EX-99.2 3 pk-ex992_6.htm EX-99.2 pk-ex992_6.htm

 

 

 

 

1 |

 

 

 


 

Fourth Quarter and Year End 2019 Supplemental Data December 31, 2019 Royal Palm South Beach Miami, a Tribute Portfolio Resort Parc 55 San Francisco, a Hilton Hotel Hilton Hawaiian Village Waikiki Beach Reso

 

 

 

 

About Park and Safe Harbor Disclosure

 

 

 

 

 

 

 

 

 

 

 

 

About Park Hotels & Resorts Inc.

Park (NYSE: PK) is the second largest publicly-traded lodging real estate company with a diverse portfolio of market-leading hotels and resorts with significant underlying real estate value. Park’s portfolio consists of 60 premium-branded hotels and resorts with over 33,000 rooms primarily located in prime city center and resort locations. Visit www.pkhotelsandresorts.com for more information.

 

Forward-Looking Statements

This supplement 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 dispositions, the declaration and payment of future dividends, and other non-historical statements. Forward-looking statements include all statements that are not historical facts, and in some cases, can be identified by the use of forward-looking terminology such as the words “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company’s control and which could materially affect its results of operations, financial condition, cash flows, performance or future achievements or events. Currently, one of the most significant factors is the potential adverse effect of COVID-19, including possible resurgences, on the Company’s financial condition, results of operations, cash flows and performance, its hotel management companies and its hotels’ tenants, and the global economy and financial markets. The extent to which COVID-19 impacts the Company, its hotel managers, tenants and guests at the Company’s hotels will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its effect, additional closures that may be mandated or advisable even after the reopening of certain of the Company’s hotels on a limited basis, whether due to an increased number of COVID-19 cases or otherwise, and the direct and indirect economic effects of the pandemic and containment measures, among others.

 

Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. You should not put undue reliance on any forward-looking statements and Park urges investors to carefully review the disclosures Park makes concerning risk and uncertainties in Item 1A: “Risk Factors” in Park’s Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020, as such factors may be updated from time to time in Park’s filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Except as required by law, Park undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Supplemental Financial Information

Park refers to certain non-generally accepted accounting principles (“GAAP”) financial measures in this presentation, including Funds from (used in) Operations (“FFO”) calculated in accordance with the guidelines of the National Association of Real Estate Investment Trusts (“Nareit”), Adjusted FFO, FFO per share, Adjusted FFO per share, Earnings (loss) before interest expense, taxes and depreciation and amortization (“EBITDA”), Adjusted EBITDA, Hotel Adjusted EBITDA, Hotel Adjusted EBITDA margin, Net debt and Net debt to Adjusted EBITDA ratio. 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 presentation including the “Definitions” section for additional information and reconciliations of such non-GAAP financial measures.

 

 

 

 

2 |

 

 

 


 

 

 

 

 

 

 

Table of Contents

 

 

 

 

 

 

 

 

 

 

 

 

1. Financial Statements

4

 

 

 

2. Supplementary Financial Information

7

 

 

 

3. Portfolio and Operating Metrics

17

 

 

 

4. Properties Acquired & Sold

28

 

 

 

5. Liquidity and Capital Structure

31

 

 

 

6. Definitions

35

 

 

 

 

 

 

 

 

Waldorf Astoria Orlando Hilton midtown

Waldorf Astoria Orlando Le Meridien San Francisco New York Hilton Midtown

 

3 |

 

 


 

 

 

 

 

 

 

Financial Statements

 

 

 

 

4 |

 

 

 


 

 

Financial Statements

 

 

 

 

 

Condensed Consolidated Balance Sheets

 

 

 

 

 

(in millions, except share and per share data)

 

 

September 30, 2020

 

 

December 31, 2019

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Property and equipment, net

 

$

9,255

 

 

$

9,594

 

Assets held for sale, net

 

 

 

 

 

71

 

Investments in affiliates

 

 

17

 

 

 

35

 

Goodwill

 

 

 

 

 

607

 

Intangibles, net

 

 

45

 

 

 

46

 

Cash and cash equivalents

 

 

1,134

 

 

 

346

 

Restricted cash

 

 

35

 

 

 

40

 

Accounts receivable, net of allowance for doubtful accounts of $4 and $2

 

 

36

 

 

 

180

 

Prepaid expenses

 

 

43

 

 

 

83

 

Other assets

 

 

53

 

 

 

40

 

Operating lease right-of-use assets

 

 

235

 

 

 

248

 

TOTAL ASSETS (variable interest entities - $234 and $242)

 

$

10,853

 

 

$

11,290

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Debt

 

$

5,121

 

 

$

3,871

 

Accounts payable and accrued expenses

 

 

168

 

 

 

217

 

Due to hotel managers

 

 

102

 

 

 

159

 

Deferred income tax liabilities

 

 

34

 

 

 

50

 

Other liabilities

 

 

124

 

 

 

282

 

Operating lease liabilities

 

 

249

 

 

 

260

 

Total liabilities (variable interest entities - $217 and $219)

 

 

5,798

 

 

 

4,839

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

Common stock, par value $0.01 per share, 6,000,000,000 shares authorized,

    235,914,952 shares issued and 235,613,445 shares outstanding as of

    September 30, 2020 and 239,589,639 shares issued and 239,386,877

    shares outstanding as of December 31, 2019

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

4,512

 

 

 

4,575

 

Retained earnings

 

 

595

 

 

 

1,922

 

Accumulated other comprehensive loss

 

 

(5

)

 

 

(3

)

Total stockholders' equity

 

 

5,104

 

 

 

6,496

 

Noncontrolling interests

 

 

(49

)

 

 

(45

)

Total equity

 

 

5,055

 

 

 

6,451

 

TOTAL LIABILITIES AND EQUITY

 

$

10,853

 

 

$

11,290

 

 

 

 

5 |

 

 


 

 

Financial Statements (continued)

 

 

 

 

 

Condensed Consolidated Statements of Operations

 

 

 

 

 

y financial information juniper hotel, curio collection hotel adagio, autograph collection the reach, Astoria resort

(unaudited, in millions, except per share data)

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

$

70

 

 

$

430

 

 

$

453

 

 

$

1,267

 

Food and beverage

 

 

10

 

 

 

156

 

 

 

174

 

 

 

534

 

Ancillary hotel

 

 

15

 

 

 

64

 

 

 

87

 

 

 

174

 

Other

 

 

3

 

 

 

22

 

 

 

25

 

 

 

59

 

Total revenues

 

 

98

 

 

 

672

 

 

 

739

 

 

 

2,034

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

 

30

 

 

 

114

 

 

 

162

 

 

 

334

 

Food and beverage

 

 

18

 

 

 

117

 

 

 

155

 

 

 

371

 

Other departmental and support

 

 

64

 

 

 

153

 

 

 

296

 

 

 

453

 

Other property-level

 

 

84

 

 

 

54

 

 

 

200

 

 

 

152

 

Management fees

 

 

2

 

 

 

32

 

 

 

27

 

 

 

101

 

Impairment and casualty loss, net

 

 

2

 

 

 

8

 

 

 

696

 

 

 

8

 

Depreciation and amortization

 

 

75

 

 

 

61

 

 

 

225

 

 

 

184

 

Corporate general and administrative

 

 

13

 

 

 

14

 

 

 

42

 

 

 

47

 

Acquisition costs

 

 

9

 

 

 

59

 

 

 

10

 

 

 

65

 

Other

 

 

6

 

 

 

23

 

 

 

31

 

 

 

61

 

Total expenses

 

 

303

 

 

 

635

 

 

 

1,844

 

 

 

1,776

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) gain on sales of assets, net

 

 

(1

)

 

 

1

 

 

 

62

 

 

 

20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income

 

 

(206

)

 

 

38

 

 

 

(1,043

)

 

 

278

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

2

 

 

 

2

 

 

 

5

 

Interest expense

 

 

(59

)

 

 

(33

)

 

 

(149

)

 

 

(98

)

Equity in (losses) earnings from investments in affiliates

 

 

(7

)

 

 

3

 

 

 

(16

)

 

 

18

 

Other loss, net

 

 

(3

)

 

 

(1

)

 

 

(6

)

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income before income taxes

 

 

(275

)

 

 

9

 

 

 

(1,212

)

 

 

202

 

Income tax expense

 

 

(1

)

 

 

 

 

 

(14

)

 

 

(12

)

Net (loss) income(1)

 

 

(276

)

 

 

9

 

 

 

(1,226

)

 

 

190

 

Net loss (income) attributable to noncontrolling interests

 

 

 

 

 

(4

)

 

 

3

 

 

 

(7

)

Net (loss) income attributable to stockholders(1)

 

$

(276

)

 

$

5

 

 

$

(1,223

)

 

$

183

 

 

 

 

(Loss) Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) Earnings per share - Basic

 

$

(1.17

)

 

$

0.02

 

 

$

(5.19

)

 

$

0.90

 

(Loss) Earnings per share - Diluted

 

$

(1.17

)

 

$

0.02

 

 

$

(5.19

)

 

$

0.90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - Basic

 

 

235

 

 

 

206

 

 

 

236

 

 

 

203

 

Weighted average shares outstanding - Diluted

 

 

235

 

 

 

207

 

 

 

236

 

 

 

204

 

____________________________

 

(1)

The nine months ended September 30, 2020 includes $607 million and $90 million of impairment losses related to goodwill and long-lived assets, respectively.

 

 

 

 

 

6 |

 

 


 

 

 

 

 

 

 

 

 

 

Supplementary Financial Information

 

 

 

7 |

 

 

 


 

 

Supplementary Financial Information

 

 

 

 

 

EBITDA and Adjusted EBITDA

 

 

 

 

 

(unaudited, in millions)

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net (loss) income

 

$

(276

)

 

$

9

 

 

$

(1,226

)

 

$

190

 

Depreciation and amortization expense

 

 

75

 

 

 

61

 

 

 

225

 

 

 

184

 

Interest income

 

 

 

 

 

(2

)

 

 

(2

)

 

 

(5

)

Interest expense

 

 

59

 

 

 

33

 

 

 

149

 

 

 

98

 

Income tax expense

 

 

1

 

 

 

 

 

 

14

 

 

 

12

 

Interest expense, income tax and depreciation and

   amortization included in equity in earnings from

   investments in affiliates

 

 

2

 

 

 

7

 

 

 

11

 

 

 

19

 

EBITDA

 

 

(139

)

 

 

108

 

 

 

(829

)

 

 

498

 

Loss (gain) on sales of assets, net

 

 

1

 

 

 

(1

)

 

 

(62

)

 

 

(20

)

Acquisition costs

 

 

9

 

 

 

59

 

 

 

10

 

 

 

65

 

Severance expense

 

 

24

 

 

 

 

 

 

26

 

 

 

2

 

Share-based compensation expense

 

 

4

 

 

 

4

 

 

 

10

 

 

 

12

 

Impairment and casualty loss, net

 

 

2

 

 

 

8

 

 

 

696

 

 

 

8

 

Other items

 

 

10

 

 

 

2

 

 

 

20

 

 

 

(2

)

Adjusted EBITDA

 

$

(89

)

 

$

180

 

 

$

(129

)

 

$

563

 

 

 

 

8 |

 

 


 

 

Supplementary Financial Information (continued)

 

 

 

 

 

Pro-forma Hotel Adjusted EBITDA and Pro-forma Hotel Adjusted EBITDA Margin(1)

 

 

 

 

 

 

(unaudited, dollars in millions)

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Adjusted EBITDA(2)

 

$

(89

)

 

180

 

 

$

(129

)

 

$

563

 

Less: Adjusted EBITDA from investments in

   affiliates

 

 

2

 

 

 

(9

)

 

 

2

 

 

 

(31

)

Add: All other(3)

 

 

11

 

 

 

12

 

 

 

34

 

 

 

41

 

Hotel Adjusted EBITDA

 

 

(76

)

 

 

183

 

 

 

(93

)

 

 

573

 

Add:  Adjusted EBITDA from hotels acquired(1)

 

 

 

 

 

39

 

 

 

 

 

 

129

 

Less: Adjusted EBITDA from hotels disposed of

 

 

 

 

 

(5

)

 

 

(2

)

 

 

(31

)

Pro-forma Hotel Adjusted EBITDA(1)

 

$

(76

)

 

$

217

 

 

$

(95

)

 

$

671

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Total Revenues

 

$

98

 

 

$

672

 

 

$

739

 

 

$

2,034

 

Less: Other revenue

 

 

(3

)

 

 

(22

)

 

 

(25

)

 

 

(59

)

Add: Revenues from hotels acquired(1)

 

 

 

 

 

125

 

 

 

 

 

 

405

 

Less: Revenues from hotels disposed of

 

 

 

 

 

(25

)

 

 

(6

)

 

 

(116

)

Pro-forma Hotel Revenues(1)

 

$

95

 

 

$

750

 

 

$

708

 

 

$

2,264

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2020

 

 

2019

 

 

Change(4)

 

 

2020

 

 

2019

 

 

Change(4)

 

Pro-forma Hotel Revenues(1)

 

$

95

 

 

$

750

 

 

 

(87.5

)%

 

$

708

 

 

$

2,264

 

 

 

(68.8

)%

Pro-forma Hotel Adjusted EBITDA(1)

 

$

(76

)

 

$

217

 

 

NM(5)

 

 

$

(95

)

 

$

671

 

 

NM(5)

 

Pro-forma Hotel Adjusted EBITDA margin(1)(4)

 

 

(81.2

)%

 

 

28.9

%

 

NM(5)

 

 

 

(13.4

)%

 

 

29.6

%

 

NM(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

___________________________________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)   Assumes hotels were acquired on January 1, 2019.

 

(2)   Includes EBITDA of $8 million for both the three and nine months ended September 30, 2019, for the period of ownership of the

     Chesapeake hotels between September 18, 2019 and September 30, 2019.

 

(3)    Includes other revenues and other expenses, non-income taxes on TRS leases included in other property-level expenses and

     corporate general and administrative expenses in the condensed consolidated statements of operations.

 

(4)   Percentages are calculated based on unrounded numbers.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5)   Percentage change is not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9 |

 

 


 

 

Supplementary Financial Information (continued)

 

 

 

 

 

Nareit FFO and Adjusted FFO

 

 

 

 

 

 

 

(unaudited, in millions, except per share data)

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

Net (loss) income attributable to stockholders

 

$

(276

)

 

$

5

 

 

$

(1,223

)

 

$

183

 

Depreciation and amortization expense

 

 

75

 

 

 

61

 

 

 

225

 

 

 

184

 

Depreciation and amortization expense attributable to

   noncontrolling interests

 

 

(1

)

 

 

(1

)

 

 

(3

)

 

 

(3

)

Loss (gain) on sales of assets, net

 

 

1

 

 

 

(1

)

 

 

(62

)

 

 

(20

)

Gain on sale of investments in affiliates(1)

 

 

 

 

 

 

 

 

(1

)

 

 

 

Impairment loss

 

 

2

 

 

 

 

 

 

697

 

 

 

 

Equity investment adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity in losses (earnings) from investments in affiliates

 

 

7

 

 

 

(3

)

 

 

16

 

 

 

(18

)

Pro rata FFO of investments in affiliates

 

 

(5

)

 

 

6

 

 

 

(9

)

 

 

27

 

Nareit FFO attributable to stockholders

 

 

(197

)

 

 

67

 

 

 

(360

)

 

 

353

 

Casualty loss (gain), net

 

 

 

 

 

7

 

 

 

(1

)

 

 

7

 

Acquisition costs

 

 

9

 

 

 

59

 

 

 

10

 

 

 

65

 

Severance expense

 

 

24

 

 

 

 

 

 

26

 

 

 

2

 

Share-based compensation expense

 

 

4

 

 

 

4

 

 

 

10

 

 

 

12

 

Other items(2)

 

 

11

 

 

 

3

 

 

 

48

 

 

 

1

 

Adjusted FFO attributable to stockholders

 

$

(149

)

 

$

140

 

 

$

(267

)

 

$

440

 

Nareit FFO per share - Diluted(3)

 

$

(0.84

)

 

$

0.33

 

 

$

(1.53

)

 

$

1.73

 

Adjusted FFO per share - Diluted(3)

 

$

(0.63

)

 

$

0.68

 

 

$

(1.13

)

 

$

2.16

 

Weighted average shares outstanding - Diluted

 

 

235

 

 

 

207

 

 

 

236

 

 

 

204

 

 

_________________________________

 

(1)

Included in other loss, net in the condensed consolidated statements of operations.

 

 

(2)

For the nine months ended September 30, 2020, includes $30 million of tax expense recognized from hotels sold during the period.

 

 

(3)

Per share amounts are calculated based on unrounded numbers.

 

 

 

 

 

 

10 |

 

 


 

 

Supplementary Financial Information (continued)

 

 

 

 

 

Historical Pro-forma Hotel Metrics

 

 

 

 

 

 

The financial information below is for the 53 consolidated hotels owned as of September 30, 2020(1).

 

 

 

Three Months Ended

 

 

TTM

 

 

 

Full Year

 

(unaudited)

 

December 31,

 

 

March 31,

 

 

June 30,

 

 

September 30,

 

 

September 30,

 

 

 

December 31,

 

 

 

2019

 

 

2020

 

 

2020

 

 

2020

 

 

2020

 

 

 

2019

 

Pro-forma RevPAR

 

$

177.84

 

 

$

136.27

 

 

$

7.85

 

 

$

26.14

 

 

$

87.47

 

 

 

$

183.69

 

Pro-forma Occupancy

 

 

80.8

%

 

 

61.7

%

 

 

6.1

%

 

 

19.1

%

 

 

42.1

%

 

 

 

82.3

%

Pro-forma ADR

 

$

220.20

 

 

$

220.90

 

 

$

127.65

 

 

$

137.10

 

 

$

207.69

 

 

 

$

223.28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro-forma Hotel Revenues (in millions)

 

$

766

 

 

$

574

 

 

$

39

 

 

$

95

 

 

$

1,474

 

 

 

$

3,030

 

Pro-forma Hotel Adjusted EBITDA (in millions)

 

$

223

 

 

$

90

 

 

$

(108

)

 

$

(76

)

 

$

129

 

 

 

$

894

 

Pro-forma Hotel Adjusted EBITDA margin(2)

 

 

29.2

%

 

 

15.6

%

 

 

(283.1

)%

 

 

(81.2

)%

 

 

8.8

%

 

 

 

29.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

TTM

 

 

 

Full Year

 

(unaudited)

 

December 31,

 

 

March 31,

 

 

June 30,

 

 

September 30,

 

 

September 30,

 

 

 

December 31,

 

 

 

2018

 

 

2019

 

 

2019

 

 

2019

 

 

2019

 

 

 

2018

 

Pro-forma RevPAR

 

$

173.18

 

 

$

175.97

 

 

$

192.94

 

 

$

187.93

 

 

$

182.50

 

 

 

$

179.14

 

Pro-forma Occupancy

 

 

78.2

%

 

 

77.7

%

 

 

85.9

%

 

 

84.7

%

 

 

81.6

%

 

 

 

81.0

%

Pro-forma ADR

 

$

221.59

 

 

$

226.46

 

 

$

224.59

 

 

$

222.04

 

 

$

223.64

 

 

 

$

221.46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro-forma Hotel Revenues (in millions)

 

$

732

 

 

$

723

 

 

$

791

 

 

$

750

 

 

$

2,996

 

 

 

$

2,922

 

Pro-forma Hotel Adjusted EBITDA (in millions)

 

$

212

 

 

$

206

 

 

$

248

 

 

$

217

 

 

$

883

 

 

 

$

870

 

Pro-forma Hotel Adjusted EBITDA margin(2)

 

 

29.0

%

 

 

28.4

%

 

 

31.4

%

 

 

28.9

%

 

 

29.5

%