Park Hotels & Resorts Inc. Reports Second Quarter 2024 Results
Park Hotels & Resorts Inc. (NYSE: PK) reported positive second quarter 2024 results, with Comparable RevPAR growth of 2% year-over-year. Key highlights include:
- Net income of $67 million, up 145.9% from Q2 2023
- Comparable Hotel Adjusted EBITDA of $199 million, up 3.4%
- Adjusted FFO per share of $0.65, up 8.3%
The company saw strong group and leisure demand in key markets like Boston, Miami, and New York. Group demand is improving, with 2024 Comparable Group Revenue Pace up nearly 10%. Park continued its capital allocation strategy by refinancing $650 million in senior notes, advancing non-core asset sales, and repurchasing 1.7 million shares for $25 million.
Park maintained a strong liquidity position of $1.4 billion and declared a Q3 2024 dividend of $0.25 per share. The company revised its full-year 2024 outlook, projecting Comparable RevPAR growth of 3.5% to 4.5% and Adjusted FFO per share of $2.10 to $2.26.
Park Hotels & Resorts Inc. (NYSE: PK) ha riportato risultati positivi per il secondo trimestre 2024, con una crescita del RevPAR comparabile del 2% rispetto all'anno precedente. I punti salienti includono:
- Reddito netto di $67 milioni, in aumento del 145,9% rispetto al Q2 2023
- EBITDA Adjusted degli hotel comparabili di $199 milioni, in aumento del 3,4%
- FFO Adjusted per azione di $0,65, in aumento dell'8,3%
La società ha registrato una forte domanda da gruppi e turisti in mercati chiave come Boston, Miami e New York. La domanda di gruppi è in miglioramento, con un aumento quasi del 10% nel Pacchetto dei Ricavi Comparabili dei Gruppi del 2024. Park ha continuato la sua strategia di allocazione del capitale rifinanziando $650 milioni in note senior, avanzando nella vendita di attivi non core e riacquistando 1,7 milioni di azioni per $25 milioni.
Park ha mantenuto una solida posizione di liquidità di $1,4 miliardi e ha dichiarato un dividendo per il Q3 2024 di $0,25 per azione. L'azienda ha rivisto le sue previsioni per l'intero anno 2024, proiettando una crescita del RevPAR comparabile dal 3,5% al 4,5% e un FFO Adjusted per azione da $2,10 a $2,26.
Park Hotels & Resorts Inc. (NYSE: PK) reportó resultados positivos para el segundo trimestre de 2024, con un crecimiento del RevPAR comparable del 2% en comparación con el año anterior. Los puntos destacados incluyen:
- Ingresos netos de $67 millones, un aumento del 145.9% respecto al Q2 2023
- EBITDA ajustado de hoteles comparables de $199 millones, un incremento del 3.4%
- FFO ajustado por acción de $0.65, un aumento del 8.3%
La compañía vio una fuerte demanda de grupos y de ocio en mercados clave como Boston, Miami y Nueva York. La demanda de grupos está mejorando, con un aumento de casi el 10% en el Ritmo de Ingresos Comparables de Grupos 2024. Park continuó su estrategia de asignación de capital refinanciando $650 millones en notas senior, avanzando en la venta de activos no estratégicos y recomprando 1.7 millones de acciones por $25 millones.
Park mantuvo una fuerte posición de liquidez de $1.4 mil millones y declaró un dividendo de $0.25 por acción para el Q3 2024. La compañía revisó su pronóstico para todo el año 2024, proyectando un crecimiento del RevPAR comparable del 3.5% al 4.5% y un FFO ajustado por acción de $2.10 a $2.26.
Park Hotels & Resorts Inc. (NYSE: PK)는 2024년 2분기 긍정적인 실적을 발표했습니다, 전년 대비 2%의 비교 가능한 RevPAR 성장률을 기록했습니다. 주요 하이라이트는 다음과 같습니다:
- 순이익 6,700만 달러, 2023년 2분기 대비 145.9% 증가
- 비교 가능한 호텔 조정 EBITDA 1억 9,900만 달러, 3.4% 증가
- 주당 조정 FFO 0.65달러, 8.3% 증가
회사는 보스턴, 마이애미, 뉴욕과 같은 주요 마켓에서 강력한 그룹 및 레저 수요를 보았습니다. 그룹 수요는 개선되고 있으며, 2024년 비교 가능한 그룹 수익의 페이스가 거의 10% 증가했습니다. Park는 $6억 5천만 달러의 시니어 노트를 재융자하고 비핵심 자산 매각을 진행하며 $2천 5백만 달러에 170만 주를 재매입하며 자본 배분 전략을 지속했습니다.
Park는 14억 달러의 강력한 유동성 위치를 유지하고 있으며, 2024년 3분기 주당 0.25달러의 배당금을 선언했습니다. 회사는 2024년 전체 전망을 수정하여 비교 가능한 RevPAR 성장률을 3.5%에서 4.5%로, 주당 조정 FFO를 2.10달러에서 2.26달러로 예상했습니다.
Park Hotels & Resorts Inc. (NYSE: PK) a annoncé des résultats positifs pour le deuxième trimestre 2024, avec une croissance du RevPAR comparable de 2% par rapport à l'année précédente. Les points forts comprennent :
- Un revenu net de 67 millions de dollars, en hausse de 145,9 % par rapport au Q2 2023
- EBITDA ajusté des hôtels comparables de 199 millions de dollars, en hausse de 3,4 %
- FFO ajusté par action de 0,65 dollar, en hausse de 8,3 %
L'entreprise a vu une forte demande de groupes et de loisirs sur des marchés clés comme Boston, Miami et New York. La demande de groupes s'améliore, avec un rythme de revenus comparables des groupes en hausse de près de 10 % pour 2024. Park a poursuivi sa stratégie d'allocation de capital en refinançant 650 millions de dollars de billets seniors, en avançant dans la vente d'actifs non essentiels et en rachetant 1,7 million d'actions pour 25 millions de dollars.
Park a maintenu une forte position de liquidité de 1,4 milliard de dollars et a déclaré un dividende de 0,25 dollar par action pour le Q3 2024. La société a révisé ses prévisions pour l'année entière 2024, projetant une croissance du RevPAR comparable de 3,5 % à 4,5 % et un FFO ajusté par action de 2,10 à 2,26 dollars.
Park Hotels & Resorts Inc. (NYSE: PK) meldete positive Ergebnisse für das zweite Quartal 2024, mit einem Vergleichbaren RevPAR-Wachstum von 2% im Jahresvergleich. Zu den wichtigsten Highlights gehören:
- Nettogewinn von 67 Millionen US-Dollar, ein Anstieg um 145,9% im Vergleich zum Q2 2023
- Vergleichbares Hotel Adjusted EBITDA von 199 Millionen US-Dollar, ein Anstieg um 3,4%
- Adjustierter FFO pro Aktie von 0,65 US-Dollar, ein Anstieg von 8,3%
Das Unternehmen verzeichnete starke Nachfrage aus Gruppen und im Freizeitsektor in wichtigen Märkten wie Boston, Miami und New York. Die Gruppennachfrage verbessert sich, wobei der Vergleichbare Gruppenerlös des Jahres 2024 um fast 10% gestiegen ist. Park setzte seine Kapitalallokationsstrategie fort, indem es 650 Millionen US-Dollar in Senior Notes refinanzierte, den Verkauf von Nicht-Kernvermögen vorantrieb und 1,7 Millionen Aktien für 25 Millionen US-Dollar zurückkaufte.
Park hielt eine starke Liquiditätsposition von 1,4 Milliarden US-Dollar aufrecht und erklärte eine Dividende von 0,25 US-Dollar pro Aktie für das Q3 2024. Das Unternehmen überarbeitete seinen Ausblick für das Gesamtjahr 2024 und prognostizierte ein Vergleichbares RevPAR-Wachstum von 3,5% bis 4,5% sowie einen Adjustierten FFO pro Aktie von 2,10 bis 2,26 US-Dollar.
- Comparable RevPAR growth of 2% year-over-year in Q2 2024
- Net income increased by 145.9% to $67 million compared to Q2 2023
- Comparable Hotel Adjusted EBITDA grew 3.4% to $199 million
- Adjusted FFO per share increased 8.3% to $0.65
- 2024 Comparable Group Revenue Pace up nearly 10% year-over-year
- Strong liquidity position of $1.4 billion
- Declared Q3 2024 dividend of $0.25 per share
- Revised full-year 2024 Comparable RevPAR growth outlook to 3.5%-4.5%, down from previous 4.0%-5.5% forecast
- Permanent closure of Hilton Oakland Airport planned for Q3 2024, which incurred a $3 million EBITDA loss in the trailing twelve months
- Ongoing default interest and late payment fees of $60 million associated with SF Mortgage Loan default
Insights
Park Hotels & Resorts' Q2 2024 results demonstrate a solid performance with some notable highlights:
- Comparable RevPAR grew
2.0% year-over-year to$194.90 , driven by a1.8% increase in ADR to$252.90 . - Net income of
$67 million , a significant improvement from a loss of$146 million in Q2 2023. - Adjusted EBITDA increased
3.2% to$193 million . - Adjusted FFO per share rose
8.3% to$0.65 .
The company's strategic investments in Key West and Orlando are paying off, with strong performance in these markets. Group demand is showing promising signs, with 2024 Comparable Group Revenue Pace up nearly
Park's balance sheet remains solid with
However, investors should note some potential headwinds:
- The permanent closure of Hilton Oakland Airport, which had been incurring losses.
- Slight declines in RevPAR in some markets like Hawaii, New Orleans and San Francisco.
- Ongoing economic uncertainties that could impact travel demand.
Overall, Park's Q2 results and full-year outlook suggest a cautiously optimistic view for investors, with the company well-positioned to capitalize on the recovering travel market while maintaining financial flexibility.
Park Hotels & Resorts' Q2 2024 results reflect the ongoing recovery in the hospitality sector, with some interesting trends:
- The group segment is showing strong signs of recovery, with Comparable group revenues up nearly
8% year-over-year. This is particularly evident in urban markets like Boston and New York. - Resort properties continue to outperform, with RevPAR growth of over
2% . The Casa Marina Key West's performance post-renovation is especially noteworthy, with a215% RevPAR increase. - The business travel segment is accelerating, contributing to the overall recovery.
The company's strategic focus on renovations and property enhancements appears to be paying off, particularly in key markets like Orlando and Key West. The Bonnet Creek Orlando complex, for instance, saw significant RevPAR increases following renovations.
Looking ahead, the group booking pace for 2024 and 2025 is encouraging, with increases in both revenue and room nights. This suggests a potential for sustained recovery in the group segment, which is important for many of Park's urban properties.
However, the decision to permanently close the Hilton Oakland Airport highlights the ongoing challenges in certain markets and property types. This move aligns with the industry trend of reassessing and optimizing portfolios in the post-pandemic landscape.
The varying performance across different markets (e.g., strong in Boston and Key West, weaker in Hawaii and New Orleans) underscores the uneven nature of the recovery in the hotel industry. Investors should keep a close eye on these market-specific trends as they may impact future performance and capital allocation decisions.
Park Hotels & Resorts' Q2 2024 results offer valuable insights into current travel trends and consumer behavior:
- Leisure demand remains strong, particularly in resort destinations. The impressive performance of renovated properties like Casa Marina Key West suggests that consumers are willing to pay premium rates for updated, high-quality accommodations.
- Group travel is rebounding, with a
10% increase in 2024 Comparable Group Revenue Pace. This indicates growing confidence in organizing large gatherings and events, a positive sign for the broader economy. - Business travel is accelerating, though it's not specified how it compares to pre-pandemic levels. This trend is important to monitor as it impacts midweek occupancy rates and overall profitability.
- The varying performance across markets reflects changing travel patterns. Strong performances in Key West, Orlando and Boston contrast with softer results in traditionally strong markets like Hawaii and San Francisco.
The company's forward-looking statements suggest optimism about continued recovery, with projected increases in group bookings and rates for both 2024 and 2025. This aligns with broader industry expectations of a multi-year recovery cycle.
However, Park's decision to close the Hilton Oakland Airport and the underperformance of some urban markets highlight the ongoing challenges faced by certain property types and locations. This could indicate a longer-term shift in travel preferences that may require further portfolio adjustments across the industry.
Investors should pay attention to these evolving trends, as they may signal broader shifts in consumer behavior and travel patterns that could impact the long-term prospects of different hotel types and locations.
TYSONS, Va., July 31, 2024 (GLOBE NEWSWIRE) -- Park Hotels & Resorts Inc. (“Park” or the “Company”) (NYSE: PK) today announced results for the second quarter ended June 30, 2024 and provided an operational update.
Selected Statistical and Financial Information
(unaudited, amounts in millions, except RevPAR, ADR, Total RevPAR and per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
| 2024 | 2023 | Change(1) | 2024 | 2023 | Change(1) | ||||||||||||||||
| Comparable RevPAR | $ | 194.90 | $ | 191.03 | 2.0 | % | $ | 185.28 | $ | 177.05 | 4.6 | % | |||||||||
| Comparable Occupancy | 77.1 | % | 77.0 | % | 74.0 | % | 72.2 | % | |||||||||||||
| Comparable ADR | $ | 252.90 | $ | 248.33 | 1.8 | % | $ | 250.51 | $ | 245.38 | 2.1 | % | |||||||||
| Comparable Total RevPAR | $ | 311.32 | $ | 301.74 | 3.2 | % | $ | 300.50 | $ | 286.81 | 4.8 | % | |||||||||
| Net income (loss) | $ | 67 | $ | (146 | ) | 145.9 | % | $ | 96 | $ | (113 | ) | 185.0 | % | |||||||
| Net income (loss) attributable to stockholders | $ | 64 | $ | (150 | ) | 142.7 | % | $ | 92 | $ | (117 | ) | 178.6 | % | |||||||
| Operating income (loss) | $ | 121 | $ | (98 | ) | 223.0 | % | $ | 213 | $ | (18 | ) | 1,315.2 | % | |||||||
| Operating income (loss) margin | 17.5 | % | (13.7 | %) | 3,120 bps | 16.1 | % | (1.3 | %) | 1,740 bps | |||||||||||
| Comparable Hotel Adjusted EBITDA | $ | 199 | $ | 192 | 3.4 | % | $ | 367 | $ | 337 | 8.8 | % | |||||||||
| Comparable Hotel Adjusted EBITDA margin | 29.9 | % | 29.8 | % | 10 bps | 28.6 | % | 27.7 | % | 90 bps | |||||||||||
| Adjusted EBITDA | $ | 193 | $ | 187 | 3.2 | % | $ | 355 | $ | 333 | 6.6 | % | |||||||||
| Adjusted FFO attributable to stockholders | $ | 137 | $ | 129 | 6.2 | % | $ | 248 | $ | 221 | 12.2 | % | |||||||||
| Earnings (loss) per share - Diluted(1) | $ | 0.30 | $ | (0.70 | ) | 142.9 | % | $ | 0.44 | $ | (0.54 | ) | 181.5 | % | |||||||
| Adjusted FFO per share – Diluted(1) | $ | 0.65 | $ | 0.60 | 8.3 | % | $ | 1.18 | $ | 1.01 | 16.8 | % | |||||||||
| Weighted average shares outstanding – Diluted | 211 | 215 | (4 | ) | 211 | 218 | (7 | ) | |||||||||||||
______________________________________________
| (1) Amounts are calculated based on unrounded numbers. |
Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer, stated, "I am pleased with our second quarter results as the strategic investments we made in Key West and Orlando continued to bolster our performance, coupled with strong group and leisure demand trends at our hotels in Boston, Miami and New York, resulting in Comparable RevPAR growth of
Additionally, during the second quarter, we continued to execute our capital allocation strategies by extending our debt maturities by refinancing our
Additional Highlights
- In May 2024, issued
$550 million of7.000% senior notes due 2030 ("2030 Senior Notes") and amended the Company's existing credit agreement to include a new$200 million senior unsecured term loan facility due May 2027 ("2024 Term Loan"). Net proceeds from the 2030 Senior Notes and the 2024 Term Loan were used to repurchase or redeem all of the$650 million of7.500% senior notes due in 2025 ("2025 Senior Notes"), and the remainder was used for general corporate purposes; - In June 2024, repurchased nearly 1.7 million shares of common stock for a total purchase price of
$25 million , or an average purchase price of$15.01 per share; - In June 2024, made the decision to permanently close the Hilton Oakland Airport, which the Company anticipates will occur during the third quarter of 2024. In connection with that decision, the Company notified the ground lessor of the hotel of its termination of the ground lease on or about the date on which the hotel closes. The Hilton Oakland Airport incurred an EBITDA loss of
$3 million for the trailing twelve months; - In July 2024, the joint ventures that own and operate the Hilton La Jolla Torrey Pines sold the hotel for gross proceeds of approximately
$165 million , and the Company's pro-rata share of the gross proceeds was approximately$41 million , which was reduced by Park's portion of debt of approximately$17 million ; and - In July 2024, paid its second quarter 2024 cash dividend of
$0.25 per share to stockholders of record as of June 28, 2024 and declared its third quarter 2024 cash dividend of$0.25 per share to stockholders of record as of September 30, 2024, to be paid on October 15, 2024.
Operational Update
Results for Park's Comparable hotels in each of the Company’s key markets are as follows:
| (unaudited) | Comparable ADR | Comparable Occupancy | Comparable RevPAR | |||||||||||||||||||||||||||
| Hotels | Rooms | 2Q24 | 2Q23 | Change(1) | 2Q24 | 2Q23 | Change | 2Q24 | 2Q23 | Change(1) | ||||||||||||||||||||
| Hawaii | 2 | 3,507 | $ | 304.25 | $ | 300.71 | 1.2 | % | 86.9 | % | 93.1 | % | ( | $ | 264.54 | $ | 280.11 | (5.6 | %) | |||||||||||
| Orlando | 3 | 2,325 | 239.96 | 231.00 | 3.9 | 68.3 | 68.4 | (0.1 | ) | 164.01 | 158.12 | 3.7 | ||||||||||||||||||
| New York | 1 | 1,878 | 314.23 | 308.51 | 1.9 | 88.7 | 86.8 | 1.9 | 278.70 | 267.78 | 4.1 | |||||||||||||||||||
| New Orleans | 1 | 1,622 | 218.36 | 214.74 | 1.7 | 66.4 | 73.3 | (6.9 | ) | 145.06 | 157.46 | (7.9 | ) | |||||||||||||||||
| Boston | 3 | 1,536 | 279.37 | 264.23 | 5.7 | 85.9 | 82.4 | 3.5 | 239.91 | 217.79 | 10.2 | |||||||||||||||||||
| Southern California | 5 | 1,773 | 224.55 | 239.42 | (6.2 | ) | 81.8 | 77.8 | 4.0 | 183.69 | 186.29 | (1.4 | ) | |||||||||||||||||
| Key West | 2 | 461 | 555.43 | 516.68 | 7.5 | 77.0 | 42.8 | 34.2 | 427.75 | 221.08 | 93.5 | |||||||||||||||||||
| Chicago | 3 | 2,467 | 246.98 | 248.86 | (0.8 | ) | 70.7 | 70.3 | 0.4 | 174.63 | 174.93 | (0.2 | ) | |||||||||||||||||
| Puerto Rico | 1 | 652 | 288.67 | 287.33 | 0.5 | 74.8 | 82.1 | (7.3 | ) | 216.03 | 235.92 | (8.4 | ) | |||||||||||||||||
| Washington, D.C. | 2 | 1,085 | 212.73 | 197.56 | 7.7 | 81.7 | 80.8 | 0.9 | 173.88 | 159.66 | 8.9 | |||||||||||||||||||
| Denver | 1 | 613 | 204.90 | 209.98 | (2.4 | ) | 69.4 | 75.0 | (5.6 | ) | 142.28 | 157.53 | (9.7 | ) | ||||||||||||||||
| Miami | 1 | 393 | 252.49 | 245.71 | 2.8 | 84.0 | 81.6 | 2.4 | 212.07 | 200.52 | 5.8 | |||||||||||||||||||
| Seattle | 2 | 1,246 | 165.56 | 167.61 | (1.2 | ) | 78.8 | 69.8 | 9.0 | 130.47 | 117.06 | 11.5 | ||||||||||||||||||
| San Francisco | 2 | 660 | 227.67 | 245.53 | (7.3 | ) | 75.6 | 70.9 | 4.7 | 172.13 | 174.15 | (1.2 | ) | |||||||||||||||||
| Other | 10 | 3,210 | 182.36 | 181.43 | 0.5 | 68.3 | 69.7 | (1.4 | ) | 124.62 | 126.41 | (1.4 | ) | |||||||||||||||||
| All Markets | 39 | 23,428 | $ | 252.90 | $ | 248.33 | 1.8 | % | 77.1 | % | 77.0 | % | $ | 194.90 | $ | 191.03 | 2.0 | % | ||||||||||||
______________________________________________
| (1) Calculated based on unrounded numbers. |
Changes in Park's 2024 Comparable RevPAR for the three and six months ended June 30, 2024 compared to the same periods in 2023, by hotel type were as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||
| 2024 vs 2023 | 2024 vs 2023 | ||||
| Resort | 2.2 | % | 5.2 | % | |
| Urban | (0.1 | ) | 3.1 | ||
| Airport | 6.5 | 6.0 | |||
| Suburban | 5.5 | 6.9 | |||
| All Types | 2.0 | 4.6 | |||
Park continued to see improvements in demand as business travel accelerated and group demand continued to witness ongoing strength at its resort hotels and certain urban hotels, with Comparable group revenues for the second quarter of 2024 increasing by nearly
At the end of June 2024, Comparable Group Revenue Pace and room night bookings for 2024 increased nearly
Balance Sheet and Liquidity
Park's current liquidity is nearly
Following the repurchase or redemption of all the
Park had the following debt outstanding as of June 30, 2024:
| (unaudited, dollars in millions) | ||||||||||
| Debt | Collateral | Interest Rate | Maturity Date | As of June 30, 2024 | ||||||
| Fixed Rate Debt | ||||||||||
| Mortgage loan | Hilton Denver City Center | September 2024(1) | $ | 53 | ||||||
| Mortgage loan | Hyatt Regency Boston | July 2026 | 127 | |||||||
| Mortgage loan | DoubleTree Hotel Spokane City Center | July 2026 | 14 | |||||||
| Mortgage loan | Hilton Hawaiian Village Beach Resort | November 2026 | 1,275 | |||||||
| Mortgage loan | Hilton Santa Barbara Beachfront Resort | December 2026 | 158 | |||||||
| Mortgage loan | DoubleTree Hotel Ontario Airport | May 2027 | 30 | |||||||
| 2028 Senior Notes | October 2028 | 725 | ||||||||
| 2029 Senior Notes | May 2029 | 750 | ||||||||
| 2030 Senior Notes | February 2030 | 550 | ||||||||
| Finance lease obligations | 2024 to 2028 | 1 | ||||||||
| Total Fixed Rate Debt | 3,683 | |||||||||
| Variable Rate Debt | ||||||||||
| Revolver(3) | Unsecured | SOFR + | December 2026 | — | ||||||
| 2024 Term Loan | Unsecured | SOFR + | May 2027 | 200 | ||||||
| Total Variable Rate Debt | 7.18% | 200 | ||||||||
| Add: unamortized premium | — | |||||||||
| Less: unamortized deferred financing costs and discount | (27 | ) | ||||||||
| Total Debt(5)(6) | $ | 3,856 | ||||||||
______________________________________________
| (1) | The loan matures in August 2042 but became callable by the lender in August 2022 with six months of notice. As of June 30, 2024, Park had not received notice from the lender. |
| (2) | Calculated on a weighted average basis. |
| (3) | Park has approximately |
| (4) | SOFR includes a credit spread adjustment of |
| (5) | Excludes |
| (6) | Excludes the SF Mortgage Loan, which is included in debt associated with hotels in receivership in Park's consolidated balance sheets. In October 2023, the Hilton San Francisco Hotels were placed into court-ordered receivership, and thus, Park has no further economic interest in the operations of the hotels. |
Capital Investments
Park expects to incur approximately
| (dollars in millions) | |||||||||
| Projects & Scope of Work | Estimated Start Date | Estimated Completion Date | Budget | ||||||
| Hilton Hawaiian Village Waikiki Beach Resort | |||||||||
| Phase 1: Renovation of 392 guestrooms and the addition of 12 guestrooms through the conversion of suites to increase room count at the Rainbow Tower to 808 | Q3 2024 | Q1 2025 | $ | 44 | |||||
| Phase 2: Renovation of 404 guestrooms and the addition of 14 guestrooms through the conversion of suites to increase room count at the Rainbow Tower to 822 | Q3 2025 | Q1 2026 | $ | 43 | |||||
| Lobby renovation: Renovation of the Rainbow Tower lobby | Q3 2025 | Q1 2026 | $ | 1 | |||||
| Hilton Waikoloa Village | |||||||||
| Phase 1: Renovation of 197 guestrooms and the addition of 6 guestrooms through the conversion of suites to increase room count at the Palace Tower to 406 | Q3 2024 | Q4 2024 | $ | 32 | |||||
| Phase 2: Renovation of 203 guestrooms and the addition of 5 guestrooms through the conversion of suites to increase room count at the Palace Tower to 411 | Q3 2025 | Q4 2025 | $ | 33 | |||||
| Lobby renovation: Renovation of the Palace Tower lobby | Q3 2025 | Q4 2025 | $ | 3 | |||||
| Hilton New Orleans Riverside | |||||||||
| Phase 1: Renovation of 250 guestrooms at the 1,167-room Main Tower | Q3 2024 | Q4 2024 | $ | 16 | |||||
| Phase 2: Renovation of 437 guestrooms at the 1,167-room Main Tower | Q2 2025 | Q4 2025 | $ | 32 | |||||
Dividends
Park declared a second quarter 2024 cash dividend of
On July 26, 2024, Park declared a third quarter 2024 cash dividend of
Full-Year 2024 Outlook
Park has revised its full-year 2024 operating results to be as follows:
| (unaudited, dollars in millions, except per share amounts and RevPAR) | ||||||||||||||||||||
| Full-Year 2024 Outlook as of July 31, 2024 | Full-Year 2024 Outlook as of April 30, 2024 | Change at Midpoint | ||||||||||||||||||
| Metric | Low | High | Low | High | ||||||||||||||||
| Comparable RevPAR | $ | 185 | $ | 187 | $ | 186 | $ | 188 | $ | (1 | ) | |||||||||
| Comparable RevPAR change vs. 2023 | 3.5 | % | 4.5 | % | 4.0 | % | 5.5 | % | (75) bps | |||||||||||
| Net income | $ | 155 | $ | 185 | $ | 151 | $ | 191 | $ | (1 | ) | |||||||||
| Net income attributable to stockholders | $ | 144 | $ | 174 | $ | 140 | $ | 180 | $ | (1 | ) | |||||||||
| Earnings per share – Diluted(1) | $ | 0.69 | $ | 0.83 | $ | 0.66 | $ | 0.85 | $ | 0.01 | ||||||||||
| Operating income | $ | 410 | $ | 441 | $ | 407 | $ | 446 | $ | (1 | ) | |||||||||
| Operating income margin | 15.6 | % | 16.5 | % | 15.4 | % | 16.6 | % | — bps | |||||||||||
| Adjusted EBITDA | $ | 660 | $ | 690 | $ | 655 | $ | 695 | $ | — | ||||||||||
| Comparable Hotel Adjusted EBITDA margin(1) | 27.3 | % | 28.1 | % | 27.1 | % | 28.1 | % | 10 bps | |||||||||||
| Comparable Hotel Adjusted EBITDA margin change vs. 2023(1) | (50) bps | 30 bps | (70) bps | 30 bps | 10 bps | |||||||||||||||
| Adjusted FFO per share – Diluted(1) | $ | 2.10 | $ | 2.26 | $ | 2.07 | $ | 2.27 | $ | 0.01 | ||||||||||
______________________________________________
| (1) Amounts are calculated based on unrounded numbers. |
Park's outlook is based in part on the following assumptions:
- Includes 50 bps of RevPAR and
$9 million of Hotel Adjusted EBITDA disruption from renovations at certain of Park's hotels, of which$8 million is associated with renovations at Park's Hawaii hotels; - Adjusted FFO excludes
$60 million of default interest and late payment administrative fees associated with default of the SF Mortgage Loan for full-year 2024, which began in June 2023 and is required to be recognized in interest expense until legal title to the Hilton San Francisco Hotels are transferred; - Fully diluted weighted average shares for the full-year 2024 of 210 million; and
- Park's Comparable portfolio as of July 31, 2024 and does not take into account potential future acquisitions, dispositions, including the Hilton Oakland Airport, or any financing transactions, which could result in a material change to Park’s outlook.
Park's full-year 2024 outlook is based on a number of factors, many of which are outside the Company's control, including uncertainty surrounding macro-economic factors, such as inflation, changes in interest rates and the possibility of an economic recession or slowdown, as well as the assumptions set forth above, 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 2024 results on August 1, 2024 beginning at 12 p.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 2024 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 the effects of Park's decision to cease payments on its
All such forward-looking statements are based on current expectations of management and therefore involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results 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, 2023, 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, FFO per share, Adjusted FFO per share, 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 one of the largest publicly-traded lodging real estate investment trusts ("REIT") with a diverse portfolio of iconic and market-leading hotels and resorts with significant underlying real estate value. Park's portfolio currently consists of 42 premium-branded hotels and resorts with approximately 26,000 rooms primarily located in prime city center and resort locations. Visit www.pkhotelsandresorts.com for more information.
| Investor Contact | 1775 Tysons Boulevard, 7th Floor |
| Ian Weissman | Tysons, VA 22102 |
| + 1 571 302 5591 | www.pkhotelsandresorts.com |
| PARK HOTELS & RESORTS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in millions, except share and per share data) | |||||||
| June 30, 2024 | December 31, 2023 | ||||||
| (unaudited) | |||||||
| ASSETS | |||||||
| Property and equipment, net | $ | 7,422 | $ | 7,459 | |||
| Contract asset | 789 | 760 | |||||
| Intangibles, net | 42 | 42 | |||||
| Cash and cash equivalents | 449 | 717 | |||||
| Restricted cash | 35 | 33 | |||||
| Accounts receivable, net of allowance for doubtful accounts of | 133 | 112 | |||||
| Prepaid expenses | 75 | 59 | |||||
| Other assets | 40 | 40 | |||||
| Operating lease right-of-use assets | 181 | 197 | |||||
| TOTAL ASSETS (variable interest entities – | $ | 9,166 | $ | 9,419 | |||
| LIABILITIES AND EQUITY | |||||||
| Liabilities | |||||||
| Debt | $ | 3,856 | $ | 3,765 | |||
| Debt associated with hotels in receivership | 725 | 725 | |||||
| Accrued interest associated with hotels in receivership | 64 | 35 | |||||
| Accounts payable and accrued expenses | 230 | 210 | |||||
| Dividends payable | 58 | 362 | |||||
| Due to hotel managers | 111 | 131 | |||||
| Other liabilities | 171 | 200 | |||||
| Operating lease liabilities | 215 | 223 | |||||
| Total liabilities (variable interest entities – | 5,430 | 5,651 | |||||
| Stockholders' Equity | |||||||
| Common stock, par value | 2 | 2 | |||||
| Additional paid-in capital | 4,133 | 4,156 | |||||
| Accumulated deficit | (355 | ) | (344 | ) | |||
| Total stockholders' equity | 3,780 | 3,814 | |||||
| Noncontrolling interests | (44 | ) | (46 | ) | |||
| Total equity | 3,736 | 3,768 | |||||
| TOTAL LIABILITIES AND EQUITY | $ | 9,166 | $ | 9,419 | |||
| 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, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenues | |||||||||||||||
| Rooms | $ | 416 | $ | 442 | $ | 790 | $ | 824 | |||||||
| Food and beverage | 182 | 178 | 364 | 359 | |||||||||||
| Ancillary hotel | 66 | 72 | 128 | 137 | |||||||||||
| Other | 22 | 22 | 43 | 42 | |||||||||||
| Total revenues | 686 | 714 | 1,325 | 1,362 | |||||||||||
| Operating expenses | |||||||||||||||
| Rooms | 105 | 117 | 207 | 224 | |||||||||||
| Food and beverage | 121 | 128 | 244 | 255 | |||||||||||
| Other departmental and support | 155 | 165 | 300 | 323 | |||||||||||
| Other property | 57 | 63 | 109 | 123 | |||||||||||
| Management fees | 33 | 34 | 63 | 64 | |||||||||||
| Impairment and casualty loss | 7 | 203 | 13 | 204 | |||||||||||
| Depreciation and amortization | 64 | 64 | 129 | 128 | |||||||||||
| Corporate general and administrative | 18 | 16 | 35 | 32 | |||||||||||
| Other | 20 | 22 | 41 | 42 | |||||||||||
| Total expenses | 580 | 812 | 1,141 | 1,395 | |||||||||||
| Gain on sale of assets, net | — | — | — | 15 | |||||||||||
| Gain on derecognition of assets | 15 | — | 29 | — | |||||||||||
| Operating income (loss) | 121 | (98 | ) | 213 | (18 | ) | |||||||||
| Interest income | 5 | 10 | 10 | 20 | |||||||||||
| Interest expense | (54 | ) | (52 | ) | (107 | ) | (104 | ) | |||||||
| Interest expense associated with hotels in receivership | (15 | ) | (9 | ) | (29 | ) | (17 | ) | |||||||
| Equity in earnings from investments in affiliates | 1 | 3 | 1 | 7 | |||||||||||
| Other (loss) gain, net | (3 | ) | 3 | (3 | ) | 4 | |||||||||
| Income (loss) before income taxes | 55 | (143 | ) | 85 | (108 | ) | |||||||||
| Income tax benefit (expense) | 12 | (3 | ) | 11 | (5 | ) | |||||||||
| Net income (loss) | 67 | (146 | ) | 96 | (113 | ) | |||||||||
| Net income attributable to noncontrolling interests | (3 | ) | (4 | ) | (4 | ) | (4 | ) | |||||||
| Net income (loss) attributable to stockholders | $ | 64 | $ | (150 | ) | $ | 92 | $ | (117 | ) | |||||
| Earnings (loss) per share: | |||||||||||||||
| Earnings (loss) per share - Basic | $ | 0.31 | $ | (0.70 | ) | $ | 0.44 | $ | (0.54 | ) | |||||
| Earnings (loss) per share - Diluted | $ | 0.30 | $ | (0.70 | ) | $ | 0.44 | $ | (0.54 | ) | |||||
| Weighted average shares outstanding – Basic | 209 | 215 | 209 | 217 | |||||||||||
| Weighted average shares outstanding – Diluted | 211 | 215 | 211 | 218 | |||||||||||
| PARK HOTELS & RESORTS INC. NON-GAAP FINANCIAL MEASURES RECONCILIATIONS EBITDA AND ADJUSTED EBITDA | |||||||||||||||
| (unaudited, in millions) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income (loss) | $ | 67 | $ | (146 | ) | $ | 96 | $ | (113 | ) | |||||
| Depreciation and amortization expense | 64 | 64 | 129 | 128 | |||||||||||
| Interest income | (5 | ) | (10 | ) | (10 | ) | (20 | ) | |||||||
| Interest expense | 54 | 52 | 107 | 104 | |||||||||||
| Interest expense associated with hotels in receivership(1) | 15 | 9 | 29 | 17 | |||||||||||
| Income tax (benefit) expense | (12 | ) | 3 | (11 | ) | 5 | |||||||||
| Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates | 2 | 2 | 5 | 5 | |||||||||||
| EBITDA | 185 | (26 | ) | 345 | 126 | ||||||||||
| Gain on sales of assets, net | — | — | — | (15 | ) | ||||||||||
| Gain on derecognition of assets(1) | (15 | ) | — | (29 | ) | — | |||||||||
| Gain on sale of investments in affiliates(2) | — | (3 | ) | — | (3 | ) | |||||||||
| Share-based compensation expense | 5 | 5 | 9 | 9 | |||||||||||
| Impairment and casualty loss | 7 | 203 | 13 | 204 | |||||||||||
| Other items | 11 | 8 | 17 | 12 | |||||||||||
| Adjusted EBITDA | $ | 193 | $ | 187 | $ | 355 | $ | 333 | |||||||
______________________________________________
| (1) | For the three and six months ended June 30, 2024, represents accrued interest expense associated with the default of the SF Mortgage Loan, which was offset by a gain on derecognition for the corresponding increase of the contract asset on the condensed consolidated balance sheets, as Park expects to be released from this obligation upon final resolution with the lender. |
| (2) | Included in other (loss) gain, net. |
| PARK HOTELS & RESORTS INC. NON-GAAP FINANCIAL MEASURES RECONCILIATIONS COMPARABLE HOTEL ADJUSTED EBITDA AND COMPARABLE HOTEL ADJUSTED EBITDA MARGIN | |||||||||||||||
| (unaudited, dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Adjusted EBITDA | $ | 193 | $ | 187 | $ | 355 | $ | 333 | |||||||
| Less: Adjusted EBITDA from investments in affiliates | (8 | ) | (8 | ) | (16 | ) | (15 | ) | |||||||
| Add: All other(1) | 14 | 13 | 29 | 26 | |||||||||||
| Hotel Adjusted EBITDA | 199 | 192 | 368 | 344 | |||||||||||
| Less: Adjusted EBITDA from hotels disposed of | — | (1 | ) | (1 | ) | (3 | ) | ||||||||
| Less: Adjusted EBITDA from the Hilton San Francisco Hotels | — | 1 | — | (4 | ) | ||||||||||
| Comparable Hotel Adjusted EBITDA | $ | 199 | $ | 192 | $ | 367 | $ | 337 | |||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Total Revenues | $ | 686 | $ | 714 | $ | 1,325 | $ | 1,362 | |||||||
| Less: Other revenue | (22 | ) | (22 | ) | (43 | ) | (42 | ) | |||||||
| Less: Revenues from hotels disposed of | — | (3 | ) | — | (10 | ) | |||||||||
| Less: Revenues from the Hilton San Francisco Hotels | — | (46 | ) | — | (94 | ) | |||||||||
| Comparable Hotel Revenues | $ | 664 | $ | 643 | $ | 1,282 | $ | 1,216 | |||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
| 2024 | 2023 | Change(2) | 2024 | 2023 | Change(2) | ||||||||||||||||
| Total Revenues | $ | 686 | $ | 714 | (4.0)% | $ | 1,325 | $ | 1,362 | (2.7)% | |||||||||||
| Operating income (loss) | $ | 121 | $ | (98 | ) | 223.0 | % | $ | 213 | $ | (18 | ) | 1,315.2 | % | |||||||
| Operating income (loss) margin(2) | 17.5 | % | (13.7 | %) | 3,120 bps | 16.1 | % | (1.3 | %) | 1,740 bps | |||||||||||
| Comparable Hotel Revenues | $ | 664 | $ | 643 | 3.2 | % | $ | 1,282 | $ | 1,216 | 5.4 | % | |||||||||
| Comparable Hotel Adjusted EBITDA | $ | 199 | $ | 192 | 3.4 | % | $ | 367 | $ | 337 | 8.8 | % | |||||||||
| Comparable Hotel Adjusted EBITDA margin(2) | 29.9 | % | 29.8 | % | 10 bps | 28.6 | % | 27.7 | % | 90 bps | |||||||||||
______________________________________________
| (1) | Includes other revenues and other expenses, non-income taxes on TRS leases included in other property expenses and corporate general and administrative expenses in the condensed consolidated statements of operations. |
| (2) | Percentages are calculated based on unrounded numbers. |
(unaudited, in millions, except per share data)
| PARK HOTELS & RESORTS INC. NON-GAAP FINANCIAL MEASURES RECONCILIATIONS NAREIT FFO AND ADJUSTED FFO | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income (loss) attributable to stockholders | $ | 64 | $ | (150 | ) | $ | 92 | $ | (117 | ) | |||||
| Depreciation and amortization expense | 64 | 64 | 129 | 128 | |||||||||||
| Depreciation and amortization expense attributable to noncontrolling interests | (1 | ) | (1 | ) | (2 | ) | (2 | ) | |||||||
| Gain on sales of assets, net | — | — | — | (15 | ) | ||||||||||
| Gain on derecognition of assets(1) | (15 | ) | — | (29 | ) | — | |||||||||
| Gain on sale of investments in affiliates(2) | — | (3 | ) | — | (3 | ) | |||||||||
| Impairment loss | 7 | 202 | 12 | 202 | |||||||||||
| Equity investment adjustments: | |||||||||||||||
| Equity in earnings from investments in affiliates | (1 | ) | (3 | ) | (1 | ) | (7 | ) | |||||||
| Pro rata FFO of investments in affiliates | 4 | 5 | 5 | 10 | |||||||||||
| Nareit FFO attributable to stockholders | 122 | 114 | 206 | 196 | |||||||||||
| Casualty loss | — | 1 | 1 | 2 | |||||||||||
| Share-based compensation expense | 5 | 5 | 9 | 9 | |||||||||||
| Interest expense associated with hotels in receivership(1) | 15 | — | 29 | — | |||||||||||
| Other items | (5 | ) | 9 | 3 | 14 | ||||||||||
| Adjusted FFO attributable to stockholders | $ | 137 | $ | 129 | $ | 248 | $ | 221 | |||||||
| Nareit FFO per share – Diluted(3) | $ | 0.58 | $ | 0.53 | $ | 0.98 | $ | 0.90 | |||||||
| Adjusted FFO per share – Diluted(3) | $ | 0.65 | $ | 0.60 | $ | 1.18 | $ | 1.01 | |||||||
| Weighted average shares outstanding – Diluted | 211 | 215 | 211 | 218 | |||||||||||
______________________________________________
| (1) | For the three and six months ended June 30, 2024, represents accrued interest expense associated with the default of the SF Mortgage Loan, which was offset by a gain on derecognition for the corresponding increase of the contract asset on the condensed consolidated balance sheets, as Park expects to be released from this obligation upon final resolution with the lender. |
| (2) | Included in other (loss) gain, net. |
| (3) | Per share amounts are calculated based on unrounded numbers. |
| PARK HOTELS & RESORTS INC. NON-GAAP FINANCIAL MEASURES RECONCILIATIONS NET DEBT(1) | |||
| (unaudited, in millions) | |||
| June 30, 2024 | |||
| Debt | $ | 3,856 | |
| Add: unamortized deferred financing costs and discount | 27 | ||
| Less: unamortized premium | — | ||
| Debt, excluding unamortized deferred financing cost, premiums and discounts | 3,883 | ||
| Add: Park's share of unconsolidated affiliates debt, excluding unamortized deferred financing costs(1) | 157 | ||
| Less: cash and cash equivalents | (449 | ) | |
| Less: restricted cash | (35 | ) | |
| Net Debt | $ | 3,556 | |
______________________________________________
| (1) Excludes approximately |
| PARK HOTELS & RESORTS INC. NON-GAAP FINANCIAL MEASURES RECONCILIATIONS OUTLOOK – EBITDA, ADJUSTED EBITDA, COMPARABLE HOTEL ADJUSTED EBITDA AND COMPARABLE HOTEL ADJUSTED EBITDA MARGIN | |||||||
| (unaudited, in millions) | Year Ending | ||||||
| December 31, 2024 | |||||||
| Low Case | High Case | ||||||
| Net income | $ | 155 | $ | 185 | |||
| Depreciation and amortization expense | 258 | 258 | |||||
| Interest income | (21 | ) | (21 | ) | |||
| Interest expense | 213 | 213 | |||||
| Interest expense associated with hotels in receivership | 60 | 60 | |||||
| Income tax expense | (10 | ) | (10 | ) | |||
| Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates | 12 | 12 | |||||
| EBITDA | 667 | 697 | |||||
| Gain on derecognition of assets | (60 | ) | (60 | ) | |||
| Share-based compensation expense | 18 | 18 | |||||
| Impairment and casualty loss | 13 | 13 | |||||
| Other items | 22 | 22 | |||||
| Adjusted EBITDA | 660 | 690 | |||||
| Less: Adjusted EBITDA from investments in affiliates | (21 | ) | (21 | ) | |||
| Add: All other | 56 | 57 | |||||
| Comparable Hotel Adjusted EBITDA | $ | 695 | $ | 726 | |||
| Year Ending | |||||||
| December 31, 2024 | |||||||
| Low Case | High Case | ||||||
| Total Revenues | $ | 2,634 | $ | 2,670 | |||
| Less: Other revenue | (92 | ) | (92 | ) | |||
| Comparable Hotel Revenues | $ | 2,542 | $ | 2,578 | |||
| Year Ending | |||||||
| December 31, 2024 | |||||||
| Low Case | High Case | ||||||
| Total Revenues | $ | 2,634 | $ | 2,670 | |||
| Operating income | $ | 410 | $ | 441 | |||
| Operating income margin(1) | 15.6 | % | 16.5 | % | |||
| Comparable Hotel Revenues | $ | 2,542 | $ | 2,578 | |||
| Comparable Hotel Adjusted EBITDA | $ | 695 | $ | 726 | |||
| Comparable Hotel Adjusted EBITDA margin(1) | 27.3 | % | 28.1 | % | |||
______________________________________________
| (1) Percentages are calculated based on unrounded numbers. |
| PARK HOTELS & RESORTS INC. NON-GAAP FINANCIAL MEASURES RECONCILIATIONS OUTLOOK – NAREIT FFO ATTRIBUTABLE TO STOCKHOLDERS AND ADJUSTED FFO ATTRIBUTABLE TO STOCKHOLDERS | |||||||
| (unaudited, in millions except per share data) | Year Ending | ||||||
| December 31, 2024 | |||||||
| Low Case | High Case | ||||||
| Net income attributable to stockholders | $ | 144 | $ | 174 | |||
| Depreciation and amortization expense | 258 | 258 | |||||
| Depreciation and amortization expense attributable to noncontrolling interests | (5 | ) | (5 | ) | |||
| Gain on derecognition of assets | (60 | ) | (60 | ) | |||
| Impairment loss | 12 | 12 | |||||
| Equity investment adjustments: | |||||||
| Equity in earnings from investments in affiliates | — | — | |||||
| Pro rata FFO of equity investments | 8 | 8 | |||||
| Nareit FFO attributable to stockholders | 357 | 387 | |||||
| Casualty loss | 1 | 1 | |||||
| Share-based compensation expense | 18 | 18 | |||||
| Interest expense associated with hotels in receivership | 60 | 60 | |||||
| Other items | 7 | 9 | |||||
| Adjusted FFO attributable to stockholders | $ | 443 | $ | 475 | |||
| Adjusted FFO per share – Diluted(1) | $ | 2.10 | $ | 2.26 | |||
| Weighted average diluted shares outstanding | 210 | 210 | |||||
______________________________________________
| (1) Per share amounts are calculated based on unrounded numbers. |
| PARK HOTELS & RESORTS INC. DEFINITIONS |
Comparable
The Company presents certain data for its consolidated hotels on a Comparable basis as supplemental information for investors: Comparable Hotel Revenues, Comparable RevPAR, Comparable Occupancy, Comparable ADR, Comparable Hotel Adjusted EBITDA and Comparable Hotel Adjusted EBITDA Margin. The Company presents Comparable hotel results to help the Company and its investors evaluate the ongoing operating performance of its hotels. The Company’s Comparable metrics include results from hotels that were active and operating in Park's portfolio since January 1st of the previous year and property acquisitions as though such acquisitions occurred on the earliest period presented. Additionally, Comparable metrics exclude results from property dispositions that have occurred through July 31, 2024 and the Hilton San Francisco Hotels, which were placed into receivership at the end of October 2023.
EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin
Earnings 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 also interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates.
Adjusted EBITDA, presented herein, is calculated as EBITDA, as previously defined, further adjusted to exclude the following items that are not reflective of Park's ongoing operating performance or incurred in the normal course of business, and thus, excluded from management's analysis in making day-to-day operating decisions and evaluations of Park's operating performance against other companies within its industry:
- 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. Further, the Company does not use or present EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin as measures of liquidity or cash flows.
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;
- Casualty gains or losses; 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) debt 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. Net Debt also excludes Debt associated with hotels in receivership.
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. 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. 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. 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.
Group Revenue Pace
Group Revenue Pace represents bookings for future business and is calculated as group room nights multiplied by the contracted room rate expressed as a percentage of a prior period relative to a prior point in time.
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