Park Hotels & Resorts Inc. (“Park” or the “Company”) (NYSE: PK)
today announced results for the third quarter ended
September 30, 2021 and provided an operational update on
COVID-19.
Third quarter financial highlights include:
- Pro-forma RevPAR was $105.48, an increase of 301.6% from the
same period in 2020 and a decrease of 43.4% from the same period in
2019;
- Pro-forma occupancy for Park’s 45 consolidated hotels open
during the entirety of the third quarter was 58.0%;
- Net loss and net loss attributable to stockholders were $(82)
million and $(86) million, respectively;
- Adjusted EBITDA was $77 million, an increase of 141% compared
to the second quarter of 2021;
- Pro-forma Hotel Adjusted EBITDA was $83 million, an improvement
of 96.5% compared to the second quarter of 2021;
- Adjusted FFO attributable to stockholders was $5 million, an
improvement of 112.2% compared to the second quarter of 2021;
- Diluted loss per share was $(0.36); and
- Diluted Adjusted FFO per share was $0.02.
Additional highlights for the third quarter
include:
- Reopened the New York Hilton Midtown in October 2021,
increasing to 96% of total room count and leaving just two hotels
in the portfolio suspended – Parc 55 San Francisco - a Hilton Hotel
and Hilton Short Hills;
- Generated positive Hotel Adjusted EBITDA, with 38 of 45 of
Park's open consolidated hotels exceeding break-even levels;
- Completed the sales of the Hotel Adagio, Autograph Collection,
and the Le Meridien San Francisco for total gross proceeds of
approximately $304 million; and
- Repaid $419 million of the term loan entered into in August
2019 ("2019 Term Facility") and fully repaid the remaining $13
million outstanding under the revolving credit facility
("Revolver"). Year-to-date 2021, the Company partially repaid $592
million of the 2019 Term Facility, leaving just $78 million
outstanding.
Thomas J. Baltimore, Jr., Chairman and Chief
Executive Officer, stated, “I am extremely proud of our continued
progress toward our strategic priorities for 2021. We reached
break-even at the corporate level for the third quarter – the first
time since the pandemic began – and celebrated the reopening of the
New York Hilton Midtown in early October. In addition, with the
completion of five hotel sales in 2021 totaling $477 million in
gross proceeds, we exceeded our stated asset sales target of
$300-$400 million and used the proceeds to de-leverage the balance
sheet. Additionally, we extended maturities for over $2 billion of
debt since the start of the pandemic and with current liquidity of
$1.8 billion, Park is well-positioned for future growth
opportunities. Despite the near-term impact of the Delta variant on
our industry, we remain encouraged by the overall progression of
the lodging industry's recovery and expect increasing demand trends
across all segments into 2022 across our portfolio, including group
business where bookings for 2022 increased for the fifth
consecutive quarter.”
Selected Statistical and Financial
Information
(unaudited, amounts in millions, except RevPAR,
ADR and per share data)
|
|
Three Months Ended
September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
Change(1) |
|
|
2021 |
|
|
2020 |
|
|
Change(1) |
|
Pro-forma RevPAR |
|
$ |
105.48 |
|
|
$ |
26.26 |
|
|
301.6 |
% |
|
$ |
75.32 |
|
|
$ |
56.14 |
|
|
|
34.2 |
% |
Pro-forma
Occupancy |
|
|
51.3 |
% |
|
|
19.1 |
% |
|
32.2 |
% pts |
|
|
40.1 |
% |
|
|
28.9 |
% |
|
|
11.2 |
% pts |
Pro-forma
ADR |
|
$ |
205.56 |
|
|
$ |
137.06 |
|
|
50.0 |
% |
|
$ |
187.71 |
|
|
$ |
194.25 |
|
|
|
(3.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro-forma
Total RevPAR |
|
$ |
157.52 |
|
|
$ |
35.69 |
|
|
341.4 |
% |
|
$ |
112.86 |
|
|
$ |
89.27 |
|
|
|
26.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss |
|
$ |
(82 |
) |
|
$ |
(276 |
) |
|
NM(2) |
|
|
$ |
(387 |
) |
|
$ |
(1,226 |
) |
|
NM(2) |
|
Net loss
attributable to stockholders |
|
$ |
(86 |
) |
|
$ |
(276 |
) |
|
NM(2) |
|
|
$ |
(392 |
) |
|
$ |
(1,223 |
) |
|
NM(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
$ |
77 |
|
|
$ |
(89 |
) |
|
NM(2) |
|
|
$ |
61 |
|
|
$ |
(129 |
) |
|
NM(2) |
|
Pro-forma
Hotel Adjusted EBITDA |
|
$ |
83 |
|
|
$ |
(72 |
) |
|
NM(2) |
|
|
$ |
94 |
|
|
$ |
(93 |
) |
|
NM(2) |
|
Pro-forma
Hotel Adjusted EBITDA margin |
|
|
20.6 |
% |
|
|
(79.1 |
)% |
|
NM(2) |
|
|
|
10.9 |
% |
|
|
(13.6 |
)% |
|
NM(2) |
|
Adjusted FFO
attributable to stockholders |
|
$ |
5 |
|
|
$ |
(147 |
) |
|
NM(2) |
|
|
$ |
(146 |
) |
|
$ |
(264 |
) |
|
NM(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per
share - Diluted(1) |
|
$ |
(0.36 |
) |
|
$ |
(1.17 |
) |
|
NM(2) |
|
|
$ |
(1.66 |
) |
|
$ |
(5.19 |
) |
|
NM(2) |
|
Adjusted FFO
per share - Diluted(1) |
|
$ |
0.02 |
|
|
$ |
(0.62 |
) |
|
NM(2) |
|
|
$ |
(0.62 |
) |
|
$ |
(1.12 |
) |
|
NM(2) |
|
Weighted
average shares outstanding - Diluted |
|
|
236 |
|
|
|
235 |
|
|
1 |
|
|
|
236 |
|
|
|
236 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts are calculated based on unrounded
numbers.(2) Percentage change is not meaningful.
Operational Update
Park reopened one hotel in October 2021,
increasing total rooms by 1,878 rooms. The timing of reopening
Park's remaining two suspended hotels will depend primarily on
demand recovery in their respective markets.
The current status of Park’s hotels as of November
3, 2021 is as follows (for a list of status by hotel please see
Park’s financial supplement):
Status |
|
Number of Hotels |
|
|
Total Rooms |
|
Consolidated Open |
|
|
46 |
|
|
|
26,551 |
|
Consolidated
Suspended |
|
|
2 |
|
|
|
1,338 |
|
Total
Consolidated |
|
|
48 |
|
|
|
27,889 |
|
Unconsolidated Open(1) |
|
|
6 |
|
|
|
4,036 |
|
Total
Hotels |
|
|
54 |
|
|
|
31,925 |
|
___________________________________________________
|
|
(1 |
) |
The ground
lease for the Embassy Suites Secaucus Meadowlands expired on
October 31, 2021 and the property was turned over to the ground
lessor on that date. |
Changes in Pro-forma ADR, Occupancy and RevPAR
compared to the same periods in 2020 and 2019 and Pro-forma
Occupancy for Park’s 48 consolidated hotels were as follows:
|
Change in Pro-forma ADR |
|
|
Change in Pro-forma Occupancy |
|
|
Change in Pro-forma RevPAR |
|
|
|
|
|
|
2021 vs. 2020 |
|
|
2021 vs. 2019 |
|
|
2021 vs. 2020 |
|
|
2021 vs. 2019 |
|
|
2021 vs. 2020 |
|
|
2021 vs. 2019 |
|
|
|
2021 Pro-forma Occupancy |
|
Q1 2021 |
|
(28.9 |
)% |
|
|
(30.6 |
)% |
|
|
(35.0 |
)%pts |
|
|
(50.7 |
)%pts |
|
|
(69.3 |
)% |
|
|
(76.2 |
)% |
|
|
|
26.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2021 |
|
44.8 |
|
|
|
(16.7 |
) |
|
|
36.1 |
|
|
|
(43.4 |
) |
|
|
897.0 |
|
|
|
(58.9 |
) |
|
|
|
42.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July
2021 |
|
45.3 |
|
|
|
— |
|
|
|
42.1 |
|
|
|
(29.0 |
) |
|
|
462.2 |
|
|
|
(33.7 |
) |
|
|
|
56.8 |
|
August
2021 |
|
52.0 |
|
|
|
(5.7 |
) |
|
|
29.3 |
|
|
|
(35.8 |
) |
|
|
269.4 |
|
|
|
(45.1 |
) |
|
|
|
49.7 |
|
September
2021 |
|
45.6 |
|
|
|
(16.6 |
) |
|
|
24.8 |
|
|
|
(34.4 |
) |
|
|
206.6 |
|
|
|
(51.8 |
) |
|
|
|
47.2 |
|
Q3 2021 |
|
50.0 |
|
|
|
(7.0 |
) |
|
|
32.2 |
|
|
|
(33.0 |
) |
|
|
301.6 |
|
|
|
(43.4 |
) |
|
|
|
51.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preliminary
October 2021 |
|
51.8 |
|
|
|
(13.8 |
) |
|
|
26.9 |
|
|
|
(34.3 |
) |
|
|
226.2 |
|
|
|
(48.8 |
) |
|
|
|
50.3 |
|
Changes in Pro-forma ADR, Occupancy and RevPAR for
certain periods in 2021 compared to the same periods in 2020 and
2019 and Pro-forma Occupancy for 2021 for only the consolidated
hotels open during the entirety of each period were as follows:
|
|
|
Change in Pro-forma ADR |
|
|
Change in Pro-forma Occupancy |
|
|
Change in Pro-forma RevPAR |
|
|
|
|
|
|
Number of Consolidated Hotels Open |
|
2021 vs. 2020 |
|
|
2021 vs. 2019 |
|
|
2021 vs. 2020 |
|
|
2021 vs. 2019 |
|
|
2021 vs. 2020 |
|
|
2021 vs. 2019 |
|
|
|
2021 Pro-forma
Occupancy |
|
Q1 2021 |
40 |
|
|
(28.3 |
)% |
|
|
(28.8 |
)% |
|
|
(27.2 |
)%pts |
|
|
(41.1 |
)%pts |
|
|
(58.5 |
)% |
|
|
(66.1 |
)% |
|
|
|
37.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2021 |
41 |
|
|
45.9 |
|
|
|
(11.1 |
) |
|
|
47.6 |
|
|
|
(28.5 |
) |
|
|
891.5 |
|
|
|
(41.1 |
) |
|
|
|
55.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July
2021 |
45 |
|
|
45.3 |
|
|
|
2.0 |
|
|
|
47.6 |
|
|
|
(20.8 |
) |
|
|
462.0 |
|
|
|
(22.9 |
) |
|
|
|
64.2 |
|
August
2021 |
45 |
|
|
52.0 |
|
|
|
(3.6 |
) |
|
|
33.1 |
|
|
|
(28.1 |
) |
|
|
269.5 |
|
|
|
(35.7 |
) |
|
|
|
56.2 |
|
September
2021 |
45 |
|
|
45.4 |
|
|
|
(12.4 |
) |
|
|
28.0 |
|
|
|
(26.8 |
) |
|
|
206.2 |
|
|
|
(41.7 |
) |
|
|
|
53.4 |
|
Q3 2021 |
45 |
|
|
49.9 |
|
|
|
(4.1 |
) |
|
|
36.3 |
|
|
|
(25.2 |
) |
|
|
301.5 |
|
|
|
(33.2 |
) |
|
|
|
58.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preliminary
October 2021 |
45 |
|
|
49.7 |
|
|
|
(11.3 |
) |
|
|
28.7 |
|
|
|
(28.2 |
) |
|
|
212.1 |
|
|
|
(41.3 |
) |
|
|
|
55.2 |
|
For the third quarter of 2021, Park’s portfolio
generated positive Hotel Adjusted EBITDA with 38 of 45 of Park’s
open consolidated hotels exceeding break-even levels.
Domestic leisure transient demand experienced some
disruption from the Delta variant beginning late August 2021
coupled with customary seasonal decline after significant growth
during the summer as COVID-19 vaccinations rates increased,
domestic restrictions eased and restrictions on international
travel continued. The Pro-forma Rooms Revenue mix for each of the
three and nine months ended September 30, 2021, 2020 and
2019 for the 45 consolidated hotels open during the entirety of the
third quarter of 2021 or 40 consolidated hotels open during the
entirety of the first nine months of 2021 were as follows:
|
|
Three Months Ended
September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Group |
|
|
13.1 |
% |
|
|
13.4 |
% |
|
|
26.2 |
% |
|
|
9.6 |
% |
|
|
26.5 |
% |
|
|
27.9 |
% |
Transient |
|
|
80.0 |
|
|
|
69.8 |
|
|
|
66.3 |
|
|
|
82.7 |
|
|
|
63.2 |
|
|
|
66.3 |
|
Contract |
|
|
5.0 |
|
|
|
14.9 |
|
|
|
5.4 |
|
|
|
5.9 |
|
|
|
8.1 |
|
|
|
3.8 |
|
Other |
|
|
1.9 |
|
|
|
1.9 |
|
|
|
2.1 |
|
|
|
1.8 |
|
|
|
2.2 |
|
|
|
2.0 |
|
The change in Pro-forma Rooms Revenue for the
three and nine months ended September 30, 2021 compared
to the same periods in 2019 for the 45 consolidated hotels open
during the entirety of the third quarter of 2021 or 40 consolidated
hotels open during the entirety of the first nine months of 2021
were as follows:
|
|
Three Months Ended
September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2021 vs. 2019 |
|
|
2021 vs. 2019 |
|
Group |
|
|
(67.1 |
)% |
|
|
(80.7 |
)% |
Transient |
|
|
(20.8 |
) |
|
|
(30.4 |
) |
Contract |
|
|
(40.1 |
) |
|
|
(14.0 |
) |
Other |
|
|
(39.7 |
) |
|
|
(52.3 |
) |
Group demand was tempered in the third quarter by
the increase in COVID-19 cases related to the Delta variant, and
certain markets have experienced attrition related to group
cancellations. Park expects to see a return of group demand
beginning in the second quarter of 2022 in select markets as groups
continued to push out meetings originally scheduled for the third
and fourth quarters of 2021 into 2022. Group bookings for 2022 have
increased each of the past five quarters, growing by nearly 260,000
room nights, or nearly 31%, since September 30, 2020 with
acceleration following the approval of COVID-19 vaccines for
emergency use in November 2020. As of September 30, 2021, 2022
group bookings are approximately 66% of what 2019 group bookings
were as of September 30, 2018, a slight decrease from last quarter
due to cancellations in Q1 2022 and a slowdown in bookings as a
result of concerns over the Delta variant. Despite this setback,
2022 average group rates on the books remain strong, exceeding 2019
average group rates on the books at September 30, 2018.
Highlights for Park's consolidated hotels owned as
of November 3, 2021 in each of the Company’s key markets, segmented
between leisure and other markets, are as follows:
Leisure Markets
- Hawaii: Both Hawaii hotels continued to
benefit from domestic leisure demand, generating positive Hotel
Adjusted EBITDA during the third quarter of 2021. Hilton Waikoloa
Village and Hilton Hawaiian Village achieved peak occupancy of 92%
and 91% in July 2021, respectively, and occupancy of 77% and 76%,
respectively, for the quarter. Rate increased by 25% at the Hilton
Waikoloa Village compared to the third quarter of 2019;
- Orlando: Park’s Orlando hotels continued to
benefit from strong leisure demand in July, resulting in peak
combined occupancy of 72% in July 2021 and combined occupancy of
49% for the quarter, while still achieving a 15% increase in rate
compared to the third quarter of 2019;
- New Orleans: The Hilton New Orleans Riverside
benefited from an increase in leisure demand and also experienced
an increase in occupancy to 74% in September from housing first
responders, displaced residents and others following Hurricane Ida
in late August. The hotel achieved occupancy of 50% for the
quarter;
- Southern California: Park’s hotels in Southern
California benefited from an increase in leisure demand during the
summer, resulting in peak occupancy of 81% in July 2021 and 74% for
the quarter, an increase of 7 percentage points from the second
quarter of 2021. Compared to the third quarter of 2019, rate
increased by 22%;
- Key West: Casa Marina, A Waldorf Astoria
Resort, and The Reach Key West, Curio Collection, continued to
benefit from leisure transient demand with peak combined occupancy
of 87% in July 2021 and 69% for the quarter. Compared to the third
quarter of 2019, occupancy increased by 10 percentage points and
rate increased by 60%; and
- Miami: Park’s Miami hotels benefited from
strong leisure transient demand in July. The hotels achieved peak
combined occupancy of 76% in July 2021 and 67% for the quarter.
Rate increased by 32% compared to the third quarter of 2019.
Other Markets
- San Francisco: Three of Park's four hotels in
the San Francisco market are open and achieved a combined occupancy
of 41% for the quarter. The JW Marriott San Francisco Union Square
and Hyatt Centric Fisherman's Wharf, both of which remained open
throughout the pandemic and benefited from strong transient demand
throughout the summer, achieved peak occupancy of 68% and 90% in
July 2021, respectively, and 67% and 84% for the quarter,
respectively, an increase of approximately 21 and 24 percentage
points, respectively, from the second quarter of 2021;
- Boston: Park’s Boston hotels benefited from
demand from airline crews coupled with strong leisure demand,
achieving peak combined occupancy of 72% in August 2021 and 69% for
the quarter, an increase of 24 percentage points from the second
quarter of 2021;
- New York: The New York Hilton Midtown
reopened in October 2021 and preliminary results were strong, with
preliminary rate that was 96% of October 2019 and better than
expected local group and catering revenue, including a 1,300-person
event;
- Chicago: Park's five hotels in Chicago
achieved a combined occupancy of 39% for the quarter and a combined
average rate that was just 8% below the combined average rate
achieved for the third quarter 2019. In particular, the Hilton
Chicago Downtown saw only a 1% decrease in rate versus the third
quarter of 2019, mostly due to strong group and leisure demand in
July;
- Denver: The Hilton Denver benefited from a
sporting-related group event in July, which resulted in occupancy
of 77% in July 2021. Occupancy for the quarter was 68%, an increase
of 18 percentage points from the second quarter of 2021, and rate
declined by just 4% versus the same period in 2019;
- Washington, D.C.: Park’s hotels in the
Washington, D.C. market benefited primarily from leisure demand,
with peak combined occupancy of 46% for August 2021 and 43% for the
quarter, an increase of 13 percentage points from the second
quarter of 2021; and
- Seattle: Park’s Seattle hotels benefited from
demand from airline crews and strong summer leisure travel with
peak combined occupancy of 66% in July 2021 and 61% for the
quarter, an increase of 10 percentage points from the second
quarter of 2021.
Balance Sheet and Liquidity
Park and its hotel managers have taken several
proactive steps to reduce the Company's burn rate, increase
liquidity and mitigate the effects of COVID-19 on its business,
including reducing labor and other operating expenses and cutting
forecasted expenditures for 2021 to approximately $56 million for
maintenance projects. As a result of these measures, coupled with
expected continued leisure demand and the continued distribution of
COVID-19 vaccines, Park's portfolio generated positive Hotel
Adjusted EBITDA and Park achieved break-even results at the
corporate level during the third quarter.
Park’s Net Debt as of September 30, 2021 was
$4.1 billion. Utilizing the net proceeds from the issuance of the
2029 Senior Secured Notes and the sales of five hotels during 2021
to repay outstanding debt, the Company has just $78 million
outstanding on its sole remaining corporate term loan. Park's
current liquidity is over $1.8 billion, including $1.075 billion of
available capacity under the Company's Revolver.
Park had the following debt outstanding as of
September 30, 2021:
(unaudited, dollars in millions) |
|
|
|
|
|
Debt |
|
Collateral |
|
Interest Rate |
|
Maturity Date |
|
As of September 30, 2021 |
|
Fixed Rate Debt |
|
|
|
|
|
|
|
|
|
Mortgage loan |
|
DoubleTree Hotel Spokane City Center |
|
3.62% |
|
July 2026 |
|
$ |
14 |
|
Mortgage loan |
|
Hilton Denver City Center |
|
4.90% |
|
August 2022(1) |
|
|
58 |
|
Mortgage loan |
|
Hilton Checkers Los Angeles |
|
4.11% |
|
March 2023 |
|
|
27 |
|
Mortgage loan |
|
W Chicago - City Center |
|
8.25% |
|
August 2023(2) |
|
|
75 |
|
Commercial mortgage-backed securities 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 |
|
|
136 |
|
Commercial mortgage-backed securities loan |
|
Hilton Hawaiian Village Beach Resort |
|
4.20% |
|
November 2026 |
|
|
1,275 |
|
Mortgage loan |
|
Hilton Santa Barbara Beachfront Resort |
|
4.17% |
|
December 2026 |
|
|
165 |
|
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 |
|
Finance lease obligations |
|
|
|
3.07% |
|
2021 to 2022 |
|
|
— |
|
Total Fixed Rate Debt |
|
|
|
5.10%(3) |
|
|
|
|
4,600 |
|
|
|
|
|
|
|
|
|
|
|
Variable Rate Debt |
|
|
|
|
|
|
|
|
|
Revolving credit facility(4)(5) |
|
Unsecured |
|
L + 3.00% |
|
2021 to 2023 |
|
|
— |
|
Mortgage loan |
|
DoubleTree Hotel Ontario Airport |
|
L + 3.00% |
|
May 2022 |
|
|
30 |
|
2019 Term Facility(4)(6) |
|
Unsecured |
|
L + 2.65% |
|
August 2024 |
|
|
78 |
|
Total Variable Rate Debt |
|
|
|
3.25%(3) |
|
|
|
|
108 |
|
|
|
|
|
|
|
|
|
|
|
Add:
unamortized premium |
|
|
|
|
|
|
|
|
3 |
|
Less: unamortized deferred financing costs and discount |
|
|
|
|
|
|
(41 |
) |
Total Debt(7) |
|
|
|
5.08%(3) |
|
|
|
$ |
4,670 |
|
(1) The loan matures in August 2042 but is callable by the
lender beginning August 2022.(2) In January 2021, Park ceased
making debt service payments toward the $75 million mortgage loan
secured by the W Chicago City Center and has received a notice of
an event of default. The default interest rate on the loan is
8.25%, and the stated interest rate is 4.25%. While Park hopes to
negotiate an amendment with the lender, there can be no assurances
that an agreement will be reached.(3) Calculated on a weighted
average basis.(4) In May 2020, Park amended its credit and
term loan facilities to add a LIBOR floor of 25 basis
points.(5) In September 2020, Park increased its aggregate
commitments under the Revolver by $75 million to $1.075 billion and
extended the maturity date with respect to $901 million of the
aggregate commitments for two years to December 2023, including all
$75 million of the increased Revolver commitments. The maturity
date for the remaining $174 million of commitments under the
Revolver is December 2021. In July 2021, Park fully repaid the
outstanding balance of the Revolver with net proceeds from the sale
of the Hotel Indigo San Diego Gaslamp Quarter and Courtyard
Washington Capitol Hill Navy Yard.(6) Following the sales of
the Hotel Indigo San Diego Gaslamp Quarter and Courtyard Washington
Capitol Hill Navy Yard in June 2021, the Hotel Adagio, Autograph
Collection in July 2021 and the Le Meridien San Francisco in August
2021, Park repaid $419 million of the 2019 Term Facility during the
third quarter.(7) Excludes $225 million of Park’s share of
debt of its unconsolidated joint ventures.
Dividends
In light of the COVID-19 pandemic, Park suspended
dividend payments following the payment of its first quarter 2020
dividend.
Full-Year 2021 Outlook
Given the continued economic uncertainty, travel
restrictions and rapidly changing circumstances related to the
COVID-19 pandemic, Park is not providing an outlook for full-year
2021 at this time.
The Company’s ability to predict future operating
results remains significantly impacted by the current COVID-19
pandemic. Park expects that the trends affecting the economy will
continue to depress hotel operating results across the portfolio.
While recent trends have shown signs of improvement, the economic
environment continues to lack sufficient clarity at this time to
provide accurate guidance.
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 third quarter 2021 results on
November 4, 2021 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’ Third
Quarter 2021 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 the expected reopening
dates for the Company’s hotels and dates that its properties 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 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 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. COVID-19 has
significantly affected the Company’s business, and the extent to
which COVID-19 continues to affect the Company, its hotel managers,
tenants and guests at the Company’s hotels will depend on future
developments, which are highly uncertain and cannot be predicted
with confidence, including the scope, severity and duration of the
pandemic, the actions taken to contain the pandemic or mitigate its
effect, the emergence of virus variants, the efficacy, availability
and deployment of vaccinations and other treatments to combat
COVID-19, including public adoption rates of COVID-19 vaccines,
additional closures that may be mandated or advisable even after
the reopening of certain of the Company’s hotels on a limited
basis, whether due to an increased number of COVID-19 cases or
otherwise, and the direct and indirect economic effects of the
pandemic and containment measures, among others. Moreover,
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, 2020 as being heightened as a
result of the ongoing and numerous adverse impacts 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,
2020, 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 54 premium-branded hotels and resorts with
approximately 32,000 rooms primarily located in prime city center
and resort locations. Visit www.pkhotelsandresorts.com for
more information.
Investor Contact |
Ian
Weissman |
+ 1 571 302
5591 |
PARK HOTELS & RESORTS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in millions, except share and per share
data)
|
|
September 30, 2021 |
|
|
December 31, 2020 |
|
|
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
Property and equipment, net |
|
$ |
8,549 |
|
|
|
9,193 |
|
Investments in affiliates |
|
|
14 |
|
|
|
14 |
|
Intangibles, net |
|
|
44 |
|
|
|
45 |
|
Cash and cash equivalents |
|
|
772 |
|
|
|
951 |
|
Restricted cash |
|
|
70 |
|
|
|
30 |
|
Accounts receivable, net of allowance for doubtful accounts of $2
and $3 |
|
|
62 |
|
|
|
26 |
|
Prepaid expenses |
|
|
34 |
|
|
|
39 |
|
Other assets |
|
|
34 |
|
|
|
60 |
|
Operating lease right-of-use assets |
|
|
215 |
|
|
|
229 |
|
TOTAL ASSETS (variable interest entities - $239 and
$229) |
|
$ |
9,794 |
|
|
$ |
10,587 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Debt |
|
$ |
4,670 |
|
|
|
5,121 |
|
Accounts payable and accrued expenses |
|
|
204 |
|
|
|
147 |
|
Due to hotel managers |
|
|
96 |
|
|
|
88 |
|
Deferred income tax liabilities |
|
|
9 |
|
|
|
10 |
|
Other liabilities |
|
|
115 |
|
|
|
134 |
|
Operating lease liabilities |
|
|
232 |
|
|
|
244 |
|
Total liabilities (variable interest entities - $218 and $213) |
|
|
5,326 |
|
|
|
5,744 |
|
Stockholders' Equity |
|
|
|
|
|
|
|
|
Common stock, par value $0.01 per share, 6,000,000,000 shares
authorized, 236,884,447 shares issued and 236,479,696 shares
outstanding as of September 30, 2021 and 236,217,344 shares issued
and 235,915,749 shares outstanding as of December 31, 2020 |
|
|
2 |
|
|
|
2 |
|
Additional paid-in capital |
|
|
4,529 |
|
|
|
4,519 |
|
(Accumulated deficit) retained earnings |
|
|
(16 |
) |
|
|
376 |
|
Accumulated other comprehensive loss |
|
|
— |
|
|
|
(4 |
) |
Total stockholders' equity |
|
|
4,515 |
|
|
|
4,893 |
|
Noncontrolling interests |
|
|
(47 |
) |
|
|
(50 |
) |
Total equity |
|
|
4,468 |
|
|
|
4,843 |
|
TOTAL LIABILITIES AND EQUITY |
|
$ |
9,794 |
|
|
$ |
10,587 |
|
PARK HOTELS & RESORTS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in millions, except per share
data)
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
274 |
|
|
$ |
70 |
|
|
$ |
587 |
|
|
$ |
453 |
|
Food and beverage |
|
|
76 |
|
|
|
10 |
|
|
|
152 |
|
|
|
174 |
|
Ancillary hotel |
|
|
58 |
|
|
|
15 |
|
|
|
137 |
|
|
|
87 |
|
Other |
|
|
15 |
|
|
|
3 |
|
|
|
35 |
|
|
|
25 |
|
Total revenues |
|
|
423 |
|
|
|
98 |
|
|
|
911 |
|
|
|
739 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
|
76 |
|
|
|
30 |
|
|
|
170 |
|
|
|
162 |
|
Food and beverage |
|
|
63 |
|
|
|
18 |
|
|
|
126 |
|
|
|
155 |
|
Other departmental and support |
|
|
119 |
|
|
|
64 |
|
|
|
298 |
|
|
|
296 |
|
Other property-level |
|
|
51 |
|
|
|
84 |
|
|
|
151 |
|
|
|
200 |
|
Management fees |
|
|
19 |
|
|
|
2 |
|
|
|
40 |
|
|
|
27 |
|
Impairment and casualty loss, net |
|
|
2 |
|
|
|
2 |
|
|
|
7 |
|
|
|
696 |
|
Depreciation and amortization |
|
|
68 |
|
|
|
75 |
|
|
|
213 |
|
|
|
225 |
|
Corporate general and administrative |
|
|
14 |
|
|
|
13 |
|
|
|
48 |
|
|
|
42 |
|
Acquisition costs |
|
|
— |
|
|
|
9 |
|
|
|
— |
|
|
|
10 |
|
Other |
|
|
14 |
|
|
|
6 |
|
|
|
34 |
|
|
|
31 |
|
Total expenses |
|
|
426 |
|
|
|
303 |
|
|
|
1,087 |
|
|
|
1,844 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) gain on sales of assets, net |
|
|
(11 |
) |
|
|
(1 |
) |
|
|
(5 |
) |
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(14 |
) |
|
|
(206 |
) |
|
|
(181 |
) |
|
|
(1,043 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
2 |
|
Interest expense |
|
|
(66 |
) |
|
|
(59 |
) |
|
|
(195 |
) |
|
|
(149 |
) |
Equity in losses from investments in affiliates |
|
|
— |
|
|
|
(7 |
) |
|
|
(6 |
) |
|
|
(16 |
) |
Other loss, net |
|
|
(5 |
) |
|
|
(3 |
) |
|
|
(7 |
) |
|
|
(6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
before income taxes |
|
|
(85 |
) |
|
|
(275 |
) |
|
|
(389 |
) |
|
|
(1,212 |
) |
Income tax benefit (expense) |
|
|
3 |
|
|
|
(1 |
) |
|
|
2 |
|
|
|
(14 |
) |
Net
loss |
|
|
(82 |
) |
|
|
(276 |
) |
|
|
(387 |
) |
|
|
(1,226 |
) |
Net
(income) loss attributable to noncontrolling
interests |
|
|
(4 |
) |
|
— |
|
|
|
(5 |
) |
|
|
3 |
|
Net
loss attributable to stockholders |
|
$ |
(86 |
) |
|
$ |
(276 |
) |
|
$ |
(392 |
) |
|
$ |
(1,223 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share – Basic |
|
$ |
(0.36 |
) |
|
$ |
(1.17 |
) |
|
$ |
(1.66 |
) |
|
$ |
(5.19 |
) |
Loss per share – Diluted |
|
$ |
(0.36 |
) |
|
$ |
(1.17 |
) |
|
$ |
(1.66 |
) |
|
$ |
(5,19 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding – Basic |
|
|
236 |
|
|
|
235 |
|
|
|
236 |
|
|
|
236 |
|
Weighted average shares outstanding – Diluted |
|
|
236 |
|
|
|
235 |
|
|
|
236 |
|
|
|
236 |
|
PARK HOTELS & RESORTS INC.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
EBITDA AND ADJUSTED EBITDA
(unaudited,
in millions) |
|
Three Months Ended
September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Net loss |
|
$ |
(82 |
) |
|
$ |
(276 |
) |
|
$ |
(387 |
) |
|
$ |
(1,226 |
) |
Depreciation and amortization expense |
|
|
68 |
|
|
|
75 |
|
|
|
213 |
|
|
|
225 |
|
Interest income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
Interest expense |
|
|
66 |
|
|
|
59 |
|
|
|
195 |
|
|
|
149 |
|
Income tax (benefit) expense |
|
|
(3 |
) |
|
|
1 |
|
|
|
(2 |
) |
|
|
14 |
|
Interest expense, income tax and depreciation and amortization
included in equity in earnings from investments in affiliates |
|
|
3 |
|
|
|
2 |
|
|
|
8 |
|
|
|
11 |
|
EBITDA |
|
|
52 |
|
|
|
(139 |
) |
|
|
27 |
|
|
|
(829 |
) |
Loss (gain) on sales of assets, net |
|
|
11 |
|
|
|
1 |
|
|
|
5 |
|
|
|
(62 |
) |
Acquisition costs |
|
|
— |
|
|
|
9 |
|
|
|
— |
|
|
|
10 |
|
Severance expense |
|
|
— |
|
|
|
24 |
|
|
|
— |
|
|
|
26 |
|
Share-based compensation expense |
|
|
5 |
|
|
|
4 |
|
|
|
15 |
|
|
|
10 |
|
Impairment and casualty loss, net |
|
|
2 |
|
|
|
2 |
|
|
|
7 |
|
|
|
696 |
|
Other items |
|
|
7 |
|
|
|
10 |
|
|
|
7 |
|
|
|
20 |
|
Adjusted EBITDA |
|
$ |
77 |
|
|
$ |
(89 |
) |
|
$ |
61 |
|
|
$ |
(129 |
) |
PARK HOTELS & RESORTS INC.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
PRO-FORMA HOTEL ADJUSTED EBITDA AND
PRO-FORMA HOTEL ADJUSTED EBITDA MARGIN
(unaudited,
dollars in millions) |
|
Three Months
Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Adjusted EBITDA |
|
$ |
77 |
|
|
$ |
(89 |
) |
|
$ |
61 |
|
|
$ |
(129 |
) |
Less: Adjusted EBITDA from investments in affiliates |
|
|
(4 |
) |
|
|
2 |
|
|
|
(4 |
) |
|
|
2 |
|
Add: All other(1) |
|
|
11 |
|
|
|
11 |
|
|
|
33 |
|
|
|
34 |
|
Hotel Adjusted EBITDA |
|
|
84 |
|
|
|
(76 |
) |
|
|
90 |
|
|
|
(93 |
) |
Less: Adjusted EBITDA from hotels disposed of |
|
|
(1 |
) |
|
|
4 |
|
|
|
4 |
|
|
|
— |
|
Pro-forma Hotel Adjusted EBITDA |
|
$ |
83 |
|
|
$ |
(72 |
) |
|
$ |
94 |
|
|
$ |
(93 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Total Revenues |
|
$ |
423 |
|
|
$ |
98 |
|
|
$ |
911 |
|
|
$ |
739 |
|
Less: Other revenue |
|
|
(15 |
) |
|
|
(3 |
) |
|
|
(35 |
) |
|
|
(25 |
) |
Less: Revenues from hotels disposed of |
|
|
(4 |
) |
|
|
(3 |
) |
|
|
(17 |
) |
|
|
(32 |
) |
Pro-forma Hotel Revenues |
|
$ |
404 |
|
|
$ |
92 |
|
|
$ |
859 |
|
|
$ |
682 |
|
|
|
Three Months
Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
Change(2) |
|
|
2021 |
|
|
2020 |
|
|
Change(2) |
|
Pro-forma Hotel Revenues |
|
$ |
404 |
|
|
$ |
92 |
|
|
|
341.4 |
% |
|
$ |
859 |
|
|
$ |
682 |
|
|
|
26.0 |
% |
Pro-forma
Hotel Adjusted EBITDA |
|
$ |
83 |
|
|
$ |
(72 |
) |
|
NM(3) |
|
|
$ |
94 |
|
|
$ |
(93 |
) |
|
NM(3) |
|
Pro-forma
Hotel Adjusted EBITDA margin(2) |
|
|
20.6 |
% |
|
|
(79.1 |
)% |
|
NM(3) |
|
|
|
10.9 |
% |
|
|
(13.6 |
)% |
|
NM(3) |
|
__________________________________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
|
(3) Percentage change
is not meaningful. |
|
|
|
|
|
|
|
PARK HOTELS & RESORTS INC.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
NAREIT FFO AND ADJUSTED FFO
(unaudited, in millions, except per share
data)
|
|
Three Months Ended
September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Net loss attributable to stockholders |
|
$ |
(86 |
) |
|
$ |
(276 |
) |
|
$ |
(392 |
) |
|
$ |
(1,223 |
) |
Depreciation and amortization expense |
|
|
68 |
|
|
|
75 |
|
|
|
213 |
|
|
|
225 |
|
Depreciation and amortization expense attributable to
noncontrolling interests |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
(3 |
) |
Loss (gain) on sales of assets, net |
|
|
11 |
|
|
|
1 |
|
|
|
5 |
|
|
|
(62 |
) |
Gain on sale of investments in affiliates(1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
Impairment loss |
|
|
— |
|
|
|
2 |
|
|
|
5 |
|
|
|
697 |
|
Equity investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Equity in losses from investments in affiliates |
|
|
— |
|
|
|
7 |
|
|
|
6 |
|
|
|
16 |
|
Pro rata FFO of investments in affiliates |
|
|
3 |
|
|
|
(3 |
) |
|
|
1 |
|
|
|
(6 |
) |
Nareit FFO attributable to stockholders |
|
|
(5 |
) |
|
|
(195 |
) |
|
|
(165 |
) |
|
|
(357 |
) |
Casualty loss (gain), net |
|
|
2 |
|
|
|
— |
|
|
|
2 |
|
|
|
(1 |
) |
Severance expense |
|
|
— |
|
|
|
24 |
|
|
|
— |
|
|
|
26 |
|
Acquisition costs |
|
|
— |
|
|
|
9 |
|
|
|
— |
|
|
|
10 |
|
Share-based compensation expense |
|
|
5 |
|
|
|
4 |
|
|
|
15 |
|
|
|
10 |
|
Other items(2) |
|
|
3 |
|
|
|
11 |
|
|
|
2 |
|
|
|
48 |
|
Adjusted FFO attributable to stockholders |
|
$ |
5 |
|
|
$ |
(147 |
) |
|
$ |
(146 |
) |
|
$ |
(264 |
) |
Nareit FFO per share – Diluted(3) |
|
$ |
(0.02 |
) |
|
$ |
(0.83 |
) |
|
$ |
(0.70 |
) |
|
$ |
(1.52 |
) |
Adjusted FFO per share – Diluted(3) |
|
$ |
0.02 |
|
|
$ |
(0.62 |
) |
|
$ |
(0.62 |
) |
|
$ |
(1.12 |
) |
Weighted average shares outstanding – Diluted |
|
|
236 |
|
|
|
235 |
|
|
|
236 |
|
|
|
236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Included in other loss, net in the condensed
consolidated statements of operations.(2) The nine months ended
September 30, 2020 includes $30 million of tax expense on hotels
sold during the period.(3) Per share amounts are calculated based
on unrounded numbers.
PARK HOTELS & RESORTS INC.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
NET DEBT
(unaudited,
in millions) |
|
|
|
|
|
September 30, 2021 |
|
Debt |
|
$ |
4,670 |
|
Add:
unamortized deferred financing costs and discount |
|
|
41 |
|
Less:
unamortized premium |
|
|
(3 |
) |
Long-term debt, including current maturities and excluding
unamortized deferred financing cost, premiums and discounts |
|
|
4,708 |
|
Add: Park's
share of unconsolidated affiliates debt, excluding unamortized
deferred financing costs |
|
|
225 |
|
Less: cash
and cash equivalents |
|
|
(772 |
) |
Less:
restricted cash |
|
|
(70 |
) |
Net
debt |
|
$ |
4,091 |
|
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
November 3, 2021 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.
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;
- 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 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.
Park Hotels and Resorts (NYSE:PK)
Historical Stock Chart
From Apr 2024 to May 2024
Park Hotels and Resorts (NYSE:PK)
Historical Stock Chart
From May 2023 to May 2024