption levels and asset turnover efficiency improving beyond the initial benchmark. Asset base growth, however, remained limited post-2020, suggesting a focus on optimizing asset utilization rather than expanding asset holdings.

The financial data indicates notable fluctuations in both current assets and liabilities over the five-year period. Current assets increased significantly from 2,093 million USD in 2019 to a peak of 4,202 million USD in 2020, followed by a steady decline to 2,614 million USD by the end of 2023. Conversely, current liabilities decreased from 2,871 million USD in 2019 to 2,431 million USD in 2020, then gradually increased each subsequent year, reaching 3,722 million USD in 2023.

The reported current ratio exhibits a similar pattern: it rose from a low 0.73 in 2019 to a high of 1.73 in 2020, indicating improved short-term liquidity, before declining consistently to 0.7 in 2023. This downward trend below 1.0 in 2022 and 2023 suggests increasing liquidity pressure and a potential challenge in meeting short-term obligations.

Adjusted figures provide a slightly improved picture but follow the same overall trends. Adjusted current assets peaked at 4,334 million USD in 2020 and then decreased to 2,745 million USD by 2023. Adjusted current liabilities dropped from 2,539 million USD in 2019 to 2,061 million USD in 2020, then rose steadily to 3,220 million USD in 2023. Correspondingly, the adjusted current ratio increased from 0.84 in 2019 to 2.1 in 2020, reflecting a stronger liquidity position during that year. However, it then declined steadily to 0.85 in 2023, indicating some erosion of liquidity cushion in more recent periods.

In summary, both reported and adjusted data reveal strong liquidity improvement in 2020, likely corresponding to unique conditions or corporate actions, followed by a gradual deterioration through to 2023. The current ratios dipping below 1.0 in the later years highlight increasing short-term solvency risks that may warrant closer monitoring and management attention.

The analysis of the financial data reveals several notable trends over the five-year period ending December 31, 2023.

Total Debt

The total debt exhibited a general upward trend with some fluctuations. It increased significantly from US$7,993 million in 2019 to US$10,487 million in 2020, reflecting a substantial rise likely associated with external or strategic factors during that year. Subsequently, total debt decreased in 2021 and 2022 to US$8,766 million and US$8,747 million, respectively, before rising again to US$9,196 million in 2023. Overall, the level of total debt remained elevated compared to the 2019 baseline.

Total Hilton Stockholders’ Deficit

The stockholders’ deficit consistently remained negative throughout the period, indicating a deficit position. It worsened notably from -US$482 million in 2019 to -US$1,490 million in 2020, signifying increased shareholder equity erosion. Although the deficit improved somewhat in 2021 to -US$821 million, it again deteriorated in 2022 (-US$1,102 million) and further declined to -US$2,360 million in 2023, reflecting ongoing pressure on equity and possibly accumulated losses or other comprehensive impacts.

Adjusted Total Debt

Adjusted total debt followed a similar pattern to total debt but at slightly higher levels. The figure increased from US$9,163 million in 2019 to US$11,628 million in 2020. It then decreased in the following two years to US$9,776 million in 2021 and US$9,691 million in 2022 before tickling upward again to US$10,120 million in 2023. This adjustment suggests additional debt-related obligations or financial adjustments beyond the reported total debt.

Adjusted Total Deficit

The adjusted total deficit showed a significant improvement from US$1,426 million in 2019 to US$475 million in 2020, suggesting some positive adjustment effects or equity enhancements during that year. However, in 2021, the deficit worsened back to US$1,040 million and slightly improved to US$969 million in 2022. Notably, in 2023, the adjusted deficit turned negative to -US$321 million, indicating a shift from deficit to surplus in adjusted equity terms.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio displayed considerable volatility. It was relatively high at 6.43 in 2019 and surged sharply to 24.48 in 2020, reflecting a high leverage level and potential financial stress in that year. The ratio decreased significantly to 9.4 in 2021 but rose again to 10 in 2022. Data for 2023 is not available, thus limiting a complete trend analysis for the latest period. The fluctuating ratio indicates varying degrees of financial leverage and capital structure adjustments over time.

The financial data reveals several key trends related to the company’s debt and capital structure over a five-year period from 2019 through 2023.

Total Debt

Total debt increased notably from 7,993 million US$ in 2019 to a peak of 10,487 million US$ in 2020, probably reflecting increased financing needs or response to external conditions around that year. Subsequently, total debt declined to 8,766 million US$ in 2021 and remained relatively stable in 2022 before rising again slightly to 9,196 million US$ in 2023.

Total Capital

Total capital mirrored a generally declining trend, starting at 7,511 million US$ in 2019 and increasing initially to 8,997 million US$ in 2020. However, it decreased steadily from 2021 onward, falling to 6,836 million US$ by 2023. This persistent decline suggests either reductions in equity, retained earnings, or other capital components.

Reported Debt to Capital Ratio

The reported debt to capital ratio increased from 1.06 in 2019 to a higher level of 1.17 in 2020, indicating greater leverage. After a temporary improvement to 1.10 in 2021, the ratio rose again in 2022 and reached its highest point of 1.35 in 2023. This increasing ratio reflects a growing reliance on debt relative to capital, implying heightened financial risk or strategic leveraging.

Adjusted Total Debt

Adjusted total debt follows a similar pattern to reported total debt but presents consistently higher values, beginning at 9,163 million US$ in 2019 and rising to 11,628 million US$ in 2020. After decreasing through 2021 and 2022, it increased again to 10,120 million US$ in 2023. The adjustments likely account for off-balance-sheet items or other liabilities, highlighting a higher burden of debt than the reported figures suggest.

Adjusted Total Capital

Adjusted total capital also starts higher than reported total capital, at 10,589 million US$ in 2019, increases to 12,103 million US$ in 2020, then declines in the following years down to 9,799 million US$ in 2023. This downward trend reinforces the overall reduction in the capital base when considering broader financial metrics.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio rises from 0.87 in 2019 to 0.96 in 2020, then slightly improves to 0.90 in 2021 before increasing again to 0.91 in 2022 and 1.03 in 2023. This ratio demonstrates a similar leverage pattern as the reported ratio but at a lower level, suggesting that adjustments somewhat moderate the portrayed increase in leverage but nonetheless affirm a trend towards greater debt reliance.

Overall, the data indicates that the company has experienced fluctuations in its leverage, with a significant increase in debt levels around 2020 possibly related to external shocks or strategic financing changes. Despite some periods of debt reduction, total capital has generally declined, particularly after 2020, resulting in higher reported and adjusted debt-to-capital ratios by 2023. This suggests an increasing reliance on debt financing relative to capital, potentially elevating financial risk. Both reported and adjusted figures align in illustrating this trend, albeit with differences in magnitude due to the broader financial measures included in the adjustments.

Total Assets

Total assets exhibited an initial increase from US$14,957 million in 2019 to a peak of US$16,755 million in 2020. However, this was followed by a decline over the next three years, arriving at US$15,401 million by the end of 2023. The overall pattern suggests a degree of asset growth during the early period, succeeded by a stabilization and slight reduction phase.

Total Hilton Stockholders’ Deficit

The stockholders’ deficit worsened notably in 2020, deepening from -US$482 million in 2019 to -US$1,490 million. Although there was an improvement to -US$821 million in 2021, the deficit increased again in the following years, reaching a low of -US$2,360 million in 2023. This series indicates volatile and generally deteriorating equity position during the period under review.

Adjusted Total Assets

The adjusted total assets closely mirror the trend in total assets, with a peak at US$16,693 million in 2020, followed by a decline to US$15,392 million by 2023. The adjusted figures show consistent relative values, indicating that asset adjustments had a minimal impact on the overall asset level trends.

Adjusted Total Deficit

The adjusted total deficit started at US$1,426 million in 2019, fell sharply to US$475 million in 2020, then increased again to reach US$1,040 million in 2021. It slightly decreased to US$969 million in 2022 and turned negative to -US$321 million in 2023, reflecting a significant improvement in the adjusted equity position by the end of the period.

Adjusted Financial Leverage

Available data on adjusted financial leverage indicate a considerable rise from 10.45 in 2019 to a peak of 35.14 in 2020, followed by a decline to 14.76 in 2021 and a moderate increase to 15.92 in 2022. The absence of data for 2023 prevents a full end-point assessment, but the 2019 to 2022 trend suggests heightened leverage in 2020 with a partial subsequent reduction.

The financial data reveals significant fluctuations in Hilton Worldwide Holdings Inc.'s performance over the five-year period ended December 31, 2023. There are notable trends in revenues, net income, and profit margins, reflecting impacts likely associated with external market conditions and internal financial management.

Revenue Trends

Revenues experienced a sharp decline in 2020, falling to 4,307 million US dollars from 9,452 million US dollars in 2019, representing more than a 50% decrease. This drop can be attributed to external shocks affecting the hospitality industry during that period. Recovery began in 2021 with revenues increasing to 5,788 million US dollars, continuing with a more substantial rise in 2022 reaching 8,773 million US dollars, and further growth to 10,235 million US dollars in 2023. The adjusted revenues follow a similar pattern, confirming the underlying operational recovery.

Net Income and Profitability

The net income attributable to Hilton stockholders shows a substantial loss in 2020 of 715 million US dollars, reversing the positive net income of 881 million US dollars recorded in 2019. Earnings turned positive again in 2021 at 410 million US dollars, rising sharply in 2022 to 1,255 million US dollars before slightly decreasing to 1,141 million US dollars in 2023. This trajectory signifies a strong rebound after the 2020 downturn with some volatility in the most recent year.

Profit Margin Analysis

The reported net profit margin reflects these income fluctuations, dropping from 9.32% in 2019 to a negative 16.6% in 2020, then gradually improving to 7.08% in 2021 and peaking at 14.31% in 2022, before moderating to 11.15% in 2023. Adjusted net profit margins follow the same trend but show a more pronounced recovery, moving from negative 14.86% in 2020 to a high of 17.08% in 2022, and settling at 10.42% in 2023. This pattern suggests that while profitability was significantly affected during the downturn year, underlying operational performance improved substantially afterward.

Adjusted Financial Measures

Adjusted net income mirrors the reported net income but tends to show less volatility, with a loss of 672 million US dollars in 2020 followed by a steadier increase to 1,528 million US dollars in 2022 and a slight reduction to 1,089 million US dollars in 2023. These adjusted figures likely exclude non-recurring items, providing a clearer indication of core profitability trends which confirm the recovery trajectory noted in other metrics.

The financial data reveals significant volatility in profitability and equity position over the five-year period analyzed. Net income attributable to stockholders experienced a sharp decline from a positive $881 million in 2019 to a loss of $715 million in 2020, coinciding with the pandemic's onset. This was followed by a recovery phase in 2021 with $410 million profit and a robust growth in 2022, reaching $1,255 million. In 2023, net income slightly declined to $1,141 million but remained substantially higher than pre-pandemic levels.

Total stockholders’ deficit shows a consistently negative trend, indicating capital erosion or accumulated losses in equity. It worsened from -$482 million in 2019 to a peak deficit of -$1,490 million in 2020. Thereafter, it slightly improved to -$821 million in 2021 but deteriorated again in 2022 and sharply in 2023 to -$2,360 million, suggesting ongoing financial challenges impacting equity despite profitability improvements.

Adjusted net income shows a similar pattern to reported net income but is consistently lower, implying exclusion of some non-recurring items or adjustments. The adjusted net income lost ground in 2020, turning negative at -$672 million, recovered in 2021 to $352 million, peaked at $1,528 million in 2022, and decreased to $1,089 million in 2023.

The adjusted total deficit moves positively from $1,426 million in 2019 to a low of $475 million in 2020, indicating some improvement, but then tends to increase again peaking at $1,040 million in 2021, slightly declining to $969 million in 2022, and turning negative at -$321 million in 2023. This suggests fluctuations in adjusted equity positions, with the latest figure indicating a return to a net positive equity situation after several years.

Adjusted return on equity (ROE) exhibits extreme volatility, consistent with the fluctuations in adjusted net income and equity levels. It was very high at 55.61% in 2019, plummeted to a highly negative figure of -141.47% in 2020, improved significantly to 33.85% in 2021, and surged to a very high 157.69% in 2022. The absence of data for 2023 prevents assessment of the most recent trend.

Profitability Trends

Net income and adjusted net income display significant recovery after substantial losses in 2020, with peak profitability in 2022.

Equity Position

Stockholders' deficit and adjusted total deficit values show ongoing challenges with equity erosion, reaching the highest deficit levels in 2023 based on reported figures, but with some signs of adjustment in the adjusted deficit restoring positive equity by 2023.

Return on Equity

The adjusted ROE reflects extreme sensitivity to earnings and equity changes, indicating financial performance volatility during the observed periods.

The analysis of the financial data over the five-year period reveals notable fluctuations in the company's profitability and asset base, reflecting both challenges and recoveries.

Net Income (Loss) Attributable to Stockholders

The net income demonstrated significant volatility, with a positive figure of $881 million in 2019, followed by a substantial loss of $715 million in 2020. This loss was likely impacted by external or internal adverse factors during that year. Subsequently, the company returned to profitability, recording $410 million in 2021, with a strong recovery seen in 2022 at $1,255 million. Although slightly lower in 2023 at $1,141 million, the income remained robust, signifying effective operational or market adjustments post-2020 downturn.

Total Assets

Total assets increased from $14.957 billion in 2019 to $16.755 billion in 2020, indicating possible asset acquisitions or revaluation despite the net loss. However, asset levels declined in the following years, settling around $15.4 billion in 2023. This decline suggests possible asset disposals or normalization after the 2020 increase, contributing to stabilizing the asset base.

Reported Return on Assets (ROA)

ROA mirrored net income trends, starting at 5.89% in 2019 and dropping to a negative 4.27% in 2020, reflecting the unprofitable year. It then improved to 2.66% in 2021, surged impressively to 8.09% in 2022, and slightly decreased to 7.41% in 2023. This pattern indicates improved efficiency in asset utilization post-2020 and a strong recovery in profitability relative to asset size.

Adjusted Net Income (Loss)

Adjusted net income followed a parallel trend to reported net income but with smaller absolute values. Starting at $793 million in 2019, it declined to a loss of $672 million in 2020, then recovered to $352 million in 2021. A remarkable increase to $1,528 million occurred in 2022, surpassing both reported and adjusted metrics for that year, followed by a decrease to $1,089 million in 2023. This metric suggests that adjustments impact profitability assessment, potentially excluding certain non-cash or unusual items, highlighting operational performance recovery.

Adjusted Total Assets

Adjusted total assets showed a similar trajectory to total assets, increasing from $14.901 billion in 2019 to $16.693 billion in 2020, then gradually declining to approximately $15.392 billion by 2023. The alignment in patterns between reported and adjusted assets underscores consistent asset valuation approaches over time.

Adjusted Return on Assets (ROA)

This profitability indicator displayed a comparable pattern to the reported ROA, but with marginally lower percentages. It started at 5.32% in 2019, fell to -4.03% in 2020, rose to 2.29% in 2021, peaked at 9.91% in 2022, and declined to 7.08% in 2023. The higher peak in 2022 relative to reported ROA suggests that adjusted earnings provide a more optimistic view of asset profitability during that period.

Overall, the company experienced a pronounced downturn in 2020 followed by a robust recovery through 2022, reflected in both earnings and asset turnover. The subsequent slight declines in 2023 across profitability measures indicate a possible stabilization phase after aggressive recovery. Asset levels peaked in 2020 and then normalized, which, combined with earnings trends, suggests strategic asset management and operational resilience.