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Park Hotels & Resorts Inc. Reports Third Quarter 2024 Results

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Park Hotels & Resorts reported strong Q3 2024 results with Comparable RevPAR increasing 3.3% to $189.73 compared to Q3 2023. Net income reached $57 million, up 83.9% year-over-year. Group demand showed improvement with 2024 Comparable Group Revenue Pace up over 9%. The company maintained strong liquidity of over $1.4 billion and continued executing capital allocation strategies, including disposing of non-core assets and repurchasing 2.5 million shares for $35 million. Notable performance improvements were seen in Chicago, New Orleans, and Boston hotels, while Florida properties sustained minimal hurricane damage and remained operational.

Park Hotels & Resorts ha riportato risultati solidi per il terzo trimestre del 2024, con un RevPAR Comparabile in aumento del 3,3% a $189,73 rispetto al terzo trimestre del 2023. Il reddito netto ha raggiunto i 57 milioni di dollari, in aumento dell'83,9% rispetto all'anno precedente. La domanda del gruppo ha mostrato miglioramenti, con il Pace del Ricavo Comparabile del Gruppo del 2024 in crescita di oltre il 9%. L'azienda ha mantenuto una liquidità solida di oltre 1,4 miliardi di dollari e ha continuato ad attuare strategie di allocazione del capitale, inclusa la cessione di beni non strategici e il riacquisto di 2,5 milioni di azioni per 35 milioni di dollari. Miglioramenti delle performance notevoli sono stati osservati negli hotel di Chicago, New Orleans e Boston, mentre le proprietà in Florida hanno subito danni minimi a causa degli uragani e sono rimaste operative.

Park Hotels & Resorts reportó resultados sólidos para el tercer trimestre de 2024, con un RevPAR Comparable que aumentó un 3.3% a $189.73 en comparación con el tercer trimestre de 2023. Los ingresos netos alcanzaron los 57 millones de dólares, un aumento del 83.9% en comparación con el año anterior. La demanda del grupo mostró mejoras, con el Ritmo de Ingresos Comparables del Grupo de 2024 en aumento de más del 9%. La compañía mantuvo una sólida liquidez de más de 1.4 mil millones de dólares y continuó ejecutando estrategias de asignación de capital, incluyendo la disposición de activos no estratégicos y la recompra de 2.5 millones de acciones por 35 millones de dólares. Se observaron mejoras notables en el rendimiento de los hoteles de Chicago, Nueva Orleans y Boston, mientras que las propiedades en Florida sufrieron daños mínimos por huracanes y siguieron operativas.

Park Hotels & Resorts는 2024년 3분기 강력한 실적을 발표했습니다. 비교 가능한 RevPAR는 2023년 3분기 대비 3.3% 증가한 189.73달러를 기록했습니다. 순수익은 5,700만 달러에 도달했으며, 이는 작년 대비 83.9% 증가한 수치입니다. 그룹 수요는 개선되고 있으며, 2024년 비교 가능한 그룹 수익 속도는 9% 이상 증가했습니다. 회사는 14억 달러 이상의 강력한 유동성을 유지하고 있으며, 비핵심 자산을 처분하고 3,500만 달러에 250만 주를 재매입하는 등 자본 배분 전략을 지속해왔습니다. 시카고, 뉴올리언스, 보스턴 호텔에서는 눈에 띄는 성과 개선이 있었으며, 플로리다의 자산은 허리케인으로 인한 피해가 최소화되어 운영이 계속되었습니다.

Park Hotels & Resorts a rapporté de solides résultats pour le troisième trimestre 2024, avec un RevPAR Comparable en augmentation de 3,3 %, atteignant 189,73 $ par rapport au troisième trimestre 2023. Le revenu net a atteint 57 millions de dollars, en hausse de 83,9 % par rapport à l'année précédente. La demande du groupe a montré des améliorations, avec un Rythme de Revenus Comparables du Groupe en hausse de plus de 9 % pour 2024. L'entreprise a maintenu une solide liquidité de plus de 1,4 milliard de dollars et a continué d'exécuter des stratégies d'allocation de capital, notamment en cédant des actifs non essentiels et en rachetant 2,5 millions d'actions pour 35 millions de dollars. Des améliorations notables des performances ont été observées dans les hôtels de Chicago, de La Nouvelle-Orléans et de Boston, tandis que les propriétés en Floride ont subi des dommages minimes dus aux ouragans et sont restées opérationnelles.

Park Hotels & Resorts hat starke Ergebnisse für das 3. Quartal 2024 gemeldet, mit einem vergleichbaren RevPAR, der um 3,3% auf 189,73 USD im Vergleich zum 3. Quartal 2023 gestiegen ist. Das Nettoeinkommen erreichte 57 Millionen USD und stieg damit um 83,9% im Jahresvergleich. Die Nachfrage der Gruppe zeigte Verbesserungen, wobei das vergleichbare Gruppeneinnahmewachstum für 2024 um mehr als 9% gestiegen ist. Das Unternehmen hielt eine starke Liquidität von über 1,4 Milliarden USD aufrecht und führte weiterhin Kapitalallokationsstrategien durch, darunter die Veräußerung nicht zum Kerngeschäft gehörender Vermögenswerte und den Rückkauf von 2,5 Millionen Aktien für 35 Millionen USD. In den Hotels in Chicago, New Orleans und Boston wurden bemerkenswerte Leistungsverbesserungen festgestellt, während die Immobilien in Florida minimale Schäden durch Hurrikane erlitten haben und weiterhin betriebsbereit blieben.

Positive
  • Net income increased 83.9% to $57 million in Q3 2024
  • Comparable RevPAR grew 3.3% to $189.73
  • Group revenue increased 13% year-over-year in Q3
  • Strong liquidity position of over $1.4 billion
  • 2024 Group Revenue Pace up over 9% compared to 2023
Negative
  • Comparable Hotel Adjusted EBITDA decreased 1.9% to $170 million
  • Adjusted FFO per share declined 3.9% to $0.49
  • Hawaii RevPAR decreased 8.1% in Q3 2024
  • San Francisco RevPAR declined 12.4% in Q3 2024

Insights

The Q3 2024 results show mixed performance with several notable highlights. RevPAR increased 3.3% year-over-year, driven by strong performances in urban markets. Net income rose significantly to $57 million, up 83.9% from the previous year. However, Adjusted EBITDA declined slightly by 2.5% to $159 million.

Key positives include group revenue growth of 13% and improved 2024 group booking pace up 9%. The company maintains strong liquidity of over $1.4 billion and continues strategic capital allocation through share repurchases ($35 million) and property renovations ($200 million).

The Hawaii properties showed some weakness with RevPAR declining 8.1%, while Orlando and Key West demonstrated strong growth. The company's dividend policy remains stable at $0.25 per share quarterly, with potential for additional top-off dividend based on full-year performance.

The strategic repositioning of Park's portfolio continues with notable moves including the disposition of the underperforming Hilton Oakland Airport and sale of Hilton La Jolla Torrey Pines through JV. The $200 million renovation program targeting core assets like Hilton Hawaiian Village and Hilton New Orleans Riverside demonstrates commitment to maintaining competitive advantage in key markets.

The debt structure remains well-managed with a weighted average maturity of 3.4 years and 5.19% weighted average interest rate. The $3.5 billion net debt position (excluding San Francisco properties) is supported by strong operational cash flows and ample liquidity. The strategic focus on urban and resort properties is paying off with RevPAR growth of 5.4% and 1.5% respectively.

TYSONS, Va., Oct. 29, 2024 (GLOBE NEWSWIRE) -- Park Hotels & Resorts Inc. (“Park” or the “Company”) (NYSE: PK) today announced results for the third quarter ended September 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 September 30, Nine Months Ended September 30,
  2024   2023  Change(1)  2024   2023  Change(1)
Comparable RevPAR$189.73  $183.64  3.3% $188.08  $180.33  4.3%
Comparable Occupancy 78.1%  75.6% 2.5% pts  75.7%  73.5% 2.2% pts
Comparable ADR$242.88  $242.89  % $248.57  $245.34  1.3%
            
Comparable Total RevPAR$294.65  $283.82  3.8% $300.83  $287.74  4.5%
            
Net income (loss)$57  $31  83.9% $153  $(82) 286.6%
Net income (loss) attributable to stockholders$54  $27  100.0% $146  $(90) 262.2%
            
Operating income$95  $85  12.3% $308  $67  358.9%
Operating income margin 14.6%  12.5% 210 bps  15.6%  3.3% 1,230 bps
            
Comparable Hotel Adjusted EBITDA$170  $173  (1.9)% $539  $512  5.2%
Comparable Hotel Adjusted EBITDA margin 27.2%  28.8% (160) bps  28.3%  28.2% 10 bps
            
Adjusted EBITDA$159  $163  (2.5)% $514  $496  3.6%
Adjusted FFO attributable to stockholders$102  $108  (5.6)% $350  $329  6.4%
            
Earnings (loss) per share - Diluted(1)$0.26  $0.13  100.0% $0.69  $(0.42) 264.3%
Adjusted FFO per share – Diluted(1)$0.49  $0.51  (3.9)% $1.67  $1.52  9.9%
Weighted average shares outstanding – Diluted 208   212  (4)  210   216  (6)

______________________________________________

(1)      Amounts are calculated based on unrounded numbers.

Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer, stated, "I am very pleased with our third quarter results, with Comparable RevPAR increasing over 3% compared to the third quarter of 2023, driven by accelerating demand trends at our hotels in Chicago, New Orleans, and Boston coupled with strong performance at our Key West and Orlando hotels, which continue to benefit from recently completed transformative renovations. Group demand continues to improve with 2024 Comparable Group Revenue Pace up over 9% compared to the same time last year, driven by improvements in business demand, an increase in citywide events and strong convention calendars benefiting our Chicago, New Orleans and New York hotels, as well as in-house group events benefiting our Florida hotels. Our Florida hotels sustained minimal damage and business interruption from Hurricanes Helene and Milton and remain fully operational. I am grateful to our teams for navigating these hurricanes that have impacted many communities in the Southeast.

Additionally, during the third quarter, we continued to execute our capital allocation strategies by disposing of non-core assets, including the Hilton Oakland Airport, repurchasing an additional 2.5 million shares of our common stock for $35 million at a significant discount to our estimated net asset value, and investing in our portfolio, commencing over $200 million of comprehensive guestroom renovations at the iconic Rainbow Tower at the Hilton Hawaiian Village Waikiki Beach Resort, the Palace Tower at the Hilton Waikoloa Village and the Main Tower at the Hilton New Orleans Riverside. With current liquidity of over $1.4 billion, we remain laser-focused on creating long-term shareholder value by further strengthening our balance sheet through non-core asset sales and investments back into our core portfolio with value-enhancing ROI projects and returning capital to shareholders in the form of dividends and leverage neutral share repurchases.”

Additional Highlights

  • In July 2024, the unconsolidated joint venture that owns and operates 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;
  • In August 2024, repurchased 2.5 million shares of common stock for a total purchase price of $35 million at an average purchase price of $13.85 per share;
  • In August 2024, permanently closed the 360-room Hilton Oakland Airport, which incurred an EBITDA loss of nearly $4 million for the trailing twelve months, and subsequently terminated its ground lease, returning the property to the ground lessor;
  • In October 2024, paid its third quarter 2024 cash dividend of $0.25 per share to stockholders of record as of September 30, 2024; and
  • In October 2024, the Waldorf Astoria Orlando was ranked 9th in the world by Condé Nast Traveler in its prestigious 2024 Readers’ Choice Awards for the Best Resorts in the World.

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 3Q24 3Q23 Change(1) 3Q24 3Q23 Change 3Q24 3Q23 Change(1)
Hawaii2 3,507 $312.86 $322.09 (2.9%) 87.0% 92.0% (5.0% pts) $272.29 $296.29 (8.1%)
Orlando3 2,325  201.39  188.44 6.9  65.1  60.2  4.9   131.18  113.54 15.5 
New York1 1,878  304.42  302.44 0.7  91.1  92.2  (1.1)  277.19  278.78 (0.6)
New Orleans1 1,622  173.42  157.49 10.1  64.3  56.4  7.9   111.44  88.82 25.5 
Boston3 1,536  281.13  267.12 5.2  87.6  86.1  1.5   246.23  230.03 7.0 
Southern California5 1,773  250.89  263.09 (4.6) 85.0  79.6  5.4   213.29  209.58 1.8 
Key West2 461  362.17  409.71 (11.6) 65.3  25.1  40.2   236.53  103.07 129.5 
Chicago3 2,467  237.93  227.83 4.4  77.1  69.4  7.7   183.56  158.20 16.0 
Puerto Rico1 652  264.86  269.92 (1.9) 68.5  67.2  1.3   181.39  181.41  
Washington, D.C.2 1,085  181.93  173.20 5.0  75.1  77.3  (2.2)  136.56  133.77 2.1 
Denver1 613  204.78  202.05 1.4  74.4  81.8  (7.4)  152.25  165.19 (7.8)
Miami1 393  185.86  177.55 4.7  72.9  71.3  1.6   135.57  126.59 7.1 
Seattle2 1,246  182.67  187.14 (2.4) 86.0  82.5  3.5   157.16  154.39 1.8 
San Francisco2 660  234.95  255.48 (8.0) 74.9  78.6  (3.7)  176.00  200.81 (12.4)
Other9 2,850  179.45  181.78 (1.3) 72.8  70.1  2.7   130.58  127.50 2.4 
All Markets38 23,068 $242.88 $242.89 % 78.1% 75.6% 2.5% pts $189.73 $183.64 3.3%

______________________________________________
(1)      Calculated based on unrounded numbers.

Changes in Park's 2024 Comparable RevPAR for the three and nine months ended September 30, 2024 compared to the same periods in 2023, by hotel type were as follows:

 Three Months Ended September 30, Nine Months Ended September 30,
 2024 vs 2023 2024 vs 2023
Resort1.5% 4.0%
Urban5.4  3.9 
Airport0.5  4.9 
Suburban8.6  7.5 
All Types3.3  4.3 
      

Park continued to see improvements in group demand from ongoing strength at its urban hotels and certain resort hotels, with Comparable group revenues for the third quarter of 2024 increasing by approximately 13% year-over-year. Comparable RevPAR growth for the third quarter was driven by increases at its urban and resort hotels of approximately 5% and 2%, respectively, year-over-year. Park's urban hotels benefited from increased group business and citywide events, including the Hilton New Orleans Riverside and the Hilton Chicago where group revenues increased nearly 56% and over 36%, respectively, compared to the third quarter of 2023, which drove increases in RevPAR of approximately 26% and 20%, respectively. Park's Orlando hotels continued to benefit from an increase in group demand following the transformative renovation at the Bonnet Creek Orlando complex in early 2024, with group revenues increasing nearly 92% and 41% at the Waldorf Astoria Orlando and Signia Bonnet Creek hotel, respectively, compared to the third quarter of 2023, which drove increases in RevPAR of approximately 46% and 9%, respectively.

At the end of September 2024, Comparable Group Revenue Pace and room night bookings for 2024 increased over 9% and 4%, respectively, as compared to what 2023 group bookings were at the end of September 2023, with 2024 average Comparable group rates projected to exceed 2023 average Comparable group rates by approximately 5% for the same time period. Additionally, at the end of September 2024, Comparable Group Revenue Pace and room night bookings for 2025 increased over 5% and nearly 2%, respectively, as compared to what 2024 group bookings were at the end of September 2023, with 2025 average Comparable group rates projected to exceed 2024 average Comparable group rates by over 3% for the same time period.

Hurricane Update

Park's hotels located in Key West, Miami and Orlando, remained fully operational while sustaining minimal damage and business interruption from Hurricanes Helene and Milton, which impacted the Southeast in September 2024 and October 2024, respectively. Park expects approximately $2 million of Hotel Adjusted EBITDA disruption from the hurricanes, with minimal financial impact in the third quarter of 2024.

Balance Sheet and Liquidity

Park's current liquidity is over $1.4 billion, including approximately $950 million of available capacity under the Company's revolving credit facility ("Revolver"). As of September 30, 2024, Park's Net Debt was approximately $3.5 billion, which excludes the $725 million non-recourse CMBS Loan ("SF Mortgage Loan") secured by the 1,921-room Hilton San Francisco Union Square and 1,024-room Parc 55 San Francisco – a Hilton Hotel (collectively, the "Hilton San Francisco Hotels").

As of September 30, 2024, the weighted average maturity of Park's consolidated debt, excluding the SF Mortgage Loan, is 3.4 years.

Park had the following debt outstanding as of September 30, 2024:

(unaudited, dollars in millions)     
Debt Collateral Interest Rate Maturity Date As of
September 30, 2024
Fixed Rate Debt        
Mortgage loan Hilton Denver City Center 4.90% March 2025(1) $53 
Mortgage loan Hyatt Regency Boston 4.25% July 2026  125 
Mortgage loan DoubleTree Hotel Spokane City Center 3.62% July 2026  14 
Mortgage loan Hilton Hawaiian Village Beach Resort 4.20% November 2026  1,275 
Mortgage loan Hilton Santa Barbara Beachfront Resort 4.17% December 2026  157 
Mortgage loan DoubleTree Hotel Ontario Airport 5.37% May 2027  30 
2028 Senior Notes Unsecured 5.88% October 2028  725 
2029 Senior Notes Unsecured 4.88% May 2029  750 
2030 Senior Notes Unsecured 7.00% February 2030  550 
Finance lease obligations   7.44% 2024 to 2028  1 
Total Fixed Rate Debt   5.10%(2)    3,680 
         
Variable Rate Debt        
Revolver(3) Unsecured SOFR + 1.80%(4) December 2026   
2024 Term Loan Unsecured SOFR + 1.75%(4) May 2027  200 
Total Variable Rate Debt   6.81%    200 
         
Add: unamortized premium         
Less: unamortized deferred financing costs and discount      (25)
Total Debt(5)(6)   5.19%(2)   $3,855 

______________________________________________

(1)The loan matures in August 2042 but became callable by the lender in August 2022 with six months of notice. As of September 30, 2024, Park had not received notice from the lender.
(2)Calculated on a weighted average basis.
(3)Park has approximately $950 million of available capacity under the Revolver.
(4)SOFR includes a credit spread adjustment of 0.1%.
(5)Excludes $157 million of Park’s share of debt of its unconsolidated joint ventures.
(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

Through the third quarter of 2024, Park has spent $164 million on capital improvements at its hotels and expects to incur approximately $230 million to $250 million in capital improvement costs during 2024. Key current and upcoming renovations and return on investment projects include:

(dollars in millions)        
Projects & Scope of Work Estimated
Start Date
 Estimated
Completion Date
 Budget Total
Incurred
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 $17
 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 $12
 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 $12
 Phase 2: Renovation of 437 guestrooms at the 1,167-room Main Tower Q2 2025 Q3 2025 $31 $


Dividends

Park declared a third quarter 2024 cash dividend of $0.25 per share to stockholders of record as of September 30, 2024. The third quarter 2024 cash dividend was paid on October 15, 2024. Park is currently targeting paying a fourth quarter dividend, subject to approval by its Board of Directors, in the range of 65% to 70% of Adjusted FFO per share for the full year, which would include both the $0.25 per share fixed quarterly component plus an incremental top-off dividend.

Full-Year 2024 Outlook

Park is not in a position to update its full-year 2024 outlook at this time due to the uncertainty surrounding continuing negotiations between Park's operators and labor unions and the related impacts on operating results, which was not factored into Park's prior outlook. Park will provide a revised outlook once the appropriate agreements have been ratified and Park has a better understanding of the impacts to its operating results.

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 2024 results on October 30, 2024 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 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 $725 million SF Mortgage Loan secured by the Hilton San Francisco Hotels and the lender's exercise of its remedies, including placing such hotels into receivership, as well as Park’s current expectations regarding the performance of its business, financial results, liquidity and capital resources, including anticipated repayment of certain of Park's indebtedness, the completion of capital allocation priorities, the expected repurchase of Park's stock, the impact from macroeconomic factors (including inflation, elevated interest rates, potential economic slowdown or a recession and geopolitical conflicts), the effects of competition and the effects of future legislation or regulations, the expected completion of anticipated dispositions, the declaration, payment and any change in amounts 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 Park’s control and which could materially affect its results of operations, financial condition, cash flows, performance or future achievements or events.

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 41 premium-branded hotels and resorts with over 25,000 rooms primarily located in prime city center and resort locations. Visit www.pkhotelsandresorts.com for more information.

Investor Contact1775 Tysons Boulevard, 7th Floor
Ian WeissmanTysons, VA 22102
+ 1 571 302 5591www.pkhotelsandresorts.com


PARK HOTELS & RESORTS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data)

 September 30, 2024 December 31, 2023
 (unaudited)   
ASSETS   
Property and equipment, net$7,413  $7,459 
Contract asset 804   760 
Intangibles, net 42   42 
Cash and cash equivalents 480   717 
Restricted cash 38   33 
Accounts receivable, net of allowance for doubtful accounts of $3 and $3 124   112 
Prepaid expenses 57   59 
Other assets 38   40 
Operating lease right-of-use assets 177   197 
TOTAL ASSETS (variable interest entities – $231 and $236)$9,173  $9,419 
LIABILITIES AND EQUITY   
Liabilities   
Debt$3,855  $3,765 
Debt associated with hotels in receivership 725   725 
Accrued interest associated with hotels in receivership 79   35 
Accounts payable and accrued expenses 240   210 
Dividends payable 57   362 
Due to hotel managers 111   131 
Other liabilities 187   200 
Operating lease liabilities 212   223 
Total liabilities (variable interest entities – $215 and $218) 5,466   5,651 
Stockholders' Equity   
Common stock, par value $0.01 per share, 6,000,000,000 shares authorized, 207,257,541 shares issued and 206,403,675 shares outstanding as of September 30, 2024 and 210,676,264 shares issued and 209,987,581 shares outstanding as of December 31, 2023 2   2 
Additional paid-in capital 4,103   4,156 
Accumulated deficit (353)  (344)
Total stockholders' equity 3,752   3,814 
Noncontrolling interests (45)  (46)
Total equity 3,707   3,768 
TOTAL LIABILITIES AND EQUITY$9,173  $9,419 


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,
  2024   2023   2024   2023 
Revenues       
Rooms$403  $432  $1,193  $1,256 
Food and beverage 157   159   521   518 
Ancillary hotel 68   66   196   203 
Other 21   22   64   64 
Total revenues 649   679   1,974   2,041 
        
Operating expenses       
Rooms 107   119   314   343 
Food and beverage 112   122   356   377 
Other departmental and support 154   161   454   484 
Other property 65   59   174   182 
Management fees 30   31   93   95 
Impairment and casualty loss       13   204 
Depreciation and amortization 63   65   192   193 
Corporate general and administrative 17   18   52   50 
Other 21   19   62   61 
Total expenses 569   594   1,710   1,989 
        
Gain on sale of assets, net          15 
Gain on derecognition of assets 15      44    
        
Operating income 95   85   308   67 
        
Interest income 6   9   16   29 
Interest expense (54)  (51)  (161)  (155)
Interest expense associated with hotels in receivership (15)  (14)  (44)  (31)
Equity in earnings from investments in affiliates 28   2   29   9 
Other (loss) gain, net (1)     (4)  4 
        
Income (loss) before income taxes 59   31   144   (77)
Income tax (expense) benefit (2)     9   (5)
Net income (loss) 57   31   153   (82)
Net income attributable to noncontrolling interests (3)  (4)  (7)  (8)
Net income (loss) attributable to stockholders$54  $27  $146  $(90)
        
Earnings (loss) per share:       
Earnings (loss) per share - Basic$0.26  $0.13  $0.70  $(0.42)
Earnings (loss) per share - Diluted$0.26  $0.13  $0.69  $(0.42)
        
Weighted average shares outstanding – Basic 206   212   208   216 
Weighted average shares outstanding – Diluted 208   212   210   216 


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,
  2024   2023   2024   2023 
Net income (loss)$57  $31  $153  $(82)
Depreciation and amortization expense 63   65   192   193 
Interest income (6)  (9)  (16)  (29)
Interest expense 54   51   161   155 
Interest expense associated with hotels in receivership(1) 15   14   44   31 
Income tax expense (benefit) 2      (9)  5 
Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates 4   2   9   7 
EBITDA 189   154   534   280 
Gain on sales of assets, net(2) (19)     (19)  (15)
Gain on derecognition of assets(1) (15)     (44)   
Gain on sale of investments in affiliates(3)          (3)
Share-based compensation expense 5   5   14   14 
Impairment and casualty loss       13   204 
Other items (1)  4   16   16 
Adjusted EBITDA$159  $163  $514  $496 

______________________________________________

(1)For the three and nine months ended September 30, 2024 and 2023, 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 beginning October 2023, as Park expects to be released from this obligation upon final resolution with the lender.
(2)For the three and nine months ended September 30, 2024, includes a gain of $19 million on the sale of the Hilton La Jolla Torrey Pines included in equity in earnings from investments in affiliates.
(3)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
September 30,
 Nine Months Ended
September 30,
  2024   2023   2024   2023 
Adjusted EBITDA$159  $163  $514  $496 
Less: Adjusted EBITDA from investments in affiliates (3)  (4)  (19)  (19)
Add: All other(1) 12   14   41   40 
Hotel Adjusted EBITDA 168   173   536   517 
Less: Adjusted EBITDA from hotels disposed of 2   1   3    
Less: Adjusted EBITDA from the Hilton San Francisco Hotels    (1)     (5)
Comparable Hotel Adjusted EBITDA$170  $173  $539  $512 
        
 Three Months Ended
September 30,
 Nine Months Ended
September 30,
  2024   2023   2024   2023 
Total Revenues$649  $679  $1,974  $2,041 
Less: Other revenue (21)  (22)  (64)  (64)
Less: Revenues from hotels disposed of (3)  (4)  (9)  (20)
Less: Revenues from the Hilton San Francisco Hotels    (51)     (145)
Comparable Hotel Revenues$625  $602  $1,901  $1,812 


 Three Months Ended September 30, Nine Months Ended September 30,
  2024   2023  Change(2)  2024   2023  Change(2)
Total Revenues$649  $679  (4.4)% $1,974  $2,041  (3.3)%
Operating income$95  $85  12.3% $308  $67  358.9%
Operating income margin(2) 14.6%  12.5% 210 bps  15.6%  3.3% 1,230 bps
            
Comparable Hotel Revenues$625  $602  3.8% $1,901  $1,812  4.9%
Comparable Hotel Adjusted EBITDA$170  $173  (1.9)% $539  $512  5.2%
Comparable Hotel Adjusted EBITDA margin(2) 27.2%  28.8% (160) bps  28.3%  28.2% 10 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.


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,
  2024   2023   2024   2023 
Net income (loss) attributable to stockholders$54  $27  $146  $(90)
Depreciation and amortization expense 63   65   192   193 
Depreciation and amortization expense attributable to noncontrolling interests (1)  (1)  (3)  (3)
Gain on sales of assets, net          (15)
Gain on derecognition of assets(1) (15)     (44)   
Gain on sale of investments in affiliates(2)          (3)
Impairment loss       12   202 
Equity investment adjustments:       
Equity in earnings from investments in affiliates (28)  (2)  (29)  (9)
Pro rata FFO of investments in affiliates 9   2   14   12 
Nareit FFO attributable to stockholders 82   91   288   287 
Casualty loss       1   2 
Share-based compensation expense 5   5   14   14 
Interest expense associated with hotels in receivership(1) 15   6   44   8 
Other items    6   3   18 
Adjusted FFO attributable to stockholders$102  $108  $350  $329 
Nareit FFO per share – Diluted(3)$0.40  $0.43  $1.37  $1.33 
Adjusted FFO per share – Diluted(3)$0.49  $0.51  $1.67  $1.52 
Weighted average shares outstanding – Diluted 208   212   210   216 

______________________________________________

(1)For the three and nine months ended September 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 beginning October 2023, as Park expects to be released from this obligation upon final resolution with the lender. For the three and nine months ended September 30, 2023, reflects incremental default interest expense and late payment administrative fees associated with the default of the SF Mortgage Loan beginning in June 2023.
(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

(unaudited, in millions) 
 September 30, 2024
Debt$3,855 
Add: unamortized deferred financing costs and discount 25 
Less: unamortized premium  
Debt, excluding unamortized deferred financing cost, premiums and discounts 3,880 
Add: Park's share of unconsolidated affiliates debt, excluding unamortized deferred financing costs 157 
Less: cash and cash equivalents (480)
Less: restricted cash (38)
Net Debt$3,519 


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 October 29, 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.


FAQ

What was Park Hotels & Resorts (PK) RevPAR growth in Q3 2024?

Park Hotels & Resorts reported a 3.3% increase in Comparable RevPAR to $189.73 in Q3 2024 compared to Q3 2023.

How much did Park Hotels & Resorts (PK) spend on share repurchases in Q3 2024?

Park Hotels & Resorts repurchased 2.5 million shares for $35 million at an average price of $13.85 per share in August 2024.

What was Park Hotels & Resorts (PK) quarterly dividend in Q3 2024?

Park Hotels & Resorts paid a cash dividend of $0.25 per share for Q3 2024 to stockholders of record as of September 30, 2024.

Park Hotels & Resorts Inc.

NYSE:PK

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PK Stock Data

3.02B
201.18M
1.59%
102.57%
10.19%
REIT - Hotel & Motel
Hotels & Motels
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United States of America
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