Hilton Worldwide Holdings Inc. (NYSE:HLT)

Debt to Capital and Related Ratios

The debt to capital ratio displayed a gradual increase over the reported periods, starting at 1.11 in the first quarter of 2020 and rising steadily to reach 1.44 by the second quarter of 2024. When including operating lease liabilities, a similar upward trend is observable, with values progressing from 1.10 to 1.40 over the same timeframe. This pattern suggests a sustained increase in the company's leverage relative to its capital base.

Debt to Assets and Debt to Assets Including Operating Lease Liabilities

The ratio of debt to assets initially remained relatively stable around 0.60 to 0.63 from early 2020 through 2021, followed by slight fluctuations but maintaining an upward trajectory starting in 2023, reaching 0.65 by mid-2024. The inclusion of operating lease liabilities resulted in consistently higher ratios, with values ranging from 0.66 to 0.70, indicating that lease obligations represent a significant portion of total liabilities when considered as part of debt.

Interest Coverage Ratio

Interest coverage showed considerable volatility during 2020, declining sharply from 3.46 to negative values by the end of that year, indicating periods of insufficient earnings to cover interest costs. Recovery began in 2021 with the ratio turning positive and then trending upwards through 2022 and into 2023. From 2022 onwards, the ratio stabilized around 4.5 to 5.2, demonstrating improved earnings relative to interest expenses and suggesting enhanced debt servicing capacity.

The financial data reveals several notable trends over the analyzed periods, particularly regarding the company's leverage and equity position.

Total Debt

Total debt remained relatively stable from March 2020 through December 2022, fluctuating slightly around the 8,700 to 10,500 million US dollar range. There was a peak in the second quarter of 2020 at 10,482 million, followed by a gradual decrease and stabilization near 8,700 million US dollars from mid-2021 through the end of 2022. However, starting in March 2023, debt levels showed a rising trend again, increasing from approximately 8,740 million to over 10,170 million by June 2024. This indicates a renewed increase in the company's borrowing or issuance of debt instruments in the latest quarters.

Total Hilton Stockholders’ Equity (Deficit)

Throughout the period, stockholders' equity remained negative, indicating a deficit position. Initially, the deficit stood at -914 million US dollars in March 2020 and worsened through 2021 and 2022, reaching a low point of -1,763 million at the end of 2023. The trend accelerated into 2024, with the deficit deepening to approximately -3,116 million by June 2024. This ongoing deterioration in equity suggests persistent losses or other factors eroding the book value attributable to shareholders.

Debt to Equity Ratio

While the explicit values for the debt to equity ratio were not provided, the consistent pattern of high debt and increasingly negative equity implies a heavily leveraged position with a deteriorating debt to equity ratio. Since equity is negative and liabilities are significant, the ratio would be unfavorable, highlighting heightened financial risk and reliance on external obligations relative to shareholder funds.

In summary, the company maintained a relatively high and somewhat stable level of debt in the initial years observed but started increasing its debt load again in 2023 and 2024. Concurrently, the equity position weakened continuously, leading to a growing negative equity deficit. These trends suggest increasing financial leverage and potentially rising financial risk, which could impact the company's capacity to secure financing or invest in growth.

Total Debt (Including Operating Lease Liability)

The total debt showed an initial increase from 10,462 million USD at the end of Q1 2020 to 11,458 million USD by Q4 2020. Subsequently, there was a gradual decline through 2021, reaching around 9,636 million USD by Q4 2021. This downward trend continued into most of 2022, holding steady near 9,500 million USD across the year. However, starting in Q4 2023 and continuing into the first half of 2024, total debt increased again, rising from 9,523 million USD in Q3 2023 to 10,958 million USD as of Q2 2024.

Total Hilton Stockholders’ Equity (Deficit)

The stockholders’ equity was negative throughout the period analyzed, indicating a deficit situation. The deficit worsened significantly from negative 914 million USD at Q1 2020 to around negative 1,490 million USD by Q4 2020. During 2021, the deficit partially improved, recovering to approximately negative 821 million USD by Q4 2021. Nevertheless, since that period, the equity position has progressively deteriorated again, with the deficit deepening steadily through 2022 and 2023, reaching nearly negative 2,360 million USD by the end of 2023. This negative trend accelerated in 2024, with the deficit expanding further to around negative 3,116 million USD by mid-2024.

Overall Financial Position Trends

The data shows a fluctuating debt level with a decline post-2020 but a resurgence beginning late 2023. Meanwhile, the company has consistently held a negative equity balance, which worsened considerably during the period analyzed. This indicates ongoing challenges in equity value preservation despite some periods of debt reduction. The simultaneous increase in total debt and deepening equity deficit in 2024 may suggest increased financial leverage and potential concerns about solvency or capital structure stability which could warrant further detailed assessment.

The analysis of the quarterly financial data reveals distinct trends in the company’s debt management and capital structure over the examined periods.

Total Debt

Total debt showed a gradual increase initially from US$9,496 million at the end of Q1 2020 to a peak of approximately US$10,490 million in Q3 2020. It then declined steadily through 2021 and remained relatively stable around US$8,700 million through 2022 and most of 2023. However, starting Q4 2023, total debt began to rise again, reaching approximately US$10,172 million by mid-2024, indicating renewed borrowing or issuance of debt instruments.

Total Capital

Total capital decreased from about US$8,582 million in Q1 2020 to a low near US$6,836 million by Q4 2023, showing a declining trend over the five-year period. There were minor fluctuations, but the overall pattern reflects a reduction in capital base, with some slight recovery evident in 2024 when capital rose to US$7,056 million by mid-year.

Debt to Capital Ratio

The debt to capital ratio remained consistently above 1, indicating total debt exceeded reported capital throughout the period. The ratio increased from 1.11 in early 2020 to 1.44 by mid-2024. This upward trend highlights a progressively higher leverage position, generally signaling increased reliance on debt financing relative to the company’s capital base. The ratio slightly fluctuated in 2021 and 2022 but resumed an upward trajectory thereafter.

Overall, the data suggests that the company has been maintaining a high leverage stance, with total debt consistently exceeding capital. The rising debt-to-capital ratio toward the later periods points to increased financial leverage, which could imply higher risk but potentially greater capital availability for operations or strategic initiatives. The modest recovery in total capital seen in 2024 may help mitigate leverage to some degree, but the continued growth in total debt warrants monitoring for sustainability and financial stability considerations.

Total Debt (including operating lease liability)

The total debt level exhibited an initial increase from approximately $10.46 billion in March 2020 to a peak near $11.46 billion by December 2020. Following this peak, the debt decreased steadily throughout 2021 and into 2022, reaching a low of around $9.50 billion by the latter part of 2022. During 2023, the debt level remained relatively stable, fluctuating slightly around $9.52 billion. However, beginning in the first quarter of 2024, there was a notable upward trend, with total debt climbing to roughly $10.96 billion by mid-2024.

Total Capital (including operating lease liability)

Total capital followed a generally declining trajectory over the observed period. Starting near $9.55 billion in March 2020, it declined steadily through 2020 and 2021, dropping to about $8.15 billion by early 2023. The downward trend continued with some short-term fluctuations, reaching approximately $7.64 billion in the fourth quarter of 2023. In 2024, there was a modest recovery in capital levels, reaching near $7.84 billion by mid-year, but still below earlier highs.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio consistently exceeded 1.0 throughout the timeline, indicating that total debt was greater than reported capital. The ratio increased from 1.10 in March 2020 to a peak of 1.15 by December 2020. It then decreased to around 1.09 by the end of 2021, reflecting improved capital position relative to debt. Nevertheless, from early 2022 onward, the ratio exhibited a steady upward trajectory, rising from approximately 1.08 to 1.40 by the middle of 2024, signaling increasing leverage relative to total capital.

Overall Trends and Insights

Over the examined period, the company experienced shifts in its financial structure characterized by fluctuating debt levels and a generally declining capital base. After peaking in late 2020, total debt was managed downward through 2021 and 2022 before increasing again in early 2024. Total capital declined consistently across the years, showing a contraction in invested resources or equity base. The rising debt to capital ratio in recent quarters suggests an increasing reliance on debt financing relative to the company’s capital, indicating higher leverage and potentially greater financial risk. This evolving capital structure warrants close monitoring to assess the impact on financial stability and credit metrics.

The financial data reveals several key trends over the analyzed periods regarding debt levels, asset base, and leverage ratios.

Total Debt

Total debt showed a gradual increase from early 2020, starting at approximately $9.5 billion and peaking around the fourth quarter of 2023 at about $9.2 billion. There was a notable decline throughout 2021 and 2022 where debt decreased to the mid-$8.7 billion level. However, from late 2023 into mid-2024, there is an observable increase, reaching over $10 billion, the highest level in the observed period.

Total Assets

Total assets initially increased from about $15.8 billion in the first quarter of 2020 to a peak around $17.1 billion mid-2020. This was followed by a decreasing trend through 2021, stabilizing around $15.2 billion by early 2023. Subsequently, assets exhibited relative stability with minor fluctuations, ending near $15.7 billion by mid-2024. Overall, there was a contraction in the asset base compared to the 2020 peak.

Debt to Assets Ratio

The debt to assets ratio started at 0.6 in early 2020, momentarily rising to around 0.63 at the end of 2020. During 2021 and 2022, this ratio decreased to approximately 0.56, reflecting a relative reduction in leverage owing to the decrease in debt alongside a more stable asset base. However, the ratio increased again in late 2023 and in 2024, reaching approximately 0.65 by the middle of 2024. This rising leverage ratio indicates a relatively higher level of debt compared to assets during this latter period.

In summary, the company experienced a peak in assets during early 2020 and subsequently underwent a reduction and stabilization of its asset base. Debt levels declined between 2020 and 2022 but started rising again into 2023 and 2024, contributing to an increase in leverage. The increase in the debt to assets ratio in the most recent quarters suggests a higher reliance on debt financing relative to total assets compared to prior periods.

The financial data reveals several notable trends concerning debt and asset management over the observed quarterly periods.

Total Debt (Including Operating Lease Liability)

The total debt exhibited an initial increase from approximately 10.5 billion USD in the first quarter of 2020 to around 11.4 billion USD by the fourth quarter of 2020. This was followed by a gradual decline throughout 2021 and much of 2022, reaching a low near 9.5 billion USD in the third quarter of 2023. Subsequently, total debt increased again significantly in late 2023 and the first two quarters of 2024, climbing back above 10.9 billion USD.

Total Assets

Total assets peaked at about 17.1 billion USD in mid-2020, then decreased consistently during the remainder of 2020 and the first half of 2021, dropping to approximately 15 billion USD. From mid-2021 into 2023, assets remained relatively stable, fluctuating slightly around the 15 to 15.5 billion USD range before a moderate increase to just under 16 billion USD by the first half of 2024.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio started relatively high, close to 0.68 in late 2020, indicating a high leverage level during that period. This ratio decreased steadily through 2021 and 2022, reaching its lowest point around 0.61 in late 2022. However, this favorable trend reversed in 2023, as the ratio began to increase again, rising to approximately 0.70 by mid-2024, signifying a return to higher leverage.

In summary, the company experienced an initial period of increasing debt and assets through 2020, followed by a deleveraging phase characterized by declining debt levels and stable to slightly declining assets through 2022. This led to an improved debt to assets ratio, implying reduced financial leverage and potentially lower risk. Conversely, the most recent periods show a reversal with rising debt and increasing leverage ratios while assets modestly increase, which may signal a strategic shift or changing market conditions impacting capital structure decisions.

The analysis of the quarterly financial data reveals several notable trends in the company's financial position over the observed periods.

Total Assets

The total assets fluctuated moderately between approximately $15.2 billion and $17.1 billion over the reported quarters. Initially, total assets peaked around mid-2020, followed by a gradual decline through 2021. From early 2022 onward, the asset base stabilized, remaining close to $15.5 billion with minor variations. There appears to be a slight increase in total assets by mid-2024, reaching near $15.9 billion before a slight dip again by June 2024. Overall, the asset base shows relative stability after earlier volatility in 2020 and 2021.

Total Hilton Stockholders’ Equity (Deficit)

The stockholders' equity consistently remained in deficit throughout the entire timeline, indicating negative net worth. The deficit deepened from an initial value of around -$914 million in early 2020, worsening to a maximum deficit exceeding -$3.1 billion by mid-2024. The negative equity trend indicates ongoing accumulated losses or substantial liabilities exceeding assets. Although there were periods of slight improvement or stabilization—for example, from late 2020 through early 2021—the general movement is toward a deeper deficit over time. This trend may reflect financial challenges or leverage pressures.

Overall Observations

While total assets remained relatively stable with moderate fluctuations, the persistent and worsening stockholders’ equity deficit suggests financial strain. The increasing deficit in equity highlights potential risks related to solvency and capital structure. The absence of data regarding financial leverage ratios limits further insight into how leverage changed relative to equity and assets.

Earnings Before Interest and Tax (EBIT)

The EBIT figures demonstrate significant volatility during the first half of the period, with marked negative values in the second and fourth quarters of 2020, reflecting challenging operating conditions. Beginning in early 2021, a recovery trend is evident as EBIT turns positive and displays consistent growth, peaking in the second and third quarters of 2022. Although there is some fluctuation in subsequent quarters, EBIT largely remains at elevated levels compared to the earlier periods, indicating improved operational profitability over time.

Interest Expense

Interest expense shows a gradual upward trend across the entire timeline. Starting at 94 million USD in the first quarter of 2020, the expense progressively increases, reaching 141 million USD by mid-2024. This steady rise suggests either increasing debt obligations or higher interest rates impacting financing costs.

Interest Coverage Ratio

The interest coverage ratio experienced substantial volatility initially, falling below 1 in multiple quarters of 2020 and early 2021, which indicates difficulties in covering interest expenses with operating earnings. From mid-2021 onwards, this ratio improves markedly, consistently exceeding 3.5 and reaching peaks above 5 in some quarters of 2022. In the most recent periods, the ratio stabilizes around 4.5, signifying a strengthened ability to service interest obligations despite the gradual rise in interest expense.

Overall Insights

The data reflects a period of recovery and strengthening financial performance following significant operational challenges around 2020. Improved EBIT and interest coverage ratios from mid-2021 indicate enhanced profitability and better financial health, despite a steady increase in interest expenses. The company demonstrates resilience with a sound capability to meet its interest commitments in the later quarters, supported by growing earnings.