Park Hotels & Resorts Inc. (“Park” or the “Company”) (NYSE: PK)
today announced results for the second quarter ended June 30,
2022 and provided an operational update.
Second quarter financial highlights include:
- Pro-forma RevPAR was $173.03, an
increase of $94.29, or 119.7%, from the same period in 2021 and a
decrease of 10.2% from the same period in 2019;
- Pro-forma occupancy was 71.0%, an increase of 19.4 percentage
points from the first quarter of 2022 and a decrease of 14.6
percentage points from the same period in 2019;
- Net income and net income attributable to stockholders were
$154 million and $150 million, respectively;
- Adjusted EBITDA was $207 million, an increase of $125 million,
or 153.1%, compared to the first quarter of 2022;
- Pro-forma Hotel Adjusted EBITDA was $207 million, an
improvement of $119 million, or 134.2%, compared to the first
quarter of 2022;
- Adjusted FFO attributable to stockholders was $139 million, an
improvement of $121 million, or 683.0%, compared to the first
quarter of 2022;
- Diluted earnings per share was $0.66; and
- Diluted Adjusted FFO per share was $0.61, an improvement of
$0.53, or 662.5%, compared to the first quarter of 2022.
Additional highlights include:
- Reopened the sole remaining suspended hotel, the 1,024-room
Parc 55 San Francisco – a Hilton Hotel, on May 19, 2022;
- Repurchased 8.5 million shares of common stock in May 2022 at
an average price of $18.33 per share, or $157 million, for a total
of 12.0 million shares repurchased year-to-date at an average price
of $18.23 per share, or $218 million;
- Exited the covenant relief period under Park's credit and term
loan facilities upon delivery of the second quarter 2022 compliance
certificate in July 2022, one quarter earlier than the scheduled
end of the waiver period;
- Sold the 128-room Hilton Garden Inn Chicago/Oakbrook Terrace in
July 2022 for $9.4 million or $73,000 per key; and
- Year-to-date, Park has sold its interests in five non-core
hotels for total gross proceeds of approximately $268 million, or
14.0x the hotels’ combined 2019 Adjusted EBITDA (or 13.1x when
excluding anticipated capital expenditures), and at an average
capitalization rate of 6.2% on the hotels’ 2019 net operating
income (or 6.7% excluding anticipated maintenance capital
expenditures).
Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer,
stated, “I am extremely excited to see continued demand growth
across our portfolio during the second quarter. Leisure demand
remains strong in our Hawaii, Florida and Puerto Rico markets,
while business transient and group demand continue to strengthen,
helping to drive average rates at our urban hotels above 2019
levels by over 2% and group rates to 2019 levels during the second
quarter. Additionally, we sold four hotels and our ownership
interests in the joint ventures that own and operate one hotel
during 2022 for gross proceeds of approximately $268 million and
utilized these proceeds to buy back $218 million in stock at a
significant discount to our estimated net asset value. Despite the
macroeconomic and geopolitical pressures that exist, I am
optimistic that our portfolio will continue to recover through the
back half of the year as pent-up demand persists across all
segments, including our current forecast reflecting transient
occupancy for the third quarter at nearly 90% of 2019 levels. With
current liquidity of approximately $1.7 billion, we are well
positioned to pivot between defense and offense as we continue to
strengthen our balance sheet and reinvest in our portfolio."
Selected Statistical and Financial
Information
(unaudited, amounts in millions, except Pro-forma RevPAR,
Pro-forma ADR, Pro-forma Total RevPAR and per share data)
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
Change ($) |
|
|
Change(1) |
|
|
2022 |
|
|
2021 |
|
|
Change ($) |
|
|
Change(1) |
|
|
Pro-forma RevPAR |
$ |
173.03 |
|
|
$ |
78.74 |
|
|
$ |
94.29 |
|
|
|
119.7 |
% |
|
$ |
145.42 |
|
|
$ |
60.22 |
|
|
$ |
85.20 |
|
|
|
141.5 |
% |
|
Pro-forma Occupancy |
|
71.0 |
% |
|
|
41.7 |
% |
|
N/A |
|
|
|
29.3 |
% |
pts |
|
61.4 |
% |
|
|
34.1 |
% |
|
N/A |
|
|
|
27.3 |
% |
pts |
Pro-forma ADR |
$ |
243.66 |
|
|
$ |
188.63 |
|
|
$ |
55.03 |
|
|
|
29.2 |
% |
|
$ |
236.97 |
|
|
$ |
176.91 |
|
|
$ |
60.06 |
|
|
|
33.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro-forma Total RevPAR |
$ |
270.63 |
|
|
$ |
120.05 |
|
|
$ |
150.58 |
|
|
|
125.4 |
% |
|
$ |
228.86 |
|
|
$ |
90.97 |
|
|
$ |
137.89 |
|
|
|
151.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
154 |
|
|
$ |
(114 |
) |
|
$ |
268 |
|
|
|
235.1 |
% |
|
$ |
98 |
|
|
$ |
(305 |
) |
|
$ |
403 |
|
|
|
132.1 |
% |
|
Net income (loss) attributable to
stockholders |
$ |
150 |
|
|
$ |
(116 |
) |
|
$ |
266 |
|
|
|
229.3 |
% |
|
$ |
93 |
|
|
$ |
(306 |
) |
|
$ |
399 |
|
|
|
130.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
207 |
|
|
$ |
33 |
|
|
$ |
174 |
|
|
|
527.3 |
% |
|
$ |
289 |
|
|
$ |
(16 |
) |
|
$ |
305 |
|
|
|
1,906.3 |
% |
|
Pro-forma Hotel Adjusted
EBITDA |
$ |
207 |
|
|
$ |
41 |
|
|
$ |
166 |
|
|
|
399.7 |
% |
|
$ |
295 |
|
|
$ |
10 |
|
|
$ |
285 |
|
|
|
2,931.3 |
% |
|
Pro-forma Hotel Adjusted EBITDA
margin |
|
30.8 |
% |
|
|
13.9 |
% |
|
N/A |
|
|
|
1,690 bps |
|
|
|
26.2 |
% |
|
|
2.2 |
% |
|
N/A |
|
|
|
2,400 bps |
|
|
Adjusted FFO attributable to
stockholders |
$ |
139 |
|
|
$ |
(38 |
) |
|
$ |
177 |
|
|
|
465.8 |
% |
|
$ |
157 |
|
|
$ |
(151 |
) |
|
$ |
308 |
|
|
|
204.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share –
Diluted(1) |
$ |
0.66 |
|
|
$ |
(0.49 |
) |
|
$ |
1.15 |
|
|
|
234.7 |
% |
|
$ |
0.40 |
|
|
$ |
(1.30 |
) |
|
$ |
1.70 |
|
|
|
130.8 |
% |
|
Adjusted FFO per share –
Diluted(1) |
$ |
0.61 |
|
|
$ |
(0.16 |
) |
|
$ |
0.77 |
|
|
|
481.3 |
% |
|
$ |
0.68 |
|
|
$ |
(0.64 |
) |
|
$ |
1.32 |
|
|
|
206.3 |
% |
|
Weighted average shares
outstanding – Diluted |
|
228 |
|
|
|
236 |
|
|
N/A |
|
|
|
(8 |
) |
|
|
232 |
|
|
|
236 |
|
|
N/A |
|
|
|
(4 |
) |
|
(1) Amounts are
calculated based on unrounded numbers. |
|
Operational Update
All of Park's hotels are open following the reopening of the
1,024-room Parc 55 San Francisco – a Hilton Hotel on May 19, 2022.
Changes in Park's 2022 Pro-forma ADR, occupancy and RevPAR compared
to the same periods in 2021 and 2019, and 2022 Pro-forma occupancy
were as follows:
|
Change in Pro-forma ADR |
|
|
Change in Pro-forma Occupancy |
|
|
Change in Pro-forma RevPAR |
|
|
|
2022 Pro-forma |
|
|
2022 vs. 2021 |
|
|
2022 vs. 2019 |
|
|
2022 vs. 2021 |
|
|
2022 vs. 2019 |
|
|
2022 vs. 2021 |
|
|
2022 vs. 2019 |
|
|
|
Occupancy |
|
Q1 2022 |
|
44.0 |
% |
|
|
0.6 |
% |
|
|
25.4 |
% |
pts |
|
(25.9 |
)% |
pts |
|
183.2 |
% |
|
|
(33.0 |
)% |
|
|
|
51.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apr 2022 |
|
36.1 |
|
|
|
8.5 |
|
|
|
33.7 |
|
|
|
(14.3 |
) |
|
|
161.8 |
|
|
|
(9.9 |
) |
|
|
|
70.2 |
|
May 2022 |
|
28.1 |
|
|
|
4.5 |
|
|
|
27.8 |
|
|
|
(16.9 |
) |
|
|
117.2 |
|
|
|
(16.4 |
) |
|
|
|
67.6 |
|
Jun 2022 |
|
26.3 |
|
|
|
11.7 |
|
|
|
26.4 |
|
|
|
(12.5 |
) |
|
|
94.4 |
|
|
|
(4.2 |
) |
|
|
|
75.4 |
|
Q2 2022 |
|
29.2 |
|
|
|
8.3 |
|
|
|
29.3 |
|
|
|
(14.6 |
) |
|
|
119.7 |
|
|
|
(10.2 |
) |
|
|
|
71.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preliminary Jul 2022 |
|
11.7 |
|
|
|
12.3 |
|
|
|
16.6 |
|
|
|
(12.6 |
) |
|
|
44.4 |
|
|
|
(4.2 |
) |
|
|
|
73.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in Park's 2022 Pro-forma ADR, occupancy and RevPAR for
the three and six months ended June 30, 2022 compared to
the same periods in 2021 and 2019, and 2022 Pro-forma occupancy for
the three and six months ended June 30, 2022 by hotel
type were as follows:
|
Three Months Ended June 30, |
|
|
Change in Pro-forma ADR |
|
|
Change in Pro-forma Occupancy |
|
|
Change in Pro-forma RevPAR |
|
|
|
2022 Pro-forma |
|
|
2022 vs. 2021 |
|
|
2022 vs. 2019 |
|
|
2022 vs. 2021 |
|
|
2022 vs. 2019 |
|
|
2022 vs. 2021 |
|
|
2022 vs. 2019 |
|
|
|
Occupancy |
|
Resort |
|
15.5 |
% |
|
|
26.8 |
% |
|
|
16.1 |
% |
pts |
|
(7.5 |
)% |
pts |
|
45.4 |
% |
|
|
15.7 |
% |
|
|
|
78.6 |
% |
Urban |
|
67.4 |
|
|
|
2.3 |
|
|
|
37.0 |
|
|
|
(21.6 |
) |
|
|
297.4 |
|
|
|
(23.6 |
) |
|
|
|
63.9 |
|
Airport |
|
30.9 |
|
|
|
(3.6 |
) |
|
|
28.2 |
|
|
|
(6.6 |
) |
|
|
102.9 |
|
|
|
(11.0 |
) |
|
|
|
79.6 |
|
Suburban |
|
46.6 |
|
|
|
(2.0 |
) |
|
|
32.2 |
|
|
|
(15.1 |
) |
|
|
177.3 |
|
|
|
(19.7 |
) |
|
|
|
68.2 |
|
All Types |
|
29.2 |
|
|
|
8.3 |
|
|
|
29.3 |
|
|
|
(14.6 |
) |
|
|
119.7 |
|
|
|
(10.2 |
) |
|
|
|
71.0 |
|
|
Six Months Ended June 30, |
|
|
Change in Pro-forma ADR |
|
|
Change in Pro-forma Occupancy |
|
|
Change in Pro-forma RevPAR |
|
|
|
2022 Pro-forma |
|
|
2022 vs. 2021 |
|
|
2022 vs. 2019 |
|
|
2022 vs. 2021 |
|
|
2022 vs. 2019 |
|
|
2022 vs. 2021 |
|
|
2022 vs. 2019 |
|
|
|
Occupancy |
|
Resort |
|
19.9 |
% |
|
|
23.8 |
% |
|
|
26.3 |
% |
pts |
|
(12.2 |
)% |
pts |
|
85.5 |
% |
|
|
6.3 |
% |
|
|
|
74.5 |
% |
Urban |
|
75.3 |
|
|
|
(3.8 |
) |
|
|
28.8 |
|
|
|
(27.4 |
) |
|
|
299.6 |
|
|
|
(37.3 |
) |
|
|
|
51.3 |
|
Airport |
|
29.6 |
|
|
|
(7.1 |
) |
|
|
27.0 |
|
|
|
(11.5 |
) |
|
|
108.6 |
|
|
|
(20.0 |
) |
|
|
|
71.3 |
|
Suburban |
|
45.0 |
|
|
|
(7.8 |
) |
|
|
22.4 |
|
|
|
(23.6 |
) |
|
|
149.9 |
|
|
|
(36.1 |
) |
|
|
|
53.3 |
|
All Types |
|
33.9 |
|
|
|
5.1 |
|
|
|
27.3 |
|
|
|
(20.2 |
) |
|
|
141.5 |
|
|
|
(21.0 |
) |
|
|
|
61.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the second quarter of 2022, Park’s portfolio generated
positive Pro-forma Hotel Adjusted EBITDA for the fifth consecutive
quarter, with 42 of 43 of Park’s consolidated hotels open for the
entire quarter exceeding break-even levels.
Domestic leisure transient demand continues to grow compared to
2021 as a result of the easing of domestic restrictions, despite
some disruption from virus variants; however, some restrictions on
international travel remain in place. The Pro-forma Rooms Revenue
mix for the three and six months ended June 30, 2022,
2021, 2020 and 2019 were as follows:
|
Three Months Ended June 30, |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Group |
|
28.5 |
% |
|
|
7.9 |
% |
|
|
8.8 |
% |
|
|
32.4 |
% |
Transient |
|
65.1 |
|
|
|
84.7 |
|
|
|
64.6 |
|
|
|
60.5 |
|
Contract |
|
4.1 |
|
|
|
5.7 |
|
|
|
25.0 |
|
|
|
5.1 |
|
Other |
|
2.3 |
|
|
|
1.7 |
|
|
|
1.6 |
|
|
|
2.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Group |
|
27.2 |
% |
|
|
7.6 |
% |
|
|
32.1 |
% |
|
|
33.5 |
% |
Transient |
|
66.3 |
|
|
|
83.4 |
|
|
|
57.9 |
|
|
|
59.3 |
|
Contract |
|
4.4 |
|
|
|
7.3 |
|
|
|
7.7 |
|
|
|
5.1 |
|
Other |
|
2.1 |
|
|
|
1.7 |
|
|
|
2.3 |
|
|
|
2.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Park saw an improvement in demand beginning in mid-February 2022
as restrictions declined across the country, business travel
accelerated and group demand began to return to Park's urban
hotels. In June 2022, group bookings for the remainder of 2022 and
2023 continued to gain with the addition of approximately 100,000
room nights as compared to May 2022. As of the end of June 2022,
group bookings for the remainder of 2022 were approximately 68% of
what 2019 group bookings were as of the end of June 2019, an
improvement of over 400 basis points from March 2022, with average
group rate near 2019 levels for the same time period. Group
bookings for 2023 are 71% of what 2019 group bookings were as of
June 2018, with average group rates exceeding 2019 average group
rates by over 2% for the same time period.
Mid-week occupancies for Park's business-oriented hotels open
for the entire quarter increased to an average of 73% for the
second quarter of 2022 compared to 41% for the first quarter of
2022, with June 2022 at 80%, signaling continued recovery of
business transient demand.
Highlights for Park's consolidated hotels owned as of August 3,
2022 in each of the Company’s key markets are as follows:
- Hawaii: Park's Hawaii
hotels continued to benefit from increased domestic leisure demand,
achieving peak occupancy of 88% in both April and June 2022. The
Hilton Hawaiian Village achieved a peak rate of $317 in June 2022,
its highest peak rate since the start of the pandemic and an
increase of 16% compared to June 2019, with the Hilton Waikoloa
Village achieving a peak rate of $386, a 79% increase compared to
June 2019. Occupancy for the quarter was 74% and 90% for Hilton
Waikoloa Village and the Hilton Hawaiian Village, respectively, a
decrease of 6 percentage points and an increase of 13 percentage
points, respectively, from the first quarter of 2022. Preliminary
combined occupancy for July 2022 is 93%;
- San Francisco: All of Park's hotels in the San
Francisco market are now open and achieved combined occupancy of
66% in June 2022, and 51% for the quarter. Excluding the Parc 55
San Francisco – a Hilton Hotel which reopened in May 2022, combined
Pro-forma occupancy for the hotels open for the entire quarter was
61%, an increase of 26 percentage points compared to the first
quarter of 2022, and combined Pro-forma rate was 95% of the second
quarter of 2019. The JW Marriott San Francisco Union Square and the
Hyatt Centric Fisherman's Wharf achieved peak occupancy of 80% and
85%, respectively, in June 2022, an increase of 5 percentage points
and 4 percentage points, respectively, from March 2022. The JW
Marriott San Francisco Union Square and Hyatt Centric Fisherman's
Wharf achieved occupancy of 74% and 76%, respectively, for the
quarter. Preliminary combined occupancy for July 2022 is 62%;
- Orlando: Park’s Orlando hotels benefited from
both the Easter holiday and spring break travel and achieved peak
combined occupancy of 77% in April 2022, an increase of 7
percentage points from March 2022, with combined occupancy of 68%
for the quarter. Combined rate for the second quarter increased 21%
compared to the second quarter of 2019. Preliminary combined
occupancy for July 2022 is 62%;
- New Orleans: The Hilton New Orleans Riverside
benefited from an increase in both leisure and group demand
primarily from the NCAA Final Four Tournament in April 2022,
achieving peak occupancy of 71% in April 2022, a decrease of 4
percentage points following Mardi Gras in March 2022, and occupancy
of 69% for the quarter, an increase of 15 percentage points from
the first quarter of 2022. Rate for the second quarter increased
15% compared to the second quarter of 2019. Preliminary occupancy
for July 2022 is 56%;
- Boston: Park’s Boston hotels benefited from
strong leisure demand from various sporting events and graduation
season, achieving peak combined occupancy of 86% in June 2022, an
increase of 17 percentage points from March 2022, and 81% for the
quarter, an increase of 24 percentage points compared to the first
quarter of 2022. Combined rate for the second quarter was 95% of
the second quarter of 2019. Preliminary combined occupancy for July
2022 is 85%;
- New York: The New York Hilton Midtown
benefited from growing domestic leisure demand and achieved peak
occupancy of 71% in May 2022, an increase of 17 percentage points
from March 2022. Occupancy was 69% for the quarter, an increase of
35 percentage points compared to the first quarter of 2022. Rate
for the second quarter increased 6% compared to the second quarter
of 2019. Preliminary occupancy for July 2022 is 73%;
- Southern California: Park’s hotels in Southern
California benefited from an increase in leisure demand, resulting
in peak combined occupancy of 82% in June 2022, an increase of 6
percentage points from March 2022, and 79% for the quarter, an
increase of 12 percentage points compared to the first quarter of
2022. Compared to the second quarter of 2019, combined rate for the
second quarter increased 29% and combined RevPAR increased 16%,
both on a Pro-forma basis. Preliminary combined occupancy for July
2022 is 83%;
- Chicago: Park's Chicago hotels achieved
combined peak Pro-forma occupancy of 71% for June 2022, an increase
of 29 percentage points from March 2022, and 61% for the quarter,
an increase of 36 percentage points compared to the first quarter
of 2022. Rate at the W Chicago - Lakeshore was 95% of the second
quarter of 2019, while rate at the Hilton Chicago Downtown
approximated 2019 levels, and rate at the W Chicago – City Center
increased 6% compared to the second quarter of 2019. Compared to
the second quarter of 2019, combined rate slightly exceeded the
second quarter of 2019 on a Pro-forma basis. Preliminary combined
occupancy for July 2022 is 72%;
- Key West: Casa Marina Key West, Curio
Collection, and The Reach Key West, Curio Collection, continued to
benefit from strong leisure transient from spring break travel
demand achieving peak combined occupancy of 77% in April 2022. The
hotels achieved combined occupancy of 75% for the quarter, a
decrease of 8 percentage points from the first quarter of 2022
following peak spring break travel in March 2022. Compared to the
second quarter of 2019, combined rate increased by 50% and combined
RevPAR increased by 32%. Preliminary combined occupancy for July
2022 is 79%;
- Denver: The Hilton Denver benefited from an
increase in group and transient demand and achieved peak occupancy
of 83% in June 2022, an increase of 17 percentage points from March
2022, and 72% for the quarter, an increase of 16 percentage points
compared to the first quarter of 2022. Compared to the second
quarter of 2019, rate increased by 6%. Preliminary occupancy for
July 2022 is 74%;
- Miami: Park’s Miami hotels benefited from
strong domestic leisure transient demand, achieving peak combined
occupancy of 90% in April 2022 and 85% for the quarter, an increase
of 3 percentage points from the first quarter of 2022. Compared to
the second quarter of 2019, combined rate increased by 38% and
combined RevPAR increased by 29%, both on a Pro-forma basis.
Preliminary combined occupancy for July 2022 is 81%;
- Washington, D.C.: Park’s hotels in the
Washington, D.C. market benefited from leisure and group demand,
achieving peak combined occupancy of 79% for June 2022, an increase
of 20 percentage points from March 2022, and 75% for the quarter,
an increase of 29 percentage points compared to the first quarter
of 2022. Combined rate for the second quarter was 92% of the second
quarter of 2019. Preliminary combined occupancy for July 2022 is
70%; and
- Seattle: Park’s Seattle hotels benefited from
an increase in group and transient demand, including cruise
travelers and airline crews, with combined Pro-forma occupancy at a
peak of 79% in June 2022, an increase of 15 percentage points from
March 2022 on a Pro-forma basis, and 75% for the quarter, an
increase of 20 percentage points from the first quarter of 2022 on
a Pro-forma basis. Compared to the second quarter of 2019, rate
increased by 6% on a Pro-forma basis. Preliminary combined
occupancy for July 2022 is 65%.
Balance Sheet and Liquidity
Park’s Net Debt as of June 30, 2022 was $4.0 billion. The
Company has just $78 million outstanding on its sole remaining
corporate term loan. Only 1% of Park’s total outstanding debt
matures in 2022, and the weighted average maturity of Park’s
consolidated debt is 4.2 years. Park's current liquidity is
approximately $1.7 billion, including $901 million of available
capacity under the Company's revolving credit facility
("Revolver").
As of June 30, 2022, Park had $109 million of restricted
cash, which includes $83 million currently held by the lenders of
the mortgage loans secured by the Hilton Hawaiian Village Waikiki
Beach Resort and Hilton Denver City Center expected to be released
during the third quarter upon submission of the certificates
reflecting compliance with financial ratios associated with these
loans.
Additionally, Park exited the covenant relief period under its
credit facilities upon delivery of the second quarter 2022
compliance certificate in July 2022, which reflected compliance
with all required covenants one quarter earlier than the scheduled
end of the waiver period. Upon exit of the waiver period, certain
restrictions related to investments and the incurrence, repayment
of debt and dividends and distributions ceased to apply.
Park had the following debt outstanding as of June 30,
2022:
(unaudited,
dollars in millions) |
|
|
|
|
|
Debt |
|
Collateral |
|
Interest Rate |
|
Maturity Date |
|
As of June 30, 2022 |
|
Fixed Rate Debt |
|
|
|
|
|
|
|
|
|
Mortgage loan |
|
Hilton Denver City Center |
|
4.90% |
|
December 2022(1) |
|
$ |
57 |
|
Mortgage loan |
|
Hilton Checkers Los Angeles |
|
4.11% |
|
March 2023 |
|
|
26 |
|
Mortgage loan |
|
W Chicago – City Center |
|
4.25% |
|
August 2023 |
|
|
75 |
|
Mortgage loan |
|
Hilton San Francisco Union Square, Parc 55 San Francisco – a Hilton
Hotel |
|
4.11% |
|
November 2023 |
|
|
725 |
|
Mortgage loan |
|
Hyatt Regency Boston |
|
4.25% |
|
July 2026 |
|
|
133 |
|
Mortgage loan |
|
DoubleTree Hotel Spokane City Center |
|
3.62% |
|
July 2026 |
|
|
14 |
|
Mortgage loan |
|
Hilton Hawaiian Village Beach Resort |
|
4.20% |
|
November 2026 |
|
|
1,275 |
|
Mortgage loan |
|
Hilton Santa Barbara Beachfront Resort |
|
4.17% |
|
December 2026 |
|
|
164 |
|
Mortgage loan |
|
DoubleTree Hotel Ontario Airport |
|
5.37%(2) |
|
May 2027(2) |
|
|
30 |
|
2025 Senior Secured Notes |
|
|
|
7.50% |
|
June 2025 |
|
|
650 |
|
2028 Senior Secured Notes |
|
|
|
5.88% |
|
October 2028 |
|
|
725 |
|
2029 Senior Secured Notes |
|
|
|
4.88% |
|
May 2029 |
|
|
750 |
|
Total Fixed Rate
Debt |
|
|
|
5.04%(3) |
|
|
|
|
4,624 |
|
|
|
|
|
|
|
|
|
|
|
Variable Rate
Debt |
|
|
|
|
|
|
|
|
|
Revolver(4) |
|
Unsecured |
|
L + 3.00% |
|
December 2023 |
|
|
— |
|
2019 Term Facility |
|
Unsecured |
|
L + 2.65% |
|
August 2024 |
|
|
78 |
|
Total Variable Rate Debt |
|
|
|
3.89%(3) |
|
|
|
|
78 |
|
|
|
|
|
|
|
|
|
|
|
Add: unamortized premium |
|
|
|
|
|
|
|
|
4 |
|
Less:
unamortized deferred financing costs and discount |
|
|
|
|
|
|
(35 |
) |
Total Debt(5) |
|
|
|
5.02%(3) |
|
|
|
$ |
4,671 |
|
|
(1) The loan
matures in August 2042 but is callable by the lender with six
months of notice. As of June 30, 2022, Park had not received
notice from the lender. |
(2) In April
2022, Park's joint venture refinanced the mortgage loan secured by
the DoubleTree Hotel Ontario Airport, which extended the maturity
date to May 2027 with a fixed interest rate of 5.37%. |
(3) Calculated on a
weighted average basis. |
(4) Park has $901
million of available capacity under the Revolver. |
(5) Excludes
$170 million of Park’s share of debt of its unconsolidated joint
ventures. |
Capital Investments
During the second quarter of 2022, Park spent $31 million on
capital improvements at its hotels. Park expects to invest
approximately $200 million to $225 million in capital improvements
during 2022, including $55 million to $62 million on return on
investment projects and $145 million to $163 million on maintenance
projects. Key current and upcoming projects are summarized
below:
- Hilton Hawaiian Village Waikiki
Beach Resort (Guestroom): $85 million expected to be
invested in three phases of guestroom renovations in the 1,020-room
Tapa Tower, of which $29 million has been spent to-date with $2
million spent in the second quarter of 2022. Phase one was
completed in 2021, phase two is expected to be completed by the end
of 2022 and phase three is expected to be completed by the end of
2023;
- Waldorf Astoria Orlando and
Signia by Hilton Orlando Bonnet Creek Complex:
- Meeting space expansion: $110 million
expansion to add more than 100,000 square feet of meeting and event
space, of which $8 million was spent during the second quarter of
2022, bringing the total invested to date to $43 million since the
project began in the fourth quarter of 2019, before being put on
hold in 2020. Park expects the expansion for the Waldorf Astoria
Orlando to be completed by the fourth quarter of 2022 and the
Signia by Hilton Orlando Bonnet Creek to be completed by the first
quarter of 2024;
- Guestroom, existing meeting space &
lobby: $20 million for existing meeting space and lobby renovations
at the Signia by Hilton Orlando Bonnet Creek, of which $11 million
has been spent to date with $3 million spent during the second
quarter of 2022. Park expects the project to be completed by the
fourth quarter of 2022. Approximately $50 million for guestroom,
existing meeting space, lobby and other public space renovations at
the Waldorf Astoria Orlando, of which $1 million was spent during
the second quarter of 2022, to be completed by the third quarter of
2023;
- Golf course renovation: $7 million to
be invested in two phases of golf course renovations, which began
during the second quarter of 2022 and are expected to be completed
by the fourth quarter of 2023; and
- Hilton Santa Barbara Beachfront
Resort: $6 million to be invested in guestroom
renovations, which are expected to begin and be completed during
the first quarter of 2023.
Dividends and Share Repurchases
Park declared a second quarter 2022 cash dividend of $0.01 per
share to stockholders of record as of June 30, 2022. The second
quarter 2022 cash dividend was paid on July 15, 2022.
During the second quarter, Park repurchased 8.5 million shares
of its common stock at an average price of $18.33 per share, or
$157 million in the aggregate, through its previously disclosed
$300 million stock repurchase program, which was approved by our
Board of Directors in February 2022. Year-to-date, 12.0 million
shares have been repurchased at an average price of $18.23 per
share, or $218 million.
Q3 2022 Outlook
Park is only providing third quarter 2022 guidance at this time
given the uncertainty with respect to macroeconomic and
geopolitical pressures in the latter part of the year. Expectations
for third quarter 2022 operating results are as follows:
(unaudited,
dollars in millions, except per share amounts and RevPAR) |
|
|
|
Q3 2022 Outlook |
|
|
|
as of August 3, 2022 |
|
Metric |
|
Low |
|
|
High |
|
|
|
|
|
|
|
|
RevPAR |
|
$ |
171 |
|
|
$ |
174 |
|
RevPAR change vs. 2019 |
|
|
(9 |
)% |
|
|
(7 |
)% |
|
|
|
|
|
|
|
Net income |
|
$ |
6 |
|
|
$ |
26 |
|
Net income attributable to
stockholders |
|
$ |
0 |
|
|
$ |
20 |
|
Earnings per share –
Diluted(1) |
|
$ |
0.00 |
|
|
$ |
0.09 |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
145 |
|
|
$ |
165 |
|
Hotel Adjusted EBITDA
margin |
|
|
26.0 |
% |
|
|
27.0 |
% |
Hotel Adjusted EBITDA margin
change vs. 2019 |
|
|
(260) bps |
|
|
|
(160) bps |
|
Adjusted FFO per share –
Diluted(1) |
|
$ |
0.34 |
|
|
$ |
0.43 |
|
(1) Per share
amounts are calculated based on unrounded numbers. |
|
|
|
|
|
Q3 2022 outlook is based in part on the following
assumptions:
- Fully diluted weighted average shares are expected to be 224
million; and
- Does not take into account potential future acquisitions and
dispositions, which could result in a material change to Park’s
outlook.
Park's Q3 2022 outlook is based on a number of factors, many of
which are outside the Company's control, including uncertainty
surrounding any new disruptions from the COVID-19 pandemic and
other macro-economic factors, including inflation, increases in
interest rates, supply chain disruptions and the possibility of an
economic recession or slowdown in 2022, all of which are subject to
change.
Supplemental Disclosures
In conjunction with this release, Park has furnished a financial
supplement with additional disclosures on its website. Visit
www.pkhotelsandresorts.com for more information. Park has no
obligation to update any of the information provided to conform to
actual results or changes in Park’s portfolio, capital structure or
future expectations.
Conference Call
Park will host a conference call for investors and other
interested parties to discuss second quarter 2022 results on August
4, 2022 beginning at 11 a.m. Eastern Time. Participants may listen
to the live webcast by logging onto the Investors section of the
website at www.pkhotelsandresorts.com. Alternatively, participants
may listen to the live call by dialing (877) 451-6152 in the United
States or (201) 389-0879 internationally and requesting Park Hotels
& Resorts’ Second Quarter 2022 Earnings Conference Call.
Participants are encouraged to dial into the call or link to the
webcast at least ten minutes prior to the scheduled start time.
A replay of the webcast will be available within 24 hours after
the live event on the Investors section of Park’s website.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements include, but are not limited
to, statements related to Park’s current expectations regarding the
performance of its business, financial results, liquidity and
capital resources, including expected dates that its hotels will
break even or achieve positive Hotel Adjusted EBITDA, the impact to
the Company's business and financial condition and that of its
hotel management companies, measures being taken in response to
COVID-19, the impact from macroeconomic factors (including
inflation, increases in interest rates, potential economic slowdown
or a recession and geopolitical conflicts), the effects of
competition and the effects of future legislation or regulations,
the expected completion of anticipated dispositions, the
declaration and payment of future dividends and other
non-historical statements. Forward-looking statements include all
statements that are not historical facts, and in some cases, can be
identified by the use of forward-looking terminology such as the
words “outlook,” “believes,” “expects,” “potential,” “continues,”
“may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,”
“intends,” “plans,” “estimates,” “anticipates,” “hopes” or the
negative version of these words or other comparable words. You
should not rely on forward-looking statements since they involve
known and unknown risks, uncertainties and other factors which are,
in some cases, beyond the Company’s control and which could
materially affect its results of operations, financial condition,
cash flows, performance or future achievements or events.
Currently, one of the most significant factors continues to be the
adverse effect of COVID-19, including actions taken to contain the
pandemic or mitigate its effects, the emergences of virus variants
and resurgences, on the Company’s financial condition, results of
operations, cash flows and performance, its hotel management
companies and its hotels’ tenants, and the global economy and
financial markets. Investors are cautioned to interpret many of the
risks identified in the risk factors included in the Company’s
Annual Report on Form 10-K for the year ended December 31,
2021 as being heightened as a result of the ongoing and numerous
adverse effects of COVID-19.
Forward-looking statements involve risks, uncertainties and
assumptions. Actual results may differ materially from those
expressed in these forward-looking statements. You should not put
undue reliance on any forward-looking statements and Park urges
investors to carefully review the disclosures Park makes concerning
risk and uncertainties in Item 1A: “Risk Factors” in Park’s Annual
Report on Form 10-K for the year ended December 31, 2021, as
such factors may be updated from time to time in Park’s filings
with the SEC, which are accessible on the SEC’s website at
www.sec.gov. Except as required by law, Park undertakes no
obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Non-GAAP Financial Measures
Park presents certain non-GAAP financial measures in this press
release, including Nareit FFO attributable to stockholders,
Adjusted FFO attributable to stockholders, EBITDA, Adjusted EBITDA,
Hotel Adjusted EBITDA, Hotel Adjusted EBITDA margin and Net debt.
These non-GAAP financial measures should be considered along with,
but not as alternatives to, net income (loss) as a measure of its
operating performance. Please see the schedules included in this
press release including the “Definitions” section for additional
information and reconciliations of such non-GAAP financial
measures.
About Park
Park is the second largest publicly traded lodging REIT with a
diverse portfolio of market-leading hotels and resorts with
significant underlying real estate value. Park’s portfolio
currently consists of 49 premium-branded hotels and resorts with
over 30,000 rooms primarily located in prime city center and resort
locations. Visit www.pkhotelsandresorts.com for more
information.
PARK HOTELS & RESORTS
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(in millions, except share and per share
data)
|
June 30, 2022 |
|
|
December 31, 2021 |
|
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
Property and equipment, net |
$ |
8,326 |
|
|
$ |
8,511 |
|
Assets held for sale, net |
|
7 |
|
|
|
— |
|
Investments in affiliates |
|
4 |
|
|
|
15 |
|
Intangibles, net |
|
43 |
|
|
|
44 |
|
Cash and cash equivalents |
|
758 |
|
|
|
688 |
|
Restricted cash |
|
109 |
|
|
|
75 |
|
Accounts receivable, net of allowance for doubtful accounts of $2
and $2 |
|
149 |
|
|
|
96 |
|
Prepaid expenses |
|
39 |
|
|
|
35 |
|
Other assets |
|
38 |
|
|
|
69 |
|
Operating lease right-of-use assets |
|
228 |
|
|
|
210 |
|
TOTAL ASSETS (variable
interest entities - $237 and $237) |
$ |
9,701 |
|
|
$ |
9,743 |
|
LIABILITIES AND
EQUITY |
|
|
|
|
|
Liabilities |
|
|
|
|
|
Debt |
$ |
4,671 |
|
|
$ |
4,672 |
|
Accounts payable and accrued expenses |
|
211 |
|
|
|
156 |
|
Due to hotel managers |
|
124 |
|
|
|
111 |
|
Other liabilities |
|
167 |
|
|
|
174 |
|
Operating lease liabilities |
|
247 |
|
|
|
227 |
|
Total liabilities (variable interest entities - $219 and $219) |
|
5,420 |
|
|
|
5,340 |
|
Stockholders' Equity |
|
|
|
|
|
|
|
Common stock, par value $0.01 per share, 6,000,000,000 shares
authorized, 225,352,740 shares issued and 224,840,982 shares
outstanding as of June 30, 2022 and 236,888,804 shares issued and
236,483,990 shares outstanding as of December 31, 2021 |
|
2 |
|
|
|
2 |
|
Additional paid-in capital |
|
4,321 |
|
|
|
4,533 |
|
Retained earnings (accumulated deficit) |
|
6 |
|
|
|
(83 |
) |
Total stockholders' equity |
|
4,329 |
|
|
|
4,452 |
|
Noncontrolling interests |
|
(48 |
) |
|
|
(49 |
) |
Total equity |
|
4,281 |
|
|
|
4,403 |
|
TOTAL LIABILITIES AND
EQUITY |
$ |
9,701 |
|
|
$ |
9,743 |
|
PARK HOTELS & RESORTS
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(unaudited, in millions, except per
share data)
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Rooms |
$ |
433 |
|
|
$ |
207 |
|
|
$ |
725 |
|
|
$ |
313 |
|
Food and beverage |
|
173 |
|
|
|
54 |
|
|
|
283 |
|
|
|
76 |
|
Ancillary hotel |
|
70 |
|
|
|
50 |
|
|
|
131 |
|
|
|
79 |
|
Other |
|
19 |
|
|
|
12 |
|
|
|
35 |
|
|
|
20 |
|
Total revenues |
|
695 |
|
|
|
323 |
|
|
|
1,174 |
|
|
|
488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
98 |
|
|
|
59 |
|
|
|
183 |
|
|
|
94 |
|
Food and beverage |
|
119 |
|
|
|
42 |
|
|
|
206 |
|
|
|
63 |
|
Other departmental and support |
|
158 |
|
|
|
101 |
|
|
|
291 |
|
|
|
179 |
|
Other property-level |
|
65 |
|
|
|
52 |
|
|
|
115 |
|
|
|
100 |
|
Management fees |
|
32 |
|
|
|
14 |
|
|
|
54 |
|
|
|
21 |
|
Casualty and impairment loss, net |
|
1 |
|
|
|
5 |
|
|
|
1 |
|
|
|
5 |
|
Depreciation and amortization |
|
68 |
|
|
|
71 |
|
|
|
137 |
|
|
|
145 |
|
Corporate general and administrative |
|
16 |
|
|
|
16 |
|
|
|
32 |
|
|
|
34 |
|
Other |
|
18 |
|
|
|
13 |
|
|
|
34 |
|
|
|
20 |
|
Total expenses |
|
575 |
|
|
|
373 |
|
|
|
1,053 |
|
|
|
661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) gain on sales of assets, net |
|
(1 |
) |
|
|
6 |
|
|
|
(1 |
) |
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss) |
|
119 |
|
|
|
(44 |
) |
|
|
120 |
|
|
|
(167 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Interest expense |
|
(62 |
) |
|
|
(66 |
) |
|
|
(124 |
) |
|
|
(129 |
) |
Equity in earnings (losses) from investments in affiliates |
|
5 |
|
|
|
(2 |
) |
|
|
5 |
|
|
|
(6 |
) |
Other gain (loss), net |
|
92 |
|
|
|
(2 |
) |
|
|
97 |
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes |
|
155 |
|
|
|
(114 |
) |
|
|
99 |
|
|
|
(304 |
) |
Income tax expense |
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
Net income
(loss) |
|
154 |
|
|
|
(114 |
) |
|
|
98 |
|
|
|
(305 |
) |
Net income attributable
to noncontrolling interests |
|
(4 |
) |
|
|
(2 |
) |
|
|
(5 |
) |
|
|
(1 |
) |
Net income (loss)
attributable to stockholders |
$ |
150 |
|
|
$ |
(116 |
) |
|
$ |
93 |
|
|
$ |
(306 |
) |
Earnings (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share – Basic |
$ |
0.66 |
|
|
$ |
(0.49 |
) |
|
$ |
0.40 |
|
|
$ |
(1.30 |
) |
Earnings (loss) per share – Diluted |
$ |
0.66 |
|
|
$ |
(0.49 |
) |
|
$ |
0.40 |
|
|
$ |
(1.30 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding – Basic |
|
228 |
|
|
|
236 |
|
|
|
232 |
|
|
|
235 |
|
Weighted average shares outstanding – Diluted |
|
228 |
|
|
|
236 |
|
|
|
232 |
|
|
|
236 |
|
PARK HOTELS & RESORTS
INC.NON-GAAP FINANCIAL MEASURES
RECONCILIATIONSEBITDA AND ADJUSTED
EBITDA
(unaudited, in millions) |
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net income (loss) |
$ |
154 |
|
|
$ |
(114 |
) |
|
$ |
98 |
|
|
$ |
(305 |
) |
Depreciation and amortization expense |
|
68 |
|
|
|
71 |
|
|
|
137 |
|
|
|
145 |
|
Interest income |
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
Interest expense |
|
62 |
|
|
|
66 |
|
|
|
124 |
|
|
|
129 |
|
Income tax expense |
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
Interest expense, income tax and depreciation and amortization
included in equity in earnings from investments in affiliates |
|
4 |
|
|
|
4 |
|
|
|
5 |
|
|
|
5 |
|
EBITDA |
|
288 |
|
|
|
27 |
|
|
|
364 |
|
|
|
(25 |
) |
Loss (gain) on sales of assets, net |
|
1 |
|
|
|
(6 |
) |
|
|
1 |
|
|
|
(6 |
) |
Gain on sale of investments in affiliates(1) |
|
(92 |
) |
|
|
— |
|
|
|
(92 |
) |
|
|
— |
|
Share-based compensation expense |
|
5 |
|
|
|
4 |
|
|
|
9 |
|
|
|
10 |
|
Casualty and impairment loss, net |
|
1 |
|
|
|
5 |
|
|
|
1 |
|
|
|
5 |
|
Other items |
|
4 |
|
|
|
3 |
|
|
|
6 |
|
|
|
— |
|
Adjusted
EBITDA |
$ |
207 |
|
|
$ |
33 |
|
|
$ |
289 |
|
|
$ |
(16 |
) |
(1)
Included in other gain (loss), net. |
PARK HOTELS & RESORTS
INC.NON-GAAP FINANCIAL MEASURES
RECONCILIATIONSPRO-FORMA HOTEL ADJUSTED EBITDA
AND PRO-FORMA HOTEL ADJUSTED EBITDA
MARGIN
(unaudited, dollars in
millions) |
Three Months Ended |
|
|
Six Months Ended |
|
|
June 30, |
|
|
June 30, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Adjusted EBITDA |
$ |
207 |
|
|
$ |
33 |
|
|
$ |
289 |
|
|
$ |
(16 |
) |
Less: Adjusted EBITDA from investments in affiliates |
|
(11 |
) |
|
|
(2 |
) |
|
|
(16 |
) |
|
|
— |
|
Add: All other(1) |
|
12 |
|
|
|
11 |
|
|
|
24 |
|
|
|
22 |
|
Hotel Adjusted
EBITDA |
|
208 |
|
|
|
42 |
|
|
|
297 |
|
|
|
6 |
|
Less: Adjusted EBITDA from hotels disposed of |
|
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
4 |
|
Pro-forma Hotel Adjusted
EBITDA |
$ |
207 |
|
|
$ |
41 |
|
|
$ |
295 |
|
|
$ |
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
June 30, |
|
|
June 30, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Total
Revenues |
$ |
695 |
|
|
$ |
323 |
|
|
$ |
1,174 |
|
|
$ |
488 |
|
Less: Other revenue |
|
(19 |
) |
|
|
(12 |
) |
|
|
(35 |
) |
|
|
(20 |
) |
Less: Revenues from hotels disposed of |
|
(6 |
) |
|
|
(14 |
) |
|
|
(11 |
) |
|
|
(20 |
) |
Pro-forma Hotel
Revenues |
$ |
670 |
|
|
$ |
297 |
|
|
$ |
1,128 |
|
|
$ |
448 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
June 30, |
|
|
June 30, |
|
|
2022 |
|
|
2021 |
|
|
Change(2) |
|
|
2022 |
|
|
2021 |
|
|
Change(2) |
|
Pro-forma Hotel Revenues |
$ |
670 |
|
|
$ |
297 |
|
|
|
125.4 |
% |
|
$ |
1,128 |
|
|
$ |
448 |
|
|
|
151.6 |
% |
Pro-forma Hotel Adjusted
EBITDA |
$ |
207 |
|
|
$ |
41 |
|
|
|
399.7 |
% |
|
$ |
295 |
|
|
$ |
10 |
|
|
|
2,931.3 |
% |
Pro-forma Hotel Adjusted EBITDA
margin(2) |
|
30.8 |
% |
|
|
13.9 |
% |
|
|
1,690 bps |
|
|
|
26.2 |
% |
|
|
2.2 |
% |
|
|
2,400 bps |
|
__________________________________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes other revenues and other
expenses, non-income taxes on TRS leases included in other
property-level expenses and corporate general and
administrative expenses in the condensed consolidated statements of
operations. |
|
(2) Percentages
are calculated based on unrounded numbers. |
|
|
|
PARK HOTELS & RESORTS
INC.NON-GAAP FINANCIAL MEASURES
RECONCILIATIONSNAREIT FFO AND ADJUSTED
FFO
(unaudited, in millions, except per share data)
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net income (loss) attributable to
stockholders |
$ |
150 |
|
|
$ |
(116 |
) |
|
$ |
93 |
|
|
$ |
(306 |
) |
Depreciation and amortization expense |
|
68 |
|
|
|
71 |
|
|
|
137 |
|
|
|
145 |
|
Depreciation and amortization expense attributable to
noncontrolling interests |
|
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
Loss (gain) on sales of assets, net |
|
1 |
|
|
|
(6 |
) |
|
|
1 |
|
|
|
(6 |
) |
Gain on sale of investments in affiliates(1) |
|
(92 |
) |
|
|
— |
|
|
|
(92 |
) |
|
|
— |
|
Impairment loss |
|
— |
|
|
|
5 |
|
|
|
— |
|
|
|
5 |
|
Equity investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Equity in (earnings) losses from investments in affiliates |
|
(5 |
) |
|
|
2 |
|
|
|
(5 |
) |
|
|
6 |
|
Pro rata FFO of investments in affiliates |
|
8 |
|
|
|
— |
|
|
|
10 |
|
|
|
(2 |
) |
Nareit FFO attributable
to stockholders |
|
129 |
|
|
|
(45 |
) |
|
|
142 |
|
|
|
(160 |
) |
Share-based compensation expense |
|
5 |
|
|
|
4 |
|
|
|
9 |
|
|
|
10 |
|
Other items |
|
5 |
|
|
|
3 |
|
|
|
6 |
|
|
|
(1 |
) |
Adjusted FFO attributable
to stockholders |
$ |
139 |
|
|
$ |
(38 |
) |
|
$ |
157 |
|
|
$ |
(151 |
) |
Nareit FFO per share –
Diluted(2) |
$ |
0.57 |
|
|
$ |
(0.19 |
) |
|
$ |
0.61 |
|
|
$ |
(0.68 |
) |
Adjusted FFO per share
– Diluted(2) |
$ |
0.61 |
|
|
$ |
(0.16 |
) |
|
$ |
0.68 |
|
|
$ |
(0.64 |
) |
Weighted average shares
outstanding – Diluted |
|
228 |
|
|
|
236 |
|
|
|
232 |
|
|
|
236 |
|
(1) Included in
other gain (loss), net. |
|
(2) Per share
amounts are calculated based on unrounded numbers. |
|
PARK HOTELS & RESORTS
INC.NON-GAAP FINANCIAL MEASURES
RECONCILIATIONSNET DEBT
(unaudited, in millions) |
|
|
|
June 30, 2022 |
|
Debt |
$ |
4,671 |
|
Add: unamortized deferred
financing costs and discount |
|
35 |
|
Less: unamortized premium |
|
(4 |
) |
Debt, excluding unamortized deferred financing cost, premiums and
discounts |
|
4,702 |
|
Add: Park's share of
unconsolidated affiliates debt, excluding unamortized deferred
financing costs |
|
170 |
|
Less: cash and cash
equivalents |
|
(758 |
) |
Less: restricted cash |
|
(109 |
) |
Net debt |
$ |
4,005 |
|
|
|
|
|
PARK HOTELS & RESORTS
INC.NON-GAAP FINANCIAL MEASURES
RECONCILIATIONSQ3 2022 OUTLOOK – EBITDA, ADJUSTED
EBITDA, HOTEL ADJUSTED EBITDAAND HOTEL ADJUSTED
EBITDA MARGIN
|
Three Months Ended |
|
(unaudited, in millions) |
September 30, 2022 |
|
|
Low Case |
|
|
High Case |
|
Net income |
$ |
6 |
|
|
$ |
26 |
|
Depreciation and amortization expense |
|
68 |
|
|
|
68 |
|
Interest income |
|
(1 |
) |
|
|
(1 |
) |
Interest expense |
|
62 |
|
|
|
62 |
|
Interest expense, income tax and depreciation and amortization
included in equity in earnings from investments in affiliates |
|
1 |
|
|
|
1 |
|
EBITDA |
|
136 |
|
|
|
156 |
|
Share-based compensation expense |
|
4 |
|
|
|
4 |
|
Other items |
|
5 |
|
|
|
5 |
|
Adjusted
EBITDA |
|
145 |
|
|
|
165 |
|
Less: Adjusted EBITDA from investments in affiliates |
|
(4 |
) |
|
|
(4 |
) |
Add: All other |
|
14 |
|
|
|
14 |
|
Hotel Adjusted
EBITDA |
$ |
155 |
|
|
$ |
175 |
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, 2022 |
|
|
Low Case |
|
|
High Case |
|
Total
Revenues |
$ |
612 |
|
|
$ |
665 |
|
Less: Other revenue |
|
(18 |
) |
|
|
(18 |
) |
Hotel
Revenues |
$ |
594 |
|
|
$ |
647 |
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, 2022 |
|
|
Low Case |
|
|
High Case |
|
Hotel Revenues |
$ |
594 |
|
|
$ |
647 |
|
Hotel Adjusted EBITDA |
$ |
155 |
|
|
$ |
175 |
|
Hotel Adjusted EBITDA
margin(1) |
|
26.0 |
% |
|
|
27.0 |
% |
(1) Percentages are calculated
based on unrounded numbers. |
|
|
|
|
|
|
|
PARK HOTELS & RESORTS
INC.NON-GAAP FINANCIAL MEASURES
RECONCILIATIONSQ3 2022 OUTLOOK – NAREIT FFO
ATTRIBUTABLE TO STOCKHOLDERS ANDADJUSTED FFO
ATTRIBUTABLE TO STOCKHOLDERS
|
Three Months Ended |
|
(unaudited, in millions except
per share data) |
September 30, 2022 |
|
|
Low Case |
|
|
High Case |
|
Net income attributable to stockholders |
$ |
0 |
|
|
$ |
20 |
|
Depreciation and amortization expense |
|
68 |
|
|
|
68 |
|
Depreciation and amortization expense attributable to
noncontrolling interests |
|
(1 |
) |
|
|
(1 |
) |
Equity investment adjustments: |
|
|
|
|
|
Equity in earnings from investments in affiliates |
|
(1 |
) |
|
|
(1 |
) |
Pro rata FFO of equity investments |
|
1 |
|
|
|
1 |
|
Nareit FFO attributable
to stockholders |
|
67 |
|
|
|
87 |
|
Share-based compensation expense |
|
4 |
|
|
|
4 |
|
Other items |
|
5 |
|
|
|
5 |
|
Adjusted FFO attributable
to stockholders |
$ |
76 |
|
|
$ |
96 |
|
Adjusted FFO per share –
Diluted(1) |
$ |
0.34 |
|
|
$ |
0.43 |
|
Weighted average diluted
shares outstanding |
|
224 |
|
|
|
224 |
|
(1) Per share amounts
are calculated based on unrounded numbers. |
|
PARK HOTELS & RESORTS
INC.DEFINITIONS
Pro-forma
The Company presents certain data for its consolidated hotels on
a Pro-forma hotel basis as supplemental information for investors:
Pro-forma Hotel Revenues, Pro-forma RevPAR, Pro-forma Total RevPAR,
Pro-forma occupancy, Pro-forma ADR, Pro-forma Hotel Adjusted EBITDA
and Pro-forma Hotel Adjusted EBITDA Margin. The Company presents
Pro-forma hotel results to help the Company and its investors
evaluate the ongoing operating performance of its hotels. The
Company’s Pro-forma metrics exclude results from property
dispositions that have occurred through August 3, 2022 and include
results from property acquisitions as though such acquisitions
occurred on the earliest period presented.
EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel
Adjusted EBITDA margin
Earnings (loss) before interest expense, taxes and depreciation
and amortization (“EBITDA”), presented herein, reflects net income
(loss) excluding depreciation and amortization, interest income,
interest expense, income taxes and interest expense, income tax and
depreciation and amortization included in equity in earnings
(losses) from investments in affiliates.
Adjusted EBITDA, presented herein, is calculated as EBITDA, as
previously defined, further adjusted to exclude:
- Gains or losses on sales of assets for
both consolidated and unconsolidated investments;
- Costs associated with hotel acquisitions or dispositions
expensed during the period;
- Severance expense;
- Share-based compensation expense;
- Impairment losses and casualty gains or losses; and
- Other items that management believes are not representative of
the Company’s current or future operating performance.
Hotel Adjusted EBITDA measures hotel-level results before debt
service, depreciation and corporate expenses of the Company’s
consolidated hotels, which excludes hotels owned by unconsolidated
affiliates, and is a key measure of the Company’s profitability.
The Company presents Hotel Adjusted EBITDA to help the Company and
its investors evaluate the ongoing operating performance of the
Company’s consolidated hotels.
Hotel Adjusted EBITDA margin is calculated as Hotel Adjusted
EBITDA divided by total hotel revenue.
EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel
Adjusted EBITDA margin are not recognized terms under United States
(“U.S.”) GAAP and should not be considered as alternatives to net
income (loss) or other measures of financial performance or
liquidity derived in accordance with U.S. GAAP. In addition, the
Company’s definitions of EBITDA, Adjusted EBITDA, Hotel Adjusted
EBITDA and Hotel Adjusted EBITDA margin may not be comparable to
similarly titled measures of other companies.
The Company believes that EBITDA, Adjusted EBITDA, Hotel
Adjusted EBITDA and Hotel Adjusted EBITDA margin provide useful
information to investors about the Company and its financial
condition and results of operations for the following reasons: (i)
EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted
EBITDA margin are among the measures used by the Company’s
management team to make day-to-day operating decisions and evaluate
its operating performance between periods and between REITs by
removing the effect of its capital structure (primarily interest
expense) and asset base (primarily depreciation and amortization)
from its operating results; and (ii) EBITDA, Adjusted EBITDA, Hotel
Adjusted EBITDA and Hotel Adjusted EBITDA margin 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.
EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel
Adjusted EBITDA margin have limitations as analytical tools and
should not be considered either in isolation or as a substitute for
net income (loss) or other methods of analyzing the Company’s
operating performance and results as reported under U.S. GAAP.
Because of these limitations, EBITDA, Adjusted EBITDA and Hotel
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.
Nareit FFO attributable to stockholders, Adjusted FFO
attributable to stockholders Nareit FFO per share – diluted and
Adjusted FFO per share – diluted
Nareit FFO attributable to stockholders and Nareit FFO per
diluted share (defined as set forth below) are presented herein as
non-GAAP measures of the Company’s performance. The Company
calculates funds from (used in) operations (“FFO”) attributable to
stockholders for a given operating period in accordance with
standards established by the National Association of Real Estate
Investment Trusts (“Nareit”), as net income (loss) attributable to
stockholders (calculated in accordance with U.S. GAAP), excluding
depreciation and amortization, gains or losses on sales of assets,
impairment, and the cumulative effect of changes in accounting
principles, plus adjustments for unconsolidated joint ventures.
Adjustments for unconsolidated joint ventures are calculated to
reflect the Company’s pro rata share of the FFO of those entities
on the same basis. As noted by Nareit in its December 2018 “Nareit
Funds from Operations White Paper – 2018 Restatement,” since real
estate values historically have risen or fallen with market
conditions, many industry investors have considered presentation of
operating results for real estate companies that use historical
cost accounting to be insufficient by themselves. For these
reasons, Nareit adopted the FFO metric in order to promote an
industry-wide measure of REIT operating performance. The Company
believes Nareit FFO provides useful information to investors
regarding its operating performance and can facilitate comparisons
of operating performance between periods and between REITs. The
Company’s presentation may not be comparable to FFO reported by
other REITs that do not define the terms in accordance with the
current Nareit definition, or that interpret the current Nareit
definition differently. The Company calculates Nareit FFO per
diluted share as Nareit FFO divided by the number of fully diluted
shares outstanding during a given operating period.
The Company also presents Adjusted FFO attributable to
stockholders and Adjusted FFO per diluted share when evaluating its
performance because management believes that the exclusion of
certain additional items described below provides useful
supplemental information to investors regarding the Company’s
ongoing operating performance. Management historically has made the
adjustments detailed below in evaluating its performance and in its
annual budget process. Management believes that the presentation of
Adjusted FFO provides useful supplemental information that is
beneficial to an investor’s complete understanding of operating
performance. The Company adjusts Nareit FFO attributable to
stockholders for the following items, which may occur in any
period, and refers to this measure as Adjusted FFO attributable to
stockholders:
- Costs associated with hotel
acquisitions or dispositions expensed during the period;
- Severance expense;
- Share-based compensation expense; and
- Other items that management believes are not representative of
the Company’s current or future operating performance.
Net Debt
Net debt, presented herein, is a non-GAAP financial measure that
the Company uses to evaluate its financial leverage. Net debt is
calculated as (i) long-term debt, including current maturities and
excluding unamortized deferred financing costs; and (ii) the
Company’s share of investments in affiliate debt, excluding
unamortized deferred financing costs; reduced by (a) cash and cash
equivalents; and (b) restricted cash and cash equivalents.
The Company believes Net debt provides useful information about
its indebtedness to investors as it is frequently used by
securities analysts, investors and other interested parties to
compare the indebtedness of companies. Net debt should not be
considered as a substitute to debt presented in accordance with
U.S. GAAP. Net debt may not be comparable to a similarly titled
measure of other companies.
Occupancy
Occupancy represents the total number of room nights sold
divided by the total number of room nights available at a hotel or
group of hotels. Room nights available to guests have not been
adjusted for suspended or reduced operations at certain of Park’s
hotels as a result of COVID-19. Occupancy measures the utilization
of the Company’s hotels’ available capacity. Management uses
occupancy to gauge demand at a specific hotel or group of hotels in
a given period. Occupancy levels also help management determine
achievable Average Daily Rate (“ADR”) levels as demand for rooms
increases or decreases.
Average Daily Rate
ADR (or rate) represents rooms revenue divided by total number
of room nights sold in a given period. ADR measures average room
price attained by a hotel and ADR trends provide useful information
concerning the pricing environment and the nature of the customer
base of a hotel or group of hotels. ADR is a commonly used
performance measure in the hotel industry, and management uses ADR
to assess pricing levels that the Company is able to generate by
type of customer, as changes in rates have a more pronounced effect
on overall revenues and incremental profitability than changes in
occupancy, as described above.
Revenue per Available Room
Revenue per Available Room (“RevPAR”) represents rooms revenue
divided by the total number of room nights available to guests
for a given period. Room nights available to guests have not
been adjusted for suspended or reduced operations at certain of
Park’s hotels as a result of COVID-19. Management considers RevPAR
to be a meaningful indicator of the Company’s performance as it
provides a metric correlated to two primary and key factors of
operations at a hotel or group of hotels: occupancy and ADR. RevPAR
is also a useful indicator in measuring performance over comparable
periods.
Total RevPAR
Total RevPAR represents rooms, food and beverage and other hotel
revenues divided by the total number of room nights available
to guests for a given period. Room nights available to guests
have not been adjusted for suspended or reduced operations at
certain of Park’s hotels as a result of COVID-19. Management
considers Total RevPAR to be a meaningful indicator of the
Company’s performance as approximately one-third of revenues are
earned from food and beverage and other hotel revenues. Total
RevPAR is also a useful indicator in measuring performance over
comparable periods.
Investor
Contact |
Ian Weissman |
+ 1 571 302 5591 |
Park Hotels and Resorts (NYSE:PK)
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From Mar 2024 to Apr 2024
Park Hotels and Resorts (NYSE:PK)
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From Apr 2023 to Apr 2024