TYSONS, Va.–(BUSINESS WIRE)–$PK #earnings–Park Hotels & Resorts Inc. (“Park” or the “Company”) (NYSE: PK) today announced results for the second quarter ended June 30, 2019. Highlights include:
Second Quarter 2019 Highlights
- Comparable RevPAR was $191.72, an increase of 0.8% from the same period in 2018;
- Net income was $84 million and net income attributable to stockholders was $82 million;
- Adjusted EBITDA was $207 million;
- Adjusted FFO attributable to stockholders was $164 million;
- Diluted earnings per share was $0.40;
- Diluted Adjusted FFO per share was $0.81;
- Comparable Hotel Adjusted EBITDA margin was 31.3% or a decrease of 90 bps from the same period in 2018;
- Completed the sale of the Hilton Atlanta Airport, Embassy Suites Parsippany and Hilton New Orleans Airport for total gross proceeds of $166 million;
- Entered into a merger agreement with Chesapeake Lodging Trust, which is currently expected to close in mid-to-late September of 2019; and
- Park and its JV partners entered into an agreement to sell the Conrad Dublin for a gross sales price of approximately $130 million.
Thomas J. Baltimore, Jr., Chairman, President and Chief Executive Officer, stated, “I am pleased to announce results for another solid quarter with RevPAR increasing 0.8% against very difficult year-over-year comparisons and a challenging demand environment. We delivered strong operating results in Key West, San Francisco and Southern California, while overall softness in business transient impacted markets like New York and Chicago. Despite these challenges, our comparable portfolio grew RevPAR index share by 350 basis points in aggregate, highlighting the continued success of our asset management initiatives. We also closed on the sale of three hotels in the quarter for total gross proceeds of $166 million, which is in line with our strategy to reduce leverage as part of the proposed Chesapeake acquisition. Finally, we continue to make meaningful progress toward closing the proposed Chesapeake acquisition, with Chesapeake recently announcing that it has entered into an agreement to sell its two New York City hotels. We remain on track to close the proposed Chesapeake acquisition in mid-to-late September 2019. We have strong conviction about the opportunity, and we remain confident in the long-term benefits of this transaction.”
Selected Statistical and Financial Information
|
(unaudited, amounts in millions, except per share data, Comparable RevPAR and Comparable ADR) |
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Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
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|
2019 |
|
|
2018 |
|
|
Change(1) |
|
|
2019 |
|
|
2018 |
|
|
Change(1) |
|
||||||
|
Comparable RevPAR |
$ |
191.72 |
|
|
$ |
190.22 |
|
|
|
0.8 |
% |
|
$ |
185.41 |
|
|
$ |
180.83 |
|
|
|
2.5 |
% |
|
Comparable Occupancy |
|
86.6 |
% |
|
|
85.9 |
% |
|
|
0.7 |
% pts |
|
|
83.1 |
% |
|
|
82.5 |
% |
|
|
0.6 |
% pts |
|
Comparable ADR |
$ |
221.40 |
|
|
$ |
221.47 |
|
|
|
(0.0 |
)% |
|
$ |
223.19 |
|
|
$ |
219.16 |
|
|
|
1.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
84 |
|
|
$ |
218 |
|
|
|
(61.5 |
)% |
|
$ |
181 |
|
|
$ |
367 |
|
|
|
(50.7 |
)% |
|
Net income attributable to stockholders |
$ |
82 |
|
|
$ |
216 |
|
|
|
(62.0 |
)% |
|
$ |
178 |
|
|
$ |
366 |
|
|
|
(51.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
207 |
|
|
$ |
228 |
|
|
|
(9.2 |
)% |
|
$ |
383 |
|
|
$ |
402 |
|
|
|
(4.7 |
)% |
|
Comparable Hotel Adjusted EBITDA |
$ |
208 |
|
|
$ |
212 |
|
|
|
(1.8 |
)% |
|
$ |
384 |
|
|
$ |
374 |
|
|
|
2.9 |
% |
|
Comparable Hotel Adjusted EBITDA margin |
|
31.3 |
% |
|
|
32.2 |
% |
|
|
(90 |
) bps |
|
|
30.0 |
% |
|
|
30.1 |
% |
|
|
(10 |
)bps |
|
Adjusted FFO attributable to stockholders |
$ |
164 |
|
|
$ |
187 |
|
|
|
(12.3 |
)% |
|
$ |
300 |
|
|
$ |
324 |
|
|
|
(7.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share – Diluted(1) |
$ |
0.40 |
|
|
$ |
1.07 |
|
|
|
(62.6 |
)% |
|
$ |
0.88 |
|
|
$ |
1.77 |
|
|
|
(50.3 |
)% |
|
Adjusted FFO per share – Diluted(1) |
$ |
0.81 |
|
|
$ |
0.93 |
|
|
|
(12.9 |
)% |
|
$ |
1.49 |
|
|
$ |
1.57 |
|
|
|
(5.1 |
)% |
|
Weighted average shares outstanding – Diluted |
|
202 |
|
|
|
201 |
|
|
|
1 |
|
|
|
202 |
|
|
|
206 |
|
|
|
(4 |
) |
| ____________________________ | |||||||||||||||||||||||
|
(1) Amounts are calculated based on unrounded numbers. |
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Top 10 Hotels
RevPAR at Park’s Top 10 Hotels increased 1.0% during the second quarter and 3.0% year-to-date, as compared to the same periods in 2018, primarily due to a 1.7% increase in occupancy, offset by a 0.9% decrease in rate during the second quarter, while year-to-date growth was due to a 1.2% increase in occupancy and a 1.6% increase in rate. Highlights within the Top 10 Hotels include:
- Hilton Hawaiian Village Waikiki Beach Resort: RevPAR increased 0.8% for the quarter and 0.6% year-to-date primarily due to an increase in group revenue;
- Hilton San Francisco Union Square / Parc 55 San Francisco – a Hilton Hotel: Combined RevPAR increased 4.5% for the quarter and 13.8% year-to-date due to strong group demand, resulting in an increase in group revenue of 12.8% and 27.0%, respectively, coupled with a 2.6% and 9.2% increase in contract revenue for the quarter and year-to-date, respectively;
- New York Hilton Midtown: RevPAR decreased 1.7% for the quarter and 1.5% year-to-date primarily due to a decline in rate as a result of a decrease in group business, partially offset by increases in both transient and contract business;
- Hilton Orlando Bonnet Creek / Waldorf Astoria Orlando: Combined RevPAR increased 2.1% for the quarter and 0.7% year-to-date primarily due to an increase in RevPAR of 6.1% at the Waldorf Astoria Orlando for the quarter and an overall increase in group business year-to-date;
- Hilton New Orleans Riverside: RevPAR decreased 5.3% for the quarter and 1.7% year-to-date primarily due to a decrease in group revenue for the quarter, partially offset by increases in both transient and contract business;
- Hilton Chicago: RevPAR decreased 1.4% during the quarter and 2.6% year-to-date as a result of a decrease in group revenue from fewer citywide event room nights;
- Casa Marina, A Waldorf Astoria Resort: RevPAR increased 6.2% during the quarter and 7.1% year-to-date primarily attributable to an increase in occupancy from strong transient demand; and
- Hilton Waikoloa Village: RevPAR increased 4.5% for the quarter, primarily due to increases in occupancy as a result of an increase in transient and contract business, which until this quarter, experienced disruption caused by the 2018 volcanic activity on the Big Island, contributing to a year-to-date RevPAR decrease of 1.4%.
Total Consolidated Comparable Hotels
Comparable RevPAR increased 0.8% for the quarter and 2.5% year-to-date. The increase in comparable RevPAR during the quarter was primarily due to increases in transient and contract revenues of 1.1% and 11.4%, respectively, as a result of an increase in occupancy, which was partially offset by a decrease in group revenue of 1.7%. The year-to-date increase in comparable RevPAR was primarily due to increases in group, contract and transient revenues of 4.0%, 13.8% and 0.4%, respectively. Group and contract revenue benefited from increases in both occupancy and rate.
The overall increase in comparable RevPAR for both periods was primarily a result of increases in occupancy at both Park’s Northern California and Southern California hotels. Northern California benefited from increases in rate and occupancy at Park’s San Francisco hotels due to increases in group and contract revenue of 12.8% and 2.6%, respectively, during the quarter and 27.0% and 9.2%, respectively, year-to-date. Southern California benefited primarily from a 28.8% and 38.0% RevPAR increase at the Hilton Santa Barbara Beachfront Resort during the quarter and year-to-date, respectively, from increases in occupancy and rate following the renovation and repositioning of the hotel completed in April 2018. Additionally, RevPAR increased at Park’s Hawaii hotels during the quarter and year-to-date primarily as a result of an increase in occupancy of 8.8% and 2.4%, respectively, at the Hilton Waikoloa Village.
The overall increase in RevPAR for our comparable hotels was partially offset by declines in RevPAR at our Chicago, New York and New Orleans hotels for both the quarter and year-to-date. The decline in RevPAR in Park’s Chicago hotels was primarily a result of a decrease in group revenue resulting from fewer citywide event room nights. The declines in RevPAR at Park’s New York and New Orleans hotels were primarily due to lower group business, only partially offset by an increase in transient and contract business.
Insurance Update
In September 2017, Hurricanes Irma and Maria caused damage and disruption at the Caribe Hilton in San Juan Puerto Rico and Park’s two hotels in Key West, Florida. The Caribe Hilton, which was closed throughout 2018, reopened on June 19, 2019.
For the second quarter, the Caribe Hilton incurred a $4 million Adjusted EBITDA loss as a result of not receiving an anticipated $5 million of business interruption proceeds. Subsequent to the end of the second quarter, the insurance carriers authorized an additional $10 million advance, of which approximately $4 million has been received and the remainder is expected to be received in the coming weeks. To date, Park has received approximately $124 million of insurance proceeds for the Caribe Hilton under this claim.
Additionally, to date Park has received $8 million of insurance proceeds related to property damage for both the Key West hotels. Park expects to finalize the insurance claims related to its Puerto Rico and Key West hotels by the end of 2019.
Dispositions
In June 2019, Park sold the 507-room Hilton Atlanta Airport in Atlanta, GA, the 274-room Embassy Suites Parsippany in Parsippany, NJ and the 317-room Hilton New Orleans Airport in New Orleans, LA for a combined sales price of $166 million or $151,000 per key.
In July 2019, Park and other owners of the entity that owns the Conrad Dublin, entered into an agreement to sell their ownership interests in the entity for a gross sales price of approximately $130 million. Proceeds are payable in cash at closing and are subject to customary pro rations and adjustments. Park’s pro-rata share of the gross sales price is approximately $62 million, which will be used for general corporate purposes, including a potential distribution to stockholders, subject to declaration by Park’s Board of Directors. The sale is subject to customary closing conditions and required regulatory approvals and is currently anticipated to close in the fourth quarter of 2019.
Balance Sheet and Liquidity
Park had the following debt outstanding as of June 30, 2019:
|
(unaudited, dollars in millions) |
|
|
|
|
|
|
|||||
|
Debt |
|
Collateral |
|
Interest Rate |
|
Maturity Date |
|
As of |
|||
|
Fixed Rate Debt |
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage loan |
|
DoubleTree Hotel Spokane City Center |
|
3.55% |
|
October 2020 |
|
$ |
12 |
|
|
|
Commercial mortgage-backed securities loan |
|
Hilton San Francisco Union Square, Parc 55 San Francisco – a Hilton Hotel |
|
4.11% |
|
November 2023 |
|
|
725 |
|
|
|
Commercial mortgage-backed securities loan |
|
Hilton Hawaiian Village Beach Resort |
|
4.20% |
|
November 2026 |
|
|
1,275 |
|
|
|
Mortgage loan |
|
Hilton Santa Barbara Beachfront Resort |
|
4.17% |
|
December 2026 |
|
|
165 |
|
|
|
Capital lease obligations |
|
|
|
3.07% |
|
2021 to 2022 |
|
|
1 |
|
|
|
Total Fixed Rate Debt |
|
|
|
4.16%(1) |
|
|
|
|
2,178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable Rate Debt |
|
|
|
|
|
|
|
|
|
|
|
|
Revolving credit facility(2) |
|
Unsecured |
|
L + 1.60% |
|
December 2021(3) |
|
|
— |
|
|
|
Term loan |
|
Unsecured |
|
L + 1.55% |
|
December 2021 |
|
|
750 |
|
|
|
Mortgage loan |
|
DoubleTree Hotel Ontario Airport |
|
L + 2.25% |
|
May 2022(3) |
|
|
30 |
|
|
|
Total Variable Rate Debt |
|
|
|
3.98% |
|
|
|
|
780 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: unamortized deferred financing costs and discount |
|
|
|
|
|
|
|
(9 |
) |
||
|
Total Debt(4) |
|
|
|
4.11%(1) |
|
|
|
$ |
2,949 |
|
|
| ____________________________ | |
|
(1) |
Calculated on a weighted average basis. |
|
(2) |
$1 billion available. |
|
(3) |
Assumes the exercise of all extensions that are exercisable solely at Park’s option. |
|
(4) |
Excludes $234 million of Park’s share of debt of its unconsolidated joint ventures. |
Total cash and cash equivalents were $480 million as of June 30, 2019, including $170 million of restricted cash, of which $154 million is held in escrow and is expected to be used in a 1031 tax deferred exchange.
Capital Investments
Excluding the redevelopment of the Caribe Hilton, Park invested $29 million in the second quarter on capital improvements at its hotels, including $19 million on improvements made to guest rooms, meeting spaces and other guest-facing areas. Key projects for the quarter included:
- Hilton Boston Logan Airport: $5 million primarily on guest room renovations;
- Hilton Orlando Bonnet Creek: $5 million primarily on meeting room and guest room renovations;
- Hilton Hawaiian Village Waikiki Beach Resort: $2 million primarily on guest room and exterior renovations;
- Hilton New Orleans Riverside: $2 million primarily on guest room renovations;
- Waldorf Astoria Reach Resort: $2 million primarily on guest room renovations in anticipation of conversion of the hotel to the Curio brand, which is expected to be completed by the end of 2019.
Dividends
Park declared a second quarter 2019 cash dividend of $0.45 per share to stockholders of record as of June 28, 2019. The second quarter 2019 cash dividend was paid on July 15, 2019.
On July 26, 2019, Park declared a third quarter 2019 cash dividend of $0.45 per share to be paid on October 15, 2019 to stockholders of record as of September 30, 2019.
Full-Year 2019 Outlook
Hilton Waikoloa Village is included in Park’s 2019 comparable hotels as its room count is expected to remain consistent throughout 2019 as compared to 2018. The full-year outlook has been adjusted to remove the June 2019 asset sales and reflect pricing of Park’s property insurance renewal, which occurred in June 2019. Park expects the full-year 2019 operating results, excluding the effect of the acquisition of Chesapeake Lodging Trust (“Chesapeake”) to be as follows:
|
(unaudited, dollars in millions, except per share amounts and Comparable RevPAR) |
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|
|
2019 Outlook |
|
|
2019 Outlook |
|
|
Change at |
|
|
|||||||||||
|
|
|
as of July 31, 2019 |
|
|
as of May 6, 2019 |
|
|
Midpoint |
|
|
|||||||||||
|
Metric |
|
Low |
|
|
High |
|
|
Low |
|
|
High |
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||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable RevPAR Growth |
|
|
2.0 |
% |
|
|
3.5 |
% |
|
|
2.5 |
% |
|
|
4.5 |
% |
|
|
-0.75 |
% |
|
|
Comparable RevPAR |
|
$ |
183 |
|
|
$ |
186 |
|
|
$ |
181 |
|
|
$ |
184 |
|
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
329 |
|
|
$ |
353 |
|
|
$ |
358 |
|
|
$ |
386 |
|
|
$ |
(31.0 |
) |
|
|
Net income attributable to stockholders |
|
$ |
322 |
|
|
$ |
346 |
|
|
$ |
350 |
|
|
$ |
378 |
|
|
$ |
(30.0 |
) |
|
|
Diluted earnings per share(1) |
|
$ |
1.59 |
|
|
$ |
1.71 |
|
|
$ |
1.73 |
|
|
$ |
1.87 |
|
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
735 |
|
|
$ |
760 |
|
|
$ |
750 |
|
|
$ |
780 |
|
|
$ |
(17.5 |
) |
|
|
Comparable Hotel Adjusted EBITDA margin change |
|
|
0 |
|
bps |
|
50 |
|
bps |
|
20 |
|
bps |
|
80 |
|
bps |
|
(25 |
) |
bps |
|
Adjusted FFO per share – Diluted(1) |
|
$ |
2.86 |
|
|
$ |
2.98 |
|
|
$ |
2.93 |
|
|
$ |
3.07 |
|
|
$ |
(0.08 |
) |
|
| ____________________________ | |
|
(1) |
Per share amounts are calculated based on unrounded numbers. |
Full-year 2019 guidance is based in part on the following assumptions:
- General and administrative expenses are projected to be $44 million, excluding $15 million of non-cash share-based compensation expense, $7 million of transaction costs and $1 million of severance expense;
- Fully diluted weighted average shares are expected to be 201.9 million;
- Includes $8 million of Adjusted EBITDA from the Caribe Hilton representing a partial year of operations, for which Park expects to be covered by business interruption insurance resulting from the hotel being closed for a portion of 2019 following the damage caused by Hurricane Maria; and
- Excludes potential future acquisitions and dispositions, which could result in a material change to Park’s outlook, including the effect of the acquisition of Chesapeake.
Park’s full-year 2019 guidance is based on a number of factors, many of which are outside the Company’s control and all of which are subject to change. Park may change the guidance provided during the year as actual and anticipated results vary from these assumptions.
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 2019 results on Thursday, August 1, 2019 beginning at 10:00 a.m. Eastern Time. Participants may listen to the live webcast by logging onto the Investors section of the website at www.pkhotelsandresorts.com. Alternatively, participants may listen to the live call by dialing (877) 451-6152 in the United States or (201) 389-0879 internationally and requesting Park Hotels & Resorts’ Second Quarter 2019 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 and transcript of the webcast will be available within 24 hours after the live event on the Investors section of Park’s website.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements related to Park’s current expectations regarding the performance of its business, financial results, liquidity and capital resources, the effects of competition and the effects of future legislation or regulations, the expected completion of anticipated acquisitions and dispositions, the declaration and payment of future dividends, the expected timetable and likelihood for completing the proposed transaction involving Park and Chesapeake, statements about the benefits of the proposed transaction involving Park and Chesapeake 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” or the negative version of these words or other comparable words.
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements for various reasons, including risks associated with Park’s ability to consummate the proposed transaction with Chesapeake and the timing of the closing of the proposed transaction; and the availability of financing; as well as other risks and uncertainties detailed from time to time in Park’s filings with the SEC. 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, 2018, as such factors may be updated from time to time in Park’s filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Except as required by law, Park undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
Park presents certain non-GAAP financial measures in this press release, including Nareit FFO attributable to stockholders Adjusted FFO attributable to stockholders, EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA, and Hotel Adjusted EBITDA margin. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss) as a measure of its operating performance. Please see the schedules included in this press release including the “Definitions” section for additional information and reconciliations of such non-GAAP financial measures.
About Park
Park is the second largest publicly traded lodging REIT with a diverse portfolio of market-leading hotels and resorts with significant underlying real estate value. Park’s portfolio currently consists of 48 premium-branded hotels and resorts with over 29,000 rooms, a substantial portion of which are located in prime United States markets with high barriers to entry.
|
PARK HOTELS & RESORTS INC. |
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|
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
|
(unaudited, in millions, except share and per share data) |
||||||||
|
|
|
June 30, |
|
|
December 31, |
|
||
|
|
|
2019 |
|
|
2018 |
|
||
|
ASSETS |
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
$ |
7,764 |
|
|
$ |
7,975 |
|
|
Investments in affiliates |
|
|
52 |
|
|
|
50 |
|
|
Goodwill |
|
|
607 |
|
|
|
607 |
|
|
Intangibles, net |
|
|
2 |
|
|
|
27 |
|
|
Cash and cash equivalents |
|
|
310 |
|
|
|
410 |
|
|
Restricted cash |
|
|
170 |
|
|
|
15 |
|
|
Accounts receivable, net |
|
|
186 |
|
|
|
153 |
|
|
Prepaid expenses |
|
|
88 |
|
|
|
82 |
|
|
Other assets |
|
|
45 |
|
|
|
44 |
|
|
Operating lease right-of-use asset |
|
|
207 |
|
|
|
— |
|
|
TOTAL ASSETS |
|
$ |
9,431 |
|
|
$ |
9,363 |
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Debt |
|
$ |
2,949 |
|
|
$ |
2,948 |
|
|
Accounts payable and accrued expenses |
|
|
208 |
|
|
|
183 |
|
|
Due to hotel manager |
|
|
117 |
|
|
|
137 |
|
|
Due to Hilton Grand Vacations |
|
|
135 |
|
|
|
135 |
|
|
Deferred income tax liabilities |
|
|
42 |
|
|
|
42 |
|
|
Other liabilities |
|
|
204 |
|
|
|
332 |
|
|
Operating lease liability |
|
|
200 |
|
|
|
— |
|
|
Total liabilities |
|
|
3,855 |
|
|
|
3,777 |
|
|
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
Common stock, par value $0.01 per share, 6,000,000,000 shares authorized, 201,799,199 shares issued and 201,621,099 shares outstanding as of June 30, 2019 and 201,290,458 shares issued and 201,198,381 shares outstanding as of December 31, 2018 |
|
|
2 |
|
|
|
2 |
|
|
Additional paid-in capital |
|
|
3,591 |
|
|
|
3,589 |
|
|
Retained earnings |
|
|
2,034 |
|
|
|
2,047 |
|
|
Accumulated other comprehensive loss |
|
|
(5 |
) |
|
|
(6 |
) |
|
Total stockholders’ equity |
|
|
5,622 |
|
|
|
5,632 |
|
|
Noncontrolling interests |
|
|
(46 |
) |
|
|
(46 |
) |
|
Total equity |
|
|
5,576 |
|
|
|
5,586 |
|
|
TOTAL LIABILITIES AND EQUITY |
|
$ |
9,431 |
|
|
$ |
9,363 |
|
|
PARK HOTELS & RESORTS INC. |
||||||||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(unaudited, in millions, except per share data) |
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|
|
Three Months Ended |
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|
Six Months Ended |
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||||||||||
|
|
|
June 30, |
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|
June 30, |
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||||||||||
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
435 |
|
|
$ |
451 |
|
|
$ |
840 |
|
|
$ |
869 |
|
|
Food and beverage |
|
|
195 |
|
|
|
205 |
|
|
|
378 |
|
|
|
388 |
|
|
Ancillary hotel |
|
|
54 |
|
|
|
58 |
|
|
|
107 |
|
|
|
108 |
|
|
Other |
|
|
19 |
|
|
|
17 |
|
|
|
37 |
|
|
|
34 |
|
|
Total revenues |
|
|
703 |
|
|
|
731 |
|
|
|
1,362 |
|
|
|
1,399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
|
113 |
|
|
|
112 |
|
|
|
220 |
|
|
|
224 |
|
|
Food and beverage |
|
|
130 |
|
|
|
131 |
|
|
|
254 |
|
|
|
257 |
|
|
Other departmental and support |
|
|
151 |
|
|
|
155 |
|
|
|
300 |
|
|
|
311 |
|
|
Other property-level |
|
|
49 |
|
|
|
50 |
|
|
|
98 |
|
|
|
103 |
|
|
Management and franchise fees |
|
|
36 |
|
|
|
39 |
|
|
|
69 |
|
|
|
72 |
|
|
Depreciation and amortization |
|
|
61 |
|
|
|
69 |
|
|
|
123 |
|
|
|
139 |
|
|
Corporate general and administrative |
|
|
22 |
|
|
|
15 |
|
|
|
39 |
|
|
|
31 |
|
|
Other |
|
|
18 |
|
|
|
18 |
|
|
|
38 |
|
|
|
35 |
|
|
Total expenses |
|
|
580 |
|
|
|
589 |
|
|
|
1,141 |
|
|
|
1,172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) gain on sales of assets, net |
|
|
(12 |
) |
|
|
7 |
|
|
|
19 |
|
|
|
96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
111 |
|
|
|
149 |
|
|
|
240 |
|
|
|
323 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
2 |
|
|
|
1 |
|
|
|
3 |
|
|
|
2 |
|
|
Interest expense |
|
|
(33 |
) |
|
|
(31 |
) |
|
|
(65 |
) |
|
|
(62 |
) |
|
Equity in earnings from investments in affiliates |
|
|
10 |
|
|
|
8 |
|
|
|
15 |
|
|
|
12 |
|
|
Loss on foreign currency transactions |
|
|
— |
|
|
|
(4 |
) |
|
|
— |
|
|
|
(3 |
) |
|
Other (loss) gain, net |
|
|
(1 |
) |
|
|
108 |
|
|
|
— |
|
|
|
108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
89 |
|
|
|
231 |
|
|
|
193 |
|
|
|
380 |
|
|
Income tax expense |
|
|
(5 |
) |
|
|
(13 |
) |
|
|
(12 |
) |
|
|
(13 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
84 |
|
|
|
218 |
|
|
|
181 |
|
|
|
367 |
|
|
Net income attributable to noncontrolling interests |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(1 |
) |
|
Net income attributable to stockholders |
|
$ |
82 |
|
|
$ |
216 |
|
|
$ |
178 |
|
|
$ |
366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share – Basic |
|
$ |
0.40 |
|
|
$ |
1.07 |
|
|
$ |
0.88 |
|
|
$ |
1.77 |
|
|
Earnings per share – Diluted |
|
$ |
0.40 |
|
|
$ |
1.07 |
|
|
$ |
0.88 |
|
|
$ |
1.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding – Basic |
|
|
201 |
|
|
|
200 |
|
|
|
201 |
|
|
|
205 |
|
|
Weighted average shares outstanding – Diluted |
|
|
202 |
|
|
|
201 |
|
|
|
202 |
|
|
|
206 |
|
|
PARK HOTELS & RESORTS INC. |
||||||||||||||||
|
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS |
||||||||||||||||
|
EBITDA AND ADJUSTED EBITDA |
||||||||||||||||
|
(unaudited, in millions) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|||||||||||
|
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
|
Net income |
|
$ |
84 |
|
|
$ |
218 |
|
|
$ |
181 |
|
|
$ |
367 |
|
|
Depreciation and amortization expense |
|
|
61 |
|
|
|
69 |
|
|
|
123 |
|
|
|
139 |
|
|
Interest income |
|
|
(2 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
(2 |
) |
|
Interest expense |
|
|
33 |
|
|
|
31 |
|
|
|
65 |
|
|
|
62 |
|
|
Income tax expense |
|
|
5 |
|
|
|
13 |
|
|
|
12 |
|
|
|
13 |
|
|
Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates |
|
|
7 |
|
|
|
5 |
|
|
|
12 |
|
|
|
12 |
|
|
EBITDA |
|
|
188 |
|
|
|
335 |
|
|
|
390 |
|
|
|
591 |
|
|
Loss (gain) on sales of assets, net |
|
|
12 |
|
|
|
(7 |
) |
|
|
(19 |
) |
|
|
(96 |
) |
|
Gain on sale of investments in affiliates(1) |
|
|
— |
|
|
|
(108 |
) |
|
|
— |
|
|
|
(108 |
) |
|
Loss on foreign currency transactions |
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
3 |
|
|
Transition expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
Transaction costs |
|
|
7 |
|
|
|
— |
|
|
|
7 |
|
|
|
— |
|
|
Severance expense |
|
|
1 |
|
|
|
1 |
|
|
|
2 |
|
|
|
1 |
|
|
Share-based compensation expense |
|
|
4 |
|
|
|
4 |
|
|
|
8 |
|
|
|
8 |
|
|
Other items |
|
|
(5 |
) |
|
|
(1 |
) |
|
|
(5 |
) |
|
|
1 |
|
|
Adjusted EBITDA |
|
$ |
207 |
|
|
$ |
228 |
|
|
$ |
383 |
|
|
$ |
402 |
|
Contacts
Investor Contact
Ian Weissman
+ 1 571 302 5591
